Often, low markets beg for internal audits of current operation structures to determine where, if at all, costs can be cut in order to stay in the black at the end of the day while still providing cattle the appropriate nutrients for peak performance.

“There’s nothing quite like a little financial stress that gets producers to really think critically about what they do and why they do it, even when they do it,” K.C. Olson, W.M. and F.A. Lewis distinguished professor of range beef cattle nutrition and management at Kansas State University, says.

“The question becomes: If our cost structure is a little bit tight right now, what things would be wise to cut back on or maybe cut out, and what things would be foolish to cut back on or cut out?”

Acknowledging that the dramatic decline in price and value of U.S. protein products in the last 18 months coupled with an uncertain export future seems rather bleak, Olson also sees some opportunities for producers nationwide.

“Our cost structure has gotten significantly better than it was 18 months ago,” Olson says. “Our forage is cheaper, most feed grains including corn are significantly cheaper, and pasture lease costs are trending down, so we might have lost a little bit on the price and value side, but I think we have gained significantly on the cost side of the ledger.”


True to the ebb-and-flow nature of commodity economics, this trend is likely to become an anomaly over the long haul. Olson says that the question then becomes: When is low-cost production not in style?

“The answer is: Never,” Olson concluded.

Capitalizing on base rations

Cost-effective basal diets are imperative to any operation structure, especially during times of financial strain. Mary Drewnoski, assistant professor and beef systems specialist with the University of Nebraska – Lincoln, offers some key points of considerations for producers to optimize basal diets.

“When developing a cost-effective ration, the most important things producers can do are to have an accurate understanding of the nutrient content of potential feeds, price [potential] feeds on a nutrient consumed basis and balance the ration to meet the requirements of the animal,” Drewnoski advises.

“When every cent counts, over- or underfeeding can be costly.”

Olson approaches basal diet considerations by looking primarily at the animal needs for two key nutrients: protein and energy.

“Is it protein you need, or is it energy you need, and how can you get that in front of your cattle with the lowest cost per unit of nutrient possible?” Olson says.

“If I am going to buy or make something, I need to figure out if it’s protein, how much it costs me per pound of protein delivered to my cows, or how much it costs me per mega-calorie of net energy delivered to my cows.”

Every bite of food a cow can get for herself is cheaper than one that must be harvested for herIn calculating dry matter and nutrient content of potential fed forages such as baled hay, Drewnoski notes that paying on a per-bale basis with a base weight assumption can be a major mistake.

“Bales of the same size can vary considerably just due to the density of the bale,” Drewnoski says. “A 5-foot-by-5-foot round bale can easily vary 300 pounds due to variations in density. Knowing the actual weight of the bales [as well as] the dry matter and nutrient content is important to making informed purchases.”

Minimizing feed shrink and waste is another consideration for any class of beef cattle, Drewnoski also points out. Key considerations include storage and feeding methods.

“When feeding three days of unrolled or ‘processed’ hay at once, feeding losses of 40 percent can be expected whereas, if fed daily, this is cut back to 12 percent,” Drewnoski says. “Using a round bale feeder will result in around 5 percent loss.”

Optimizing base diets and rations while keeping input costs down is always a benchmark worth considering, Olson says. Once basal diets are nutritionally and financially optimized, he advises producers to shift gears in production cost considerations.

“Once we have arrived at least cost per unit of nutrient, I think we need to focus on our cost centers,” Olson says. “Those tend to be winter-feeding for the cow herd, heifer development and any receiving that we might do for weaned calves or for grower cattle that we’re bringing in.

If we do well nutritionally in those three areas, we’re going to do well nutritionally overall in terms of success and cost.”

Cost centers

It is common to critically analyze what, if any, input costs can be eliminated with the least negative impact overall, as both Drewnoski and Olson note.

“When calf prices aren’t that good, that doesn’t mean it’s time to cut out high-return-on-investment options like a good mineral program, like implants, like ionophores, like parasite control,” Olson concludes. “What it really means is that we need to double down on our major cost centers.”

