Figuring the “Marginal Value” on Calf Weights

[wpcol_1half id="" class="" style=""] It is important that cattle producers know the cost of adding gain to cattle and the marginal value of that gain. These costs and values are often similar from year to year. But when the grain market or the finished cattle market changes, the cost and value of gain will change. When grain prices are low, feedlot cost of gain is low and light cattle have greater value, making the marginal value of calf gain on pasture relatively low.  When grain prices are high, feedlot cost of gain is high and heavy cattle are valued more since they need less grain to finish in the feedlot.  This means that the marginal value of gain on pasture is  greater than when grain is cheap. [/wpcol_1half] [wpcol_1half_end id="" class="" style=""] What is Marginal Value? According to the Business Dictionary:  It is the incremental value that is achieved through additional output. Figuring marginal value tells us if the investments we make in supplements, pasture management, pasture weaning and backgrounding are resulting in better prices for the calves we're selling [/wpcol_1half_end]It is a good practice to calculate these values each year to see what they are and how profitable current management will be or if management needs to be changed to keep in step with the markets.  Here's how. The marginal value of calf weight gain is based on the price slide between weight breaks of cattle being sold. The marginal value of calf gain is a

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3 thoughts on “Figuring the “Marginal Value” on Calf Weights

  1. So the $107.50/cwt is telling me that heavier calves are bringing a tad bit more money than the lower weight calves in this example?

    1. The $107.50/cwt. is the value of putting another 100 lbs. gain on the lower weight cattle.

      Reporting prices on a cwt. versus head basis is what makes it confusing.

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