Economics: October 1999

Texas take stockers in on rate of gain. One problem every rancher faces is that steers' average daily gain is often higher than that of heifers, yet most ranchers charge a flat rate for gain. If you look at this situation from an economic standpoint, the rancher is not realizing as much revenue from heifers and therefore not achieving his maximum profit.

Over the last few years, the Noble Foundation Red River Demonstration and Research Farm has conducted research on steer and heifer gains. In 1995 and 1996, the farm weighed three different herds of calves that subsequently were each test group all the calves came from the same herd of cows. The calves tested in 1995 had a graze period of 210 days; the two groups of calves tested in 1996, 127 days (table 1). An additional contracted herd was tested in 1999 and had a graze period of 100 days, after which the calves were taken off the grass, separated, and weighed to determine their average daily gain.

Table 1. Weight gains for steers & heifers on pasture.
Year	Days on Grass	Steers (ADG)*	Heifers (ADG)*	Difference
1995	210	1.52	1.45	0.07
1996	127	1.22	0.89	0.33
1996	127	1.32	1.21	0.11
1999	100	2.3	1.9	0.40
*ADG = average daily gain in pounds.

As shown in table 1, the difference between heifers' and steers' daily gain ranged from 0.07 to 0.40 pounds.

Tables 2 and 3 demonstrate the differences between heifers' and steers' weight gain on pasture. The tables' data are based on a fixed grazing period of 120 days, with a base price for gain of 30 cents in table 2 and 35 cents in table 3.

The numbers that are highlighted in the tables are the amount of heifers' daily gain that is less than that of steers. The left column's numbers are the average daily gain for steers. Using these numbers, the grazing period, and your price for steer gain, you can use the tables to find the rate per pound of gain required for heifers' value to equal that of grazing steers.

As shown in table 1, steers' average daily gain was higher than that of heifers. In 1996, steers' and heifers' average daily weight gain was quite different; information from table 2 can be used to find the correct price to charge for the heifers.

We know that steer price per pound of gain in table 2 is $.30 and that the steers had an average daily gain of 1.22 pounds with heifers averaging 133 pounds less. Find 1.2 in the first column's data and the 0.3 heading (highlighted) in the fourth column; follow the first column's data to the right and go down the column that's headed 0.3. The table shows that $.40 is the heifers' price per pound of gain.

For the 1999 herd, the difference (in pounds) between steers' and heifers' average daily gain was .40, and steers' average daily gain was 2.4 pounds. According to table 2, the price to charge for that set of heifers would be around $.36. These rates for heifers ($.40 and $.36) are comparable to the base price for steers ($.30). You can use table 3 when the base price for gain on steers is $0.35. As daily gain for steers increases from 1 to 2.8 pounds per day, the rate per pound of gain required for heifers' value to equal steers' declines.

Ranchers can learn from these tables and use them in their operations. They can take a set of stockers in on rate of gain and set a price on steers' gain and, when the steers' and heifers' average daily gain is determined, follow the tables to set the price for the heifers.

Editors Note: Cody is a junior Agricultural Economics/Business Management major at Texas Tech University who served a three-month internship with the Agricultural Division.