As the grass greens up producers begin to look forward to turning cattle onto spring pasture and discontinue feeding. As fall-born calves are weaned, producers must decide if adding weight by turning calves out on grass or backgrounding in a lot will be profitable. Likewise, as spring calves get older, whether or not to creep feed will become a common question. Value and cost of gain calculations will aid in these decisions.
Value of gain calculates the value of each additional pound of calf gain. As calves get heavier, the value per hundred weight declines while calf value increases. To determine the value of adding calf weight, determine the heavier calf value then subtract the lighter calf value and divide by pounds added. For example: (650 * $1.10) – (550 * $1.18) = $66 / 100 pounds = $0.66. Each additional pound added from 550 to 650 pounds is worth $0.66.
Cost of gain must be calculated and will vary depending on cattle performance, feed efficiency and feed cost. Expensive feed resulting in exceptional performance may result in a similar cost of gain as cheaper feed with lower performance. If creep feed costs $140 / ton or $0.07 / lb, and calves require 10 to 14 pounds of creep feed for each pound of additional gain, then feed cost of gain is $0.84. Using the value of gain from above, each additional pound added to the calf resulted in a $0.18 loss ($0.66 - $0.84 = - $0.18).
Placing calves in a backgrounding lot and feeding $140 / ton feed with calves converting at six pounds of feed to a pound of gain results in a $0.42 feed cost of gain. This example leaves $0.24 per pound of gain for yardage, treatment, interest, etc. Another example would be turning calves out on pasture with a grazing cost of gain at $0.40 / pound. In grazing systems stocking rate, animal performance and forage availability will influence cost of gain. Regardless of how calves are fed and managed the key is to do the calculations for your operation to determine if the value of gain outweighs the cost.
Source: Missouri Ag Extension