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The Modern Feedlot for Finishing Cattle John J. Wagner,1 Shawn L. Archibeque,1 and Dillon M. Feuz2 1

Department of Animal Sciences, Colorado State University, Fort Collins, Colorado 80523; email: [email protected], [email protected]

2

Department of Applied Economics, Utah State University, Logan, Utah 84322; email: [email protected]

Annu. Rev. Anim. Biosci. 2014. 2:535–54

Keywords

The Annual Review of Animal Biosciences is online at animal.annualreviews.org

nutrition, management, environment, marketing, economics

This article’s doi: 10.1146/annurev-animal-022513-114239

Abstract

Copyright © 2014 by Annual Reviews. All rights reserved

The modern beef feedlot has evolved into a complex system that is very dependent upon technology. Modern feedlots are organized into departments, often including the office, cattle, yard, feed milling, and feed departments, that allow for improvements in production efficiency through the specialization of management and labor. Regardless of size, feedlots must succeed at the following tasks: cattle procurement, cattle receiving, cattle processing, daily cattle observations, health treatments, cattle marketing, feed procurement, feed commodity receiving, feed commodity storage, diet formulation, diet delivery, bunk management, and environmental management. Apart from cattle ownership, feedlots create most of their gross income from feed sales, yardage, inventory gain on flaked grain, and combinations of these sources. The future of the industry is filled with economic and political challenges, including high grain prices owing to competition from the ethanol industry, environmental regulations, excess feedlot capacity, and a diminishing labor pool owing to declining rural populations.

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INTRODUCTION

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Cattle entered what is now the United States through four distinct paths starting in the early sixteenth century (1). The Spanish brought cattle from the West Indies to the Atlantic or Gulf of Mexico coast of Florida. Spanish cattle also entered the Southwest, including present-day New Mexico and Texas, from Mexico. The third incursion of cattle came from French settlements in present-day Canada into states near the St. Lawrence River and Great Lakes region. The fourth entry was associated with the settlement of various colonies along the Atlantic coast by the Dutch, English, and Swedes. Interestingly, many of the cattle imported by the English were of Spanish origin and were purchased in the West Indies. Imported cattle were initially used as draft animals. Bowling (1) concluded that the initial economic purpose for the importation of cattle by the Spanish was for hide production. Tongues and tallow were also important products; however, the production of beef remained a by-product of the hide industry. Cattle imported by the Dutch and Swedes were used primarily for dairy production. The interest in beef production as a primary economic enterprise did not occur until the end of the eighteenth or the start of the nineteenth century in response to the production of surplus crops in the Ohio River Valley. In June of 1817, New York City received its first shipment of Ohio grainfed steers (2). Early grain and cattle production systems were remarkably simple. Whitaker (3) stated that in early-nineteenth-century Illinois and Iowa, corn required little effort to plant and even less to harvest, because cattle were often turned into the fields to harvest the crop themselves, and hogs often followed the cattle to salvage any grain that the cattle knocked down and wasted. Once fattened on surplus corn, livestock walked to markets located near the river systems because railroads were not established yet. The cattle feeding industry expanded as surplus crops were produced. Technological improvements, such as the invention of the John Deere steel plow in 1838 (4), the increased availability of hybrid seed corn in the 1930s (5), and the development of deepwell irrigation in the 1940s (6), in addition to political decisions, such as the Homestead and Morrill Acts of 1862, have resulted in large increases in corn production over the past 150 years (7) (Figure 1). From humble beginnings, the modern beef feedlot industry has evolved into a highly

Corn production (billion bushels)

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Year Figure 1 United States Department of Agriculture–estimated corn production by year for the United States (7).

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sophisticated, complex system that is very dependent upon technology. In 2011, there were 77,120 feedlots in the United States (8). Only 2.7 of these operations had a one-time capacity of 1,000 head. However, these feedlots with 1,000–7,999 head of capacity marketed 15.4%, whereas feedlots with 8,000 head of capacity marketed 72.3% of all US feedlot cattle marketings. This review endeavors to describe the organization and operation of a modern beef feedlot (1,000head capacity) and to discuss how current conditions may shape the industry in the future.

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FEEDLOT ORGANIZATION Modern feedlots are managed by a general manager and, frequently, an assistant general manager. The feedlot is typically organized into several distinct departments that allow for improvements in production efficiency through the specialization of management and labor resources. These departments include, but are not necessarily limited to, the office department, cattle department, yard department, feed milling department, and feed department. Feedlots that also conduct considerable farming as part of their operation may have a farm department in their structure as well. Two or more of these departments may be combined. For example, some feedlots combine the feed milling and feed departments into one larger department. Other feedlots might combine the yard and farming departments. Regardless of the organizational structure, tasks described for each of these departments must be completed to maintain efficient operations.

