Cost of hay verses price of beef

[forageconverter]

How many pounds of 'good quality' hay does it take to make a pound of beef?

Since a cattle producer is more or less trying to turn feed into beef, and then sale that beef at a profit, doesn't the price of beef more or less dictate what he can pay for the feed?

I understand the high costs of putting up hay. But when the hay becomes more valuable than the beef it can be turned into, what is the point of turning the hay into beef?

For that matter, what is the point of putting up the hay in the first place if you are just going to convert the hay to something less valuable? Why in the world would a cattle producer buy hay that is more valuable as 'hay' than it is once it has been converted to beef?

If one was in a down market, I could see feeding high price hay to hold off liquidating until the market turned. But other than that scenario, I'm having a hard time penciling the high cost of hay verses the price of beef.

 

[dun]

How many pounds of 'good quality' hay does it take to make a pound of beef?

Since a cattle producer is more or less trying to turn feed into beef, and then sale that beef at a profit, doesn't the price of beef more or less dictate what he can pay for the feed?

I understand the high costs of putting up hay. But when the hay becomes more valuable than the beef it can be turned into, what is the point of turning the hay into beef?

For that matter, what is the point of putting up the hay in the first place if you are just going to convert the hay to something less valuable? Why in the world would a cattle producer buy hay that is more valuable as 'hay' than it is once it has been converted to beef?

If one was in a down market, I could see feeding high price hay to hold off liquidating until the market turned. But other than that scenario, I'm having a hard time penciling the high cost of hay verses the price of beef.

The 64 thousand dollar question. That is the reason that most people prefer to let the cows harvest the hay and try to have the cows mostly foraging for their grub. Hay is only for those few weeks/months that the forage isn;t available.
A cow will eat roughly, being generous, 3% ofher weight per day. A 1200 lb cow will eat 36 pounds a day or 1 1000 lb bale will last 27.7 days. At 35 bucks a bale that's 461 dollars a year in just hay.

dun

 

[hayray]

How many pounds of 'good quality' hay does it take to make a pound of beef?

.

I figure it cost me 22 tons of hay and or forage to produce 1 ton of retail beef product cut and wrapped. At the time I did my cost analysis I priced hay at $130/ ton, which is a real high estimate because for the most part I sell my hay for that price or higher, and then beef was valued at $9500/ton based on an average price of $4.75/lb. Anybody doing a little bit of searching should easily find hay for 60 to $80/ton.
What are your numbers you came up with?

 

[forageconverter]

A 1200 lb cow will eat 36 pounds a day or 1 1000 lb bale will last 27.7 days. At 35 bucks a bale that's 461 dollars a year in just hay.

dun

So if a 1200 lb cow weans off a 600 lb calf every 12 months, and the cow existed totally on hay, it would take about 22 lbs of hay to make a pound of beef.

At $35 for a 1000 lb bale, that's $0.035 for each pound of hay, which would make each pound of beef cost $0.77. If the calf sold for $1.20 per lb, that would leave a profit of $0.43 per lb of beef produced.

Lately, though, finding a 1000 lb bale for $70 is a bargain, and that's before paying a ridiculously high price for trucking to have it delivered.

At $70 for a 1000 lb bale, that $0.07 for each pound of hay, and that makes each pound of beef cost $1.54 to produce. If the calf sells for $1.20 per lb, that would leave a loss of $0.34 per lb of beef produced.

I figure at $1.20 per lb for beef, the breakeven for hay, including delivery, is about $109 a ton. This figures out to about $54.50 for a 1000 lb bale delivered.

I'm just failing to see how a hay seller can expect to get a price for his hay that is higher than the breakeven of converting that hay to beef.

 

[forageconverter]

I figure it cost me 22 tons of hay and or forage to produce 1 ton of retail beef product cut and wrapped. At the time I did my cost analysis I priced hay at $130/ ton, which is a real high estimate because for the most part I sell my hay for that price or higher, and then beef was valued at $9500/ton based on an average price of $4.75/lb. Anybody doing a little bit of searching should easily find hay for 60 to $80/ton.
What are your numbers you came up with?

How much 'case ready' beef would be in a 600 lb calf?

Using a 600 lb calf, dressing out at 63%, than taking 50% of the hanging weight to get the actual meat in a case, that would leave me with 189 lb of beef at $4.75 a lb which comes out to be $897.75 for the 600 lb calf.

If the hay cost me $460 at Dun's price of $70 a ton, and using your price of beef $4.75 a lb, that leaves me with a profit of $437.75 per calf.

Using your hay price of $130 per ton would figure out to a hay cost of $854.10, which would leave me a profit of $43.65 per calf.

Of course this only takes in account the cost of the hay, and not the cost of actually making the beef 'case ready'.

 

[forageconverter]

I figure it cost me 22 tons of hay and or forage to produce 1 ton of retail beef product cut and wrapped. At the time I did my cost analysis I priced hay at $130/ ton, which is a real high estimate because for the most part I sell my hay for that price or higher, and then beef was valued at $9500/ton based on an average price of $4.75/lb. Anybody doing a little bit of searching should easily find hay for 60 to $80/ton.
What are your numbers you came up with?

How much 'case ready' beef would be in a 600 lb calf?

