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CATTIE FEEDING
and its Place in Twelfth District Agriculture

Supplement to

MONTHLY REVIEW
JANUARY, 1953

F E D E R A L




R E S E R V E

B A N K

O F

S A N

F R A N C I S C O




• • CONTENTS

■ •
Page

IN TR O D U C T IO N .................................................................. 3

CATTLE FEEDING: WHY, WHERE, AND H O W ................... 3

THE FEEDLOT, THE RANCH, AND THE F A R M ................... 11

PRICES, MARGINS, AND RETURNS...................................... 17

Prepared by Justinian Caire, Agricultural Economist,
under the direction and review of officers
of the Research Department.

I h e western range has long been a major source of cattle for the nation. In Us early
years, still firmly established in story and legend, cattle moved eastward from the ranges
of the Great Plains directly to slaughter. Today, cattle slaughter in the Far West has
assumed significant proportions, and cattle feeding, that is, concentrated supplemental
feeding after cattle leave the range, is an important part of the cattle industry.
This article reviews the cattle feeding industry with particular reference to the
Twelfth District: the basis for the industry, its processes, its relation to and influence
upon District agriculture, and some of the factors affecting prices and returns. The Corn
Belt is still the nation’s most important cattle feeding area, but District cattle feeding
has been developing rapidly in recent years, supported by an expanding demand for beef
that has resulted from an increasing population and rising income in the West.
Several aspects of District cattle feeding justify a regional discussion, not the least
of which is its recent expansion. The feedlot may appear prosaic indeed alongside the
more glamorous source of feeder cattle
the cattle ranch
but its importance to west­
ern agriculture and to the western economy is perhaps not yet fully appreciated.
—

—

In contrast to many other areas, cattle feeding in the Twelfth District is marked
by considerable diversity of both feeding materials and feeding enterprises. Various
feeding combinations, including cotton and sugar beet by-products as well as hay and
grain, are utilized. Most cattle are fed on commercial feedlots, but during the past ten
years or so, an increasing number of farmers are finishing stock for slaughter. Livestock
feeding as a part of farm operations may bring real advantages if it means a better bal­
anced and more diversified farm plan, but it also presents problems, particularly to the
inexperienced farmer feeder. Since profit prospects for the livestock industry have been
favorable over most of the postwar period, an insufficient knowledge of livestock, nutri­
tion, and markets on the part of less experienced feeders has not been as serious as it
may be under other conditions.







INTRODUCTION
n a t io n

's

rapid expansion of a m ajor agricultural industry—cattle
feeding.
The number of beef cattle in the Twelfth District, how­
ever, has not expanded sufficiently to fill the growing re­
quirements for both slaughter and feeder stock. During
the past quarter century, the number of beef cattle2 in the
seven western states increased only 37 percent while the
human population more than doubled. The combination of
more animals, a greater beef output per animal unit, and
more pounds of beef produced per acre has not been suffi­
cient to balance the growing western demand for meat.
W hereas the District was formerly a region of surplus
cattle production, it now imports cattle from other sections
of the country despite the fact that it is a large primary
cattle breeding area. California and W ashington are re­
sponsible for the D istrict’s net importation of cattle. In
the other District states, the net m arketings3 of cattle ex­
ceed the number slaughtered. However, the combined
surplus of marketings over slaughter from District states
of Idaho, Utah, Nevada, and Arizona would be insuffi­
cient to equalize the deficit of California alone, if all their
sales were to this one state.

diet is influenced chiefly by the kind of food

A available to its people and by the level and distribu­
tion of its citizens’ incomes. Preferences in food also influ­
ence diet habits providing there are adequate supplies and
sufficient income.
Meat, when available in sufficient quantity, is one of the
principal components of the human diet. Being readily
digestible and nutritious, as well as pleasing to the taste,
it is highly prized as food in all seasons and in nearly all
climates. The per capita consumption of meat is highest
in countries which possess a large grazing and cropland
resource in relation to population.
W hile the United States ranks fifth in per capita con­
sumption of meat, its level of consumption is much below
that of the four leading countries— Uruguay, New Zea­
land, Argentina, and Australia. It has an extensive land
area better suited to grazing than to cultivation which
enables it to maintain a large livestock resource. Com­
bined with an abundance of highly productive farm land,
this resource yields a relatively high per capita meat sup­
ply. Since the ratio of meat production to population is
not so great in the United States as in some of the other
leading meat producing nations, the level of consumers’
disposable income has a more direct bearing on per capita
consumption in this country than it does in nations of an
essentially pastoral economy. This has been highlighted
during the past fifteen years when, with a rise in the level
of disposable income, the demand for meat likewise ex­
panded rapidly.
In addition to the rise in incomes, improved standards
of diet1 and an increasing population have had a signifi­
cant influence on the amount, kind, and quality of meat
produced. In the Twelfth District this has resulted in the

XA broader acquaintance w ith n u tritio n al research has revealed the im ­
portance of protein to th e diet. M eat is recognized as a rich source of
protein as well as of o th e r essential n u trien ts including vitam ins (T h ia ­
min Bi, Riboflavin B 2 , and N iacin) ; iron and copper, w hich are basic
for the form ation of hem oglobin in the red blood corpuscles ; and phos­
phorous, the key to sound bones and teeth.
2 T he increase in to tal beef cattle num bers in the T w elfth D istric t as a
whole has lagged behind the expansion in o th er regions. W hereas betw een
1925 and 1952 the D istrict increase am ounted to 37 percent, beef cattle
num bers in the Corn B elt rose 71 percent and in the sou th eastern states
102 percent. T he num ber of cattle fattened by supplem ental feeding has
increased m ore rapidly in the D istric t th an in th e nation, how ever.
(S ee page 8.)
3 N e t m arketings of cattle by th e producers of any state are based upon
the recorded num bers slaughtered under inspection in the state, less nu m ­
bers b rought in for im m ediate slaughter, to w hich difference is added the
num bers shipped out of the state.

CATTLE FEEDING: WHY, WHERE, AND HOW
population brought about a growing demand for better
meat. The combination of these two factors was princi­
pally responsible for the fundamental change which has
occurred in the character of American beef production. A
much smaller proportion of the beef served on the nation’s
dinner table now comes to slaughter directly off grass.
The western range serves essentially as a producing area
of “feeder” cattle, that is, cattle which require further con­
ditioning in order to conform to the higher diet standards
of the American consuming public.

By trail and then by rail, the nation’s supply of beef
originally moved from the areas of natural grass directly
to the centers of slaughter. The westward extension of
the rail head following the Civil W ar tapped the vast
herds roaming the Texas breeding grounds. H erds of
four- to five-year-old bullocks were trailed from this
natural producing region up to the virgin pastures of
Oklahoma and Kansas where they were fattened during
the summer and then forwarded to slaughter centers
farther east. Large herds were later trailed northward for
fattening on the grass plains of W yoming and M ontana
and the Dakota prairies. The profit to be made by im­
proving Texas steers on Illinois corn was soon discovered
by midwest farmers, resulting in the development of an
extensive cattle traffic between the southern ranges and
these northern feeding areas.

Why Cattle Feeding
Most of the beef cattle raised on the range go through
a period of more or less concentrated feeding prior to
slaughter. This supplemental feeding of livestock serves
a multiplicity of purposes in the agricultural economy of
the nation. The chief reasons for feeding of beef cattle are
(a ) to minimize the seasonal aspect of production, (b)
to convert crops into a more desirable food, (c) to im­
prove the palatability of the meat, (d ) to implement the

In the closing decades of the last century, however, the
extensive regions of good fattening range gave way to
westward farm expansion. Moreover, in the early decades
of the new century an expanding urban and industrial




3

Im proving meat qualify

diversification of farm production, and (e) to utilize by­
product and locally grown feeds.

F or meat to be palatable and tender, a certain amount
of fat over and through the tissue is required. Cattle re­
quire a source of feed beyond that necessary to maintain
growth in order to produce a carcass in which the fat is
adequately distributed. Fattening increases yield and, to a
certain extent, the relation of more desirable cuts to the
less desirable portions. It also improves the storage quali­
ties of the carcass and decreases the moisture loss in
cooking.

Balancing seasonal supply
with dem and

In the western range area, the yearly production of beef
cattle is largely seasonal in character. W here the ranching
unit is able to limit access of bulls to the breeding herd at
a specific season, calving is regulated so as to have the off­
spring born when pastures are green and m other cows
can supply a maximum flow of milk. This controlled
breeding is conducive to the production of a more uniform
and higher quality calf crop. Even when the physical as­
pects of the ranching unit are such as to require that bulls
be left with the herd throughout the year, calving is
largely seasonal. Cattle are more prolific when range
grasses are green and animals are in vigorous health. The
resulting seasonal characteristics of calf production vary
within certain limits over the range area, depending upon
climatic, vegetative, and topographical conditions. Never­
theless, the m ajor portion of the western calf crop arrives
during the spring and early summer.

Many forage plants at certain stages of growth are
nutritious enough to produce an acceptable degree of
finish. As the nutriments supplied by natural pasture are
extremely variable in the plant life cycle, however, so also
is the finish achieved by animals grazing thereon. Beef
animals feeding on natural forage approach their m axi­
mum conversion of feed to fat as grasses approach
maturity. After plants have m atured, a decline in their
nutritive value occurs. It is at the optimum point of range
feed value that “grass” cattle reach their best slaughter
condition. They are then either sold for direct slaughter as
“grass fat,” if of sufficient quality, or further finished on
a concentrated feed ration. Since the supply of grass-fat
slaughter cattle is as seasonal as the grasses upon which
they are fattened, a m ajor portion of the animals required
to produce a year-long supply of beef must be brought
to slaughter condition in the feedlots, cornfields, and
irrigated pastures of the nation.

The demand for beef at the nation’s meat counter, on
the other hand, is relatively constant. P art of the year­
long beef demand is satisfied by cattle fattened on sea­
sonal forage— animals which require no further finishing
for slaughter. However, the ranges which grow natural
grasses containing sufficient nutrim ent to fatten beef cattle
satisfactorily are limited, highly seasonal, and extremely
variable in grass production. Meat, being perishable, can­
not be adequately stockpiled during times of plentiful
grass, nor are storage facilities adequate for maintaining
more than a few weeks’ supply. Feeding operations offset
the annual peaks and troughs of both cattle and forage
production and make available a uniform supply of beef
of acceptable quality throughout the year.

Toward farm diversification

The experimentation and analyses resulting from an
aroused interest in the conservation of agricultural re­
sources have highlighted the functional position of live­
stock in the maintenance of farm fertility. Crop rotation
and better cultural practices have also been recognized as
im portant elements in soil conservation. The ideal plan
for long-time maintenance of farm productivity, however,
requires proper crop rotation coupled with intelligent cul­
tural practices, and both of these integrated with the use
of livestock. Equilibrium of crop production is based on
the rotation of small grains or hay, then cultivated or
tilled crops—cotton, sugar beets, corn, potatoes, beans—
and finally the growing of grasses or legumes. Livestock
produces the fertilizer which replaces those ingredients
in the soil which the growing of crops has removed and
serves as a means of converting farm crops and by-prod­
ucts into a consumer commodity.

From foo d to better food

Livestock has long served as a means of converting
crops into foods more desirable to man. In countries
where land resources are severely limited in relation to
population, it has been necessary to devote farming ef­
forts almost entirely to the growing of grain for direct
human consumption. Nations which are favored with ex­
tensive areas of natural forage, ample tillable land, and
water resources, however, are able to divert a large por­
tion of their crop output to the production of meat—per­
haps a less efficient usage.1 But where the relation of the
land resource to population is conducive to the production
of livestock for food, man has clearly indicated his prefer­
ence for meat.

By-product feeds

The fattening of livestock also serves as a practical
means of marketing some m ajor agricultural by-products.
This is particularly im portant to Twelfth District agricul­
ture. The meal feeds— such as residue from oils processed
from cottonseed—are rich sources of protein feed. The
meals are widely used as a basic part of the concentrated
ration in drylot fattening as well as for supplemental

1 A pproxim ately 13 pounds of live w eight gain are produced per 100 pounds
of corn fed to cattle. T his is eq u iv alen t to ab o u t 8.5 pounds of edible
beef, w hich fu rn ish approxim ately 6 d ay s’ supply of energy and protein.
O n th e o th e r han d , 100 pounds of corn consum ed as corn m eal w ould
fu rn ish enough energy and p ro tein com bined for the average person for
ab o u t 55 days. T h e average person requires ab o u t 2600 calories of energy
and 0.15 pounds of p ro tein per day. See R. D. Jen nings, Consumption of
Feed by Livestock, U n ite d S tates D e p artm e n t of A gricu ltu re, B ureau of
A g ric u ltu ral E conom ics, C ircular 836.




4

Another form of ranch operation is one in which all
ages of cattle are handled. The herd is composed of breed­
ing cows, replacement heifers, and growing cattle to be
sold as stockers or feeders. In some areas where pastures
and feed conditions permit, the offspring may be retained
to be fattened on grass by the producer. Unless the natural
features of the operating unit dictate specialization in
either producing calves or grazing steers, the greater flex­
ibility of the general purpose ranch is frequently pre­
ferred as a safer long-range pattern of operation since
adjustments are more easily made to changes in feed
supply and demand and price conditions.

feeding on the range. The growing of sugar beets offers
another valuable source of livestock feed. The by-prod­
ucts alone of an average acre of sugar beets are said to
exceed in feeding value the entire product of an average
acre of corn.
These and numerous other by-products have become
more plentiful in the Twelfth District states during the
last twenty years. They are among the main sources of
protein and carbohydrate feeds used by the beef produc­
ing industry in the area. The feeding of cattle serves as an
efficient means of marketing these bulky products “on
the hoof.”

