Bowen, C. C.

Moore, John E.

KnowledgeBank at OSU

October 197'2 t·135 What to Pay for Feeder Steers Top Pric.es a Farmer Can Pay and Still Break Even for --2 Levels of Management --7 Prices for Corn --7 Selling Prices for Slaughter Cattle --5 Weights of Feeder Steers COOPERATIVE EXTENSION SERVICE THE OHIO STATE UNIVERSITY 11/72-SM The Ohio State University cooperating with the U. S. Department of Agriculture. Cooperative Extension Ser-vice, Roy M. Kottman, Director, Columbus, Ohio 43210. Printed and distributed in furtherance of Acts of May 8 and June 30, 1914. What to Pay for Feeder Steers C. C. Bowen and J. E. Moore Department of Agricultural Economics & Rural Sociology Ohio Agricultural Research and Development Center and Ohio Cooperative Extension Service This leaflet presents two tables of prices to guide farmers in buying feeder cattle. One table shows the highest prices an average cattle feeder can pay for choice grade steers and still break even. The other table shows the top prices an above average cattle feeder can pay and still cover all costs of raising the cattle to slaughter weights. All costs were considered in figuring how much to pay for feeder stock. These costs included a charge for depreciation of cattle buildings and equipment, a charge of $2.50 an hour for all labor used, and a charge of 6 percent interest on the current value of all invested in the feeding-out process. If a farmer wants to be paid more than these amounts for the labor and capital used, or wants to make a profit on each animal after he pays all costs, he will have to pay less than the prices shown in the table for his level of management. The purchase prices in both tables were determined on the basis of the break even point for two reasons. First, this price represents the maximum a farmer can pay and still cover all costs of finishing the cattle for slaughter purposes. Second, some farmers may want to make more profit per animal than others. Whatever profit a farmer wants to make will have to be deducted from the break even prices in the two tables to give the actual prices the farmer should pay for feeder cattle. Over the short period of time, a farmer might pay slightly more than the calculated prices and still break even if only the variable costs are considered. For example, in the short run it might be advisable to feed cattle even though all fixed costs were not completely covered, such as depreciation, interest on total investment, full-time hired men, etc. However, over the long period of time, all costs must be con-sidered in figuring the profitability of feeding cattle. An average farmer or manager cannot afford to pay as much for feeder cattle as an above average manager because of higher costs. On the other hand, an above average manager may demand higher re-turns from labor, management and capital than an average manager. A below average farm manager may