Office Department The office department of a modern feedlot is responsible for the administrative functions of the business. As feed and feeder cattle enter the facility, and as fed cattle are sold, the office department records and tracks these activities. In addition, the office department is responsible for billing customers; paying invoices; managing human resources, including payroll and benefit issues; and greeting visitors to the facility. Depending upon feedlot size, the office staff may include a cattle clerk, who enters incoming and removes outgoing cattle from the books; a commodity clerk, who is responsible for entering all feed deliveries into the inventory system; a receptionist, who is often the first feedlot employee in contact with the general public, either by phone or with visitors; and an accounting manager. Often, but not always, the accounting manager serves as the manager of the office department. With an increase in the importance of computers, servers, printers, wireless devices, and other technological tools, some feedlots have added information technology specialists to the office department.

Cattle Department Daily management and health care of the cattle in a modern feedlot are the responsibilities of the cattle department. Leadership within the cattle department typically falls to the cattle department manager. Those managing or working in the cattle department should possess outstanding animal husbandry skills. Cattle department functions are usually divided into several areas, including shipping and receiving, pen riding, and routine veterinary care. Personnel involved in shipping activities remove cattle that are to be sold from their respective pens, weigh them on group scales, and load them on trucks for transport to the abattoir. Individuals involved in receiving activities frequently meet truckloads of new cattle as they arrive at the feedlot; assist in unloading the cattle; and place them into holding pens, which provide fresh water and feed, and where cattle are held until processing. New cattle are then processed into the feedlot and placed into pens so they can begin the feeding program. In most large feedlots, pen riding is still accomplished by cowboys on www.annualreviews.org



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horseback who are trained to identify sick or injured cattle. Once cattle with health issues are identified and removed from the pen, feedlot veterinary technicians, often referred to in the feedlot as doctors, administer the appropriate medical treatment that has been prescribed by a licensed veterinarian. Frequently, the head doctor, head cowboy, or person responsible for shipping and receiving functions as the assistant cattle department manager.

Yard Department

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Feedlot maintenance and repair are the responsibilities of the yard department manager. The yard department manager, assistant manager, and employees must be mechanically inclined and possess the skills necessary to operate loaders, trucks, backhoes, tractors, and other heavy equipment. The yard department maintains and repairs all fencing, gates, feed bunks, water fountains, roadways, hospital sheds, drainage ditches, lagoons, and retention ponds. In addition, manure management is an important component of the yard department function. The yard department cleans manure from the pens and either stockpiles the manure for transport to local fields by farmers or transports the manure to the field, if the feedlot is also engaged in considerable farming operations. In either case, extensive records are required to document that the feedlot is following a comprehensive nutrient management plan.

Feed Mill Department The feed mill maintains an inventory of feed ingredients, processes feed grains, and mixes the diets needed to feed the cattle each day. Feed mill managers and assistant managers must be highly organized and pay attention to minute detail to ensure that an adequate supply of feed is on hand to meet the needs of the cattle. In addition, feed mill personnel must possess mechanical skills to operate and maintain the multitude of augers, conveyors, elevator legs, storage bins and tanks, scales, pumps, grain-processing equipment, boilers, and mixing equipment required to manufacture feed. Preventative maintenance of equipment is fundamental to successful feed mill operations.

Feed Department In a modern feedlot, feed truck drivers employed within the feed department deliver feed to the cattle. Feed department managers and assistant managers must understand the factors that impact daily feed intake by cattle. Feed bunks are evaluated each day, and the amount of feed that each pen of cattle consumes and other relevant factors are used to determine how much feed should be delivered to the cattle. Feed department personnel also ensure that daily feed deliveries are recorded into the record-keeping system. The feed record system in a modern feedlot has evolved from a simple two-column ledger to a spreadsheet-based system or, in many instances, a sophisticated computer program purchased from outside software vendors. Often, feed truck drivers are also responsible for the daily maintenance of the trucks that they drive.

ESSENTIAL FEEDLOT ACTIVITIES Cattle Procurement Early in the development of the cattle feeding industry, cattle procurement and sales were seasonal. Following the fall harvest, cattle were purchased and fed through the winter and sold in the spring prior to planting. Consistently making money on cattle with such a seasonal production cycle 538

