Move Feed to Livestock or Livestock to Feed?

BROOKINGS, S.D. -- With drought severely limiting pasture and hay production over much of South Dakota, many ranchers are faced with either buying feed or moving their livestock to feed if they want to keep their animals.
 

A publication written by South Dakota State University Extension Economist Donald Peterson and SDSU Extension Range Livestock Production Specialist Barry Dunn can help producers choose the alternative that makes the most sense economically for their operations.
 

SDSU Extension Extra 5041, "Short on Feed? Move the feed to the livestock, or the livestock to the feed?" is available through county Extension offices. Or find it online at the SDSU Extension drought Web site, http://sdces.sdstate.edu/drought/.

The first step in comparing the alternatives is to determine the cost of getting purchased feed to the feed bunk.  This is the sum of the (1) purchase cost of the feed, (2) shipping costs, (3) opportunity cost of labor in feeding and caring for the animals, and (4) shrink and waste.
 

The second step is to determine the cost of moving the animals to a feed source and paying for their feed and care there.  This is the sum of (1) shipping the animals to and from the feed source, (2) the cost of the feed at the feeding facility, and (3) the daily charge by the feeder to care for and feed the animals.
 

For example, suppose a rancher estimates it will be nine months before the ranch can again support the herd, given normal rains next year.
 

If each cow needs about 30 pounds for hay per day to maintain her, it will take about 8,100 pounds, or nearly 4.1 tons of hay to maintain her for 270 days, or the nine months.  If good hay can be purchased at $82 per ton, the total cost of the hay will be $336.20 per animal.  However, if this hay is 300 miles away, shipping costs must be added.  With a freight charge of $2.75 per loaded mile, the cost will be  $825 per load.  Assuming 22 tons per load, the freight cost is $37.50 per ton or $153.75 for 4.1 tons.  Thus, the total cost for the hay delivered to the ranch is $489.95 per animal for the 9 months.  This example assumes that there is less than .75 pound of wasted hay per day and that the rancher has no opportunity cost for his/her labor.
 

Another alternative is to ship the cattle to a feeder 300 miles away for the nine months.  If the price of the hay is the same at the feeder’s lot, the cost of the feed will be $336.20 per head.  However, there will be freight for moving the cattle to and from the feeder’s facilities.  The average custom rate for hauling cattle is about $2.90 per loaded mile, with 40 cows per load.  Thus, a round trip cost will be $43.50 per animal and the total cost of hay and hauling cattle comes to $379.70 per head for the nine months.  If the feeder charges 20 cents per head per day for water, utilities, and labor, the total cost will be  $433.70 per head for the 9 months, or $56.25 less than the cost of moving feed to the cattle.  However, the purchase price of feed and the shipping distance for the cows and hay may not be the same under both circumstances.
 

Some custom feeders include feed in their daily yardage charge.  When feed is included in the yardage charge, the charge will be about $1 to $1.50 per head per day.  At $1.25 per day, the cost of boarding the cattle will be $337.50.  Adding  $43.50 for shipping the cattle, the total cost is $381.00 per head for the nine months with an added charge likely, if the spring calves are born at the feeder’s facility.  These prices may vary with changing prices for feed.
 

Keep in mind that by purchasing more nutrient-dense feeds such as corn shipping costs per nutrient fed can be reduced.  However, when substituting feeds, one needs to make sure all nutrient needs are met.  Also, consulting a county Extension educator or nutritionist is recommended.
 

When buying feed, such as hay, buy from a reputable dealer or inspect the merchandise before buying.  The same applies to using a custom feeder to winter pregnant cows.  Inspect the lot, and if it is satisfactory, draft a written agreement specifying what and how much is to be fed, who pays for death losses and veterinary expenses, etc.  Also reserve the right to inspect the cattle unannounced.
 
 

Contact: Donald Peterson, (605) 688-4859; Barry Dunn, (605) 688-5455
 
 

** For links to other sites showcasing SDSU's work in teaching, research, and Extension, visit http://sdces.sdstate.edu.

Lance Nixon, Editor
AgBio Communications Unit
South Dakota State University
ACC, Box 2231, Rm 200
Brookings, SD 57007
Telephone: (605) 688-4653
Lance_Nixon@sdstate.edu