 I'm going to talk about feed prices and rations for 2014. This happens every year over the past my lifetime where feed prices always follow the corn price. No matter if it's hay price, salad price, co-product prices, the corn price seems to always set what our feed prices are going to be in the industry. Obviously when prices went up, feed prices went up, and when corn prices went down we see what happened. You know I provided something like this back in 2012 of what our prices were back then. And as you can see corn back then was $6.58 or if I remember right $235 a ton and wheat meds were $2.50, barley malt sprouts were $2.60, and distillers grains were $2.55. That was really high prices and how quick we forget that in 2013 they went down to $4 a bushel, which is around $150 a ton. And look at the wheat meds price, $145, barley malt sprouts at $160, and dried distillers grains at $165, really close to the same price as what corn is. Hay obviously has less energy in it so it's price lower, and corn silage is a higher moisture content so consequently it's price lower per ton on an as-fed basis. If you come to 2014 that's this year, I handed in our room a co-products price list and I don't know if in the other rooms they might have had a selected co-products in North Dakota but it's a price list that's been handed out. Off of that I've picked up the corn price of the ethanol plants in North Dakota and you can see that corn is priced around $268 yesterday. Not today, price has changed with $268, which is somewhere around $95 a ton. So let's look at the wheat med price, $92 a ton. Barley malt sprouts still have that premium of $110 and the dried distillers grains were anywhere from $90 to $120 but they're at $100 a ton at the plants in North Dakota. Corn silage is priced 8 to 10 times the value of corn or a third the price of alfalfa hay so you can see where the prices are and grass hay with corn at $95 a ton is probably around $65 a ton. We'll have to see where things turn out this year when it comes to availability of all these feeds that we have for feeding cattle. Yeah, well it must be hit. Well anyway, on this particular slide this slide isn't here. I'm sorry but there's a co-product list in North Dakota that I handed out and I was going to show you what those are and it happens to not be here so well whatever the case is. I did want to point on daily nutrient feed costs when it comes to feeding the cattle. Let's just take an example. We got a 700 pound steer eating 3% of body weight. Well that math turns out to be about 21 pounds of feed per day of what the cow could eat and that's air dry feed. Dry matter of that would be around 17.8 pounds of dry matter intake. Well if we want the calf to gain he's going to require around a 57 megacal ration and or a 14 pounds of TDN if you think in the TDN world and around a 13% crude protein ration. Now my point here is that if we look at the feed part of the feed, energy is what keeps us hearts pumping every day. Protein builds muscle and helps digestion. The biggest cost in keeping that animal around is going to be the TDN or the energy cost at 14.14 pounds a day and the corn price for energy is five cents a pound. So that's 70 cents a day we spend in just in keeping that animal going. If we just consider the protein side of it, cattle consume around 2.3 pounds of protein a day and protein cost is 18 cents so consequently it's going to cost about 41 cents and protein cost a day. If we added those two up we'd say it's a dollar 20 but that's not what the feed costs are for feeding the calf right now that's because when you buy energy you also buy protein in the feed too. When you buy wheat meds it's 18% protein. When you buy corn it's 9% protein. When you buy alfalfa hey it's 23% well maybe not that high it could be only 12% protein but you get the point so in some of these in like a corn ration if you follow the math down below they need 2.3 pounds of protein a day but the corn is supply in 1.74 pounds a day so we need to provide an extra six tenths of a pound of protein. So if you buy two pounds of a 50% protein supplement that a commercial manufacturer would make or if you provide three pounds of distiller's grains to the ration that would be how you get the extra protein in and if you only supply that six tenths of a pound and the protein costs 18 cents we're only really spending 10 cents a day on additional protein supplementation so my point is and whenever I talk to people once in a while they get hung up on protein costs when in reality we need to focus on energy costs because that's what drives the cost of feeding cattle. Protein has a cost but it's not as big as energy cost and then once in a while we have the discussion of water. We always need water for our cattle but we never really put a price on what water is worth and I think if you look at some of those if you just do rural water costs you might only spend two cents a day in water costs so as a good nutrition perspective energy costs a lot protein needs to be supplemented