Feedlot Ration Decision Under Rising Grain Price
A 600-head feedlot finishes steers from 320 kg to 480 kg liveweight over 110 days. The current ration is 70% barley, 20% hay, 10% protein-mineral supplement, delivering 12.5 MJ ME/kg DM and 13% crude protein. Barley has risen 22% in price; hay is unchanged and cheap locally. The nutritionist warns that dropping barley below 55% risks a growth penalty of about 0.15 kg/day and may push days-to-target beyond 120. Each extra day on feed costs roughly $2.10/head in yardage and interest. The owner wants to cut feed cost per head immediately.
1. Explain the trade-off the owner faces and identify what data is needed before changing the ration.
Read the worked answer
The trade-off: Feed cost per head is not the same as cost per kilogram of gain. Cheaper ingredients (more hay, less barley) lower the daily ration cost but reduce energy density, slowing growth and lengthening the feeding period. Every extra day adds yardage, interest and labour, and delays the sale - so apparent savings can be erased or reversed.
Quantify the risk: A 0.15 kg/day penalty over the finishing phase could add roughly 8–15 days. At $2.10/head/day, that is ~$17–32/head in extra costs, before considering that slower, fatter-type gain may reduce carcase value or miss a target weight window.
Data needed before deciding:
- Actual cost per MJ ME and per kg crude protein of each ingredient, not just per tonne.
- The barley price threshold at which the ration change becomes worthwhile (break-even).
- Whether a lower-energy ration can still hit the 480 kg target within the processor's delivery window.
- Rumen-health and acidosis risk from abrupt ration shifts.
- Local availability and quality variation of hay (energy and protein content vary widely).
Judgement: The owner should not cut barley blindly; the decision hinges on the break-even price and the cost of extra days, which must be calculated, not assumed.
2. Using the figures given, outline how you would test whether the ration change is financially justified, and state a reasonable recommendation.
Read the worked answer
Break-even framing: Compare total cost per head of two scenarios over the same finish.
Scenario A (current): 110 days × $2.10 = $231/head in non-feed costs, plus full-barley ration cost.
Scenario B (reduced barley): If gain drops 0.15 kg/day, reaching 160 kg of gain takes 160 ÷ (160/110 − 0.15) ≈ 160 ÷ 1.30 ≈ 123 days. Extra days ≈ 13 × $2.10 ≈ $27/head in yardage and interest.
Decision rule: The ration change is justified only if the feed-cost saving per head exceeds ~$27 plus any carcase-quality discount. Because barley is only 22% more expensive, the saving per head is modest - likely comparable to or below the penalty cost.
Recommendation: Do not slash barley to the minimum. Instead:
- Test a moderate reduction (e.g. 70% → 60% barley) to capture some saving while staying above the 55% threshold the nutritionist flagged.
- Phase the change over 7–10 days to protect rumen function.
- Monitor average daily gain and days-to-target on a pen basis, and reverse the change if gain falls below the modelled level.
Justification: The calculation shows the margin is thin; a cautious, monitored adjustment preserves the option to revert, rather than locking in a slower finish for an uncertain saving.