Increasing Income with Stocker Cattle

Running a profitable stocker cattle calls for a balance of performance and budgeting with a focus on the expenses. A report from Texas A&M University provided a method to analyze these type of expenses. As the table below shows, I took the liberty of updating the budget to today’s standards and repeated the analysis.

The budget developed to calculate the values in Table 1 showed a profit of $111/hd. The analysis indicated that decreasing the purchase price for the same quality and weight stocker by $0.05/lb results in an increased profit of $28/hd. Reducing the pasture lease $10/acre increases profit $5/hd. While these factors are additive, the astute stocker operator should focus on the production factors that have the greatest potential to improve return – marketing, animal gain and reducing the cost of gain by increasing days on pasture. For the purposes of this article we will focus on increasing average daily gain (ADG) and length of the grazing season.

In this analysis, improving ADG from 1.5-pound to 1.7-pound increased profit by $43/hd. Assuming the animal is healthy, there are basically three ways to increase animal weight: increase feed quality, forage intake and feed efficiency. Animals that have been sick, heavily parasitized, small framed and/or overly conditioned will not be profitable.

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These practices can either increase animal performance or increase stocking rate:

  • Forage in the vegetative stage of growth is higher in energy and protein and lower in fiber than mature forage: The average total digestible nutrient (TDN) of grass pasture (Dairy One Feed Composition Library) is 62 percent. This forage should support an ADG of 1.6 pounds. Increasing the TDN to 65 percent increases ADG to 1.8 pounds. Keeping cattle in grass that is 4-8 inches in height should maintain the desired quality.
  • Adding legumes: Legumes increase palatability, intake and feed quality over grass alone. They also even out production and maintain quality by growing during the summer when grasses slow down and increase in fiber content. Research from University of Virginia showed a 20 percent increase in the ADG of steers grazing Red Clover and Orchardgrass over Orchardgrass alone, while adding legumes to tall fescue increased ADG 44 percent.
  • Nitrogen fertilization: Based on the green grass seen around manure piles, most pastures are nitrogen deficient. Nitrogen (N) increases grass quality and quantity. Agronomists at Cornell University report a 4 percent unit increase in crude protein of grass when N was applied at 100 pounds per acre, with a concomitant decrease in fiber (NDF). Cornell agronomists recommend 125-150 pounds of N per acre in intensively managed pastures. However, N fertilization reduces legume content. If the pasture contains 25-35 percent legumes, N should be applied at 30-50 pounds per acre. For every pound of nitrogen applied, you can expect an increase of 20-40 pounds of DM. For best results, a soil test should be conducted to determine if your pastures will respond to N fertilization.
  • Soil testing: In an Oklahoma survey of stocker operators, only 52 percent conducted soil analysis every 3-4 years. I don’t have similar data for the Northeast, but my guess is that we are not that different. Correcting soil pH and concentrations of phosphorus (P) and potassium (K) will increase forage yield and quality, reducing cost per pound of gain.
  • Supplements: With the availability of dried distiller’s grains (DDG) there is opportunity to increase individual animal performance and stocking rate. Studies have shown an 8-30 percent increase in ADG and a 105 percent increase in stocking rate when stocker cattle have been supplemented with DDG. Research indicates that for every pound of DDG fed, 1 pound of forage can be replaced. This results not only from added energy but also from a more efficient use of forage.
  • Growth-promoting implants: While data does not exist for the Northeast, I would guess that less than 20 percent of stocker operators utilize implants to boost performance. Multiple studies document an 8-15 percent in ADG in implanted steers. This equates to an additional 18-34 pounds of sale weight. At $2 per pound, this is a lot of money being left on the table.
  • Ionophores: Use of ionophores (Rumensin and Bovatec) increased ADG 6-12 percent on steers grazing wheat pasture through more efficient use of forage. The impact of implants on steers grazing native pastures typical of the Northeast is planned for this summer.

There are many animal and agronomic practices that can improve production and reduce the cost of gain (refer to Table 2). This is only a short list and astute producers are adding animal health practices, marketing strategies and financial management to further increase profit. Historically, stocker cattle has been a profitable enterprise in many parts of the United States. With more experience and research in the Northeast, we will be able to further identify the factors that make stockers a viable use of the abundance of idled farmland which is our competitive advantage.

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