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proved challenging (2). Feeders began to try having cattle ready for market during more lucrative times, when supplies of feed cattle were low. This caused the industry to evolve into a year-round business, requiring the procurement and marketing of cattle during all times of the year. A feedlot with capacity for 40,000 head that feeds predominately yearling cattle likely has a turnover rate of 2–2.4, resulting in 80,000 to 96,000 head marketed annually. In contrast, a 40,000-head-capacity feedlot that feeds predominately calves may have a 1.5–1.8 turnover rate, resulting in annual marketings of 60,000 to 72,000 head. Cattle in the feedlot may be owned by the feedlot, or they may be owned by other individuals that hire the feedlot to feed the cattle on a custom basis. The feedlot general manager usually retains the responsibility for cattle procurement, or the responsibility may be assigned to a small number of highly trusted and qualified employees, perhaps the assistant general manager or the cattle manager. Potential custom-feeding customers include farmers or ranchers wishing to retain ownership of their calf crop through the feedlot phase of production or investors seeking to earn a return for investing in cattle to feed. Potential sources for feeder cattle purchases include livestock auction markets, video auction markets, direct purchases from the farm or ranch, and purchases from cattle-order buyers. One advantage associated with purchasing feeder cattle through live or video auctions includes the establishment of value in an open market. However, purchasing feeders through a livestock auction barn might result in biosecurity issues related to the exposure of cattle to pathogens. Direct purchase of cattle from the farm or ranch might result in less exposure to pathogens. Value determination for direct purchases is more difficult in that price, weighing conditions, and shipment timing are all subject to negotiation. Often, a base price is established using the feeder cattle futures market as a guide. The US feedlot industry has fed foreign cattle in addition to domestic cattle. Just over one million head of lightweight feeder cattle from Mexico have been fed in US feedlots each year for the past 15 years. Most of these cattle are fed in feedlots in Texas. The Mexican feeder cattle are similar to some US feeder cattle from the southeast and southwest regions of the United States in that often they are of considerable Brahman breed type, gain less efficiently in feedlots, and produce lower-quality beef. However, these cattle are heat tolerant and hardy, often experiencing fewer health problems if managed correctly. Northern US feedlots have fed Canadian feeder cattle. These cattle tend to be similar in type to many northern US feeder cattle in that they are of predominately Bos taurus genotype and perform well in northern feedlots but may experience heatstress issues if fed in the southern plains. Although in the past over half a million Canadian feeder cattle were fed per year in the United States, that number has been declining owing to a decline in the number of Canadian cattle and to the change in the US and Canadian dollar exchange rate. When US$1 could purchase Can$1.3–$1.4, as was the case during most of the 1990s and through approximately 2008, there was a strong incentive for Canadian ranchers to sell calves to US feedlots for US dollars. However, in 2011 and 2012, when the exchange rate was approximately equal between the two dollars, there was no exchange-rate incentive for Canadians to sell calves in the United States. The number of Canadian feeder cattle fed in US feedlots in 2011–12 was just over 100,000 head per year. In total, Mexican and Canadian feeder cattle fed in US feedlots account for less than 5% of the total number of cattle on feed. Numerous breeds of cattle make up the modern feedlot industry. Early importation of cattle to North America from Europe ended in approximately 1640 and did not resume until the early nineteenth century (1). The first cattle fed in the Ohio River Valley likely originated from France through Canada and Michigan (1). Matsushima & Farr (2) listed the introduction of various breeds into the United States, including Hereford and Shorthorn in 1817, Angus in 1873, Simmental in 1896, and Charolais in 1936. Another important event in the development of the breeds typically found in feedlots was the establishment of the American Brahman breed from four breeds of Bos indicus cattle during the late nineteenth and www.annualreviews.org



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early twentieth century (9). Today, many of the cattle in Texas and southwestern feedlots carry some Brahman influence in their genetic makeup. These cattle are generally more heat tolerant (10) but are often less tender and of lower quality than are British or European cattle breeds of B. taurus origin. One of the most significant developments in the industry relative to breed type began in 1978 with the formation of Certified Angus Beef Ò (11). In 1978, approximately 32% of the total fed cattle slaughtered in the United States were black and were assumed to be influenced by Angus genetics (L. Corah, personal communication). By January 2013, approximately 62% of the total fed cattle slaughtered qualified as Angus influenced (12). The long-term implications of this trend toward more black-hided cattle on the efficiency of beef production, especially in hotter climates, are not known. Branded beef programs have developed recently, the requirements of which vary. Some require specific breeds of cattle. Other branded beef programs prohibit the therapeutic or subtherapeutic use of antibiotics. Most programs disallow the use of growth-promoting implants or feed additives, such as monensin (RumensinÒ, Elanco Animal Health, Greenfield, IN) or ractopamine HCl (OptaflexxÒ, Elanco Animal Health, Greenfield, IN). Regardless of the specific program requirements, all of these programs have complicated the procurement of cattle for the feedlot. Identification and source verification for individual cattle arriving into the feedlot are becoming greater concerns.

