Profiting on the Grid
Carcass-based factors affecting feeding performance and profit.
Increasing numbers of finished cattle are being sold on carcass-value grids. In grid selling, value is based on carcass weight, not live weight. So, factors such as feed efficiency, average daily gain (ADG), etc., should be considered on a carcass basis. An analysis was conducted of 67,570 lots of steers and heifers fed during 2002-2008 in 212 feedyards in six feeding regions of the United States.
Carcass-based feed efficiency was the most influential factor in determining both cost of carcass-based gain and net return per animal. The second-most-important factors determining value of carcass gain were carcass-based ADG and days on feed, by virtue of their overall effects on total carcass weight gain during feeding. Carcass-based ADG and days on feed were also the second- and third-most-important determinants of net return per animal. Grid price variables (quality and yield, weight discounts, dark cutter) also affected value of carcass gain, but not to the extent of the effect of increased weight.
Highest profit was realized by feeding cattle until cost of carcass gain was higher than value of carcass gain. This point was reached by feeding to weights heavier than when comparing cost and value of gain on a live basis. (An important factor here is that, as animals finish, a progressively higher percentage of live weight gain is in the form of carcass weight.) In this study, profit was maximized at carcass weights of approximately 930 lb. (1,425 lb. live) for steers and 845 lb. (1,290 lb. live) for heifers.
Author’s Note: This study involves only the finishing phase of production. It should not be taken as an indicator that all cow-calf operations should produce steer calves capable of being profitably fed to 1,425 lb. Cow-calf producers, even those retaining ownership through feeding and grid marketing, should consider all factors involved in their entire production and marketing system.