and water is actually pretty cheap. Now I did do some values here on doing the math on cost per pound of nutrient and we've got four different feeds here one is canola mill wheat mids corn grain and distiller's grains or dried distiller's grains crude protein a canola mill is 38 percent the energy value on an as-fed basis is 62 percent the cost per ton right now is 219 cost per pound is it is 10 cents or 11 cents cost per pound of energy though is of protein is 28 cents and cost per pound of TDN is going to be 18 cents so what you do in order to get the cost per pound of TDN is take the cost per pound that 0.10 divided by the crude protein of 38.7 and then times by 100 and you end up with 0.175 0.28 now if you do for cost per pound of TDN you take the the cost per pound was be 0.109 and divide that by 0.621 and that would end up with your cost per pound of TDN so if we look here we'll see that on our protein sources distiller's grains is our cheapest protein source out there well let's look at the energy cost of our feeds looking down through that list wheat mids corn grain and distiller's grains are all about the same price per pound of energy so corn at 95 bucks a ton on your own farm is a pretty cheap source of energy if you need some extra protein in the ration if you buy distiller's grains to the energy you're getting a lot of protein for free so that's where you can see distiller's grains fits in these rations pretty easy wheat mids work as well too and the real issue comes into his freight costs if it costs too much to haul him home twenty dollars a ton or five dollars a ton that all ends up in the final discussion um there's some unique feed options in north dakota this year there's uh some places there's a lot of high vomit toxin or don wheat and barley uh i've talked to some places and i've asked them if they have any vomit in their wheat no they don't have any talked to other places my gosh we're getting it sent back we can't even sell it it's so high so even though the fda says that in the final ration should be no more than five parts per million uh we've done research here at the kerrington re center 10 15 years ago where we fed high vomit toxin barley to cattle this research was also done at crookston minnesota and if i remember right we can get up i think the barley was around 20 parts or 30 parts a million vomit toxin the final ration is about 15 parts per vomit toxin and whether we fed it to backgrounding calves finishing calves pregnant cows lactating cows replacement heifers uh we didn't see any problems no issues don't feed it to pigs but it didn't appear to be any problems to the beef cattle so if you find some cheap wheat um consider it might be a feedable source there's also some sprouted grains in certain areas so take advantage of those at a discounted price if you can get be careful of the of the alfalfa hay that you might find out there we had substantial early june rain so if you cut your hay early like you wanted to to get high quality hay and a rain three inches on top of it do a test on it to find out just how much energy has been washed out of the feed it might test fairly high in protein but the sugars have been washed out so consequently you're going to have to buy some energy like corn or any of these other things to boost up the ration still too early to tell about our high moisture corn situation um our cold our frosts and our warm days um it's still drying so nobody's really looked at combining corn but boy I sure it'd be an opportunity if we all of a sudden turned to real cold weather and now they got to do something with this high moisture corn it might be a real feedable thing as I was calling for co-product prices yesterday it became really apparent to me the problems are co-product suppliers in North Dakota having and getting trains to get their products out of the state you know we used to talk about oil and and elevators getting their feeds out but when it comes to the co-products um there's a lot of availability now this year when in previous years that wasn't the case so you might be able to find some product that might be priced well competitively obviously compared to corn but maybe because of the ability to ship it out maybe a problem too I'm going to switch gears a little bit and just talk about differences between animals we do a project every year it's going to be happening this year on Saturday it's called the Dakota feeder calf show to be a 16th year where producers consign cattle to this show and the calves in groups of three or four are then exhibited that day in pens and then at that point they're shipped over here to Carrington to be fed they're fed out to finish and they're on research projects here but I do sort up the data at the end for the producers that consign the cattle and I think this is kind of insightful as you look at these numbers the top five pens of coverage that means the top five average the top profitable five top profitable pens uh they average 3.3 pounds a day average daily gain and their feedlot average