Cattle Receiving The cattle department is responsible for receiving new cattle into the feedlot. Cattle arrive at the feedlot at all times of day or night, and the feedlot must be prepared to receive them. As cattle are unloaded from the truck, they must be carefully inspected to ensure the load delivered was accurately presented at purchase. For example, if steers were purchased, were any intact bulls or heifers among the unloaded cattle? If British-Continental crossbred cattle were purchased, were any cattle of Brahman, dairy, or longhorn breeding present? Other important items to observe are the general health and locomotion of the cattle as they are unloaded. Cattle that appear sick or injured should be noted. Often, cattle arrive and are unloaded after dark; therefore, sufficient lighting must be in place to allow for adequate inspection. Upon unloading, cattle should be weighed as a group and moved quietly to clean, dry receiving pens; provided fresh water and feed; and allowed to rest for several hours before being handled again. Generally, the feed of choice in this circumstance is long-stemmed grass hay fed in either bale feeders or fence-line feed bunks. The objective of this rest period is to allow cattle a chance to rehydrate and recover part of the water lost as shrink while in transit. With this goal in mind, some feedlots provide mineral supplements to cattle during the initial hours immediately after arrival.

Cattle Processing Cattle department personnel are responsible for processing cattle into the feedlot, although some feedlots hire a custom crew to process newly arrived cattle. Processing procedures are established in modern feedlots in collaboration with nutrition and veterinary consultants. The goal of the processing program is to prepare the cattle for success in the feedlot. Products used during cattle processing are intended to promote the health and well-being of the cattle and to ensure that the cattle get off to a good start in the feedlot. Processing procedures usually include animal identification; rectal palpation of heifers for pregnancy; administration of vaccines for the prevention of respiratory and clostridial disease; administration of parasite-control products; application of growth-promoting implants; and, occasionally, the removal of horns and castration. The specific products and procedures used depend upon the weight and background of the cattle coming in as well as the feeding program objectives. 540

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Regardless of the processing products used, the feedlot industry has adopted a strong commitment to concepts of beef-quality assurance. These concepts include using products only according to label specifications, adhering strictly to withdrawal requirements, using subcutaneous injections whenever possible, injecting product only into the lower value muscles of the neck if intermuscular injection is required, and never injecting the rump or round. Injection needles are changed frequently to ensure that only sharp needles are used. Maintaining adequate sanitary conditions has become part of the administration process for growth-promoting implants. Implants are administered under the skin on the back side of the middle third of the ear. Prior to implanting, this area is examined, and if necessary, manure and other foreign matter are cleaned from the ear. The needle of the implanting device is wiped clean with an antiseptic solution before each calf is implanted. Once the implant is administered, the wound is pinched closed by hand. Feedlots have also placed an increased emphasis on reducing stress on cattle during processing. This is accomplished primarily by handling cattle calmly and reducing noise during processing. Rubber pads added to the moving parts of the squeeze chute eliminate loud banging noises. Cattle processing crews are now trained to use conversation-level voices as opposed to yelling or whistling. In addition, the industry has greatly reduced the use of dogs to chase cattle in alleyways as well as excessive use of electric cattle prods. Cattle-processing audit procedures have been implemented in many feedlots to monitor frequency of cattle vocalizations, cattle prod use, needle changes, and abscessed implant sites, as well as other indicators of proper processing technique.

Pen Riding Following processing, cattle are returned to a receiving pen for a few more days as the amount of feed delivered to them is increased, or they may be moved to a clean pen, where they are housed for the rest of their stay at the feedlot. Daily health status for the cattle is monitored by pen riders. The number of cattle assigned to each pen rider depends upon many factors. Experienced pen riders will examine 8,000–12,000 cattle daily. Fewer cattle that are new to the feedlot or that are classified as high risk in terms of potential health issues will be assigned to less-experienced pen riders. Relatively more cattle that have been in the feedlot for a longer period of time or that are classified as low risk may be assigned to more-experienced pen riders. Pen riders ride quietly through each pen examining cattle for specific symptoms of disease. These symptoms include nasal discharge, ocular discharge, increased respiration rate, cough, depressed appearance, and lameness. Pen riders also examine cattle in the pen for signs of sexual behavior. Steers that stand and allow pen mates to mount and ride them, risking injury to themselves and their pen mates, are termed bullers. Cattle exhibiting signs of disease, lameness, or bulling behavior are removed from the pen by the pen rider. Cattle identified as bullers are segregated from other cattle and managed separately. Injured and sick cattle are trailed by the pen riders to the hospital area of the feedlot.

Treatment Administration At the feedlot hospital, feedlot veterinary technicians, often referred to as doctors, move each individual through a squeeze chute, administer an individual identification tag if one was not applied at arrival processing, assess the general health symptoms of the cattle, obtain a rectal body temperature, and diagnose the specific medical condition of the animal. The doctors then record health observations in either a written or an electronic format and administer the appropriate medical treatment that has been prescribed by a licensed veterinarian. Treated cattle remain in the hospital for three to five days, depending upon the program established with the veterinarian. www.annualreviews.org



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During this time, the cattle are fed, allowed access to fresh water, and observed closely. At the end of this period, the cattle are examined carefully, and one of the following choices is made:

