This document analyzes the costs of five beef cattle finishing systems: an earthen lot with windbreak, earthen lot with shed, concrete lot with shed, total confinement with solid floor, and total confinement with slatted floor. Confinement systems have the highest initial investment but benefit from economies of scale. Operational costs are highest for deep bedded housing due to bedding costs. Providing shelter is justified across all systems. For confinement systems to be competitive, producers must capture increased manure nutrient value. Key factors in system competitiveness include containment of runoff and utilization of increased manure value from confinement operations.

1. III. Economic evaluation of different
types of buildings on the outcome of
finishing beef cattle
Dan Loy
Professor of Animal Science
Director, Iowa Beef Center
Iowa State University

2. Five Systems Analyzed
• Earthen lot with no shelter…windbreak only
• Earthen lot with a shed for shelter
• Concrete lot with a shed
• Total confinement with solid concrete floor
• Total confinement with slatted floor

3. Costs/assumptions
• 1 USD $ = 2.32 R$
• 1 R$ = $.43
• Interest rates 10%

4. Assumptions Common to All
• Fencing costs are the same for all. Cost = R$76/m.
• Site preparation = R$ 4.64 per head
• Concrete cost costs = R$ 606/m3
• Concrete depth = 10.2 cm
• Earth volumes for settling basin and detention basin
construction = volume of liquid to handle

5. Assumptions Common to All
• 150 head per pen
• .3 m of bunk space per head
• 1 gate per pe
• 1 waterer per pen
• 100% of rainfall runs off
• Environmental control facilities designed per DNR regs (for once
a year pumping)

6. Earthen Lot with Shed
Windbreak fence
Open lot (150) head
Fenceline bunk
Drive alley
Open lot (150) head
Settling basin
Windbreak fence
Detention basin
6

7. Earthen Lot Assumptions
• 3.66 m concrete apron along length of bunk
• 13.9 sq m concrete pad around waterer
• 2.72 MT/yr-hd solid manure each year
• Lot with windbreak
– 23.2 sq m per head lot space
– 2.79 sq m per head mound space
– Windbreak = R$ 34.80/ head

8. Earthen Lot Assumptions
• Lot with shed
– 20.9 sq m/head outside, 2.3 inside
– No concrete inside building
– Building cost = R$388/sq m

9. Concrete Lot with Shed
S ettlin g a p ro n
Pa ve d lo t
Deten tio n b a s in
9

10. Concrete Lot Assumptions
• 1.85 sq m/head inside, 2.79 outside
• No feed alley
• No roof water gets on lot
• 4.1 MT/yr/hd solid manure
• Weekly scraping or oftener

11. Complete Confinement Building
with Solid Floor
11

12. Complete Confinement Building
• Total roof means no liquid manure to haul
• Total solid concrete floor
• 5.5 MT/yr/hd solid manure
• Solid hauling cost = R$8.88/MT

13. Complete Confinement Building
with Slatted Floor
13

14. Complete Confinement Building
with Slatted Floor
• No solid manure to haul
• Liquid manure = 24.6 l/day/hd
• Hauling cost = R$0.06/l

15. Change In Feed Intake
Open Lot vs. Confinement
14
12
10
8
6
4
2
0
ISU 70-75 ISU 78-83 MN 70-76 MN 77-78 NB 74-75 MO 74-82 SOI 88-97

16. Change In Feed/Gain
Confinement vs. Open Lot
8
7
6
5
4
3
2
1
0
-1
-2
-3
ISU 70-75 ISU 78-83 MN 70-76 MN 77-78 NB 74-75 MO 74-82 SOI 88-97

17. Change In Feed/Gain
No Shelter vs Shelter
10
9
8
7
6
5
4
3
2
1
0
ISU 70-75
ISU 78-83
MN 70-76
MN 77-78
H&G
SOI 88-97

18. ADG Assumptions
1.50
1.00
0.50
0.00
Yearlings
Calves
Open
1.41
1.27
OL/S, PC
1.49
1.34
Conf
1.37
1.24

19. F/G Assumptions
7.4
7.2
7
6.8
6.6
6.4
6.2
Yearlings
Calves
Open
7.4
7
OL/S, PC
7
6.7
Conf
7.2
6.85

20. Rations
• Flexible feed storage
– Modified distillers grains
– Ground hay
– Dry corn
– Supplement

21. Economic Analysis
• Initial investment
• Annualized costs
• Cost per head
• Yardage
• Environmental structures costs

22. Other costs
• Feed costs ($R per MT)
• Bedding cost
• Labor, land, etc.

23. Other non-feed costs
• Bedding-- $R 127/MT
• Land Rent-- $R 1030/hectare
• Wage rate $R32/hr
Other Non-feed Costs, per Head ($R/head)
YEARLINGS
Veterinary and health
Machinery and equipment
16.25
CALVES
22.30
25.50
Marketing and miscellaneous
Total
37.10
71.85
32.50
80.30
18.50