Source of cattle for Twelfth District feeders

Source of Feeder Cattle

The characteristics of feeder cattle production in the
Twelfth District are generally representative of the pat­
terns prevailing in the western range region. Both breed­
ing ranches and general purpose ranches are found in
all District states. The extensive areas in Federal and
state lands in the intermountain states of the District are
principally breeding ranges. Over three-quarters of the
land comprising the states of Arizona, Utah, Nevada,
Idaho, and eastern Oregon is composed of Federal land
of varying degrees of livestock productivity. The climate
and vegetation make these areas more suitable for produc­
ing calves than for growing or fattening beef. The pro­
duction from these ranges finds a ready outlet in the graz­
ing areas of California’s foothill districts and irrigated
pastures, in the alfalfa fields of the Imperial and Salt
River Valleys, and in District feedlots. Breeding ranches
in the southern desert areas of the District usually oper­
ate as all-year ranges. In the colder climates of northern
Utah and Nevada, Idaho, and eastern Oregon and W ash­
ington, breeding herds are summer grazed but require
supplemental winter feeding.

The American meat industry depends heavily upon
the breeding and growing ranges of the vast area of the
western states for its production of feeder cattle. Because
of the diversity of the forage, climatic, and physical fea­
tures of the West, various methods of production are fol­
lowed. Producing ranches, however, are basically of three
ty p es: primary producers (breeding ranches, called cow
and calf ranges), steer ranches (growing or fattening
ranges), and operations which sell cattle of all ages and
combine both other types.
All western range lands supply forage to a greater or
lesser degree, though in most areas it is not of the right
quality to fatten cattle to a desirable slaughter condition.
Management, therefore, concentrates on the production
of cattle for others to fatten. These are marketed at wean­
ing time in the fall or are carried until the following spring
and sold as yearlings. On some breeding ranges, grazing
is on a year-round basis and little or no extra feed is nor­
mally required. Labor expenses and other costs of opera­
tion, as a consequence, are relatively low. In other areas
where winters are more severe, hay—frequently cut from
natural meadows—must be stored for winter feeding of
the breeding herd. While labor requirements are higher
in this type of operation, the generally larger percentage
of calves raised and their normally heavier weight tends
to offset the lower production costs on all-year ranges.
Good grass fattening ranges are more localized than
are breeding ranges. They are found principally in the
foothill areas of California and in the Flint Hills-Osage
district of Kansas and Oklahoma. On the fine natural
grass pastures of these two regions combined, over a mil­
lion head of cattle are brought to slaughter condition each
year. Due to seasonal differences, peak marketings of
California grass beef occur in late spring and early sum­
m er, while cattle from the Flint Hills-Osage country are
m arketed in late summer or fall.
/ Steer ranch management is a highly speculative opera­
tion. Stocker cattle, contracted for in the breeding areas,
are brought' onto pastures at the start of the grass season
with the objective of adding maximum gains over a rela­
tively short season. W hile profits are potentially high,
losses are frequently severe.




The m ajor portion of the District steer ranches (fat­
tening ranges) are located in California. The SacramentoSan Joaquin foothills, as well as those of the numerous
smaller valleys in the state, produce a wild pasture (prin­
cipally alfilaria and burr clover) relatively high in protein
content during the growing season and up to maturity.
To convert this grass into beef, thousands of feeder cat­
tle are shipped into California each fall from the breeding
ranges of the District and from other western states. In
normal years, many of these cattle reach a finish of suffi­
cient quality to be marketed for slaughter directly off
grass the following spring and summer.
Although California’s foothill pastures offer some of
the finest natural grass pastures in the W est, their pro­
duction is variable in quality and their efficient use ex­
tremely seasonal. In relation to the expanding District
demand for finished beef, these fattening ranges are also
limited in extent. The m ajor share of semi-finished cattle
from the ranges of the District and from some of the ad­
joining states as well are therefore conditioned for slaugh­
ter in District feedlots on their way to the consumer table.

5

Shipm ents into California

created for the output of their breeding herds. In view of
high freight costs and incidental shipping charges, loss
in weight through shrinkage, and losses incurred through
bruising or death—all factors reducing net returns—thd
existence of a market closer to the prim ary production
area represents an immeasurable gain to the District cat­
tle growers. Areas outside the District have also bene­
fited from District cattle feeding activity. Texas and M on­
tana, whose well-bred stock was relatively scarce on Dis­
trict meat counters in the past, are now a m ajor source of:
the type of replacements so desired by Pacific feeders.
The W est Coast buyer is a familiar personage at the
roundup in these breeding areas.

An indication of the expansion which has occurred in
the western demand for beef is the trend in the number of
cattle (excluding calves) slaughtered in California over
the past twenty-five years. Between 1925 and 1935, an
annual average of 770,000 head under all inspection serv­
ices was slaughtered in the state. During the latter half of
the 1930’s, yearly slaughter had risen to one million head,
and during the following ten years it exceeded this, on
the average, by a half million. In 1951 California became
the nation’s leading cattle slaughtering state when, under
all inspection services, 1,658,000 head were butchered.1
Some of the stock supplying this increased demand are
animals fattened outside of the state and shipped in for
immediate slaughter. Also, appreciable amounts of
dressed beef are received by rail and truck.

During the 1930’s Arizona was by far the largest west­
ern exporter of stocker and feeder cattle to California.
Subsequently, A rizona’s importance as an exporter of
replacement stock to the Pacific area was diminished by
a series of drought years which generally reduced A ri­
zona cattle numbers, and later on, by restrictions against
importation of Mexican cattle. Additional contributing
factors were a larger home market for slaughter cattle
and the increase in the shipment of finished animals.
Meanwhile, however, range cattle producers in Oregon,
Nevada, Idaho, Utah, Texas, and M ontana have each
greatly increased their westward feeder and stocker
marketings.

The inshipment of stocker and feeder cattle required
to maintain feeding operations is, however, of still greater
importance than shipments into California of animals for
immediate slaughter. From 1930 to 1944 a yearly aver­
age of about 400,000 head was received in the state for
restocking its grass ranges and its then relatively insig­
nificant pasture and feeding operations. Beginning in
1945, however, inshipments of cattle for fattening pur­
poses increased sharply. In 1951 over a million head of
such types were imported—either directly to feed yards
or to be conditioned for feeding on native or irrigated
pastures.
This larger need for replacement cattle to maintain the
District enterprise has redounded to the advantage of
range cattle producers. Pacific Coast feeder-cattle buyers
have had to reach farther and farther inland for the ani­
mals necessary to satisfy their demand. Form erly ship­
ment to eastern farm and finishing centers was the nor­
mal pattern of movement for the m ajor portion of the
western range output. Today, in contrast, buyers from
the W est Coast are strong competitors in all District
ranges, as well as far beyond. Not only has the resulting
competition reacted to the favor of the District cattle
grower, but an active m arket closer to home has been

Characteristics and Location of
Cattle Feeding Areas
The m ajor feeding areas of the nation depend for their
economic existence primarily upon the availability of suit­
able fattening feeds, access to a dependable supply of
feeder cattle, and a direct market outlet for the finished
product—fat cattle. Adequate facilities for livestock
transportation are also essential to the locale of livestock
fattening areas.
Generally speaking it is cheaper and easier to transport
cattle to feed than to haul the feed to cattle. It is essential
not only that feeds be available, but also that the conver­
sion of feed to beef be at least as profitable as are the
alternate market outlets for the foodstuff grown in an
area. Although some of the grains commonly used in fat­
tening cattle can be used directly as human food, many of
the feeds used in fattening cattle are not suitable for con­
sumption in such fashion. O ther types of livestock opera­
tions, however, offer competitive outlets for feedstuffs—
the fattening of hogs and lambs and the production of
poultry and dairy products.
As converters of feed into human food, beef cattle ^re
less efficient utilizers of feed than are some other types; of
livestock.1 The cattle feeder must therefore be able to con­
vert the feed, through his cattle, into enough pounds of
beef of such quality as to receive a price which justifies

1T h e 1951 to tal cattle slaughter, how ever, was n o t the largest for a single
year, having been exceeded in 1945, 1946, and 1947 as a resu lt of the
large m ark etin g s incident to early postw ar reductions of breeding herds.
F e e d e r a n d S t o c k e r I n s h i p m e n t s — C a l if o r n ia
(in thousand head)

1930-39
average
Principal states of origin
A rizona ....................................... . . 133
Id a h o ......................................... . .
K a n s a s .........................................
N e b r a s k a ....................................
N evada .......................................
N ew M exico ............................
O klahom a ..................................
O reg o n .......................................
U ta h

21
2
8
2
36
1
30

...........................................

20

W y om ing ..................................
O th e r .........................................

9
7

T o tal ....................................... . .

420

1940-49
average
120
18
34
8
40
8
80
65
4
66
75
23
4
15
12

1950
120
18
58
27
117
5
118
62
13
133
157
62
14
31
18

571

953

1951
156
41
56
42
96
6
106
89
30
106
256
42
6
20
23

1 For exam ple, a h undredw eight of corn or its equivalent fed to beef cattle
in the average fattening enterprise would produce about 17,000 calories and
0.8 pounds of protein. A n equal am ount of corn fed to hogs w ould produce
34.000 calories and 1.2 pounds of p ro te in ; to a com m ercial laying flock
of chickens, 12,600 calories and 2.4 pounds of protein. A com m ercial dairy
farm selling whole milk, m aking use of the equivalent feed, would produce
28.000 calories and 3.1 pounds of protein. See Jen n in g s, op. cit., T able 13.

1075

S o u rce : California Crop and L ivestock R ep o rtin g Service, “ C alifornia A n ­
n u a l L iv esto ck R ep o rt, Sum m ary for 1951.”




6

its competitive usage in this manner. It is essential, then,
that feeding operations be located where feed is abundant
and relatively cheap and where its cost is not encumbered
by excessive freight.
In order to be close to an adequate supply of feed, com­
mercial livestock feeding enterprises are located in farm ­
ing areas. The higher land values in such areas, however,
preclude their usage by large scale breeding herds. The
availability of replacement cattle is then of m ajor im­
portance to the feeding enterprise. Though some stock
may be available from farm herds located in the cropgrowing regions, the total output from this source is not
generally enough to insure the needs of large feeding en­
terprises. Also farmers who raise beef cattle as part of
their management program are likely to feed their own
animals for more profit than can be realized by disposing
of their animals as feeders. Consequently, commercial
cattle feeding areas must look for their replacement sup­
ply of livestock in regions where agriculture is better
suited to cattle raising than to crop growing.

some fattening areas to the slaughter market, it may be
more advantageous to truck the animals on the final ship­
ment to slaughter, even though “in-transit” privileges by
rail are thereby lost. This is true of most of the main fat­
tening areas of the Twelfth District.
Since the principal District markets are close to the
W est Coast, the distance from the feedyard to the slaugh­
ter market is in most cases a relatively small part of the
total travel involved between the cow range and the pack­
er’s hook. This operates to the advantage of the District
feeding industry, in general, even where no in-transit
privileges may be exercised, since the m ajor share of the
livestock travel comprises movement as feeders. N or­
mally, the weight loss in transit by feeder cattle is of less
value per hundredweight than the weight loss of fat
cattle.
The Corn Belt

The m ajor cattle feeding area in the United States is
that commonly referred to as the “Corn Belt.”1 Although
other areas in the nation have increased in importance in
the beef fattening enterprise, the Corn Belt still contrib­
utes a large share of all cattle fed in the nation. The his­
torical background of the region, the nature of the land,
and its favorable location have combined to make the fat­
tening of livestock one of the main phases of its farm econ­
omy. Midway between the western breeding grounds and
the great eastern metropolitan areas, crisscrossed by an
extensive web of rail and highway facilities, this mid-con­
tinent area serves a m ajor function in the production of
the nation’s beef requirements.
Livestock feeding in the Midwest first centered around
the fattening of hogs. After the enactment of various Fed­
eral laws reduced the profit to be made from distilling
corn into spirits and as wheat raising moved westward to
the short-grass plains, pioneers in the Ohio Valley turned
to the raising of hogs. Because of the slow methods of
transportation existing at the time, however, meat had
to be salted or “pickled” and shipped as barrelled pork.
Slaughter was confined to the winter season. W hen trans­
portation facilities improved and expanded, it became
possible to ship livestock and poultry products to eastern
markets. As the land proved particularly adapted to
growing of corn, the fattening of livestock became the
principal agricultural pursuit of the region.
Though hogs are still the mainstay of midwest live­
stock production, the fattening of beef cattle also plays an
important part in the management plan on a large share
of the region’s farms. The average Corn Belt farm raises
more corn than that ordinarily required for the hog pro­
gram or for feeding to the poultry flock or work stock.
The m ajor portion of this surplus is used to fatten cattle.
It is estimated that one-fifth of the annual corn crop is
fed to cattle on farms—about half of this to beef cattle
and half to dairy animals. Another fifth is utilized by
poultry and work stock on farms while hogs consume

The western range herds constitute the most depend­
able source of feeder stock for most of the m ajor feeding
areas. Feeder buyers are better able to find in the range
districts the uniformity in breeding, quality, and age to
fill their individual requirements than would be possible
by gathering stock from a large number of smaller farm
producers. The season of range sale, too, generally coin­
cides with the season in which cattle feeders are most apt
to want replacements. Many specialty producers of feeder
cattle ordinarily dispose of the year’s calf crop in the fall
of the year prior to turning the breeding herds out on
winter range or before winter feeding of hay becomes
necessary.
Ordinarily, producers would not be able to carry the
calf crop during the winter without cutting down on their
breeding units, except in years of particularly favorable
feed conditions. This is the time feeder buyers want de­
livery since the animals will be fattened and sold before
price competition develops from marketings of grass-fat
cattle, which gets under way the following summer.
The location of a feeding area in relation to the ulti­
mate area of consumption is also an aspect of considerable
importance in the commercial fattening of livestock. A
fa ttening enterprise favorably situated between the supply
area of feeder cattle and the final consumer market profits
both by advantages in transportation costs and by smaller
weight losses during transit. Freight rates on feeder cattle
are less than those on fat cattle in transit to slaughter des­
tination. W hen the finishing area is located in the general
direction toward which the livestock would normally
move to slaughter, the feeder (by registering the animals
in transit to ultimate destination) is sometimes able to
take advantage of “stop-over” privileges. Total transpor­
tation costs from origin to the final market are then less
than they would be for a double movement—that is, first
to the feedyard at one rate and later to slaughter at a
higher rate. However, because of the relative proximity of




1 C om prising all or p arts of the states of South D akota, N ebraska, K ansas,
M innesota, Iow a, M issouri, W isconsin, Illinois, M ichigan, In d ia n a and
Ohio.