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1. The calf has recovered sufficiently to have a reasonable chance of competing with its contemporaries. This calf may or may not be treated again and is sent back to the home pen. 2. The calf has not recovered sufficiently to return to the pen of origin but is deemed to have a reasonable chance of recovery with another round of therapy. Therefore, this calf is treated again and remains in the hospital for another three to five days. 3. The calf has not recovered sufficiently to return to the pen of origin and is deemed unlikely to recover to the extent necessary to return to the pen of origin. This calf may or may not be treated again; it is removed from the hospital and placed into what is called a railer or realizer pen, where it waits out its pharmaceutical product withdrawal period and is sold for salvage after the appropriate number of days. The percentage of cattle identified as sick and pulled from the pen for treatment varies significantly based on several factors. Freshly weaned calves are more likely to experience health issues upon arrival into the feedlot as compared with preconditioned calves or yearlings. Nutritionally challenged cattle, such as feeder cattle grown at low rates of gain using low-quality roughage, often experience more sickness upon arrival than cattle that have been fed diets of adequate nutrient content prior to feedlot placement. Environmental stresses, such as heat, cold, wind, precipitation, and dust, also contribute to increased cattle illness. The morbidity and mortality rate for heavy yearling steers, subjected to moderate or low environmental stress, frequently is lower than 10% and 1%, respectively. Conversely, freshly weaned calves subjected to stressful conditions may experience morbidity and mortality rates greater than 40% and 3%, respectively.

Cattle Marketing The feedlot general manager likely retains responsibility for marketing fed cattle; however, this responsibility is sometimes delegated to a highly trusted and experienced assistant manager or cattle department manager. Thirty years ago, when most cattle were sold on a live basis, the person responsible for marketing the cattle would examine the daily feed-delivery records, closely evaluate the cattle for degree of finish, take into account historical performance records, and decide which cattle were within a couple of weeks of market readiness. These cattle were placed on what was called the show list. This list was made available to packer buyers, who were welcomed to the feedlot to examine the listed cattle. Packer buyers would then bid on the listed cattle. Through negotiations, a price and date of shipment were established. Under live-weight marketing, the packer had a monopoly on carcass data and bore the risk associated with poor dressing percentages and quality grades. The situation today is much more complex. Many cattle are now sold on a formula or grid basis. Although the final price paid for cattle today may be determined by formula and not subject to direct negotiation, some elements of the grid are subject to negotiation. These negotiated elements include but are not limited to 1. base price [a US Department of Agriculture (USDA) Choice, Yield Grade 3 carcass is often used to establish the base]; 2. base USDA Choice and Prime percentages; 3. premiums for USDA Upper 2/3’s Choice and Prime; 4. base USDA Yield Grade 1 and 2 percentages; 5. premiums for USDA Yield Grade 1 and 2; 542

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premiums for dressing percentage above plant average; discounts for USDA Select and Standard; discounts for USDA Yield Grade 4 and 5; discounts for carcasses showing advanced skeletal maturity, often referred to in the industry as hard bones, or sometimes as heiferettes, for young cows; 10. discounts for dressing percentage below plant average; and 11. discounts for light or heavy carcasses that fall outside the optimal range for efficient operation of equipment in the plant and that frequently result in retail cuts that are outside the optimal size range.

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6. 7. 8. 9.

Depending upon the formula or grid, many of the premiums and discounts may remain fixed for long periods of time, perhaps up to one year. Risks associated with poor dressing percentage and grade are now borne by the feedlot. Persons responsible for marketing fed cattle from the feedlot need a complete understanding of the grid used and of how cattle fed at the feedlot fit the grid. It is important to note that there is not one grid or formula; several different grids exist, with the same packer even offering multiple grids. Adding to this complex marketing environment, most cattle not previously committed to a specific grid or formula may be sold within a very short trading window of no more than a couple of hours on many weeks. The day of the week on which this narrow trading window occurs varies based on market conditions, holidays, government report release dates, and the psychology of the market participants. On any given week, feedlots have a number of cattle they want to sell, and beef packers have a number of cattle they want to buy. Neither side really knows what these numbers are. However, on some weeks, if there are more cattle offered than packers want, some feedlots are forced to feed cattle longer than they want to at generally higher costs. Alternatively, on some weeks packers are not able to buy all the cattle they want, and their plants are forced to run less efficiently. As a week progresses, feedlots are holding out for a higher price, and packer buyers are trying to get a lower price. Eventually, either a packer blinks and offers a higher price, or a major feedlot blinks and takes a lower price. In today’s world of cell phones, the Internet, and instant market reports, this sale becomes known by the market participants, and either all packers quickly offer the higher price to secure adequate cattle or most feedlots accept the lower price to guarantee they are able to sell all of their market-ready cattle.