average daily gain was 3.85 last year that's why you know I don't remember this Tim because we made phenomenal dollars on feeding cattle last year I mean this is so wrong well it's so right I'd love to see it again maybe in my lifetime we'll see it again sometime but this is just amazing when you see numbers like $441 a head feeding profit that's really because we priced them really low in October of the previous year and that's what they were selling at so you know there's a real run up okay let's look at the bottom pen of calves the average they gained 2.93 which isn't a bad average daily gain when they're on finishing on a finishing ration the feedlot average daily gain was 3.41 and the feeding that should be profit per head was 292 not a loss but a profit there's a typo there and I see I've got a typo down below there too sorry about that the average of all pens was 3.25 with the feedlot average daily gain of 3.62 and what I'm getting at here is every year there appears to be a hundred and fifty dollars spread between the top penny calves and the bottom penny calves and profitability the average the difference between the average and the high was 75 dollars difference between the average and the low was 75 dollars whether we're making 400 bucks a head or only making 25 bucks a head or losing 100 bucks a head it seems that spread always continues showing up so when you're looking at buying calves you see where some calves are priced a lot higher than others there's some history there that knows how well these calves perform and that's probably why they're bidding because there's huge differences out here in the cattle I would like to talk a little bit about weight gain in cattle it's affected by both the animal and by the feed of course as the animal gets older it's rated gain if it's been small well put it this way small animals don't usually gain as fast as what bigger animals are just because their ability to intake feed if they've been green they're going to go ahead and grow well if they're fleshy they may not grow as well if they're stunning they just don't grow sickness if they've had previous sick mass and lungs you're going to find out that they just don't marble or they take more days on feed implants can improve average daily gain if they're exposed to really cold weather snow and no bedding then you can end up having poorer performance mud is a killer when it comes to performance in cattle even three four inches of mud can reduce the the rate of gaining calves by three four or feed efficiency by five six percent now the feed that's what we're usually talking about here today is the energy density of the feed grain is more dense than hey obviously it's also more expensive than hey if you want calves to gain three and a half pounds a day the ration's mostly going to be grain if we wanted to gain a pound a day it's mostly going to be hay because we just don't limit feed cattle that much grain feed additives like rumensin and bovatech will help improve feed conversion so and control coxidiosis so if you have the opportunity you can increase your feed efficiency by five percent by adding those in mixing wagons always appear to go ahead and improve the the ability for the performance of calves eating feed we've done products projects here at the center we've where a fed cattle separately or together in a mixed wagon and you'll see an increase of five six percent by mixing feeds and delivering to a feed bunk rather than feeding grain and then feeding hay and of course waste and feed loss are huge issues so by all means please even though feed's cheap try not to waste it okay now let's talk a little bit about the different rations and feed costs that come along with them i've got about 12 different rations here i'd like to go go through we're going to start out some lower average day of the gain then we're going to switch to a little bit higher this first one these are for 700 pound steers so if you're doing a budget if you want to go from six to 800 pounds an average would be 700 so that gives you an idea where things are at if you start off with a simple grass hay now this is kind of good grass hay not crappy grass hay this would be the stuff that's harvested in july not september you fed that along with 10 pounds of barley malt sprouts you can end up with two pounds a day gain feed conversions a 10 to 1 and feed costs to 42 cents now if we took the same hay mixed it with a little bit alfalfa hay and 10 pounds of wheat meds would actually impact or pick up our our energy concentration the ration our gain would go up to 2.5 our feed conversions go down to 8 to 1 and the feed cost goes down to at 33 cents we couldn't just feed grass hay and wheat meds but wheat meds are high in phosphorus so we need to supply some extra lime calcium limestone is a source of calcium so in this particular ration eight grass hay 12 wheat meds were down to two and a half pounds a day gain 8 to 1 feed conversion 33 cents just kind of the same as the ration be above so two and a half pounds a