have consider-able difficulty buying feeder cattle at prices low enough to make the feeding-out process profitable, even if he accepts low returns on the labor and capital used. The following formula was used in calculating the cattle prices in the two tables: (Selling price per head for slaughter animal)- (Cost per head of raising feeder animal to slaughter weight) +- (Purchase weight of animal in terms of 100 pounds) = (Top price per hundredweight to pay for feeder steer). For average management, the following costs were used to produce 100 pounds of gain: buildings and, equipment, $3.25; labor, $3.00; tractor power, $.50; veterinary and medicine, $.25; and truck, automobile, telephone and electricity, $.40. For above average management, the following costs were used per 100 pounds of gain: buildings and equipment, $2.35; labor $2.50; tractor power, $.45; veterinary and medicine, $.25; and truck, automobile, telephone and electricity, $.35. Death losses for both levels of management were figured at 1.8 percent for 400 pound feeder cattle, 1.5 percent for 500 pound cattle, 1.2 percent for 600 pound cattle, .9 percent for 700 pound cattle, and .6 percent for 800 pound feeder cattle. Interest and taxes on' cattle were figured at 7.5 percent of the purchase price for the length of time needed to raise the feeder steer to slaughter weight. Feed costs for average management varied from $15.30 to $22.40 per h4ndred pounds of gain when corn was valued at $1.10 a bushel. The low cost was for 400 pound cattle fed to 900 pounds. The high cost was for 800 pound cattle fed to 1,000 pounds. Feed costs for above average management were figured at 80 percent of the cost for average manage-ment. Suppose you want to know the top price an average cattle feeder can pay for a 400 pound steer that will be fed to 1,000 pounds and sold for $26.00 per hun-dredweight when corn is worth $1.10 a bushel. Follow these steps: ( 1) Turn to table of prices for average cattle feeder. (2) Locate the line of figures for $1.10 corn and $28.00 slaughter cattle. ( 3) Follow this line to the right until you come to the section for slaughter cattle sold at 1,000 pounds. ( 4) Read the price on this line for 400 pound feeders, which is $32.50 per hun-dredweight. For 600 pound steers, you could pay up to $26.25. If you want to make some profit after all costs are paid, you will have to deduct this amount from the break even prices shown in the table. TOP PRICES THAT AN ABOVE AVERAGE CATTLE FEEDER CAN PAY PER HUNDREDWEIGHT FOR CHOICE GRADE STEERS AND STILL BREAK EVEN1 Price Selling Price When Cattle Are Price When Cattle Are Of Price For Sold At 900 lbs. And Sold At 1,000 lbs. And Price When Cattle Are SOld At Corn 100 lbs. Purchase Weight Is Purchase Weight Is 1,100 lbs. and Purchase Weilbt Is Per: Of Live 400 500 600 400 500 600 700 400 500 600 180 100 Bushel Cattle• lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. $1.00 $28 $38.50 $32.50 $29.00 $40.00 $33.75 $29.75 $27.50 $41.00 $34.25 $30.25 $27.75 $2625 1.00 30 43.00 36.00 32.00 44.75 37.50 33.00 30.25 46.25 38.50 34.00 31.00 29.00 1.00 32 47.25 39.50 34.75 49.75 41.50 36.25 33.00 51.50 42.75 37.50 34;.00 31.75 1.00 34 51.75 43.00 37.75 54.50 45.25 39.50 35.75 57.00 47.00 41.00 37.00 34.25 1.00 36 56.25 46.50 40.75 59.25 49.00 42.75 38.50 62.25 51.25 44.75 40.25 37.