Making supplementation pay off in ‘pasture fed’ systems

Supplying cattle to ‘pasture fed’ markets can pay off through price premiums. Achieving such premiums for slaughter cattle requires finishing stock to slaughter specifications and this may involve well considered strategies that provide eligible supplements to pasture, particularly during periods of low pasture productivity. Furthermore, maintaining supply continuity requires a supply of cattle that meet market specifications all year round, meaning there is a need for eligible and cost effective options for finishing stock to market specifications.

There are several company-based farm assurance programs supplying their own pasture fed brands and other brands utilising the Pasturefed Cattle Assurance System (PCAS) program.

The common theme underpinning these programs is the eligible diet, particularly the restriction on feeding grain over the lifetime of the animal. Under PCAS, cattle must never be fed separated grain or grain by-products (for more information about the PCAS Standards visit the website).

Pasture quality and availability can be highly variable throughout the year and special consideration needs to be given to the feed requirements to finish cattle to pasture fed specifications. For example, to grow a 500kg animal to a slaughter weight of 550kg liveweight would require a minimum of 138 megajoules of metabolisable energy (MJ ME) and 1,950g protein per day. If this cannot be delivered through pasture alone, consideration must be given to a cost effective and practical feeding program that will allow the specifications to be met.

As an example, a line of 18-month-old Angus steers destined for a pasture fed market and grazing a pasture providing 9MJ ME/kg DM, 7% crude protein and 74% neutral detergent fibre (NDF), were supplemented with silage and an eligible manufactured supplement in order to meet required growth rates and market specifications. The steers’ average starting liveweight was 477kg. Table 1 describes the contribution each feed type provided to meet the feed requirements. The eligible supplement was a manufactured lucerne-based cube ration with all ingredients in the cubes being on the eligible feeds list. 

Table 1: Contribution and cost of eligible ration components for pasture fed steers to meet animal requirements (Source: Victorian Department of Economic Development, Jobs, Transport and Resources).

Feed source	$/T DM	kg DM	MJ ME	ME Total	CP (g)	Total CP (g)	$/head/day
Dry pasture (9MJ ME/kg DM, 7% CP, 74% NDF)	$30	1.3	9.1	12	77	100	$0.04
Silage (11MJ ME/kg DM, 11% CP, 49% NDF)	$160	7.4	11.3	84	116	858	$1.20
Eligible supplement (10MJ ME/kg DM, 17% CP, 38% NDF)	$483	4.2	10	42	170	714	$2.03
TOTAL		13kg		138		1672	$3.27

The steers were fed for 46 days and were gaining 1.26kg/day until consigned to slaughter with an average liveweight of 535kg. Although all the steers met market specifications and graded well, determining the profitability of this ration requires calculating the cost per kilogram of the liveweight gain and the final gross operating margin. From this, the actual profit can be calculated.

In this example, the daily feeding cost was $3.27/head to produce an additional 1.26kg liveweight/day. The total investment over the period was $150.42/head.

A critical factor for a profitable supplementary feeding program is to ensure the price received per kilogram at slaughter is higher than the price paid for animals (or value assigned to the animals) at the commencement of feeding, as it is both weight gain and price margin that ensures feeding to produce extra kilograms is worthwhile.

In this scenario, a positive price margin existed, as the steers were valued at $1.80/kg liveweight at the commencement of feeding, with a finishing slaughter price of $2.16/kg liveweight providing an increase in the value of the cattle in c/kg/lw of $0.36.

This equates to a purchase price, or starting value, of $858.60/head before feeding, a slaughter price of $1155.60/head and a profit of $146.58/head once the feeding costs are subtracted. If no price margin existed for achieving the extra weight gain, a loss of $25/head would have been realised.

Neither of these calculations takes into account the additional expenses involved, including transport, labour and fuel associated with supplementary feeding. These should be accounted for when considering the whole of enterprise profitability.

Before starting any feeding program for out-of-season finishing, producers are advised to:

• establish the feeding cost for the additional weight gain
• determine the starting value of the cattle prior to feeding
• secure a minimum, or contract, price for the cattle at slaughter.

These calculations should be completed prior to the commencement of feeding, regardless of the attractiveness of available price premiums.Other requirements for successful supplementary feeding include:

• undertaking a feed test of all components of the ration
• completing a feed budget based on the energy and protein needs of the animals
• planning on-farm storage and handling of supplements
• contracting the slaughter price.

Finally, producers supplying cattle to pasture fed programs should remind themselves of the eligible diets (including forage crops, pastures or prepared feeds) that can be used within these programs, as well as any other requirements relating to animal production and documentation.

Further information

• Maria Crawford, Victorian Department of Economic Development, Jobs, Transport and Resources, Ph: 03 5573 0749

• Pasturefed Cattle Assurance System website