Table 9.
Management system economic analysis for income, expense, and net return with and without futures market hedge for yearling feedlot control steers (FLT) compared to yearling steers grazing perennial pasture (PST), or annual forage (ANN)
| Treatments1 | |||
|---|---|---|---|
| Item | PST | ANN | FLT |
| Income | |||
| Gross carcass value/head, $2 | 1718.41 | 1738.93 | 1497.41 |
| Expenses | |||
| Steer cost, $3 | 1041.72 | 1051.56 | 1034.02 |
| Pregrazing cost/steer, $ | 60.00 | 60.00 | 60.00 |
| Grazing cost/steer | |||
| Perennial grass, $4 | 157.19 | 94.13 | |
| Field pea–barley, $5 | 49.87 | ||
| Standing unharvested corn,$6 | 94.36 | ||
| Feedlot feeding cost/steer, $7 | 381.18 | 276.12 | 578.30 |
| Transportation, health. and brand/steer, $8 | 108.42 | 103.80 | 123.14 |
| Total system expense/ steer, $ | 1748.51 | 1729.84 | 1795.46 |
| Steer net return without futures market hedge, $ | −30.10 | 9.09 | −298.05 |
| Futures hedging9 | |||
| Steer profit from futures market hedge, $ | −14.35 | 22.04 | −15.59 |
| Steer net return with futures market hedge, $ | −44.45 | 31.13 | −313.64 |
1PST = crested wheatgrass and native range; ANN = crested wheatgrass, native range, field pea–barley, and unharvested corn; FLT = feedlot control.
2Steers were sold on the Angus America Grid, Cargill Meat Solutions, Fort Morgan, CO.
3Steer cost basis established from market results Stockmen’s Livestock Exchange, Dickinson, ND.
4Perennial native range pasture cost based on starting and ending weight and days grazed; PST—$157.19; ANN—$94.13.
5Field pea–barley crop input cost—seed $25.40/ac, seeding $10/ac, spraying $5/ac, inoculant $5.08/ac, preplant chemical $3.18/ac, windrowing $10/ac, land rent $30/ac = ($88.66/ac × 13.5 ac)/24 steers = $49.87/steer; mean days grazed: 27 d.
6Unharvested corn—seed $47.82/ac, planting $10/ac, spraying $5/ac, fertilizer (urea $37.85/ac, MESZ $28.69/ac (MicroEssentials fused-technology: nitrogen 12.0%, phosphorus 17.5%, sulfur 10.0%, zinc 1.0%, The Mosaic Company, 3033 Campus Dr., Suite E-490, Plymouth, MN), potash $4.96/ac), chemical $3.43/ac, land rent $30/ac = (167.75/ac × 13.5 ac)/24 steers = $94.36/steer; mean days grazed: 52 d.
7Steer feedlot days on feed: PST—91 d; ANN—66 d; FLT—142 d.
8Transportation, health, and brand expense: variance in amounts was due to different trucking companies hauling the steers to the feedlot from North Dakota and from the feedlot at Lingle, WY, to the packing plant at Fort Morgan, CO. Brand inspection charges varied from one closeout group to another.
9Chicago Mercantile Exchange simulated live cattle futures market hedge: live cattle hedge contracts for PST, ANN, and FLT were sold in May for the contract month closest to the expected marketing day and the contracts were offset by purchasing the contracts on the actual steer marketing dates (FLT—October, ANN—January, PST—February).