~ 1.00 38 60.50 50.00 43.50 64.25 53.00 46.00 41.25 67.50 55.50 48.25 43.25 ~.75 .. 1.00. 40 65.00 53.50 46.50 69.00 56.75 49.25 44.00 73.00 59.75 51.75 4625 ~ 1.10 28 37.50 32.00 28.50 38.75 32.75 29.25 27.00 39.50 3325 29.50 27211 26,08 1.10 30 42.00 35.50 31.50 43.75 36.50 32.50 29.75 44.75 37.50 33.00 30.25 28.50 1.10 32 46.25 39.00 34.50 48.50 40.50 35.75 32.50 50.00 41.75 36.50 33.25 31.25 1.10 34 50.75 42.50 37.25 53.25 44.25 39.00 35.50 55.25 46.00 40.25 36.25 34.00 1.10 36 55.25 46.00 40.25 58.25 48.00 42.25 38.25 60.50 50.25 43.75 39.25 36.50 Llil -- - .llt - 59.5(1 49-5fl_ 4325 63.00 52.00 45.50 41.00 65.75 -- -54..5ll - -4125 -·-42.25- 3925 1.10 40 64.00 53.25 46.00 67.75 55.75 48.75 44.00 71.00 58.75 51.00 45.25 42.00 1.20 28 36.75 31.25 28.00 37.50 31.75 28.50 26.50 37.75 32.00 28.75 26.75 25.50 1.20 30 41.00 34.75 31.00 42.50 35.75 31.75 29.50 43.25 36.25 32.25 29.75 28.25 1.20 32 45.50 38.25 34.00 47.25 39.50 35.00 32.25 48.50 40.50 35.75 32.75 30.75 1.20 34 49.75 41.75 37.00 52.25 43.50 38.25 35.00 53.75 44.75 39.25 35.75 33.50 1.20 36 54.00 45.25 40.00 57.25 47.50 41.50 38.00 59.25 49.00 42.75 38.75 3625 1.20 38 58.50 48.75 43.00 62.00 51.25 44.75 40.75 64.50 53.25 46.25 41.75 38.75 1.20 40 62.75 52.25 46.00 67.00 55.25 48.00 43.50 69.75 57.50- 49.75 44.75 41.50 1.30 28 35.75 30.75 27.75 36.50 31.00 28.00 26.25 36.50 31.00 27.75 26.00 25.00 1.30 30 40.00 34.25 30.75 41.25 35.00 31.25 29.00 41.75 35.25 31.50 2925 27.7~ 1.30 32 44.50 37.75 33.50 46.00 38.75 34.50 31.75 47.00 39.50 35.00 32.25 30.50 1.30 34 48.75 41.25 36.50 51.00 42.75 37.75 34.50 52.50 43.75 38.50 35.25 33.00 1.30 36 53.00 44.75 39.50 55.75 46.75 41.00 37.25 57.75 48.00 42.25 38.50 35.75 1.30 38 57.50 48.25 42.25 60.50 50.50 44.25 40.00 63.00 52.25 45.75 41.50 38.50 1.30 40 61.75 51.75 45.25 65.50 54.50 47.50 42.75 68.50 56.50 49.25 44.50 41.00 1.40 28 34.75 30.25 27.25 35.25 30.00 27.50 25.75 35.00 30.00 27.00 25.50 24.75 1.40 30 39.25 33.75 30.25 40.00 33.75 30.75 28.50 40.25 34.25 30.75 28.75 27.50 1.40 32 43.50 37.25 33.00 45.00 37.75 34.00 31.25 45.50 38.50 34.25 31.75 3025 1.40 34 48.00 40.75 36.00 49.75 41.50 37.25 34.00 51.00 42.75 37.75 34.75 32.75 1.40 36 42.50 42.25 39.00 54.50 45.25 40.50 36.75 56.25 47.00 41.50 38.00 35;50 1.40 38 56)5 47.75 41.75 59.50 49.25 43.75 39.50 61.50 51.25 45.00 41.00 38.25 1.40 40 61.25 51.25 44.75 64.25 53.00 47.00 42.25 67.00 55.50 48.50 44.00 40.75 1.50 28 34.00 29.50 26.75 34.00 29.00 26.75 25.25 33.25 28.75 26.25 25.00 24.25 1.50 30 38.50 33.00 29.75 39.00 32.75 30.00 28.00 38.50 33.00 29.75 28.00 . 