7

nearly 50 percent of the total crop. About 10 percent finds
an outlet in industrial and commercial and other non­
farm use.
Approximately four million head of cattle are put on
grain feed annually in the Corn Belt—the greatest num­
ber on Iowa farms which, on the average, fatten over onequarter of the total. Illinois is the second ranking state,
followed by Nebraska, Kansas, and Missouri as the lead­
ing producers of grain fed beef in the region.

Feeding operations are carried on in various parts of
Texas also. Cattle are fattened through the fall and win­
ter months, primarily on hay, grain, and sorghums grow n,
in the locality. The by-products from cotton growing also
constitute an important feed concentrate. Although feed­
ing operations in Texas have expanded considerably dur­
ing the past decade, the rate of growth has been less than
in the country as a whole.

Western Feeding Areas

Cattle feeding in the Twelfth District has not had the
long historical background that identifies the more famous
Corn Belt enterprise. The District industry blossomed
with the regional economic activity of the w ar and post­
war periods and has been characterized by a diversity of
operational methods, in contrast to the more uniform pat­
tern of midwest production. The District enterprise does
not rely so much upon the output of a single crop, and its
access to a wide variety of feedstuffs offers the feeder
greater flexibility of production.
The Twelfth District as a region possesses all the
essentials required of an economic beef fattening area:
(1) a vast acreage of both public and private grazing land
on which high quality feeder stock is produced; (2) a
multitude of feeds and by-products of high nutritive value
which the farming areas of the District supply ; (3 ) ex­
panding market outlets which are favorably situated in
relation to breeding and feeding; and (4) a highly devel­
oped system of rail and highway transportation facilities
that adequately serves the region from the cow range to
the slaughtering pen.

Twelfth District feeding areas

j
!

Cattle feeding in the W est, which presently accounts
for about one-fifth of the nation’s cattle feeding, is carried
on in two general regions: the Rocky Mountain States1
and the seven states of the Twelfth Federal Reserve Dis­
trict. This division is the result partly of natural geo­
graphic features and partly of the relation of these areas
to the m ajor m arket outlets. The number of cattle fat­
tened annually in this western region increased during
the past two decades at a more rapid rate than in either
the Corn Belt or in the nation as a whole. Between the
decades 1932-41 and 1942-51, numbers fed in the W est
increased 44 percent compared with a 34 percent increase
for the United States.2 The low point during the past
twenty years occurred on January 1, 1935 when an esti­
mated 321,000 head were on feed in the western region.
W ith occasional fluctuations, numbers fed increased rap­
idly to a peak of nearly one million head at the beginning
of 1952.
Between 1930 and 1935 the Rocky Mountain section
of the W est fattened slightly more cattle than did the
Twelfth District. Although the feeding industry has de­
veloped rapidly in both these regions, it has expanded
faster in the District. Between 1932-41 and 1942-51 Dis­
trict numbers increased 51 percent compared with a 38
percent increase in the Rocky Mountain region. Since
1947 Twelfth District operators have accounted for 54
percent of the feeding activity in the West.

Trends in District feeding

On January 1, 1952, 687,000 head of cattle were being
fed in the Twelfth District for winter and spring markets.
Of this amount 348,000 were in California drylots. An
additional 8,000 head were being fattened on field feeds
and irrigated pastures in the state, so that California ac­
counted for 58 percent of the District total and 31 per­
cent of all cattle on feed in the twelve western states.
W hile the total number of cattle put on feed has been
greater since 1942 than during the previous decade in all
District states, some shifts have occurred in the relative
importance of the various states. California’s share pf
total District feeding has increased over the past twenty
years. Comparing the two 10-year periods— 1932-41 and
1942-51— Idaho and W ashington have also become morie
important as cattle feeding states, contributing 16 and 7
percent, respectively, during the latter period. Arizona
and Nevada, on the other hand, now account for a smaller
share of total District feeding than formerly. During thq
latter ten-year period, A rizona’s share was about 14 per­
cent and Nevada’s only 5 percent. U tah and Oregon have
about maintained their relative importance in District
cattle feeding but their respective contributions are less
than 10 percent each.

The Rocky Mountain area

Nearly half of the western cattle feeding is done in the
feedlots and farms of the area from Montana to Texas.
The irrigated valleys bordering the South Platte and
Arkansas Rivers in eastern Colorado are im portant feed­
ing districts. Feeder cattle from that state and bordering
ranges are fattened through the winter and spring months
on hay, grain, and sugar beet by-products. Also adjacent
to the Rockies are a number of less important feeding
districts— in the environs of Billings, Montana, the Big
H orn and the southeastern corner of Wyoming, and along
the Pecos Valley of New Mexico. Marketings from these
areas bordering the Great Plains are heaviest from Janu­
ary to June and shipments move principally to Chicago
and the river m arkets.3
1 M on tan a, W y o m in g , Colorado, N e w M e x ico , and T ex a s.
2 B ased on figu res of C a ttle on F eed as of January 1 com piled b y th e U n ited
S ta te s D ep a rtm en t of A g ric u ltu r e, B u reau of A g ricu ltu ra l E co n o m ics.
T h e se are th e on ly sta tistics available coverin g all sta tes for a com parable
period.
3 K an sas C ity, S t. L o u is, O m aha, S t. J osep h , and S io u x C ity.




8

normally less during this time. Nevertheless, it is esti­
mated that, including slack seasons, at least a million head
of cattle a year are fattened in California drylots under
the present level of activities.

California

California is the leading beef fattening state in the Dis­
trict. The important fattening areas are the Los Angeles
commercial yards, the Imperial Valley, the Great Central
Valley, and adjacent coastal areas. Small scale operations
are also carried on in some localities in the northern moun­
tain counties. The large feeding plants in the vicinity of
Los Angeles and up and down the Central Valley are
mostly commercial drylot operations where hay, grain,
and mill feeds are widely used. In the Imperial Valley
large numbers of cattle are winter fattened on irrigated
grains and alfalfa pastures. The hay, grain, and sorghums
grown in the vicinity also form the basis for a large drylot
enterprise.
In California the months of peak activity in cattle feed­
ing are December and January. Feeding at this season is
largely timed so that cattle will be ready for slaughter be­
fore the heavy run of grass-fat cattle is initiated the fol­
lowing summer. Approximately four-fifths of the cattle
on feed at this time of the year are normally marketed
before the end of March. On December 1, 1951, a total of
434,000 head was reported in the state’s drylots—an in­
crease of 480 percent over the same date two decades
previous. Up to 1935 less than 85,000 head of cattle were
reported on feed on December 1 in any year. F or the fol­
lowing ten years, numbers increased steadily with only
minor fluctuations and by 1947 exceeded 200,000 head.
Subsequently feeding operations expanded rapidly. Al­
though December and January are the months of heaviest
feeding in California,1 the new character of western de­
mand requires that large numbers of cattle be fed through­
out the year. Because of the availability of grass-fat cat­
tle during the summer months, feeding operations are

Idaho-A rizona

Idaho and Arizona are the states next in importance in
District feeding. Feeding in Idaho is located principally
in the Snake River Valley, between Rexburg in the east
and the Payette-W eiser area to the west. Hay, grain, and
sugar beet by-products are the main feeds used. The irri­
gated desert area of Arizona’s Salt River and Yuma
Valleys produces a combination of pastures, alfalfa, hay,
grain, sorghums, and cotton by-products upon which rela­
tively large feeding operations are based. Feeder stock
produced on the state’s ranges and Brahman cross-bred
cattle from the Southwest move through the drylots and
irrigated pastures of these areas on their way to Los A n­
geles or local markets.
O ther District areas

A number of small irrigated valleys in western Nevada
and in northern and central U tah supply hay and some
concentrate feeds for about 15 percent of the cattle fed
through the winter season in the Twelfth District. Cattle
from the Nevada sector are fattened mainly for the San
Francisco market area while those from U tah are shipped
principally to Los Angeles and eastern markets.
Feeding operations are less localized in the Pacific
Northwest than in Nevada and Utah, although Oregon
and W ashington combined fatten approximately the same
amount as the total of the other two states. Commercial
yards in the Puget Sound area fatten beef for the TacomaSeattle markets. The hay and grains grown in the Spokane-Pullman-W alla W alla triangle and in the vicinity
of Yakima are used to finish beef for the north coast m ar­
kets. A large proportion of Oregon feeding is done in the
Tule Lake-Klamath Basin district and in the sugar beet
area in the eastern part of the state, though smaller num ­
bers are also fattened in the central and northeastern
sections.

1 D ecem b er 1 and January 1 are th e on ly rep ortin g d ates for num bers on
feed in California.

Thousands
o f head

N U M B E R O F C A T T L E O N F E E D O N JA N U A R Y 1
T W E L F T H D IS T R IC T S T A T E S »—1932-1952

Scientific Feeding
As contrasted to the methods of fattening beef cattle in
other parts of the nation, the western feeding industry is
characterized by its factory line pattern of production.
District cattle feeding plants vary in size from those able
to feed a few hundred head to yards with a capacity of
over twenty thousand. Yet operations, even in the smaller
plants, are generally highly mechanized, both as to the
preparation or mixing of feeds and the delivery of the
ration to the feed trough. F or example, most plants are
so designed that from a push-button central panel one
man can mix and store feed in the desired proportions.
From the storage facilities rations are mechanically de­
posited in the trough by trucks or rail cars in such a man­
ner that all animals are fed within the space of a few
hours. The horse, the wagon, and the pitchfork have been
relegated to the curio room.

1 In c lu d es on ly cattle b ein g fatten ed for m ark et as a m ore>or le ss d istin ct
agricu ltu ral enterprise, and exclu d es sm all op erations in cid en tal to dairy
and gen eral farm ing.
S o u r c e : U n ited S tates D ep artm en t of A gricu ltu re, B u reau of A g ricu ltu ra l
E con om ics, C a ttle on F eed— January 1 .




9

Since District feeding plants are essentially beef-making factories, their inherent high capital costs have neces­
sitated the elimination of a m ajor part of the guesswork
in feeding. It has long been a saying that the eye of the
master fatteneth his cattle. Today it may perhaps more
properly be said that it is the hand of the nutritionist that
does so. True, the western feeder must also “know” cat­
tle. H e must know the feeding characteristics of the
various types, ages, and sexes of the animals he handles.
H e must be able to judge how his animals are reacting
to the rations fed and to tell when and what adjustm ents
may be necessary during the course of the feeding period.
H e must be acquainted with the beef grade standards and
also the qualities his animals must possess in order to
yield those standards in carcass form. But most im­
portant, the cattle feeder must know the relative fattening
value of different feeds and what combinations will pro­
duce a balanced diet. To do so requires that he be a nutri­
tionist and, as such, possess a thorough knowledge of the
organic and inorganic composition of feeds and how they
are used by the animal body.

ing m ixture must be arrived at by weighing the various
nutrient components against the costs of the feed medium
supplying them.
In preparing the ration, the feeder is therefore inter­
ested in determining the quantity and the quality of the
nutrient content available to satisfy the daily maintenance
requirements of his stock according to their age, weight,
and condition. He must also analyze the quantity and
quality of those ingredients which are available to be
transferred into body fat. H e must, of course, determine
the relative cost of each, and this is finally dependent upon
his knowledge of their nutritive function and value.
The palatability of the feed m ixture is also essential to
the ration. Even if all the required nutrients are present
and in correct proportion, unless the animals take to the
feed with eagerness they will not consume sufficient quan­
tity to make economical gains.
Owing to the great variety of feeds available in the area,
a far broader acquaintance with the principles of animal
nutrition is exacted of the District cattle feeder than is
generally required of the farm er feeder in regions of less
diversified feed resources. F or this reason, the District
operator finds it necessary to keep in close touch with the
results of research in animal nutrition1 and in the devel­
opment of feed by-products.