Feed Procurement Excluding cattle costs, feed costs comprise the largest single expense to feedlots. Feedlot general managers often reserve feed purchases as their own responsibility; however, an experienced assistant general manager or feed mill manager may also be assigned the responsibility for feed procurement. Approximately 60–70% of the feed used in a modern feedlot is grain. Vasconcelos & Galyean (13) studied the nutritional recommendations of feedlot consulting nutritionists and reported that, for all of the 29 responding nutritionists, corn was the primary grain fed. The secondary grain most frequently used by the respondents was wheat. Sorghum grain and barley were used less frequently. Most of the time spent procuring feed should be spent on the purchase and delivery of feed grains. Prices paid for feed grains are generally linked to the futures market in some fashion, plus or minus a basis. The basis is simply the difference between the cash paid for the corn and the futures market and is driven largely by geographic location and season of the year. Geographic location of the feedlot and season of the year largely impact transportation costs by influencing the distance that the grain must travel from the place of origin to the feedlot. Significant resources are also spent procuring roughages for the feedlot. On average, 15–25% of the feed needed by a feedlot is considered roughage. These feeds include, but are not limited to,

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corn silage, sorghum silage, wheat silage, alfalfa hay, and wheat hay and, in recent years, owing to increased roughage costs, corn stalks, wheat straw, or other crop residues. Roughages are included in feedlot diets to maintain healthy rumen function and adequate feed intake. Roughages are the most expensive commodity purchased as feed when the price is expressed on a net energy basis. Roughages are bulky and expensive to transport, process, and store. In addition, they can be subject to considerable shrinkage during storage and can be difficult to work through feed mills. Supplements, containing nonprotein nitrogen, minerals, vitamins, and feed additives, are needed at approximately 4–5% of the total feed. Although considerable effort is often spent pricing and procuring supplements for the feedlot, owing to their low inclusion rates, excess time spent in this area is likely better spent procuring more favorable prices for corn or roughage. In recent years, the use of corn milling or ethanol industry by-products has increased in feedlots. These ingredients include items such as wet or dry distiller’s grain, corn gluten feed, distiller’s solubles, and corn steep liquor. In addition, the inclusion of fats, such as yellow grease and tallow, in feedlot diets has become popular. The key to successful use of these alternative feeds is to clearly understand the nutrient and dry-matter concentration relative to the price of these commodities as compared with that of corn or other traditional feeds. Receiving feed commodities. Feed is usually received at the feedlot five to six days per week. According to Focus on Feedlots from Kansas State University (14), average daily dry-matter intake for each month of 2012 for yearling steers was 9.86 kg/head. If the typical diet dry matter was 72%, total feed required would be 13.69 kg/head daily on an as-fed basis, or 547,600 kg daily for a 40,000-head feedlot. Assuming the standard semitruck trailer carries 22,700 kg/load, approximately 24 semitruck loads of feed are required daily to supply the needs of the feedlot. If the feedlot uses silage for a significant portion of its roughage needs, daily deliveries of feed into the lot will be reduced from the estimated 24 per day; however, silage delivery during the harvest season involves hundreds of truckloads over seven 12-h days per week. The most important pieces of equipment at the feedlot are the truck scale for weighing incoming feed, the probe for sampling grain, the drying oven, and the gram balance. Each load of incoming feed should be weighed and sampled for moisture determination. Understanding the moisture variation in feeds and adjusting price to a prenegotiated base are extremely important processes involving thousands of dollars. Feuz and colleagues (15) at Utah State University describe the basics of determining the value of feeds based on moisture concentration and the value of alternative feed choices. Typically, the price of corn is adjusted to a 15.5% moisture (84.5% dry-matter) basis, as illustrated in Equation 1. For this example, the corn arriving at the feedlot is 18% moisture. $7.00 per 25.4 kg ð1 US bushelÞ ¼ $0.2756 per kg corn ð 15.5% moistureÞ, $0.2756=0.845 ¼ $0.32615 per kg corn ð100% dry matterÞ, $0.32615  0.82 ¼ $0.26744 per kg corn ð18% moistureÞ, $0.26744  25.4 kg ¼ $6.7930 per 25.4 kg ð1 US bushelÞ.

1:

The price of corn silage is commonly adjusted to a 35% dry-matter (65%-moisture) basis, as shown in Equation 2. For this example, the corn arriving at the feedlot is 32% dry matter. $70.00 per 907.44 kg ð1 US tonÞ ¼ $0.07714 per kg corn silage ð35% dry matterÞ, $0.07714=0.35 ¼ $0.2204 per kg corn silage ð100% dry matterÞ, $0.2204  0.32 ¼ $0.070528 per kg corn silage ð32% dry matterÞ, $0.070528  907.44 kg ¼ $64.00 per 907.44 kg ð1 US tonÞ.