26.75 1.50 32 42.75 36.50 32.75 43.75 36.75 33.25 30.75 43.75 37.25 33.25 31.00 29.50 1.50 34 47.25 40.00 35.50 48.50 40.50 36.50 33.75 49.00 41.50 37.00 34.00 32.25 1.50 36 51.75 43.50 38.50 53.50 44.25 39.75 36.50 54.25 45.75 40.50 37.00 34.75 1.50 38 56.00 47.00 41.50 58.25 48.25 43.00 39.25 59.50 50.00 44.00 40.00 37.50 1.50 40 60.50 49.75 44.25 63.00 52.00 46.25 42.25 64.75 54.25 47.75 43.00 40.25 1.60 28 33.00 29.00 26.50 33.00 28.25 26.25 25.00 32.00 27.75 25.25 24.25 23.75 1.60 30 37.25 32.50 29.50 38.00 32.25 29.50 28.00 37.50 32.00 28.75 27.25 26.50 1.60 32 41.75 36.00 32.50 42.75 36.00 32.75 30.75 42.75 36.25 32.25 3025 29.00 1.60 34 46.00 39.50 35.50 47.75 40.00 36.00 33.50 48.00 40.50 35.75 33.25 31.75 1.60 36 50.25 43.00 38.50 52.75 44.00 39.25 36.50 53.50 44.75 39.25 3625 34.50 1.60 38 54.75 46.50 41.50 57.50 47.75 42.50 39.25 58.75 49.00 42.75 39.25 37.00 1.60 40 59.00 50.00 44.50 62.50 51.75 45.75 42.00 64.00 53.25 46.25 4225 39.75 llncludes all costs of obtaining cattle. 2 After marketing costs are deducted. TOP PRICES THAT AN AVERAGE CATTLE FEEDER CAN PAY PER HUNDREDWEIGHT FOR CHOICE GRADE STEERS AND STILL BREAK EVEN1 Price Selling Price When Cattle Are Price When Cattle Are Of Price For Sold At 900 lbs. And Sold At 1,000 lbs. And Price When Cattle Are Sold At Corn 100 lbs. Purchase Weight Is Purchase Weight Is 1,100 lbs. and Purchase Weight Is Per Of Live 400 500 600 400 500 600 700 400 500 600 700 800 Bushel Cattle" lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. lbs. $1.00 $28 $33.75 $29.25 $26.75 $33.75 $29.25 $26.75 $25.50 $33.50 $29.00 $26.25 $25.00 $24.50 1.00 30 38.00 32.75 29.75 38.75 33.25 30.00 28.25 38.75 33.25 30.00 28.00 27.00 1.00 32 42.50 36.25 32.75 43.50. 37.00 33.25 31.00 44.00 37.50 33.50 31.00 29.75 1.00 34 46.75 39.75 35.75 48.50 41.00 36.50 33.75 49.50 41.75 37.00 34.25 32.50 1.00 36 51.00 43.25 38.75 53.50 45.00 39.75 36.50 54.75 46.00 40.75 37.25 35.00 1.00 38 55.50 46.75 41.75 58.25 48.75 43.00 39.25 60.00 50.25 44.25 40.25 37.75 1.00 40 59.75 50.25 44.75 63.25 52.75 46.25 42.00 65.50 54.50 47.75 43.50 40.50 1.10 28 32.50 28.50 26.25 32.25 28.25 26.00 25.00 31.50 27.50 25.25 24.25 23.75 1.10 30 37.00 32.00 29.25 37.25 32.00 29.25 27.75 36.75 31.75 29.00 27.25 26.50 1.10 32 41.25 35.50 32.25 42.00 36.00 32.50 30.50 42.25 36.00 32.50 30.25 29.25 1.10 34 45.75 39.00 35.00 47.00 39.75 35.75 33.25 47.50 40.25 36.00 33.50 31.75 1.10 36 50.25 42.50 38.00 52.00 43.50 39.00 36.00 52.75 44.50 39.75 36.50 34.50 1.10 38 54.50 46.00 41.00 56.75 47..50 -42.25 38.75 58.25 48.75_ _43.25~ 39.50 37.25 J..To- 40 59.00 49.50 43.75 ----61.75 51.25- 45.50 · 4i.5o --63~50-- 53.00 46.75 42.75 39.75 1.20 28 31.50 27.75 25.75 30.75 27.25 25.25 24.50 29.50 26.00 24.25 23.50 23.25 1.20 30 35.75 31.25 28.75 35.75 31.00 28.50 27.25 35.00 30.25 28.00 26.50 26.00 1.20 32 40.25 34.75 31.50 40.50 35.00 31.75 30.00 40.25 34.50 31.50 29.50 28.75 1.20 34 44.50 38.25 34.50 45.50 38.75 35.00 32.75 45.50 . 