Cattle and hog feeding margin calculator
A per head closeout: revenue minus the feeder, the feed and everything else.
Livestock feeding margin
Livestock feeding margin
Per-head closeout - enter your own buy, feed, and sell numbers.
Prefilled with current-market estimates - replace each field with your own for an accurate closeout.
Revenue $3,262.50 − feeder $2,650.00 − feed $231.00 − other $300.00
What does this pen make per head at current feeder, corn and fed prices?
A feeding closeout is four numbers: what the animal sells for, what it cost to buy, what it ate, and everything else. The margin is what is left, and in a tight feeder market it is frequently close to zero or below it.
The arithmetic matters most when feeders are expensive. High feeder cattle prices do not automatically pass through to a profitable closeout, because the fed price and the cost of gain are set separately by different markets.
Worked example
- Species
- Cattle
- Feeder cost
- $2,650 per head
- Sale price
- $225 per cwt
- Finish weight
- 1,450 lb
- Corn fed
- 55 bu per head
- Corn price
- $4.20 per bushel
- Other costs
- $300 per head
- Revenue: $225 × (1,450 ÷ 100) = $3,262.50 per head
- Feed: 55 bu × $4.20 = $231.00 per head
- Margin: $3,262.50 − $2,650.00 − $231.00 − $300.00 = $81.50
Eighty one dollars on a $2,650 feeder is a thin closeout, and it is thin because of what the animal cost to buy rather than what it cost to feed. Corn is only $231 of a roughly $3,180 total cost.
How it works
Sale revenue is a price per hundredweight against a finish weight, so both have to be right. A hundred pound difference in finish weight at $225 is $225 a head, which on this closeout is nearly three times the margin.
Feed is entered as bushels of corn per head times the corn price, which is a simplification. A real ration includes silage, distillers grains, supplement and hay, and a feedlot would work in cost of gain per pound rather than bushels of corn. Entering the corn equivalent of the whole ration keeps the arithmetic usable without pretending to model a ration.
Other costs is where yardage, interest, health, death loss and transport go. Death loss in particular is a percentage rather than a fee, and on an expensive feeder it is a large number: two per cent on a $2,650 animal is $53 a head spread across the ones that live.
The feeder cost dominates. In the worked example it is 83% of total cost, which is why a feeding margin tracks the feeder market more closely than it tracks corn, and why cheap corn does not rescue an expensive feeder.
margin = (sale price $/cwt × finish weight ÷ 100) − feeder cost − (corn bu × corn price) − other costsThe same pen at different fed cattle prices
Feeder at $2,650, 1,450 lb finish, 55 bushels of corn at $4.20, $300 other. Every $5 per cwt is worth about $72 a head.
| Sale price | Revenue | Total cost | Margin per head |
|---|---|---|---|
| $210/cwt | $3,045.00 | $3,181.00 | −$136.00 |
| $215/cwt | $3,117.50 | $3,181.00 | −$63.50 |
| $220/cwt | $3,190.00 | $3,181.00 | $9.00 |
| $225/cwt | $3,262.50 | $3,181.00 | $81.50 |
| $230/cwt | $3,335.00 | $3,181.00 | $154.00 |
Common questions
Why is the corn price entered per bushel rather than as cost of gain?
Because corn is the price most operations track daily and it is the input that moves. A feedlot working in cost of gain per pound can enter the corn equivalent of the full ration instead, which gives the same total feed cost.
Where does death loss go?
Into other costs, as a dollar figure per head rather than a percentage. On an expensive feeder it is worth calculating rather than estimating: the feeder cost times the loss rate, spread across the animals that finish.
Why can feeder cattle be expensive and the closeout still be negative?
Because the two prices are set by different markets. Feeder prices reflect scarce supply of animals; fed prices reflect what packers will pay, which depends on their own margins and on beef demand. A feeder can be bid up beyond what the fed market will return.
Does this work for hogs?
Yes. Switching species loads hog defaults: a lighter feeder cost, a lower finish weight and far less corn per head, because the production cycle is months rather than years. The formula is identical.
Related
This tool is designed to help plan your overall portfolio and is not trading advice. You should carefully consider your portfolio, risk tolerance, and other metrics; Consult with your broker prior to making trading decisions