Alfredo DiCostanzo 1 , Nicole M. Kenney-Rambo 1 , and Andrew Nesseth 2

1 University of Minnesota, St. Paul and 2 Extended Ag Services, Inc.

Iowa Cattle Industry ConventionDes Moines, IA 2014

$14$17 $19

$23

$44$48

$32

$41 $44$39

$23$27

$31$35

$68

$76

$51

$65$68

$62

$44

$52

$60

$66

$119

$127

$87

$114

$120

$114

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

$140.00

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Open lot

Manure pack

Slats on pit

Energy

Roughage

Beef

N P KMicro

OM

Nutrients

Structure

Cattle feeders who own cropland and cattle facilities (sometimes even some cows) Are young and looking to be in the business for > 30 years Have upgraded their facilities Are interested in the entire system

Crops, Cattle, Nutrient recycling Gross return to corn land—differential between gross income

and non-corn land expenses Yardage Purchased feeds Hay or non-corn roughage Veterinary Cattle Implants

$0

$1

$2

$3

$4

$5

$6

$7

$8

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Market Feeder No Land Base Feeder with Land Base

During high corn price years and lower or unstable cattle prices, feedlot is at lower capacity

During low corn price years, regardless of cattle prices, feedlot is at full capacity

This process permits financial sustainability

Corn Price

Forage PriceBedding Price

Fed Price

Feeder Price

Fertilizer Price

Design

8 occasions during last decade where feeding corn grain through cattle enhanced price of corn Average = $0.77/bu

Drivers Corn price, fed steer to corn ratio Avg = 32

Roughage price, Average = $132/ton

Fed price, fed to feeder ratio = -15

Fertilizer price, DAP to corn grain price = 142

Fertilizer price, DAP to corn yield = 0.91

2 occasions during last decade where feeding corn grain through cattle decreased price of corn Average = -$0.71/bu

Drivers Corn price, fed steer to corn ratio Avg = 29

Roughage price, Average = $149/ton

Fed price, fed to feeder ratio = -26

Fertilizer price, DAP to corn grain price = 108

Fertilizer price, DAP to corn yield = 0.80

Driver Value enhanced Value decreased Effective

Fed steer to corn grain price 32 29 Yes

Roughage price 132 149 Yes

Fed to feeder price -15 -26 No

DAP to corn grain price 142 108 Yes

DAP to corn yield price 0.91 0.80 Yes

Greater fertilizer prices starting in 2008 served as incentives to build feedlots with greater capacity to capture the value of manure as fertilizer.

The value of manure as fertilizer has contributed to making cattle feeding operations competitive with corn farming only operations in the past decade.

Corn grain, feeder and fed cattle prices, fertilizer prices and corn grain yield interact to determine profit from feeding corn grain to cattle vs selling corn grain at market price.

High fed cattle prices relative to corn grain prices with greater than average corn grain yields at current high fertilizer prices favor feeding corn grain to cattle rather than selling in the market place.

Main drivers of sustainability in cattle feeding-farming operations are: Fed steer to corn grain price—value of cattle against corn grain

Roughage price—high roughage price makes cattle feeding expensive

Fertilizer to corn grain price—areas of low corn grain yield benefit from cattle feeding

Fertilizer to corn yield price—low value of corn grain relative to fertilizer price