Page 168 - Calculating Agriculture Cover 20191124 STUDENT - A

14-28 Feeds and Feeding CH 14]

Cost of Gain

There is a cost to feeding animals and that cost is measured in terms of Total Cost and eventually
is expressed as Cost per Unit, where the cost per unit is an efficiency measurement. Cost of gain
functions as a ratio in terms of “How much does it cost to grow, raise or produce the units.”
The ratio is expressed as:
Cost of the feed : # units produced.

The ratio is simply the cost per unit. The “per” is either the colon ( : ) or the divisor ( − ) with a
fraction. The arithmetic remains the same, in that the numerator is divided by the denominator.
Feed efficiency and gain conversion determines how many pounds of feed are fed for every
pound of gain when growing an animal. When considering feed for body maintenance the costs are
different than the economic considerations for maintaining breeding livestock or working animals.
When feeding animals for their production, such as for dairy cows or milking goats, the efficiency is
how many pounds of feed does it take to generate the pounds of milk and the associated feeding costs.
Feed costs alone can account for about 80% of the total cost for raising animals exclusive of the
purchase of the animal. The most important measurement for the owner is an economic consideration
which is the feed’s usefulness in terms of “net returns.” Feed costs in terms of per pound or per ton of
feed, and pounds of feed required to produce a pound of gain, a pound of milk, a pound of meat for
meat animals, and for poultry when considering the cost of producing eggs, all being the economic
consideration. The net return determines whether a business survives and the owners can continue in
their business.
If the cost of a broiler ration is 4 cents per pound and 2.5 pounds of the ration are required to
produce 1 pound of body weight, then the feed cost per pound of body weight can be arrived at by
multiplying 4 cents x 2.5 pounds, which gives a feed cost of 10 cents per pound. When rations are
compared, the ration that produces a unit of product at the lowest total feed cost is the most desirable
from an economic point of view.

Example A. On average a broiler consumes about 9 pounds of feed to reach a five pound live
weight in 42 days (6 weeks). Assume that the broiler ration(s) cost on average $1.50
for the 9 pounds of feed. If the broiler grower grows 15,000 birds then (a) how many
pounds of feed will be required? (b) How much will that feed cost? (c) What is the
cost per day for feeding 15,000 birds? (d) What is the cost per day for feeding one
bird?
Solution algorithm:
(a) Total feed consumed = Total birds x pounds of feed / bird
= 15,000 x 9 #
Total feed consumed = 135,000 #

(b) Feed cost = Cost / pound x Total Feed Consumed
= $1.50 / 9 # x 135,000
Feed cost = $22,500

(c) Feed Cost per day = Feed Cost ÷ Number of days on feed
= $22,500 ÷ 42
Feed Cost per day = $535.71

(d) Feed cost per bird/day = Feed Cost per day ÷ Total Birds
= $535.71 ÷ 15,000
Feed cost per bird/day = $0.0357

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