day the cost of a feed to put on a gain not total cost of gain but just feed cost is 33 cents last year i looked at these numbers and they were 10 to 15 cents higher than what they are this year her feed costs have gone down okay here's a four a combination of four grass hay alfalfa hay a little bit of corn green and wheat meds again two and a half pounds a day gain feed efficiency at 8 to 1 and our feed costs are 33 cents broken record alfalfa hay and corn salvage given the price that i said earlier around what $27 per ton of what our corn salvage price was and our alfalfa hay is going to be at $80 a ton alfalfa hay in the tube okay 2.2 average day of the gain feed conversions are 17.7 as fed to 1 pound a gain that's because salvage is 70 percent water 60 percent water a feed cost is 33.34 cents per pound a gain not bad another ration okay let's pick up the average day of the gain a little bit we're going to increase the amount of corn grain to six pounds wheat meds to six pounds but we've got to drop off the hay to only eight pounds our gain goes up to 2.9 feet conversions of 7 to 1 feed cost goes down to 30 cents slight changes in gain especially with the corn price can really reduce our cost per pound a gain a feed okay where am i at here i think i got two more rat no i got six more rations here here's alfalfa hay 2.6 pounds a day gain along with seven pounds of corn this is some not uh not fully mature alfalfa hay nor is it pre-bud alfalfa hay um it's going to be uh one-tenth bloom alfalfa type hay along with seven pounds of grain now if this hay has been been dried out and stored i don't see too much bloat potential enough it's been you know still kind of moist and and and fairly palatable you might end up some roll issues so you might have to adapt cattle this particular ration depending upon how you put it together uh or add rumensin which will help decrease the bloat issues feed conversions 7.7 or 8 to 1 feed cost is 33 cents again you know it's just amazing well everything's around 33 cents per pound a gain because all our feeds are hooked together and we're doing around a two and a half pound a gain well here's one where you're doing seven pounds of alfalfa and 11 pounds of corn but we need extra protein in the ration so we're going to use a pound and a half of protein supplement you get up to 3.4 pounds a day gain feed conversions are less than 6 to 1 cost to gain is 36 cents not out of line if you want to use even more corn to boost up the gain to 3.8 you're going to have to you've maintained the protein supplement of a pound and a half and alfalfa hay at 5.5 pounds or decrease your feed conversion goes down to 3.3 to 1 and the cost now is again at 33 cents so if the cattle can handle the gain feeding the extra grain will put on more weight and and the cost to gain is still very competitive well here's my last slide when it comes to rations we've got grass hay at 15 pounds and five pounds of distillage grains gain is going to be 1.7 pounds a day gain kind of like that heifer backgrounding ration feed to gain is 12 pounds to pound to gain um cost to gain is 44 cents when they don't put on much weight it just costs a lot that's yeah so now let's go to grass hay at 10 pounds a little spike with corn grain at 4 pounds and 6 pounds of distillers 2.7 pounds a day gain 7.5 pounds 7 and a half feed conversion 30 cent cost to gain if we pick up the grain even more to 7 pounds and keep the distillers at 6 and grass hay at 7 we're doing 3.3 with a 2.63 cost to gain so far that cheap distillers grains cheap corn cheap grass hay fed at a pretty high rate gives a pretty good cost to gain so things to think about and consider now let's talk about a rate of gain goals you know if you're looking to make grass cattle all these cattle and your goal is to go ahead and sell them into the grass market or put them on your own pastures you kind of want to have less than a 2 pound a day average day of the gain it's when they go out to pasture they gain weight if they're fairly fleshing go out to pasture they just stall out and don't really gain too much so you kind of have a high cost to gain during the backgrounding phase but a low cost to gain during the pasture phase and so the two kind of work out or that's why people bid up well for those cattle because they really do well out on pasture if your cattle want to have a medium rated gain that 2 to 3 pounds a day gain you can really grow them without adding condition they go into the feed yards and explode quite well higher rates of gain greater than 3 pounds a day depending upon your cattle you know they can they might get kind of fat and fleshy and if they're too fat and fleshy they kind of reduce the subsequent feedlot performance we see it in some of our projects here and that can happen although we do have cattle that show up in these projects that that they're just really good fast-grain and cattle and there's you can't give them enough energy to keep them growing fast enough and get fat they just really grow they eventually do get fat