W ide variety of feeds in the Twelfth District

The great difference between District methods of feed­
ing and those of the im portant midwest region originates
in the dissimilarity of the agriculture of the two areas.
The midwest feeding plan is based on a corn economy,
and the principal feed formula used is a corn ration.
Because the growing of corn is particularly adapted to
the soil and climate of the area and because this cereal
is so relished by cattle, it has long been the backbone of
Corn Belt feeding. Corn is especially suited for fattening
cattle because of its high proportion of digestible nutri­
ents and net energy. It is high in fats and in nitrogen-free
extract, being nearly all starch. Having a low fibre con­
tent, it is highly digestible. These properties, combined
with its palatability, have made corn the standard to
which other fattening feeds are compared. Midwest farm ­
ers have not had to search for a better feed.
The growing of corn, however, is not a basic part of
agriculture in the Twelfth District, and this grain is not
the basis of the region’s feeding economy. The diversity
of District agriculture, however, makes available a wide
variety of feeds suitable for producing any of the several
carcass grades that the western market demands. Both
concentrate and bulk feeds are abundant. They are, nev­
ertheless, of diverse chemical composition and conse­
quently differ in relative fattening value. W hich particu­
lar feeds are used depend upon their availability, their
nutritive qualities, and their ability to bring a group of
animals to the desired finish or grade most economically.
The feeder’s problem, then, becomes one of producing a
balanced ration for the least cost. No one feed or combi­
nation of feeds is best or most economical. The price of
feeds fluctuates from year to year, even from season to
season. Their chemical composition is also variable. Since
a suitable ration can be made up of many different com­
binations, an appraisal of the fattening value of the result­




1 As show n by n u tritio n al research, th e anim al body needs m u st be m et
by supplying feed in both concentrate and roughage form. T h e form er
(g rain s and the m any high protein by-products such as cottonseed or
linseed m eal) are low in fibre and high in total digestible n u trien ts. T he
la tte r (th e hays and straw s, silage, cottonseed hulls, w et beet pulp, etc.)
are bulk feeds essential to the proper physiological functioning of the
anim al body. T hey are high in fibre b u t low in to ta l digestible n utrients.
C ertain feed ingredients are essential to the m aintenance of grow th and
continued h ealth p o th e rs are required to furnish energy. T he feeder th e re ­
fore cannot be satisfied w ith m erely filling the anim al’s paunch. H e m ust be
sure th a t he is filling it w ith the to tal am ount of digestible n u trie n ts and
the required m inerals to insure his stock m axim um gains over th e entire
feeding period.
T h e to tal digestible n u trien ts in the ration are th e sum of all th e d ig e st­
ible organic n u trien ts— protein, carbohydrates, and fat. T h eir percentage in
the feed rep resen ts the approxim ate h eat or energy value of the feed. T he
net energy supplied by the anim al feed intake is expended in a num ber of
w ays, b u t principally in body m aintenance, grow th and m uscular activity,
and in the production of offspring and of m ilk in breeding anim als. C attle
in the feed pen ex ert a m inim um of m uscular activity. T he surplus n et
energy above th a t required for body functions, m aintenance, and grow th
is used for the form ation of body fat.
T he feeder supplies protein because it is essential to the m aintenance
and rebuilding of the tissues of the anim al body. A nim als build the protein
of th e ir tissues prim arily from the amino acids w hich re su lt from the
digestion of protein in th e ir food. P ro tein s are supplied chiefly by legum e
hay or concentrates such as seed meals. A ny excess over th a t required to
m eet the m aintenance needs of the body serves as a source of heat an d
energy. As protein feeds are norm ally higgler priced th an feeds high in c a r­
bohydrate and fat content, they are ordinarily less desirable th an the cereal
grains for the addition to body fat.
T he feeder supplies carbohydrates as a source of h e at and energy. Since
carbohydrates form about three-fourths of all the dry m a tte r in plants, th e y
are the main source of these p articular needs. T he carbohydrates differ
g reatly in digestibility and n u tritiv e value, how ever. F o r the purpose of
feed analysis they are divided into nitrogen-free e x tra c t and fibre. T h e
nitrogen-free ex tract includes the m ore easily digested and, therefore, m ore
valuable carbohydrates such as the sugars and s ta rc h ; the fibre, cellulose,
and o th er carbohydrates are n o t easily dissolved and consequently a re
of lower feeding value.
T he feeder supplies fats as a fu rth er source of energy and of body fa t.
T he fats also aid in the absorption from food of vitam in A and c aro te n e,
w hich anim als convert to vitam in A. F a ts are supplied prim arily by tihe
cereal grains (corn, oats, b a rle y ), in th e residue m eal from c ertain oil
seeds (cottonseed, soybeans), and to a c ertain ex te n t from roughage. #
M ineral n u trien ts are likew ise of g re a t im portance to livestock feeding,
and th eir lack causes serious diet deficiencies w hich re ta rd gains or ma.y
actually cause loss of w eight. Calcium and phosphorus m ake up th re e q u arters of the m ineral m a tte r in the anim al body and over 90 p ercent of
th a t of the skeleton. These elem ents are derived chiefly from the legum e
hays and the protein-rich concentrates of the ration. A lack of them may
cause loss of appetite and general u nthriftiness. Iro n and copper are essen­
tial to the blood and have o ther vital functions. T race m inerals— m agne­
sium, zinc, m anganese— are im p o rtan t to the anim al diet also if m axim um
gains are to be realized. T heir lack m ay cause a loss of appetite or d e­
praved app etite, em aciation, or anem ia. Sodium and chlorine (in the
form of com m on s a lt), of course, are vital, and in the feedlot these are
usually supplied separately from the feed.

10

A use for by-products
The expansion in cattle feeding has been accompanied
by a corresponding increase in the output of feed by­
products suitable for the finishing of livestock. In the
Twelfth District, however, more pounds of beef are pro­
duced by the feeding of sugar beet1 and cottonseed by­
products2 than by any other by-products.
The importance of livestock feeding enterprises as a
market for sugar beet by-products is reflected in the num­
ber of cattle marketed each year from the sugar refining
areas. As many as 50,000 to 60,000 cattle are fattened
each year in some of the larger feed yards. It is estimated
that in the 1950-51 season over 350,000 head of cattle
were finished on rations consisting in large part of beet
pulp. The most extensive operations were carried on in
California and Idaho, which fed 167,000 and 95,000 head
of cattle, respectively, followed by Utah, Oregon, and
1T he by-products derived incident to the grow ing of su g ar beets have long
been an im portant source of livestock feed upon which m any thousands
of cattle and lambs are fattened annually in m ost w estern states. Livestock
feed from sugar beets is derived both on farm s w here th e beets are grow n
and from the factories where th ey are processed.
B eet tops, the residue of leaves, and the p a rt of th e crow n left a fte r h a r­
vest are a rich protein feed. Tops are generally utilized by allow ing the
cattle to glean the fields. E ach y ear cattle feeders co n trib u te appreciably
to th e income of D istrict b eet grow ers th ro u g h ren tal paid for this feed.
F a rm e rs realize retu rn s on a per acre or per head basis or in the tonnage
yield of the crop harvested.
I t is in the process of ex tractin g sugar from th e b eet, how ever, th a t the
m ost im p o rtan t by-products— pulp and molasses— are derived. P ulp is fed
in wet, pressed, or dried form. W et pulp, the principal feed derivative of
sugar beet processing, is a carbohydrate feed m uch relished by cattle.
S eventy pounds of w et pulp has the equivalent feeding value of five pounds
of barley. L arg e cattle feeders often co n tract for th eir pulp directly w ith
D istrict beet su g ar factories. Since w et pulp is both bulky and of high
w ater content (85-90 p e rc en t), it is usually fed close to the extraction
plant. D ried pulp finds an ou tlet m ainly as a dairy feed. B eet molasses, up
to certain q uantities, is considered equal in food value to grain and is e x ­
tensively used by D istrict feeders. A valuable carbohydrate, it serves an
im p o rtan t function in various feeding rations.
2 Cottonseed cake or meal is a rich source of th e pro tein req uirem ents of
the anim al diet. I t is extensively used in th e w estern feedlots to balance
rations deficient in this n u trim en t, as well as for supplem enting feeding on
the range. W hen filling a protein deficiency in th e ration, 100 pounds of
cottonseed m eal is about equal in value to 250 or 300 ^pounds of grain.
T he hulls, the outer cdvering of the cottonseed rem oved in the oil e x trac­
tion process, are a satisfactory source of carb o h y d rate roughage. They
are used extensively by large feeders in the D istrict cotton grow ing areas,
who generally build their feeding facilities in th e vicinity of the oil mills.
As a feed, seed hulls supply up to 43 p ercen t of the to tal digestible n u tri­
ents required in the ratio n , which is about equal to th a t furnished by the
late cut hay or oat straw . Being low in protein and certain necessary m in­
erals and vitam ins, they m ust be fed in conjunction w ith feeds which will
correct these deficiencies.

W ashington with 40,000, 32,000, and 18,000 in that
order.1
Cattle feeders also constitute the m ajor outlet for the
by-products retrieved by the extraction of edible oil from
cottonseed. W ith Arizona and California nowTm ajor cot­
ton growing states, there has been a corresponding in­
crease in the tonnage of livestock feed produced from this
source. In 1951 approximately one million tons of raw
cottonseed were produced in the District cotton growing
area. From this amount about 48 percent would be real­
ized as cake or meal and 26 percent as hulls. The main
portion of both found a ready market in the cattle feed
troughs of the region. An average price of $60 per ton for
meal means to the District a value of production at the
mill level of over $27 million. Cottonseed hulls, calculated
at an average value of $14 per ton, contributed nearly $4
million more at current production levels.
The use of sugar beet and cottonseed by-products has
been stressed because of their greater production, higher
feeding value, and wider usage as a source of feed in Dis­
trict cattle finishing plants. Both of these products high­
light the importance of the feeding enterprise as a m ar­
keting medium for agricultural by-products. The finish­
ing of livestock, however, exists as a steady outlet for
many other feeds which are residues of District crops.
Surplus prunes, grape pumice, almond hulls, and citrus
and pear pulp are a few of the feed materials derived from
the fruit and nut orchards which contribute various nutri­
ents to cattle feeding rations. To these may be added field
products, such as surplus potatoes and offal from the
vegetable and fruit canning industries. Each year, as a
result of research and experimentation, new uses are
found for the waste materials supplied by the processors
of agricultural products. Cattle feeding makes possible
the economic m arketing of many of them. The wider use
of these by-products is reflected in turn upon the price
District farmers ultimately receive for the output of their
crop land.
1 E stim ated from beet sugar refinery reports.

THE FEEDLOT, THE RANCH, AND THE FARM
Although many cattle are fattened with supplemental
feeds by range and farm operators, the bulk of the cattle
feeding in the Twelfth District occurs on commercial feed­
lots. The typical District feedlot is operated by a specialist,
known as a “custom” feeder, who contracts to fatten
cattle for a packer, a cattleman, a farmer, or other type of
operator. Many District packers also operate their own
feedlots to provide cattle for their slaughtering plants. In
addition, some food merchandising chains feed livestock
so as to supply their own meat counters with the carcass
grades most suited to their needs. Range producers fre­
quently choose to enhance the value of their animals by
fattening them for markets rather than by selling them
to others for fattening. The District feeder, like his midwestern counterpart, may also be a farm er who uses




cattle as a mechanism for marketing his crops to better
advantage or as a medium of greater farm diversification.

The Custom Feeder
The most important District cattle feeder is the com­
mercial or “custom” feeder, especially in California, the
leading beef producing state of the F ar W est. Commercial
feeding enterprises are not entirely new to the District. A
few feedyards, controlled either by packers or independ­
ent operators, have existed for a number of years in the
vicinity of the principal metropolitan centers, notably
around Los Angeles and the San Francisco Bay region.
The number and size of “drylot” enterprises, however,
have increased rapidly during the past decade and are
now more generally located in the intensely farmed val­
ley areas.

1
1

Relationships of supply and demand prevailing since
1940 have been the motivating force in the rise of this
type of operation to its present significance in District
agriculture. W ith the supply of grass cattle far short of
increasing meat consumption requirements, the oppor­
tunity was presented for extensive production-line out­
put. U nder the circumstances, the possibility of attrac­
tive profits for the competent feeder was created, while
the speculative aspects inherent in beef-cattle feeding
were minimized. The change in consumer preferences,
which accompanied western economic expansion, has been
further conducive to the development of this highly spe­
cialized type of operation. Though differences still exist
between the types of beef demand in the eastern and west­
ern sections of the nation, western consumers are increas­
ingly demanding smaller cuts and beef of more tender
quality. Changes in diet habits have also reduced the
usage of animal fat. Consumers, therefore, now favor meat
containing a minimum of fat waste, yet of sufficient finish
to insure palatibility.
These shifts in consumers’ wants have required the
slaughter of younger animals which produce smaller car­
casses. They have also created a stronger demand for
cattle carrying a higher degree of finish. Younger cattle,
however, make the most economical gains, as they require
less feed per 100 pounds of gain. H igher finish, within
limits, commands a higher price because through it the
meat receives its tenderness and flavor. Obviously then,
the evolution in the character of western demand has
worked to the advantage of the cattle feeding industry as
a whole since less time is involved from the cow range
to the dinner table. M ore especially has it done so in the
type of operation where feeding practices, and therefore
quality of production, are expertly controlled. The cus­
tom feeder, as a specialist, has exploited these changes
in the pattern of beef consumption. His job is to put the
required finish on a beef animal for the least possible cost.
H e must do this within the margin of feeder and slaughter
prices while allowing for his own as well as the stock
owner's profit. In minimizing the speculative risk, he
has, of course, narrowed his relative opportunity for
profit. The custom feeder’s gamble is allied with changes
in the cost of the ingredients which he uses in mixing his
feeding rations, rather than in fluctuations in cattle prices.
F o r this reason he is better able to “hedge” his risks, as
the cost of feed tends to be less variable than the market
price of fat cattle.
Contractual agreem ents

W hen cattle are shipped into the custom yard, an agree­
ment is entered into between the owner and the feeder
relative to the conditions under which the stock is to be
fed. Some contract feeders require a written contract em­
bodying the term s and conditions of the service. More
frequently, however, a verbal agreement is considered
sufficient by the feeder, as possession of the cattle is a
satisfactory guarantee against the liabilities which will
accrue to the account of the owner.