24. Feed Costs
• Corn--$R 387/MT
• Hay--$R 199/MT
• Modified Distillers Grains (50% DM)-- $R 217/MT
• Supplement-- $R 1020/MT

25. Initial Investment Per Head by System and Size R$
$2,000
$1,800
$1,600
750 head
1,500 head
5,000 head
$1,400
$1,200
$1,000
$800
$600
$400
$200
$Earthen Lot
w/Windbreak
Earthen Lot w/ Shed
Concrete Lot w/ Shed
Confinement Solid
Floor
Confinement Slatted
Floor

26. Ownership and Operating Costs (nonfeed) per Head
(Two Turns of Yearling Steers), R$
$350
$300
750 head
1,500 head
5,000 head
$250
$200
$150
$100
$50
$Earthen Lot
w/Windbreak
Earthen Lot w/ Shed
Concrete Lot w/ Shed
Confinement Solid
Floor
Confinement Slatted
Floor

27. Cost of gain with 2 turns of yearlings
(days on feed = 152 to 164) R$
$2.04
750 head
$2.02
1,500 head
$2.00
5,000 head
$1.98
$1.96
$1.94
$1.92
$1.90
$1.88
$1.86
$1.84
Earthen Lot
w/Windbreak
Earthen Lot w/ Shed
Concrete Lot w/ Shed
Confinement Solid
Floor
Confinement Slatted
Floor

28. Cost of gain with one turn of calves
(days on feed = 194 to 207), R$
$1.92
750 head
$1.90
1,500 head
$1.88
5,000 head
$1.86
$1.84
$1.82
$1.80
$1.78
$1.76
$1.74
$1.72
Earthen Lot
w/Windbreak
Earthen Lot w/ Shed
Concrete Lot w/ Shed
Confinement Solid Floor
Confinement Slatted
Floor

29. Breakeven Yardage Charge at 85% Capacity, R$
$2.50
750 head
$2.00
1,500 head
5,000 head
$1.50
$1.00
$0.50
$Earthen Lot
w/Windbreak
Earthen Lot w/ Shed
Concrete Lot w/ Shed Confinement Solid Floor Confinement Slatted
Floor

30. Breakeven Yardage Charge minus
Manure Value (85% Capacity), R$
$1.40
750 head
$1.20
1,500 head
5,000 head
$1.00
$0.80
$0.60
$0.40
$0.20
$Earthen Lot
w/Windbreak
Earthen Lot w/ Shed
Concrete Lot w/ Shed
Confinement Solid
Floor
Confinement Slatted
Floor

31. Initial Investment
• Earthen lot with windbreak has lowest initial investment
• Adding a shed doubles the costs
• Concrete with shed comparable to earthen lot with shed
when environmental structures included
• Confinement highest investment

32. Overhead and Operation
• Earthen lot advantage for small lot
• Earthen lots without shed or concrete lot were lowest cost for
large lot
• Confinement had higher costs
• Yardage ranges from R$1.23-2.06 /head/day

33. Cost of Gain
• Incorporates animal performance
• Yearlings and calves similar
• Confinement has higher cost of gain

34. Environmental Structures
• Not needed on confinement
• Lowest for concrete lot with shed
– 1/5 to 1/10 the cost of earthen lot structures
• Relative cost of structures
– $50 was largest initial investment
– 15% of pens lose more than $50/head
– Maximum annual cost less than $5/head

35. Size of Feedlot
• Subject to assumptions
– Many costs were linear
• 750 head lot
– Already capturing most economies of scale
– Environmental savings may be short lived
• 5000 head lot
– Economies of scale
– Environmental and overhead

36. ISU Beef Feedlot
Systems Manual
(PM-1867)

37. Summary
Construction and Operational Factors
• Confinement systems have the highest initial investment
• Economies of size exist for runoff containment
• Operational costs are highest with the deep bedded housing mostly
due to bedding costs
• The cost of shelter is justified in all systems
• To capture the value of initial investments in confinement
producers must also capture and utilize increased manure nutrient
values.

38. Key to Competitiveness
with Confinement

39. Questions?
Dan Loy
Extension Beef Specialist
Director, Iowa Beef Center
515-294-BEEF
dloy@iastate.edu