38.75 35.00 32.75 31.25 1.20 36 48.75 41.75 37.50 50.50 42.50 38.25 35.50 51.00 43.00 38.75 35.75 34.00 1.20 38 53.25 45.25 40.25 55.25 4t6.50 41.50 38.25 56.25 47.25 42.25 38.75 36.75 1.20 40 57.50 48.75 43.25 60.25 50.25 44.75 41.00 61.50 51.50 45.75 42.00 39.25 1.30 28 30.25 27.00 25.25 29.25 26.00 24.50 23.75 27.75 24.75 23.25 22.75 22.75 1.30 30 34.50 30.50 28.25 34.25 30.00 27.75 26.50 33.00 29.00 26.75 25.75 25.50 1.30 32 39.00 34.00 31.00 39.00 33.75 31.00 29.50 38.50 33.25 30.25 28.75 28.25 1.30 34 43.25 37.50 34.00 44.00 37.75 34.25 32.25 43.75 37.50 34.00 32.00 30.75 1.30 36 47.50 41.00 37.00 49.00 41.75 37.50 35.00 49.00 41.75 37.50 35.00 33.50 1.30 38 52.00 44.50 39.75 53.75 45.50 40.75 38.00 54.50 46.00 41.00 38.00 36.25 1.30 40 56.25 58.00 42.75 58.75 49.50 44.00 40.75 59.75 50.25 44.75 41.25 38.75 1.40 28 29.00 26.25 24.75 27.75 25.00 23.75 23.25 25.75 23.25 22.25 22.00 22.00 1.40 ·---30--- 33:25 ~ -----zT.75 32.75. 29.00 27.00 zo:oo- ---n:mr- -zT.50 25.75 25.00 24.75 1.40 32 37.75 33.25 30.50 37.50 32.75 30.25 29.00 36.50 31.75 29.25 28.00 27.50 1.40 34 42.00 36.75 33.50 42.50 36.75 33.50 31.75 41.75 36.00 33.00 31.25 30.00 1.40 36 46.25 40.25 36.50 47.50 40.75 36.75 34.50 47.00 40.25 36.50 34.25 32.75 1.40 38 50.75 43.75 38.25 52.25 44.50 40.00 37.50 52.50 44.50 40.00 37.25 35.50 1.40 40 55.00 57.25 42.25 57.25 48.50 43.25 40.25 57.75 48.75 43.75 40.50 38.00 1.50 28 28.00 25.50 24.25 26.25 24.00 23.00 22.75 23.75 2L75 21.25 21.25 21.50 1.50 30 32.25 29.00 27.25 31.25 28.00 26.25 25.50 29.00 26.00 24.75 24.25 24.25 1.50 32 36.75 32.50 30.00 36.00 31.75 29.50 28.50 34.50 30.25 28.25 27.25 2];00 1.50 34 41.00 36.00 33.00 41.00 35.75 32.75 31.25 39.75 34.50 32.00 30.50 29.50 1.50 36 45.25 39.50 36.00 46.00 39.75 36.00 34.00 45.00 38.75 35.50 33.50 32.25 1.50 38 49.75 43.00 38.75 50.75 43.50 39.25 37.00 50.50 43.00 39.00 36.50 35.00 1.50 40 54.00 56.50 41.75 55.75 47.50 42.50 39.75 55.75 47.25 42.75 39.75 32.50 1.60 28 26.75 24.75 23.75 24.75 22.75 22.25 22.00 22.00 20.50 20.25 20.50 21.00 1.60 30 31.00 28.25 26.75 29.75 26.75 25.50 24.75 27.25 24.75 23.75 23.50 23.75 1.60 32 35.50 31.75 29.50 34.50 30.50 28.75 27.75 32.75 29.00 27.25 26.50 26.50 1.60 34 39.75 35.25 32.50 39.50 34.50 32.00 30.50 38.00 33.25 31.00 29.75 29.00 1.60 36 44.00 38.75 35.50 44.50 38.50 35.25 33.25 43.25 37.50 34.50 32.75 31.75 1.60 38 48.50 42.25 38.25 49.25 42.25 38.50 36.25 47.75 41.75 38.00 35.75 34.50 1.60 40 52.75 55.75 41.25 54.25 46.25 41.75 39.00 54.00 46.00 41.75 39.00 37.00 llncludes all costs of obtaining cattle. 2 After marketing costs are deducted. 

What to Pay for Feeder Steers

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What to Pay for Feeder Steers

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