Basically, the custom feeder sells feed and with it his
ability to convert that feed into economical gains on the
owner’s cattle. His primary profits are realized through
the m arkup he is able to take on the cost of the feed con­
sumed. The value of his product—the feed formula— is
the reflection of its efficiency in producing the gains re­
quired. Reputation for performance, then, must of nec­
essity play a m ajor part in continuing success in the type \
of operations identified with the larger share of the Dis­
trict feeding industry.
Little custom feeding is now done on a gain-in-weight
basis although formerly this practice was rather common.
A gain-in-weight basis is generally considered undesir­
able by drylot operators for a number of reasons. It is a
potential source of poor owner-feeder relations. Disagree­
ments can too easily arise wrhen the cattle owrner feels
that the expected gains have not been realized. The nature
of individual animals and the conditions under which they
have been raised and handled may have an unmeasurable
effect upon their capacity to gain weight under feedlot
conditions. Wild, nervous cattle will take much longer to
“get on feed” or may never put on the equivalent gains
as the same breed of animals of gentler disposition. Simi­
larly, cattle from a range of deficient feed conditions may
lack the capacity essential for an adequate feed intake.
T hat the stock owner is more apt to be acquainted with
these characteristics than the feeder might well work to
the advantage of the one and the disadvantage of the
other. Ownership of the cattle frequently changes hands
during the feeding period. As the gains in weight norm ­
ally are higher in the forepart of the period, it is unlikely
that the feeder can continue the same rate of increase for
the second owner.
F or much the same reasons, contracts which embody
a gain, plus part of the price margin, are considered unde­
sirable by the m ajority of commercial feeders. W ith the
more precise interpretation of beef grades introduced by
changes in the character of western demand, feeding on
percent of the margin (price spread) is felt by most cus­
tom operators to involve unwarranted risks.
Quotations are, therefore, generally based on either a
cost-plus formula or a stipulated fee per head per day.
Both methods relate to the cost of feed. The former is a
charge for the actual cost of feed consumed, to which is
added an overage per ton. The feeder may include his?
overhead costs (milling, labor, insurance, etc.) in quoting
his charges on feed ton prices. On the other hand, his
rates may be based on the current market price of the,
essential feed ingredients, plus a stipulated spread. M ost
commercial yards charge a service, or “yardage,” fee of
3 or 4 cents per head per day. The services norm ally;
rendered include vaccination, branding, sorting, weigh- '
ing, hospitalization of sick stock, and other services inci­
dent to the care of cattle. The feeder, however, does not
accept the responsibility for death loss.
Decisions as to length of the feeding period, the grade
and weight to which individual groups of animals are to

1
2

be fed, and a number of other variable factors are agreed
upon between the feeder and the livestock owner. Some
commercial firms feed whatever ration is requested by the
owner. Others insist that the feeding procedure be at the
feeder's discretion. Many commercial operators feel that
in order to maximize results they must have the latitude
of feeding cattle according to their own prescribed pro­
cedures. Most custom yards, however, offer the livestock
owner a range of feeding formulas.
Records of performance of each pen of animals are
made available to the cattle owner. These indicate the
amount of feed consumed and, if periodic weighing peri­
ods are requested, the average gains being made. A t the
completion of the feeding period a report is submitted
which discloses the total feed consumed and the total
gains accomplished, the average gains per day, and the
average cost per pound of gain. The feeder, in daily con­
tact with the animals in his care, usually notifies the
owner when, in his opinion, the cattle have reached their
maximum efficient condition. The owner then makes his
own marketing arrangements.

The Packer Feeder
M eat packers are essentially processors of livestock.
Competition within the industry is keen, and profits per
dollar of sales are small. Consequently successful opera­
tion depends upon insuring maximum sales, coupled with
efficiency of operation. In the Twelfth District during the
past decade, maximum sales and plant efficiency have had
to be maintained in conjunction with a program of plant
expansion in slaughter capacity, and this at a time when
suitable cattle supplies were not expanding as rapidly as
demand. It is this adverse relationship which forced the
western packing industry to assume a m ajor role in the
District cattle feeding. W hereas slaughterers in other
regions have access to a regular source of farm fattened
animals, western packers had to create a large share of
their expanding need for slaughter stock.
Statistics on the percentage of total District cattle feed­
ing done by meat packing firms are not available. Packers,
however, account for the largest share of all District
commercial cattle feeding, either through their own oper­
ations or by contracting with custom feeders.
P rior to the last decade, western slaughter needs were
largely filled by the marketing of heavy, grass-fat cattle
from the better range forage areas or from cattle fattened
on western hay crops and beet tops. The rapid growth in
western population and economic activity incident to the
w ar and postwar periods not only created a greater de­
m and but also a changing type of demand. More people
required a greater amount of beef. But more people with
higher incomes also gave rise to a demand for a quality
of meat not generally realized from the carcass of an aged,
grass-fed steer. Unlike the midcontinent area where the
production of quality beef has long been a part of the
agricultural economy of the region, the W est rapidly out­
stripped its supply of desirable slaughter cattle. Conse­




13

quently, District packers had the alternative either of
drawing both live and dressed beef from areas far re­
moved from western markets and competing under the
disadvantages of higher costs or of feeding, directly and
indirectly, sufficient numbers of cattle to guarantee their
plants a minimum supply consistent with efficient opera­
tion. By and large, they have chosen the latter course.
Advantages of packer feeding

It is recognized that the profits realized from their
feeding operation during the past decade have been, in
general, very favorable. O ther less spectacular advan­
tages have also accrued. Owing to the seasonal character
of western grass production, the output of grass-fat cat­
tle is extremely variable. Dry cycles are quickly reflected
in the number and quality of animals suitable to market
off grass. Through their ownership of cattle in custom
yards or by operating their own feeding plants, District
packers have been able to meet the requirements of the
trade even during seasons of unfavorable grass condi­
tions. Feeding a portion of their annual slaughter needs
also places the packers in a position to adjust more
quickly to anticipated changes in the type of supply. Pack­
ers, especially the national firms, are in close touch with
regional as well as nationwide supply conditions and out­
look. If it appears that a certain type of slaughter animal
will in the future be scarce, they are better able to feed to
that particular end, in order to avoid being forced to bid
on what would likely be a tightening market. The new
merchandising practices introduced by the large chain
stores have served to stimulate a greater standardization
of quality and cuts. Many of these firms refuse to accept
beef carcasses above specified weights and also require
meat of particular Government grade. By feeding a part
of their slaughter requirements to these specifications, the
District packing industry has been better able to guar­
antee the requirements of new meat merchandising
methods.
One of the im portant contributions of District opera­
tions in which packer feeding has played a significant
part has been the improvement of the general quality of
beef produced in the area. It is obvious that large con­
sumer demand must have existed and a shift in the char­
acter of that demand must have occurred. The yearly
output of good and choice grade beef which has been
maintained in this western region, however, may, in large
measure, be attributed to the volume of feeding for which
the packers have been responsible. Their direct and indi­
rect participation has been influential in establishing
feeding practices conducive to quality output.
The extent of packer feeding has also been a sustaining
force to large scale commercial feeding operations. Cus­
tom feeders, of course, finish many cattle for farmers, pro­
ducers, speculators, and others. The high percentage of
packer cattle in custom yards, however, attests to the
importance of that industry in maintaining volume pro­
duction in commercial plants.

Problems arising from packer feeding

Despite the advantages which have accrued both to
themselves and other livestock interests, the feeding ac­
tivities of District packers have introduced some prob­
lems also. It has been pointed out that packers are pri­
marily livestock processors. Their feeding program has
required of them an annual outlay of many millions of
dollars of high risk capital which is not directly involved
with processing operations. W hile cattle prices have been
high and feeding margins large, profits from this venture
have been favorable. A sharp drop in cattle prices during
the feeding period, however, such as occurred during the
1948-49 winter season, causes serious losses. While the
national packing firms are perhaps better able to sustain
such losses for a time, since feeding is only a limited
aspect in their nationwide operations, the independent
District packer is not so favored. The unit or regional
operator could conceivably be liquidated in one or two
seasons of declining prices. Yet the independent, to pro­
tect his position in an economy where the prim ary re­
source has been relatively scarce, has frequently been
forced to involve his plant in a heavy feeding program.
T he situation has long range implications for the unit
slaughterer which m erit serious analysis and research—
more particularly since higher feeding costs and smaller
margins are likely to prevail in the future.
On the other hand, large feeding plants are vulnerable
to any appreciable shift in the District feeding pattern.
Commercial operators are essential in the business of
selling feed and “know-how.” A marked decrease in the
volume of cattle fed for the account of the packers could
possibly create a serious problem to many District com­
mercial feeders unless supplemented by volume demand
from other sources. M aintaining capacity output in com­
mercial feeding plants is of paramount importance, par­
ticularly in those establishments which raise only a small
part or none of their feed materials.
Large scale packer feeding may be said to present fur­
ther disadvantages to other District feeders. The harvest
from a livestock fattening venture is like that of many
other agricultural commodities—when the “crop” is
ready, it has to be marketed. Regardless of how many
packer-owned cattle may be approaching slaughter con­
dition, by and large the feeder's animals must be offered
for sale when they are ready. W ithout knowledge of
either the amount of packer cattle on feed or the approxi­
mate time they will be ready, the independent operator
is feeding against a supply situation he is unable to esti­
mate. It is hardly to be expected that his trading position
will be favorable any time that packer inventories of
slaughter cattle are temporarily adequate.
In order to maintain their feeding operations, con­
tracting by packers for both slaughter and feeder stock
at country points rather than at central markets has been
greatly increased. From one point of view, the producer
gains thereby since he is in a better position to accept or
refuse an offer, that is, he can trade before his animals
leave the ranch. O n the other hand, the central markets




of the District become less representative of the actual
prices which prevail—yet the only comprehensive and re­
liable daily price information emits from these centers.
W hether, in the long run, District cattlemen— both feed­
ers and range operators—will benefit more from direct
country sale or from sale in central markets is a debatable
question and more properly allied to a marketing study.1

The Grower Feeder
Generally speaking, the western cattle grower is not a
producer of slaughter cattle. W estern ranches do not gen­
erally possess the feed potential required to include the
fattening phase of the beef production cycle. Because of
this, most range operators are primarily interested in
raising stock for others to fatten. Nevertheless, because
of large capital requirements and high operating costs,
many producers have attempted to improve their relative
position within the industry. In most instances, this has
been partially accomplished by increasing the weight and
quality of animals marketed from a given ranch unit. It
has been further accomplished on many District ranches
by feeding stock to the final slaughter stage. W here irri­
gation water resources are available, owners have fre­
quently been able to develop or acquire the facilities nec­
essary for carrying on a feeding enterprise in conjunction
with the breeding unit.
Like its effect on many other phases of the livestock
industry, a demand which has given rise to high prices
and generally favorable margins has furnished an added
incentive for cattle growers to integrate a feedlot with the
ranch structure. W here feasible, whether in the drylot or
by supplemental feeding on irrigated pastures, or both,
the feeding program also offers other advantages to the
range livestockman. Off-age calves can be brought along
to quick m aturity and marketable condition rather than
carrying them over another year. Cull bulls and aged
cows are often profitably conditioned for market. By
bringing their salable stock to a desirable slaughter grade,
some cattlemen have established a dependable and pre­
mium market outlet for their product.

The Farmer Feeder
Farm er feeders supply a smaller share of the total beef
output of the Twelfth District than they do in many other
areas of the nation. Nevertheless, the high cattle prices
which have prevailed for beef relative to competing alter­
natives and a general confidence in the future demand of
an expanding western m arket have induced many D istrict
farmers to encompass cattle feeding in their farm opera­
tion during the past decade. The contribution of cattle
feeding to a well-balanced farm plan has also come to he
more greatly appreciated. Feeding is only incidental to
crop production on some District farm s; on others, how­
ever, livestock is employed as a prim ary and sometimes
the sole vehicle for marketing the crop output.
1 See, for instance, A. A. D ow ell and K n u te B jo rk a, Livestock M arketing,
(N ew Y ork, M cG raw -H ill, 1941).

14

ing conservation of soil fertility, usually consists of a rota­
tion of three to five years of alfalfa followed by the grains
and row crops. Irrigated pastures, basically legumes, are
also frequently worked into the cycle.
One of the most significant recent developments in the
character of District agriculture has been the inclusion of
irrigated pastures on many farms formerly devoted exclu­
sively to intensified crop production. The shift from crop
growing to a crop and grass economy has been largely
the result of an increase in livestock farming. The feeding
phase, in its various aspects, has been the main contribut­
ing cause. In California alone, in less than fifteen years,
irrigated pasture acreage has increased from a nominal
amount to an estimated 700,000 acres. While it would be
incorrect to conclude that this development has been en­
tirely due to beef cattle feeding or grazing activities, since
dairymen and lamb feeders are also extensive users of
irrigated pasture, the greatest impetus has come from the
recognition of irrigated pastures as an efficient method of
producing good grade beef.
Many acres not suitable to the economic production of
high value crops have proved capable of yielding quality
pastures where adequate water is available. Even when
grown in competition with crops, irrigated pastures fre­
quently show favorable returns when all factors are con­
sidered. W here production is high, they offer through a
fairly long growing season a source of relatively cheap,
nutritious, and succulent feed of high carrying capacity.
Serving also as a soil binding crop when of a legume
character, they form an appropriate balance for the higher
cost concentrate feeds grown on most District farms and
mesh into a desirable rotation plan as well.