Similarly, Drewnoski notes that it is easy to see an up-front cost benefit to cutting out certain efficiency management options.

“In terms of low-hanging fruit for increased profitability, implants are ripe for picking,” Drewnoski says. “[But] it is still, if not more important, to use implants and ionophores when profit margins are tight.”

Unless producing on a niche market with premiums for not implanting, Drewnoski says that producers would be leaving money on the table for cutting out implant programs altogether in order to meet a lower production budget threshold.

“The cost of the implant and labor is usually less than $2 per head,” Drewnoski says. “Calfhood implants can increase average daily gain 4 to 8 percent and typically increase weaning weights 15 to 20 pounds. Thus, implanting steer calves will be profitable even with the lower calf prices we are currently experiencing.”

Implants require a basal diet that is nutritionally sufficient in order to exceed the threshold by which return on investment is measured, Olson says.

“As long as our diet quality is sufficient to allow us to exceed that threshold, the return on investment on an implant is going to be in the order of 18 to 25 to 1,” Olson concludes.

Ionophores tend to be another low-hanging fruit that is tempting to cut out of management programs, Olson says. However, he emphasized that ionophores are a high return on investment regardless of the diet quality.

“Ionophores work for all classes of beef cattle and for literally all diet types,” Olson says. “We can expect a 5 to 15 percent jump in feed efficiency every time we use them, and we measure the cost of those things [ionophores and implants] in pennies per day.”

When a producer has a basal diet with adequate nutrient composition at the lowest feasible cost, return on investment for such performance technologies will be felt, Drewnoski concludes.

“So even when times are tight, cutting out those high-return investments like ionophores and implants is almost like cutting off our nose to spite our face,” Olson says.

Last, another major cost center that is often considered to get cut out of management programs when money is extra tight is parasite control protocols, Olson notes. Oftentimes, it is difficult to see the subclinical effects of parasite infections when such protocols are cut, he says.

Using Kansas as an example, “If we’re not cleaning up our cows twice a year, we can count on subclinical effects on feed conversion in the cow and transfer of that parasite infection and slowed growth of the calf,” Olson says. “It almost never manifests visibly in the cow, but there’s almost always a major detriment in calf performance.”

Parasite control strategy, in terms of timing and compounds, are heavily dependent on geographical location within the U.S., Olson says. Regardless of location, however, cutting out parasite control in efforts to minimize production costs is a significant liability.

“If we don’t do it, we pay the price,” Olson says. “Don’t cut out those high-return options, even if you think you can’t afford them, because they will come back to bite you.”

Adjusting calving season

Capitalizing on when grazable forages can be the most nutritional for cattle is the most significant cost-cutting strategy as Olson sees it. Every bite of food a cow can go out and get for herself is cheaper than one that has to be harvested for or brought to her, he summarizes.

“We are so focused on the gross output of the equation we tend to forget that this is a business about net,” Olson offered. “When we make our cows calve in February and March, we’re causing them to hit peak lactation at a time when low-cost, abundant, high-quality forage is not available in most latitudes.”

He has observed many producers across the nation who are reconsidering the timing of calving and peak lactation to align with when the high-quality grazable forages are most available.

“[Rethinking calving seasons] is probably one of the biggest avenues to cost savings, to making yourself competitive in your cost structure, that I can think of,” Olson says.

“And maybe the single biggest piece of reducing winter feed cost and heifer development, in my experience, is making sure peak lactation lines up with peak forage quality where that occurs. That’s true in North Dakota, and that’s true in Florida.”  end mark

PHOTO 1: Storage and baling density may seem like small factors at times, but loosely baled hay can cost significant amounts.

PHOTO 2: Every bite of food a cow can get for herself is cheaper than one that must be harvested for her. Photos by Danielle Schlegel.

Danielle Schlegel