Using a 600 lb calf, dressing out at 63%, than taking 50% of the hanging weight to get the actual meat in a case, that would leave me with 189 lb of beef at $4.75 a lb which comes out to be $897.75 for the 600 lb calf.

If the hay cost me $460 at Dun's price of $70 a ton, and using your price of beef $4.75 a lb, that leaves me with a profit of $437.75 per calf.

Using your hay price of $130 per ton would figure out to a hay cost of $854.10, which would leave me a profit of $43.65 per calf.

Of course this only takes in account the cost of the hay, and not the cost of actually making the beef 'case ready'.

 

[AngusLimoX]

A 1200 lb cow will eat 36 pounds a day or 1 1000 lb bale will last 27.7 days. At 35 bucks a bale that's 461 dollars a year in just hay.

I'm just failing to see how a hay seller can expect to get a price for his hay that is higher than the breakeven of converting that hay to beef.

Hay seller doesn't give a darn about price of beef - just his costs and what the hay market is bearing. The hay market includes horsies and dairy.

I know it is another argument , but I find it funny so many people depend on buying their hay. Way too risky for ole ALX. :lol:

 

[MarshallForage]

Hay seller doesn't give a darn about price of beef - just his costs and what the hay market is bearing. The hay market includes horsies and dairy.

Pretty close to the truth there, ALX. Honestly, and speaking as a decent-sized hay producer, I don't expect beef farmers to make a profit buying my hay and shipping it to Texas. I price my hay very reasonably to drought areas for it's quality but shipping more than doubles the end cost to the producer. If I relied on shipping hay to wherever the next drought area and 'price-gouging' opportunity happened to be, I would have been out of business years ago. The real money in our operation is in the dairy and horse markets. These markets demand a premium product and are willing to pay for it. Anybody making only beef-quality hay and selling it to beef producers is in for either very thin profits or will being labelled a 'gouger.'

Purchasing hay and paying to ship it across the country to feed beef animals should only be a last-resort action. Too many years of drought and very high hay prices and you have to think seriously about why you have cattle at all? If the cattle side of my operation could buy forage from the hay side at dairy and horse-type prices every year and still turn a profit, you wouldn't be able to swing a stick around here without hitting a cow.

I guess my answer to the OP about high-priced hay is it really isn't worth it. High-priced hay just enables you to keep your herd until a profitable year rolls around.

Jason
http://www.marshallforage.com

 

[hayray]

I figure it cost me 22 tons of hay and or forage to produce 1 ton of retail beef product cut and wrapped. At the time I did my cost analysis I priced hay at $130/ ton, which is a real high estimate because for the most part I sell my hay for that price or higher, and then beef was valued at $9500/ton based on an average price of $4.75/lb. Anybody doing a little bit of searching should easily find hay for 60 to $80/ton.
What are your numbers you came up with?

How much 'case ready' beef would be in a 600 lb calf?


Using a 600 lb calf, dressing out at 63%, than taking 50% of the hanging weight to get the actual meat in a case, that would leave me with 189 lb of beef at $4.75 a lb which comes out to be $897.75 for the 600 lb calf.

If the hay cost me $460 at Dun's price of $70 a ton, and using your price of beef $4.75 a lb, that leaves me with a profit of $437.75 per calf.

Using your hay price of $130 per ton would figure out to a hay cost of $854.10, which would leave me a profit of $43.65 per calf.

Of course this only takes in account the cost of the hay, and not the cost of actually making the beef 'case ready'.

I would then figure it on pounds of calf weaned instead of case ready retail product. I would use Dun's figures for hay cost for a cow for the year to give you the cost for the weaned calf.

 

[hayray]

Hay seller doesn't give a darn about price of beef - just his costs and what the hay market is bearing. The hay market includes horsies and dairy.

Pretty close to the truth there, ALX. Honestly, and speaking as a decent-sized hay producer, I don't expect beef farmers to make a profit buying my hay and shipping it to Texas. I price my hay very reasonably to drought areas for it's quality but shipping more than doubles the end cost to the producer. If I relied on shipping hay to wherever the next drought area and 'price-gouging' opportunity happened to be, I would have been out of business years ago. The real money in our operation is in the dairy and horse markets. These markets demand a premium product and are willing to pay for it. Anybody making only beef-quality hay and selling it to beef producers is in for either very thin profits or will being labelled a 'gouger.'

Purchasing hay and paying to ship it across the country to feed beef animals should only be a last-resort action. Too many years of drought and very high hay prices and you have to think seriously about why you have cattle at all? If the cattle side of my operation could buy forage from the hay side at dairy and horse-type prices every year and still turn a profit, you wouldn't be able to swing a stick around here without hitting a cow.

I guess my answer to the OP about high-priced hay is it really isn't worth it. High-priced hay just enables you to keep your herd until a profitable year rolls around.

Jason
http://www.marshallforage.com

Well stated, but I think here in my region of the country you can almost always buy beef quality hay cheaper than you can produce your own, of course we always have a lot of surplus hay in my state and rarely have droughts, and our droughts are never real droughts like the West and South. And like stated before, I price my hay to the horse markets, I always have a hard time priceing hay to a beef person because it is just way too expensive for them, I tell them to look at the hay sales.