I believe cutting is best. Here's some info from Beef Magazine:
"The KSU study looked at seven-weight bulls, half of them knife-cut and half banded. Animals were on feed 28 days after castration. Research looked at dry matter intake (DMI), average daily gain (ADG) and whether the local anesthetic made a performance difference. Each animal's performance was monitored daily and summarized weekly.
In the first week, banded calves had higher DMI and ADG than knife-cut calves. But after the first week, knife-cut calves began eating and gaining more, and it continued from 14-21 days. In fact, banded calves saw decreased performance through day 28.
"There's early pain and stress with the knife cut," Thomson says. "But the pain associated with banding is much more evident at 14-21 days. At 21 days, only 40% of the scrotum had fallen off.
"Overall, the knife-cut calves had DMI of 22 lbs./day, compared to 20 lbs. for banded calves. Knife-cut calves had ADG of 2.6 lbs., compared to 1.7 lbs. for banded calves."
Thus, the added profit of knife-cut calves is about $26/head relative to banded calves. Thomson adds the research showed no performance benefit in calves receiving the local anesthetic, regardless of castration method.
"We need to expand this overall study to where cattle are monitored all the way through closeout," he says.""
full article:
http://beefmagazine.com/mag/beef_stocke ... index.html
I have other reports that agree.