and they grade really well but they can handle a full feed of grain their whole life and and do quite well so if you know the history of the cattle how you how you performance manage them it gives you an idea of how you can feed them john talked a little bit about the calf weight calculator there's the website for it or just type google and type in calf web and you can do a break use the break even calculator i always like it because it's been peer reviewed and when you crank out the numbers that's kind of way they're supposed to be okay i did some cost comparisons too for budgets for kind of a different reason but um we took 570 pound calves fed them up to 750 pounds four different rations one at 1.7 one at 2.2 one at 2.5 and one at 3.4 different types of beans one's used grass hay and distillers others alfalfa and corn salad you want grass hay and mids and the other one grass hay corn and distillers three different types of rations you know to be perfect rations they should have a trace mental supplementation some vitamins um maybe an anaphore added with it maybe even a coxidious debt like core it or decox if you got coxidiosis issues um three four different types of average daily gains for backgrounding calves now this is kind of a busy slide it's got a lot of numbers on there but i think it used the same numbers that john did for in weights 570 calves in weights around 280 out weights 750 around 240 then you've got your four different average daily gains now your ration cost per ton on that first ration is 75 on the corn side ration is 39 on the ground hay and wheat meds is 82 grass hay and wheat meds is 82 and now you got the corn distillers it's 85 your feed conversions differ because the average daily gains differ yardage at 35 cents we had other expenses i put in some price protection here at 20 pounds you can see they all gained 180 pounds the ones that only gained 1.7 pounds we fed them for a hundred days the ones that we smoked at 3.4 pounds a day gain went out in less than two months well you look down here at the break even costs and or the total cost of gain you can see where as they increase their gain they decrease their break even cost and their total cost of gains per pound of gain goes down and if you look at the profit yeah tim you're right 50 bucks ahead in some of those calves yeah i came up to the same number but i did this to show that as cal as you pick up the average daily gain your profit potential usually picks up too now one other point that i like to show i did this compared to last year's numbers and then this year's numbers last year when we did the budget we expected to make uh 29 dollars on a group of calves with 1.8 average daily gain expected to make 63 dollars on a 2.3 average daily gain on a 2.873 and a 3.486 now because the market run up we made like two three four hundred dollars ahead just amazing but at the time we did the budgets this is where the models where the numbers came out and now you have the 214 numbers 2014 numbers i just shared with you if you look at the difference between last year's projected budgets and this year's projected budgets and the snares they used they're within 15 20 bucks ahead difference so even though you say the calf price is really high and the feed prices are really low last year calves were low and feed prices are high when we walked into the budgets it's a margin business there's about so much money penciled into this whole thing and it's showing up year after year after year so in summary i just like to say at 2014 feed costs have really really dropped it's kind of fun to go out and price corn at six cents a pound for feeding our feed cost projections decreased 10 cents a pound compared to last year's projections um i hope you caught my drift of this feed cost per gain um the cost of gain continues to decrease as your rate of gain increases so as you pick up the average day of the gain your costs per pound of gain tend to decrease ration options continue to be many we can get focus on lots of different weights of gain there's a lot of different local feeds if you got some damage feeds you can take a option of that's that'll work for you uh the feed prices follow the corn price so i suspect him as soon as the prices of corn go up our feed prices are going to go up too i had a conversation earlier today that talked about co-product prices and and his prices are quite a bit higher than what the what he was finding was higher than what the plants are offering that's because whoever he was pervading it from had bought them at high prices and they hadn't gotten rid of their high inventory cost to get down to low cost yet so there's some of that going on and like my last slide commented backgrounding continues to be a margin business and looking at the budgets this year there's some margin to be made even with these really high priced calves so with that i'm done with the comments i have to share if you've got any questions i'd be sure to happy to answer one or two if not we'll continue on to our next speaker