Randy Rosenboom, Beef Specialist
We all get this question nearly every day. And, we don’t always have time to fire up our computer and run a projection to answer the question. So it is helpful to have a feel for what kind of cost of gains are associated with various feed prices as well as feeder weights. While you cannot be completely accurate without running a projection, you can get close enough to be helpful if you keep a few things in mind.
Most of the guys in my area right now are using $4 on corn since it has run up a bit in the last while. In general, if you are using $4 corn and $85 on modified distillers and around $65 on wet distillers (which equates to around $160 DDG), your cost of gain on a 600-lb steer is going to be around $79-80/cwt. This figure includes feed, yardage and interest.
From there you just need to know the market weight, let’s say 1450-lb. So 1450 – 600 = 850 lb of gain.
Multiply 850 x $0.80 COG and you have $680. So if your 600-lb steers cost $275/cwt, you have $1650 invested in the feeder. Adding $680 + $1650 = $2330 total investment.
So now we can divide $2330 by 1450 lb and come up with our breakeven of $160.69/cwt.
This simple calculation gets done every day. Once you establish that the cost of gain on 600-lb steers is $80/cwt of gain, you can vary from there based on body weight and corn price.
In general, for every plus or minus 25 cents on corn price, cost of gain will go up or down about $2/cwt. And for every plus or minus 100 lb of feeder weight purchased, your cost of gain will go up or down about $3/cwt.
Heifers cost of gain will be about 10% higher than comparable steers.