District farm-feeder operations are generally of the
pasture feedlot system, that is, one in which varying com­
binations of irrigated pastures, concentrates, and occa­
sionally owned or rented winter range are used to carry
the animals until they are ready for final finishing on
home-grown feeds. Sometimes the farmer buys mature
animals to be placed directly on a full fattening ration.
The purchase of feeders of sufficient age and weight to
be placed immediately in the feedlot entails greater risk,
however. Price fluctuations on the slaughter cattle m ar­
ket are quickly reflected on the profit margin because of
the higher cost of the gains made by m ature animals and
their smaller total gains.
Most District farmers, therefore, prefer to grow out
and fatten younger animals because of the less specu­
lative nature of this procedure. The original investment is
lower and the average cost per pound of gain is reduced
because of the growth factor. Growing animals also make
more satisfactory use of certain farm feeds which are not
available to commercial operators. The longer time the
animals are held in a farm-feeding operation also makes
for more flexible operations by offering greater latitude
in the weight and finish to which the animals are fattened
and in the timing of the marketing period. A djustm ent to
a longer or shorter feeding period is facilitated. Since beef
cattle on the farm become an integral part of the w7
hole
farm production plan, the farm-fattening process has
less of an over-all specialty aspect than have other forms
of cattle feeding.
Diversification

Fattening cattle on farms requires the raising of crops
for feed rather than primarily for the cash market. This
means growing a greater variety of crops, tending towrards
wider diversification. As crop production becomes less
specialized, the plague of surpluses is also reduced. An
added inheritance of crop-livestock management is the
introduction of better patterns of crop rotation which
makes possible the adoption of better soil conservation
practices.
W ith the increase in feeding operations, there has been
wider diversification in the crops grown on District cattle
feeding farms. The growing of legumes—particularly al­
falfa—becomes an integral part of the cropping plan.1 In
addition to the legumes, grains are grown for feed concen­
trates and row crops for cash income. Barley, oats, and
sorghums are the chief feed grains grown on District live­
stock farms. The row crops—cotton, sugar beets, beans,
etc.— require intensive cultivation, which conditions the
Soil and keeps weeds under control. Both row crops and
grains likewise contribute valuable crop aftermath to the
farm feed resource. The general cropping pattern fol­
lowed on most feeding farms, which implements continu­

Flexibility

Besides the greater diversification and better land use
practices inherent in livestock-crop farming, a greater
flexibility of operations is also introduced with cattle feed­
ing. Since the farmland resource is ordinarily too valu­
able for use in a cattle breeding program, replacement
stock is purchased from outside sources. The number fed
can thereby be adjusted seasonally to the supply and
value of feed. The length of time the cattle will be held
can be geared to circumstances peculiar to each year’s
conditions. This can be effected in a variety of ways, more
particularly by the age and type of livestock purchased
and the length of the feeding period. That the sale of fat
cattle contributes cash income at different times of the
year from other farm marketings is an added advantage.
Feeding livestock on the farm requires proportionately
less labor and a better disposition of labor time. Cattle
also serve as efficient consumers of the roughage crops
grown on the farm, besides converting into income crop
residue that wrould otherwise be wasted. Feeding opera­
tions insure the production of the fertilizer necessary to
maintain long-time fertility. This latter factor alone is
felt by many farmers to justify feeding, even when rela­
tively higher cash return could be realized by selling a

1 M ore th an any o th er crop, alfalfa m eets th e need of the feeding ration. I t
surpasses all other hay crops because of its high protein and m ineral con­
te n t, and is, as well, a good source of th e essential V itam in A. I t ranks
high in palatability and is a good producer of the feed roughage required.
I t possesses the im p o rtan t advantage of being a deep-rooted, nitrogenfixing plant, which acts as a soil builder and counterbalances the depleting
effects which re su lt from intensive grain and row crop culture.




15

larger volume of crops on the cash market. An equation
of one head of stock per acre farmed is considered ade­
quate to maintain a good balance of fertility—based on
the production of approximately four tons of manure per
head per year. It has been aptly said that the long-range
maintenance of soil fertility will be the chief inheritance
of District farm feeding enterprises.
The problem s of the farm er feeder

Although the integration of cattle feeding into the pro­
duction plan offers many advantages to the farm economy
of the District, the adjustm ent may likewise present nu­
merous problems to producers making the change. The
grazing and fattening of livestock necessitates a rudi­
mentary knowledge of animal husbandry not possessed by
all farmers alike. The range in type and quality of cat­
tle, which contributes to differences in their feeding char­
acteristics, requires a “know-how” which comes in large
measure from increasing experience. Livestock requires
constant surveillance, thereby robbing the specialty crop
producers of slack seasons which can be devoted to other
endeavors. Fencing, stockwater facilities, and winter
feeding also contribute to the exactitude of livestock-crop
farming as opposed to a single crop system.
A limited acquaintance with the complexities of the
livestock m arket serves to complicate the general m arket­
ing program for many producers. Because of the pecu­
liarities of the livestock market, the farm er who also han­
dles cattle is required to keep in closer contact with market
forces than he may ordinarily be accustomed to doing.
The m atter of buying replacement stock is a further
problem confronting the farm er feeder—more particu­
larly those new in the business or those who fatten a
small number of head. Few central markets in the District
can be considered representative markets for feeder cat­
tle, nor do they receive extensive shipments covering a
range of classes and quality as do feeder markets farther
east. Large feeding enterprises are able to care for their
needs through their own experienced buyers or through
the services tendered by specialized purchasing agents.
Ordinarily, the D istrict farm er has neither the time nor
the experience required to buy his feeders advanta­
geously in distant range areas. H e is, therefore, largely
dependent on order buyers whose natural concern is a
profitable transaction.
Geared to this problem, co-operative livestock procure­
ment agencies are attem pting to reduce the difficulty.
Staffed with trained buyers and shippers with wide cover­
age and contacts over the western range, their efforts
made to service this need have facilitated, in some District
areas, the purchase of replacement stock for the smaller
feeder. A much broader extension of facilities is needed,
however, before farmers over the District generally will
be adequately cared for—particularly those desiring to
buy less than carload lots.
The increase in the number of rural livestock auction
yards in the W est over the past ten years has also facili­




tated the exchange of feeder and stocker cattle within
local areas. To a certain extent these yards offer a source
of replacement cattle to the feeder requiring only a few
head. In general, however, local auctions offer neither the
standardization of quality nor the type of cattle which can
be most advantageously fed to District requirements.
These are some of the problems presented District
farm er feeders. There are also others more dependent
upon the character of local agriculture and the peculiari­
ties of each individual operation. However, with the p ra c-s
tical aid extending through Government research and ex­
periment agencies (both Federal and state) and with
improving procurement and marketing facilities, the inte­
gration of livestock in the farm pattern is well justified,
011 the long term, in those locations where land and water
resources are conducive to feed and forage production.
Cattle Feeding and District Agriculture

W hile cattle feeding over the past decade has proved a
generally profitable venture for the farm er who has in­
cluded livestock in his production plan, as well as to ranch
and feedlot operators, its impact on the general character
of Twelfth District agriculture is of greater importance.
Cattle feeding has effected a change in the farming pat­
tern in many localities, and the shifts which have occurred
can be expected to expand over a larger and larger area.
It has stimulated an increasing interest in the use of live­
stock as an efficient means for conservation of the basic
agricultural resource—land. Its development has created
a broader outlet for the hay, grain, and crop by-products
produced in the region. It has furthered the practical ex­
ploitation of water resources and the more economic use
of the water already available, while introducing new and
improved irrigation techniques. As a result of expanded
feeding activities, changes in some aspects of cattle m ar­
keting have occurred which have resulted in a closer rela­
tion being established between the producer and buyer
of slaughter cattle. Finally, the combination of these and
related factors has furthered the integration of the entire
District beef production function.
Each of the different suppliers of the D istrict’s expand­
ing slaughter cattle requirements—feedlot, ranch, and
farm operators—has contributed a share toward this bet­
ter balance in the agricultural composition of the region.
Because of the character of the western land resource and
the peculiarities of its agriculture, it is not likely, however,
that any one of them will become the dominant factor in
producing the future beef supplies for the District market.
As ranch and farm feeding increases, meat packers will
undoubtedly find it less urgent to carry large cattle inven ­
tories of their own—and in the long run will profit there­
by. Large scale farming and large scale production of by­
products, however, exist as a supporting element for
large scale commercial feedlot enterprise. But feeding
cattle for the western m arket meanwhile will continue to
serve as an effective means of lessening the cattle growers’
specialization and broadening the farm ers’ opportunities.

16

PRICES, MARGINS, AND RETURNS
Factors Influencing Prices

The cattle feeder is able to influence only within rela­
tively narrow limits the price he receives for his product.
W ithin these limits, however, there are a number of fac­
tors that affect the price he will receive. Judgm ent exer­
cised in the type and quality of the feeders purchased and
the grade to which they are finished influences what he
will be paid for his fattened animals within the price range
existing on the market at the time of sale. A choice feeder
steer fattened to a choice slaughter grade will bring more
per hundredweight than the same animal brought to a
less desirable finish. On the other hand, the same animal
fattened to a prime finish but to an excessive weight
would suffer a price discount under normal market
conditions.

Consum er income and the dem and for beef

Beef is consumed in all parts of the country by persons
in all income levels. The extent of its usage, however, is
strongly influenced by the level of disposable income—the
higher the income, the greater the consumption. Because
per capita income more significantly affects beef con­
sumption, it also more readily influences beef cattle prices
than those of either pork or lamb.1 In 1940 beef (exclud­
ing veal) made up 38.6 percent of the per capita con­
sumption of red meat. As the level of incomes increased
after 1940, the proportion of beef to total red meat
consumed by civilians rose to 43.6 percent in 1941-42.
Because of the needs of the armed forces, lend-lease,
and other Governmental requirements during 1943 and
1944, only 36 percent of civilian per capita meat con­
sumption consisted of beef during those years. Following
this period, however, an increased rate of slaughter and
the reduction in military requisitions made available a
larger supply of beef for civilian use. The proportion of
beef in total consumption of meat varies considerably
from year to year, but since 1944 it has averaged over
42 percent, indicating a strong preference for beef among
American consumers when their incomes are high.
The amount of income and its distribution among peo­
ple also influence the quality of beef consumed. Since
most consumers prefer steaks and roasts to stewing meats,
they are willing to spend relatively more for the former
when their incomes are high and relatively less when
their incomes are reduced.
The effect of rising national income upon beef prices is
indicated by the trend in cattle prices as compared with
other meat animal prices over the past decade. By 1950
disposable personal income had risen 210 percent above
the 1935-39 average, while average prices received by
farmers for beef cattle rose 256 percent during the same
period. The price of hogs rose only half as much. A l­
though the relative rise in lamb prices was nearly as great,
this is of little significance since lamb and mutton com­
prise less than 5 percent of all red meat consumed in the
nation.

Timing of sale is an important element also—both in
calculating the most favorable m arketing period and in
determining when the animals are ready for market. It is
important that the feeder set the feeding period so that
his animals will be ready for slaughter at the most favor­
able time relative to seasonal demand. It is likewise im­
perative that he be able to judge at what point his stock
have made their most efficient gain and have acquired
their most desirable finish.
The cattle feeder has a certain latitude in the choice of
markets. M arket prices fluctuate and the closest market,
after allowing for transportation differentials, is not al­
ways the highest market. The choice of the method of
m arketing may also affect the final price realized per
hundredweight. The operator may elect to sell by direct
contract to a slaughter buyer or to consign his cattle to a
specialized selling agent to be sold at highest bid—or in
some areas by auction.
The trading ability of the operator or of his agent is
reflected to a degree in most transactions. W hen quality
and condition of a commodity can vary over such a wide
range, price appraisal may be subject to the elements of
human judgment rather than based solely on measurable
specifications.
The exercise of proper care in the branding, dehorn­
ing, and handling of stock can minimize or eliminate
bruising or shrinkage or badly scarred hides. The animal
loss incurred from bruising, crippling, and various other
sources prior to final sale amounts to many millions of
dollars—much of which eventually reacts upon the prices
received by producers.

Slaughter cattle price trends

Beef cattle price movements, over the long term, ac­
company the m ajor trends of other commodity prices.
Their fluctuations upward or downward are frequently
sharper, however, since they are generally more sensitive
to consumer purchasing power. Beef cattle prices rose
with the all-commodity wholesale price index to record
levels during and immediately following W orld W ar I ;

■A part from these various points, the feeder has little
cpntrol over the price his animals command in the market
•place. Slaughter prices on the nation’s market are pri­
marily a reflection of the complex relation between the
extent and the character of the national demand for meat
on the one side, and the volume of cattle marketing and
meat inventories on the other, further influenced by local
supply and demand situations.




1T he consum ption of pork varies geographically and by population groups.
In areas w here pork is habitually used, its consum ption varies little a t
different levels of income. T he consum ption of lamb changes by income
and also by population groups. T he preference for lamb, especially in the
A m erican w hite group, increases as incomes increase. L am b is m ore g en ­
erally eaten in urb an areas and in population centers w ith a concentration
of people of M editerranean extraction, who by custom prefer lamb.
S e e : E . C. V oorhies and R. W . R udd, Sheep and Wool Situation in California,
1950, U niversity of California, College of A griculture, A gricultural E x ­
perim ent Station, C ircular 339.

