SA Graan June 2018

ISSN 1814-1676

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• Die menings van die skrywers van artikels in hierdie blad

is hul eie en verteenwoordig nie noodwendig die mening

van Graan SA nie.

•

The opinions expressed by contributors are their own.

They do not necessarily express the opinion of Grain SA.

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ALLE regte van reproduksie van alle berigte, foto’s, teke-

ninge, advertensies en alle ander materiaal wat in hierdie

tydskrif gepubliseer word, word hiermee uitdruklik voorbe-

hou ingevolge die bepalings van Artikel 12(7) van die Wet

op Outeursreg Nr. 98 van 1978 en enige wysigings daarvan.

John Deere Financial se landboubatefinan-

sieringspakkette word geskoei op jóú unieke

omstandighede en meganisasiebehoeftes.

Hierdie besondere finansieringsopsie is van

toepassing op die aankoop van enige nuwe

boerderytoerusting, mits dit van ‘n gemagtigde

John Deere handelaar bekom is.

Voorblad

Cover

Junie 2018

�ro�it ��

feeding period for cattle

he cattle feedlot sector plays a sig-

nificant role in the redmeat indus-

try. Approximately 70% to 80% of

cattle that reach the consumerwent

through a feedlot feedingphase to ensure a

market acceptable carcass.

Intensive feedingof cattle in feedlots is cru-

cial due to insufficient land and pastures to

raiseweaners for themarket. Furthermore,

the rate and efficiency to feedweaners for

themarket by utilising grain are higher and

can be done in less time, hence the prefer-

ence for this system. Feed isoneof thema-

jor input costs in a feedlot and has a great

influence on feedlot profitability and there-

fore sustainability.

Feedlot profitability is risky and unstable

due to various factors such as input and

output prices,which aremarket driven and

determined by supply and demand. Pro-

duction factorswhich include growth, feed

conversion and carcass characteristics are

determined by genetics, products, climate

andmanagement, amongothers.

Variation in price and production factors

have a great influence on profit margins.

The occasional ‘cost squeeze effect’,where

the profitmargin decreases due to increas-

ing input costs and stable or decreasing

output prices, places even more pressure

on profit margins – hence the importance

ofand focuson theeffectiveandproductive

useof resources andmanagement.

A solution for the above is precision agri-

culture, which can be defined in a simple

two step definition: Firstly identify the ge-

neticornaturalpotentialof theanimal.After

the capped potential has been determined,

change and adopt the products and pro-

cesses to utilise the genetic or natural po-

tentialoptimally.

Results

The Sernick Precision Feedlotting project

of 2015 is a practical example of precision

agriculture in the feedlot. Feedlots gener-

ally treat all beef breeds in a homogeneous

programmewith a standard feedingperiod.

Theobjectiveof thisstudywas todetermine

theprofitmaximising feedingperiod fordif-

ferent breeds, consequently the differentia-

tion between beef breeds. Firstly, referring

to the definition of precision agriculture,

the unique genetic growth and feed intake

curves were determined for each breed

through a feedlot experiment.

Graph 1

indi-

cates the average daily gain curves for the

sevendifferentbreeds.

It is evident that the initial growth slopes,

peakaveragedailygainand finishinggrowth

slopes differ significantly. Feed intake and

feed conversion for the seven breeds are

indicated in

Graph 2

and

Graph 3

. Big dif-

ferences are evident, therefore there is

an opportunity to differentiate between the

breeds.

Inputandoutputprices,whichare feedand

carcass prices, were incorporated into a

modelwith thegrowthand feed intakedata.

A production economic theorywas used to

calculate theprofitmaximising feedingperi-

od.This theory simply states thatmaximum

profitwillbe realisedwhen themarginal ad-

ditionalvalueof theproductequals themar-

ginal cost,which refers to the value of the

weight gained by the animal and the value

of the feed that itwas fed.

The results indicated significant differenc-

es between the profit maximising feeding

June2018

ON FARM LEVEL

Feedlot /Profitability /Sustainability

Animals

PHILLIPOOSTHUIZEN,

head:Economics andResearch,SernickGroup

Graph 1:The averagedailygain curves fordifferentbeefbreeds.

Graph 2: Feed intake fordifferentbeefbreeds.

period for the different breeds

in the

specific price scenario of 2015. Brahman,

Afrikaner and Bonsmara had a profitmax-

imising feeding period of 112, 105 and

112 days respectively. A profitmaximising

feedingperiodof 147 and 154dayswas cal-

culated forSimbra andAngus.

Anunexpected longprofitmaximising feed-

ing period of 189 and 182 days was deter-

mined for Simmentaler and Limousin. The

average standard feeding period in most

South African feedlots is 133 days. Conse-

quently Brahman, Afrikaner and Bonsmara

must be fed shorter than the average,were

Simbra and Angus have to be fed longer

andSimmentalerandLimousineven longer.

Graph 4

shows the profitmaximising feed-

ingperiodmodel result.

Conclusion

Referring to the definition of precision agri-

culture, an additional 6% ingrossprofit can

be realised by using the profitmaximising

feeding periodmodel. This can have a sig-

nificant influence on feedlot profitability.

Thegeneticpotentialof eachbreedwasde-

terminedandused incombinationwithvari-

able market prices to determine the profit

maximising feeding period. For this reason

management in terms of slaughter criteria

mustbe changedwhere theprofitmaximis-

ing feedingperiodmodel is concerned con-

sidered.

This way an animal’s genetic potential will

be utilised optimally, the price variation risk

will be addressed and decreased, and re-

sources and feed will be utilised optimally

toproducebeef.

Graph 3: Feed conversion fordifferentbeefbreeds.

Graph 4:Graphic representationof theprofitmaximising feedingperiod.

animals

rubrieke

features

4 Graan SA Standpunt:

Burokratiese rompslomp sloer

al hoe meer

5 Grain SA Point of View:

Red tape takes longer and longer

7 Uit die Woord

7 Op die kantlyn

78 Wiele vir die plaas:

Geharde en sportiewe voorkoms vir nuwe

sportnutsvoertuig

80 E-posse:

‘n Okkasie