2:

Most grain in the Great Plains region is traded using the Southwest Scale of Grain Discounts (16), in which deductions for moisture are calculated into the purchase weight of the grain. Deductions 544

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to price are also calculated based on the grade of grain being traded. Grade is based on factors such as bushel test weight, percentage damaged kernels, percentage heat-damaged kernels, and percentage foreign matter. Grading of grain at both the feedlot and an official grading lab are important components of the feed-quality-control program.

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Feed Commodity Storage Once feed arrives at the feedlot, it must be stored until it is needed to manufacture a diet. Feedlots try to strike a balance among several management factors in determining how much feed is in storage. Having sufficient quantities of all feed commodities reduces the likelihood that the feedlot will run short of any one commodity owing to unforeseen problems, such as a sudden winter storm that may prevent trucks from making deliveries. In addition, having sufficient feed storage allows the feedlot to purchase and accept delivery on larger quantities of feeds at any one time, thus taking advantage of favorable prices, should the opportunity arise. Other factors to consider might suggest limiting the amount of feed that is stored on the feedlot. Large amounts of feed in storage require larger investments in storage facilities. Feed that is on hand and in storage may also tie up more capital in inventory than desirable. This is especially true for feedlots attempting to purchase large supplies of high-moisture corn or corn silage in the fall and store it for the entire year. In addition, the longer feed remains in storage, the greater the opportunity is for shrink to occur. A 40,000-head feedlot requiring 130 million kg of corn annually loses 1.3 million kg of corn, amounting to $358,000 for each 1% shrink if corn is valued at $7.00 per 25.4 kg (1 US bushel).

Feed Processing Feed processing is an important part of diet preparation in modern feedlots. Although longstemmed, unprocessed hay may be fed in receiving programs, most hay fed in feedlots has been processed. Hay processing is required to facilitate the handling of hay through the feed mill and to achieve a uniform diet mix. Dry hay is usually ground using a tub grinder equipped with a 5-cm screen, which generally results in particle sizes of 5 cm or less for the hay. Grinding hay too finely may reduce its value as a roughage source (17), and grinding hay too coarsely may result in increased feed-mixing problems and highly variable nutrient densities in feedlot diets. Matsushima (18) outlined the history of grain processing by the cattle feeding industry. Common grain-processing methods include grinding, cracking, or rolling of dry grain; grinding or rolling plus ensiling high-moisture grain; and steam-flaking. Steam-flaking was the primary processing method reported by 19 of 29 responding consultants from the Texas Tech survey (13), followed by dry-rolling (4 consultants), high-moisture harvesting and storage (4 consultants), and a combination of dry-rolling and high-moisture harvest and storage (2 consultants). Matsushima (18) developed steam-flaking of corn for cattle at Colorado State University, and it was introduced to large feedlots in 1962. Zinn et al. (19) provided an in-depth review of the steam-flaking process. In brief, the steam-flaking of dry grain requires two processes to occur: (a) The grain kernel must be hydrated with moisture and heat, and (b) the soaked kernel must be rolled between two rolls positioned a precise distance apart (approximately 0.8 mm for corn, according to early Colorado research; 18). The penetration of moisture into the kernel is best accomplished using steam over a period of several minutes and at increased pressure. Thus, the steam-flaking process requires energy typically in the form of natural gas or electricity. Steam-flaking improves starch digestion in feedlot cattle from 87.08% for whole corn to 99.09% (19), driving an 8–12% improvement in the efficiency of converting feed to body weight gain (17). Improving the efficiency of feed use is of major importance during times of high feed www.annualreviews.org



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costs, such as those experienced during 2012 and forecast for the future. Steam-flaking continues to be popular in large feedlots and has survived during times of relatively high energy costs. Several feedlots are currently exploring alternative energy sources for powering the steam-flaking process. One alternative being examined is the harvesting of methane gas from the manure produced in the feedlot. Because steam-flaking is costly, feedlot nutritionists have instituted quality-assurance programs in the daily routine at feedlots. Steam-flaked grain samples are systematically collected at various times during the day and subjected to quality analysis. Laboratory techniques to gauge starch availability include birefringence analysis to directly measure starch gelatinization; incubation with a-amylase, b-amylase, or amyloglucosidase; or the measurement of gas production from in vitro fermentation of flaked grain (20, 21). Most laboratory methods are tedious and too time-consuming to be used for immediate adjustments to the steam-flaking process. Researchers at Kansas State University (22) developed a refractive index procedure for rapidly determining starch availability in grain. More recently, an optical method (Lextron Micro Tech, Greeley, Colorado) has proven to be an easy and reliable on-site tool for estimating starch availability. One simple, frequently obtained measurement is bulk density of the grain following the flaking process. Flake density is negatively correlated with starch availability (20), as determined by laboratory analysis. As density decreases, starch availability increases. Whole shelled corn weighs approximately 716 g/L (25.4 kg per US bushel). Feed mill managers, working with a consulting nutritionist, establish a target density for the mill to obtain. Across the industry, target flake density ranges from 310–360 g/L (10.9–12.7 kg per US bushel); however, for a specific feedlot, the target is very precise, representing a balance of several management factors. Low-density flakes require more energy to produce, are likely more fragile and subject to breakage, and may lead to digestive upsets in cattle owing to rapid fermentation of starch in the rumen. High-density flakes may not result in high enough starch availability to promote optimum feed efficiency. When samples fail to meet density targets, the cause of the discrepancy is investigated. Correcting the problem often involves increasing or decreasing retention time for grain in the steam chamber or adjusting the distance between rolls.