17

likewise, cattle prices registered a sharp postwar break
but recovered more rapidly than the over-all index dur­
ing the latter part of the 1920’s. They both dropped dis­
astrously to the depths of the great depression. Following
1940, both cattle prices and the index of all commodities
reflected war and postwar conditions. The removal of
price control and the high level of postwar economic ac­
tivity are highlighted, however, by the steep ascent in the
price of beef cattle after 1945.
Prices of beef cattle also exhibit the cyclical movement
identified with other livestock prices. The numbers of
any type of livestock increase and decrease over a period
of years in recurring patterns—generally referred to as
the production cycle. The increase or decrease in the vol­
ume of marketings incident to these changes in inventories
is reflected in an inverse manner on prices. W hen greater
inventories precipitate larger marketings, they exert a
downward pressure on prices; and when the numbers
marketed are reduced because of contracting inventories,
prices are strengthened. The beef price cycle is normally
of longer duration than that of either hogs or lambs since
the latter reproduce more rapidly and their offspring are
marketed at an earlier age.
Seasonal price movements

Like other meat animal prices, the market prices of
slaughter cattle are subject to the seasonal variations
which result from seasonal marketing trends— receipts of
grass-fat animals through summer and early fall and of
fed cattle through winter and early spring. The extent
and duration of seasonal movements are influenced by
the numbers of livestock marketed and the length of the
m arketing season, which in turn are influenced by range
grass conditions, feed supplies, inventories of cattle, and,
to a certain extent, by the profit or loss experienced by
cattlemen the previous year.
The over-all length of the grass marketing period is
largely dictated by rainfall and growing conditions on the
better range grass areas. In seasons of abundant natural
pasture, “grass” operators are likely to stock more heav­
ily in order to utilize this resource of relatively cheap
feed. Consequently, marketings are spread over a longer
period. Similarly, in years of poorer grass, fewer cattle
are marketed “grass fat” and these over a shorter time.
Fed cattle marketings accelerate after the decline of the
“grass run.” The nation’s feeders, particularly in the im­
portant Corn Belt area, postpone their principal feeding
enterprise until the grain harvest can be anticipated and
its future price more correctly appraised. A larger num­
ber of animals are, therefore, normally placed on feed in
the fall, and the increase in fed cattle marketings devel­
ops a few months later. The volume of long-fed cattle,
which results from a plentiful and relatively cheap supply
of corn, or of short-feds, because of a soft corn crop, like­
wise affects the duration of the surplus-fed cattle m arket­
ing season.
Large profits or severe losses experienced one year
tend to have a psychological influence on the extent to




which cattle feeders, both range and feedlot operators,
are willing to gamble the following year. In varying de­
grees, then, the above elements combine to determine the
seasonal pattern of marketings and, therefore, of slaugh­
ter prices as well.
Short-run price fluctuations

Quotations on the nation’s cattle markets fluctuate from
week to week, and even from day to day, on the samel
markets as well as between markets. Many factors co n -'
tribute to these short-run movements. The balance be­
tween the demand for meat (as expressed at the whole­
sale level) and the volume of daily and weekly m arket­
ings is primarily responsible for the frequent change in
cattle prices. W hat the wholesaler receives for carcass
beef is quickly reflected in the price of slaughter cattle.1
The volume of weekly receipts and the types of animals
marketed are extremely variable. As marketings and
slaughter vary, the supply of beef is also affected. Live­
stock slaughterers, since they are handling a perishable
commodity, are able to adjust their beef inventories, up­
ward or downward, only to a limited extent. W hen fat­
tened animals reach their most desirable finish, they must
be slaughtered. F or feeders to hold them for more favor­
able prices would in most cases prove more costly than
profitable. W hen his animals are ready he has a relatively
short time to capitalize on their most efficient returns.
Neither is the packer in a position to wait out a tempo­
rary period of rising prices, nor to increase appreciably
his inventory of slaughter cattle on a relatively low m ar­
ket. The commitments to his customers have to be filled
and delivery made if he is to maintain his competitive
position. Since beef in carcass form is a perishable com­
modity and a steer on the hoof an expensive boarder, the
packer can neither store a larger than normal inventory
in his cooler nor carry a backlog of fat cattle beyond that
required to insure continuous operation. F or these rea­
sons, the slaughter buyer is in the m arket each day.
Through him the packing industry gears its slaughter to
the level of consumer demand for beef.
Most of the fresh beef handled by packers is sold within
two weeks of the time of slaughter. W hen marketings are
1A stee r is no t all beef. T he spread, or lack of spread, betw een the dollar
value of a fat bullock and w hat its carcass brings a t wholesale has a n
im p o rtan t influence on w hat the slaughterer is willing to pay for an anim al.
Since the value of the by-products he processes or sells to others for p r o c ­
essing also determ ines his m argin of profit, this value often becom es the
basis of packer resistance to the asking price for livestock on the day-today m arket. T he following ch art gives the percentage of finished p ro d u ct
to live w e ig h t:
P e rc e n t
Beef .......................................................................................................................... 54.3*
B y-products : H ide .............................................................................................
5.9
F a t s ...............................................................................................
2.2
H ead .............................................................................................
2.12
F e e t ...............................................................................................
l.,’
l
B lo o d ....................................................................................................... b
Casings .........................................................................................
M
M iscellaneous ...........................................................................
3.2
V alueless m aterials ......... ...................................................................................
10.1
Shrinkage ...............................................................................................................
6.8
A dditional shrinkage thro u g h p ro c e ss in g ...................................................
12.7
100.0
*This dressing percentage is ta k e n as th e rep resen tativ e average yield for
all grades slaughtered.
S o u rc e : Sw ift & C om pany, A g ricu ltu ral R esearch D epartm ent, Bulletin.
N o. 6.

18

large, the available supply of beef approximately 14 days
forward will be relatively large. So also is the supply to­
day a reflection of the volume of marketings at some pre­
vious time. On the analysis of the short-run supply situa­
tion, distributors become either aggressive or reluctant
buyers. W hen supplies are large, they are only willing
to buy at lower prices. The slaughterer, to sell his beef
competitively, must lower his quotations, against which
he must also lower the price he offers for live cattle. W hen
live marketings are reduced, the reverse is true— distrib­
utors become more aggressive and prices are bid up. The
slaughterer in turn must pay more for the stock needed
to replenish his cooler.

price changes occur between this market and other cen­
ters, as well as between pairs of markets, excluding Chi­
cago.1 F or short intervals the changes may even be in
the opposite direction. Nevertheless, because Chicago is
advantageously located between the primary production
ranges and the great consumption areas and contains the
administrative center of the nationwide packing firms
and because from it is diffused a great volume of market
information, it serves as the composite expression of
nationwide supply and demand conditions. Chicago quo­
tations, therefore, are closely watched by buyers and
sellers at all principal livestock centers.
F or somewhat the same reasons, slaughter quotations
on the Los Angeles market perform a similar function
relative to livestock prices in the F ar West. Serving the
largest western concentration of population, it offers the
greatest diversity of demand for slaughter cattle in the
District, which it supplies by drawing from practically all
states west of the Mississippi River. W ithin its boundaries
are located not only the m ajor nationwide meat packing
firms but a large concentration of independent plants as
well. The market reports which emanate daily from Los
Angeles are regarded throughout a large portion of the
District as a reflection of the strength or weakness of
District slaughter cattle prices.
While the level of slaughter cattle prices at any market
range within the limits established by the over-all supply

Price differentials between markets

Because of a larger volume of daily receipts and greater
diversity in the class of animals sold, average prices at
one market will ordinarily be more significant than at
other markets in the same general trading area. As a re­
sult the larger market comes to be considered the price
setter and is looked to as a barometer of prices for the
region. But if prices within a regional trading area were
actually determined at the m ajor center, daily price move­
ments at the other markets could be expected to react in
a like manner. Prices at these markets should reflect those
at the m ajor center, plus or minus freight and shipping
differentials. However, studies of price differentials be­
tween Chicago—the nation’s largest livestock center—
and competing midwestern markets show that daily

Dollars

1 See Dowell and B jorka, op. cit.

S L A U G H T E R S T E E R P R IC E S A T C H IC A G O C O M P A R E D W IT H W H O L E S A L E D R E S S E D
M E A T P R IC E S A T N E W Y O R K 1
—1937-1952

1 T he prices used are those for “ good” grade steers and dressed m eat. T he g rade designation is th a t used prior to D ecem ber 30, 1950. F rom 1951 on,
th e previous “ goo d ” grade has been designated as “ choice.”
*N o t available. D u rin g this period th e volume of sales was insufficient to establish representative prices.
N o te : T his c h art is plotted on a sem i-logarithm ic scale on which equal v ertical distances rep resen t equal percent changes ra th e r th an equal absolute
am ounts.
Source : U nited S tates D ep artm en t of A g ricu ltu re, Pro d u ction and M ark etin g A dm inistration, L ivestock B ranch.




19

and demand situation, they also express special circum­
stances existing in the area served by the particular m ar­
kets. Circumstances peculiar to the area influence not
only the over-all movement of livestock prices on the local
market but also the price level of separate classes of live­
stock on the same market. This is more characteristic of
cattle prices than other types of livestock since cattle sales
cover a wider range in age, type, weight, and grade of
animals. Should receipts of long-fed, well-finished steers,
for example, be larger than anticipated when the local
wholesale carcass supply of this type is still relatively
plentiful in the area, buyer resistance would be registered
and prices would quickly reflect the situation. At the same
time, reduced receipts of short-fed, medium-finished ani­
mals, coinciding with an active demand for the same, may
make prices stronger for this grade. Another market with­
in the general trading area may meanwhile be expressing
a different set of local features with resulting stronger or
weaker market pressures. Prices at the one market, there­
fore, may be lower or higher for the same class of animals
on the same day. The disparity between the two markets
would not long exist, however, before purchasers at one
would find it no longer profitable to buy and would, there­
fore, shift their activity to the competing center, providing
transportation differentials were equalized. Each market,
it is seen, is continuously subject to its peculiar local in­
Differences from
Los Angeles price
(Dollars per cwt.)

fluences, but it also reacts to occurrences outside its own
immediate trading area. Influenced by these interrelated
forces, the sum of the movements results in a constant
shifting and readjusting of quotations as prices tend to
equalize within the broad limit representing national con­
ditions.
Demand differs in various markets: The character of
demand peculiar to one trading area, however, may tend
to make the average run of prices higher at one competing \
market than at another. Over a period of time, one m a rk e t'
may also be stronger for particular classes or grades of
livestock. This fact is of much practical importance to
District feeders, especially to those operators so situated
that they may choose one or more alternate markets for
disposing of their animals. F or example, to many District
shippers the freight differential from their place of opera­
tion to either the Los Angeles or San Francisco area is
of little consequence in determining the ultimate returns
realized on the sale of livestock. It is worth any feeder’s
time to analyze price trends over a period of years at the
centers available to him and for the separate classes of
cattle he normally handles.
In the early postwar years “medium” grade steers1 at
South San Francisco averaged about $1.50 per hundred1 G rade as used prior to D ecem ber 31, 1950.

D IF FE R E N C E S IN SLA U G H TE R PRICES BETW EEN T H E SOUTH SAN FRA N C ISC O AND LOS A N G ELES
MARKETS FOR “ G OOD” AND “ M E D IU M ” SLA U G H TE R G R A D ES1 1946-1952
—

1 P rices of slau g h ter steers, 900-1100 pounds. G rade designations are those used prior to D ecem ber 30, 1950. F ro m 1951 on, th e previous “ good” grade
has been designated as “ choice,” and th e previous “ m edium ” grade has been split into two grades, the top half of which is now designated as “good” and
th e rem ain d er is called “ com m ercial.” Since th e change in grade designations, the price used for the “ m edium ” grade is the average of the prices for
th e “ good” and “ com m ercial” grades.
*N o t available. D u rin g these periods the volum e of sales was insufficient to establish representative prices.
Source : U n ited S tates D e p artm e n t of A g ricu ltu re, P roduction and M arketing A dm inistration, L ivestock B ranch.




20

weight higher than the same class of cattle on the Los
Angeles market. On the other hand, the price of the
" ‘good” grade, with but a few exceptions, was higher
in the southern market for the same period. The differ­
ences between the two markets for these grades is usually
explained by the character of their respective demands for
Tieat at the retail level. In this case the more heterogene­
ous nature of the southern market makes for a relatively
Wronger demand not only for the best grades but for
:heap meat as well. The existence of a large group of
high-income people and a substantial restaurant outlet
results in a strong demand for choice grade beef. Because
Los Angeles slaughterers also serve the requirements of
a large demand from the lower income groups, there is a
large outlet for the cheaper stewing and roasting meats.
This is why Los Angeles has long been known as a more
favorable market for cows, from which much of the supply
of cheaper meat is derived.
Although medium grade steers have commanded a
higher price on the South San Francisco than on the Los
Angeles market, the favored position of this grade ap­
pears to have diminished in the last two or three years.
F or various reasons, however, the South San Francisco
m arket has become less representative of prevailing prices
for the central Pacific Coast area, and consequently those
producers accustomed to marketing this class of cattle
DifFerences from
North Portland price
(Dollars per cwt.)

should not draw unjustified conclusions from this trend.
Keen competition among slaughter buyers over the past
few years has induced more and more direct buying at
country points so that fewer cattle of all grades are being
offered on the public market. Moreover, the increasing
inaccessibility of the stockyards—the result of metropol­
itan traffic congestion—and increased slaughtering activ­
ity of interior plants have contributed to the diminishing
position of the public m arket in the area.

