Beef Management Tips:
The Cost of Sick Feedlot Cattle
Livestock Update, July 1999
Bill R. McKinnon, Extension Animal Scientist, Livestock Marketing, Virginia Tech
The economic costs of sick cattle in the feedlot continues to heap added costs upon the beef industry. The costs for visits to the hospital pen pulls money out of the production chain that results in lower prices for feeder cattle. The cattle feeder must adjust the bid for feeder cattle downward to cover the costs from sick cattle.
Cattle that require treatment in the feedlot are typically less profitable than healthy cattle. A recent analysis of the Virginia ROP steers shipped last September found that cattle requiring treatment made an average of $29.54 less than the nontreated cattle. Past studies have indicated that this difference may average as wide as $60 to $75 per head. Typically the actual cost of medicine and physically treating the cattle is less than half the reason for the profit difference. The cost of treatment for the September, 1998 ROP steers averaged $10.47 per head for the sick cattle with a range of $3.37 to $64.62. The major loss of profit for the treated cattle is the reduced rate of gain and efficiency. On the average, cattle requiring treatment just seem to never catch up with their penmates.
|The Cost of Sick vs. Healthy Cattle|
1998 Va. ROP Steers
|Treated Cattle||Health Cattle|
|Adjusted net income||$79.02||$49.48|
|Average daily gain||2.95||3.14|
|Cost of gain/cwt.||$51.20||$42.85|
The information above illustrates why the cattle feeding industry is interested in obtaining groups of cattle with reduced sick pulls. As the industry becomes more informed as to the actual total costs of sick cattle we can expect to see price differentials grow for cattle with reduced health risk. The major cause of treatment pulls is respiratory disease. Though there is no "silver bullet" for preventing respiratory disease, producers can alleviate the problem by reducing the stress involved in the transition from the cow/calf herd to the feedlot and implementing an effective vaccination program. Over time we should expect buyers to demand improved presale vaccination and/or backgrounding programs. The alternative may be substantially lower bids for the traditionally sold feeder calf with little or no health history.