Factors Influencing Returns
The fattening stage is of importance to the beef making
process because during this period the dressing percentage (proportion of carcass to live weight) is increased.
A t the beginning of the feeding period, slightly less than
half of the average feeder steer is edible. During feeding,
the m ajor share of the weight increase takes place in the
edible portion of the animal body. A suitable feeder steer
when fattened to “choice” slaughter grade is made to yield
in carcass form between 58 and 60 percent of its live
weight—and as high as 63 percent when finished to
“prime.” The tenderness and palatability of the beef pro­
duced improves along with this increase in edible por­
tion. To produce this increase in carcass weight and to
improve its quality profitably, the feeder must carefully
consider (1 ) the relationship that is likely to exist be­

D IF FE R E N C E S IN SLA U G H TER PRICES BETW EEN T H E SPOKANE AND N O R TH PORTLAND
MARKETS FOR “ GOOD” AND “ M ED IU M ” SLA U G H TE R G RA D ES1 1946-1952
—

1 Prices of slau g h ter steers, 900-1100 pounds. G rade designations are those u sed prior to D ecem ber 30, 1950. F ro m 1951 on, the previous “ good” grade
has been designated as “ choice,” and th e previous “ m ed iu m ” g rade has been split into tw o grades, the top half of which is now designated as “ good”
and th e rem ainder is called “com m ercial.” Since th e change in g rad e designations, the price used for the “ m edium ” g rade is the average of th e prices
for th e “ good” and “ com m ercial” grades.
*N ot available. D u rin g these periods th e volum e of sales was insufficient to establish represen tativ e prices.
Source : U n ited S tates D ep artm en t of A g ricu ltu re, P ro d u ctio n and M arketing A dm inistration, L ivestock B ranch.




2
1

tween the per hundredweight buying and probable selling
price, and (2 ) the type of animal best suited to exploit
this relationship.
The feeder-slaughfer margin

Normally, the feeder expects to receive a higher price
per hundredweight for his cattle when fat than he was
required to pay for them. Since the fattening process re­
quires a certain amount of time, however, he must buy
replacement stock to be sold against a future market
subject to the complex price relationships previously
described.
The amount of time involved between the purchase of
feeder stock and their sale as fat animals is largely de­
pendent upon the amount of additional weight the oper­
ator feels is necessary to enhance their value most, as well
as the grade to which he thinks they will most econom­
ically fatten. U nder conditions in which cattle are fattened
in the District, the time required to bring a suitable feeder
to “choice” slaughter grade ranges from 120 to 180
days. Approximately 90 to 120 days’ feeding is needed to
acquire a “good” slaughter finish. Heavier, well-fleshed
cattle or those grass-fat animals which can be improved
by a turn in the feedlot are fed for a shorter term —60 to
90 days. It is seldom profitable to attempt feeding a lower
quality animal to a higher slaughter grade, however, since
their relatively inferior characteristics preclude their pro­
ducing a desirable carcass economically.
Price fluctuations on the m arket for which the animals
are being fattened are often greater, as well as more fre­
quent, than on the market where they were purchased.
A large part of the feeder buying is done on a contract
basis a considerable time in advance of delivery and at
country points far removed from the m ajor markets.
Feeder prices, consequently, are less subject to day by
day market pressures. Based on the slaughter grades most
in demand on the D istrict market, a seasonal pattern in
the dollar m argin between buying and selling prices
usually occurs, after allowing for the time lag of the vari­
ous feeding periods. The m argin for all grades usually
decreases between summer and fall and is relatively wider
during the winter and early spring. The dollar m argin is
usually greater for the higher grade and less for each
lower grade. W hen margins rise or fall the changes
usually occur sooner in the lower grades. W hen both
slaughter and feeder prices are relatively high, dollar
margins are generally greater, while the reverse usually
occurs when both are low.
Required margins: The price the feeder receives for
his cattle when fat will be realized not only on the weight
added but also on the original weight bought. The animal
which brings the highest price per hundredweight when
fat does not always furnish the operator the greatest
profit. Neither does the grade which shows the widest
spread insure the highest net return. The cost of the gain
becomes increasingly great as the animal approaches the
highest finish. Fed on the D istrict’s high-cost feedlot ra­




tions, the cost per pound of the added weight is, there­
fore, usually higher than the price per pound the feedei:
realizes from the sale of the animal. Hence, the cost o
the gain becomes of basic importance to successful live­
stock feeding.
Feed costs represent approximately 80 percent or m on
of the cost of the gains in weight. Another 6 percent ii
usually absorbed by interest on the purchase price of th ‘
Margin required
to break even

B R E A K -E V E N M A R G IN S

N o te : T his c h art indicates the relation of th e cost of feed and the cost of
feeder cattle to the m argin betw een the cost and sale price of cattle th a t is
required to break even on the feeding operation. I t is based upon a 700
pound feeder steer fed to 1,000 pound slau g h ter condition in 150 days w ith
an average w eight of 850 pounds during the feeding period and average daily
feed consum ption of 3 pounds per cw t. T he costs include in te re st a t 6 p e r­
cent on cost of cattle (for five m onths) b u t no o th e r production costs.
T he use of this c h art m ay b e st be illu strated by citing an exam ple. A
reading of the vertical price scale a t the point of in tersection betw een a
given cost line for cattle and a given cost line for feed indicates the m a rg in
betw een the cost and sale price of cattle th a t is required to b reak even on
th e feeding operation under the conditions previously indicated. Thu,s, if
cattle cost $30 per cw t. and feed costs $60 per ton, the sale price w puld
have to exceed the cost price of cattle by $3 per cw t. in ord er to break even.
T he detailed calculations are as follow s:
Cost of steer (700 lbs. @ $30 per c w t.) ............................
Cost of feed (1.9125 tons [see below ] a t $60 per ton)
In te re s t (6 percent on $210 for 150 d a y s ) .....................

= $ 2 1 0 .0 0 ;
= 114.75
=
5.25

T otal cost ................................ ....................................
$33 per cwt. (or $3 per cw t. above cost price) is the
required selling price for finished steer in order to
break even (1,000 lbs. @ $33 per c w t.).

$330.00
= $ 3 3 0 .0 0

T he am ount of feed consum ed is calculated by m ultiplying th e average
w eight of the steer d uring the feeding period (850 lbs.) by the daily feed
consum ption (3 lbs. per cw t.) which is th en m ultiplied by the length of the
feeding period (150 days).

22

cattle. Labor, taxes, purchasing and marketing charges,
loss from shrinkage, and mortality loss make up most of
the remaining expenses. The by-products retrieved from
feeding—principally manure— serve to regain part of
these.
Since the cost of feed and the cost of cattle are the
m ajo r capital expenses in any feeding venture, they are
the most significant variables which reflect on profit or
loss. How the cost of feed and the cost of cattle influence
fdie m argin required for the feeder to break even on his
operation is indicated in the accompanying chart. Such an
illustration must necessarily be tied to certain constants
because of the range in the price of cattle based on age,
sex, and type. But the influence of both cattle and feed
costs would similarly affect the necessary m argin for any
group of animals, although by different amounts. It is
seen that the more the operator has to pay per hundred­
weight for feeder cattle, the smaller the m argin necessary
if the feed cost remains the same because the cost of the
weight gains approaches the original cost of the cattle.
Discounting other expenses, if the per hundredweight
cost of the gain and of the cattle are equal, the operator
could obviously sell the finished animal for the same price
per pound as he paid for it and still break even. As the
feed price decreases, the cost per pound of weight gain
is also reduced. Conversely, the more the gains cost the
feeder, the wider the m argin he will need.
A larger margin is required when both cattle and feed
prices are relatively high than when the price of both is
low. The most margin is needed and, therefore, the least
desirable feeding conditions exist when the price of feed
is high and the price of cattle is relatively low because the
cost of gains in weight is relatively greater.
W ithin certain limits, the more the animals weigh the
less the required margin tends to be since the increased
price received when they are fattened is realized on a
greater amount of initial pounds. Limits are imposed,
however, by a decrease in the feeding efficiency of heavier
and older cattle.
Feeding returns: Profits from cattle feeding are pri­
marily influenced by the size of the m argin realized at the
time of sale between the per hundredweight buying and
selling prices. It is this aspect which contributes to the
speculative aspect of feeding operations and to the poten­
tial costliness of an error in judgment in anticipating
future slaughter cattle price trends. W hen prices for fat­
tened cattle move upward during the feeding period, m ar­
gins rise rapidly. Short-run price declines, on the other
hand, can result in heavy financial loss. Cattle feeding has
been generally profitable over the past decade because of
favorable price relationships between costs of feeders and
prices of slaughter cattle.

expects they will make all influence his decision as to the
age, sex, and type of animals he chooses to fatten.
Age: The age of an animal is im portant because of the
effect on the efficiency with which it utilizes its feed to
transm it its gains into weight. Younger animals make
more economical weight gains—greater gains for the
amount of feed consumed— since less net energy is re­
quired to make a pound of gain. Yearling steers make
more economical gains than two-year-old cattle of the
same breeding and quality, and calves, in turn, more fav­
orable gains than yearlings. On the other hand, the higher
price of the younger animals and the longer time required
to bring them to slaughter condition may make the total
gain less profitable when the feed is a high-cost ration.
The extra time required to reach a desirable slaughter
weight ordinarily is not justified in District feeding unless
the animals are to be fattened to a prime degree of finish,
for which there is a relatively limited market in the area.
Heavy, mature steers can be expected to consume more
feed per 100 pounds of gain than do younger animals;
yet in a period of strong demand for heavy cattle (such as
at a time when heavy military buying occurs), they fre­
quently prove more profitable to feed.
W hether it is more profitable to fatten yearlings, twoyear-olds, or heavy cattle depends, therefore, upon the
particular circumstances which influence the level of
slaughter cattle prices. In the Twelfth District partic­
ularly, anticipation of the level of prices for long-fed,
high quality calves, or heavy, older cattle requires a keen
analysis of future demand conditions and is generally
attempted only by feeders of wide experience. The de­
mand for higher finished beef—prime grade—is largely
restricted to the specialty restaurant trade. The outlet for
heavier beef carcasses is principally in the demand that
arises from the military, a rather unpredictable outlet.
Sex: The nation’s annual calf crop is about equally
divided between steer and heifer calves. A portion of the
female calves each year is retained by breeders for herd
replacement. How many are actually kept depends on the
relationship of cattle inventories to feed prospects and
whether, because of price outlook, breeders are desirous
of expanding or contracting their herds. Over the long
term, however, about two-thirds of the annual crop of
heifers is slaughtered for veal or sold as feeders. These
latter actively compete with steers on the feeder market.
The usual lower price of heifers frequently makes them
more profitable to finish. Heifers do not make as rapid
gains as steers, but they become fat sooner. However, be­
cause of the possibility of their being pregnant and their
tendency toward accumulation of wasteful kidney and
external fat, prejudice has long been exercised against
heifers by slaughter buyers. W ith retail demand tending
toward smaller carcasses and younger beef, however, the
discrimination against them has become less extreme than
formerly was the case. W hen young and not overly fat,
their dressing percentage compares favorably with that of

The choice of feeder cattle

How the operator views the possible margin, his analy­
sis of what it will cost to feed his cattle, and the gains he




23

steers and their carcasses show few of the undesirable
characteristics which develop with age and excessive
weight.
T ype: Because of the preponderance of the British
breeds— Hereford, Angus, and Shorthorn—over the na­
tion generally, the m ajor share of the country’s cattle m ar­
ketings is represented by these types. W hen of suitable
beef conformation, little preference between them is ex­
hibited by slaughter buyers. Personal preferences and
their respective availability usually dictate the feeder’s
choice.
During the past two decades, however, crossbreeds of
Brahman influence have gained in popularity in some of
the main producing areas because of their resistance to
heat, drought, and parasites and because of their early
maturity. Feeder cattle of this type are now both num er­
ous and more generally accepted. Since a much smaller
proportion of the crossbreeds grade as high in carcass
form as the standard breeds wT fed under equal condi­
hen
tions, they normally bring less per hundredweight and
may face further penalty for excessive weights.
Because of these crossbreed characteristics, it must be
decided whether their higher dressing percentage and
ability to reach m arket condition sooner are sufficient to
offset the lower price which results from their less desir­




able beef conformation. M arketing them at weights not
more than 100 to 150 pounds heavier than other cattle
serves to minimize the graduated penalties for heavy
carcasses. On the other hand, the weight characteristics
which normally affect the demand for them adversely are
turned to an asset when there is a strong m arket for heavy
carcasses.
W hereas in periods of high prices and wide demand fqr
meat the advantages offered by crossbreeds may offset
their undesirable features, it m ust be appreciated that in
a period of declining prices less desirable cattle are likely'
to be penalized first.
It is to be seen from the above discussion relative tc*
feeding margins and choice of feeders that the profits to
be made in cattle feeding, as well as the losses which can
be incurred, are perhaps as diverse as the num ber of oper­
ators involved or the groups of animals which are fed.
Since the feeder is interested in making the maximum
dollar profit for his expended effort, the character of each
operation represents his individual appraisal of the vari­
ables which concern the m arket outlook. Because of the
nature of the animals and the nature of the demand for
meat, cattle feeding allows for considerable flexibility of
operation—more than in many other forms of agricultural
endeavor—and places a premium upon the correctness of
the producer’s intuition regarding m arket forces.

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