Diet Formulation The modern feedlot industry relies on consulting nutritionists to formulate diets, train employees, and monitor the entire nutrition and feeding program. These consultants may work as private individuals, as employees of corporate cattle-feeding companies, or as employees of consulting firms or may be employed directly by feed companies. Generally, these consultants have a PhD in nutrition or a related field; however, several highly successful consultants with masters of science work in the industry. Prior to formulating diets, the dry-matter and nutrient concentrations in all available feed ingredients are required. These values may be based on prior experience or data from feed composition tables or, preferably, from laboratory analyses of samples obtained at the feedlot. Typical analyses used in diet formulation include dry matter, crude protein, nonprotein nitrogen, fat, calcium, and potassium, as well as some indicator of fiber, either crude fiber, neutraldetergent fiber, or acid-detergent fiber. The next item of information needed is an understanding of the nutrient requirements of beef cattle. According to Vasconcelos & Galyean’s (13) survey of consulting nutritionists, 89.7% of the consultants used one or more of the 1976, 1984, or 1996 editions of the National Research Council’s Nutrient Requirements for Beef Cattle (17, 23, 24). Other sources of information identified by name included the Cornell Net Carbohydrate and Protein System (25), the Journal of Animal Science, The Professional Animal Scientist, Feedstuffs, Beef magazine, Animal Feed Science and Technology, and Feedlot magazine. 546

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Feedlots generally attempt to limit the number of diets manufactured. Mixing a limited number of diets eases logistical issues associated with numerous diets and reduces the opportunity for mistakes to occur. Mill designs include (a) batch mills, where complete diets are stored after weighing and mixing in stationary equipment; (b) bunker mills, where diets are weighed and mixed on feed trucks from ingredients stored primarily in bays; and (c) hybrids of batch and bunker mills. Feedlots that weigh and mix on feed trucks typically have more flexibility, in terms of number of diets, than do those with batch mills, which store finished feed. As few as two diets are sufficient in some feedlots, one for starting and another for finishing. Often feedlots will have step-up diets for transitioning from starting to finishing and specialty finishing rations for delivering feed additives, such as melengestrol acetate (MGA) and beta agonists. The primary diet needed in the cattle-finishing feedlot is a high-energy finishing diet. The ingredient composition of this diet is based upon the availability of specific ingredients to the feedlot. A typical finishing diet may resemble the following expressed on a 100% dry-matter basis: 8–12% roughage (corn silage, sorghum silage, and/or ground alfalfa hay), 5% supplement (either liquid or dry supplement that contains crude protein, nonprotein nitrogen, minerals, vitamins, and feed additives), and 83–87% grain (processed corn, wheat, barley, or sorghum), plus grain-processing by-products (wet or dry distiller’s grains, distiller’s grain solubles, corn steep liquor, and corn gluten feed). Some finishing diets may include up to 3% added yellow grease or tallow to increase the energy density of the diet. Starting diets differ from finishing diets primarily in levels of roughage. Starting diets typically contain 35–50% roughage on a dry-matter basis. To stimulate intake and minimize digestive disorders, starting diets often include relatively high levels of ethanol by-products and minimal amounts of starch from highly processed grains, such as flaked grain or high-moisture corn. The amount of time cattle remain on the starting diet depends on weight, age, health, and body condition of new arrivals and ranges from as few as 4–5 days for healthy yearlings to more than 30 days for newly weaned calves. Cattle then are gradually adapted to finishing diets by using one or more step-up diets of intermediate energy or by replacing the starting diet with increasing increments of the finishing diet. Yearlings usually reach the finishing diet 15–20 days after feedlot entry and remain on feed for a total of 140 to 180 days depending upon arrival weight. On the other end of the spectrum, calves often are fed growing diets for 2–3 months prior to adaptation to the finishing diet. The purpose of growing is to limit rate of gain, so calves do not finish at light weights, and to minimize problems with rumenitis, depressed intake, and laminitis in the terminal phase of finishing. Gain is restricted either by ab libitum feeding a high-roughage diet or by feeding a limited quantity of the finishing diet. Total days on feed for calves may range from 180 to 240 depending upon arrival weight and length of the growing program used. Calf-fed Holstein steer calves, by-products of the dairy industry, may be on feed for 320 or more days.

Diet Delivery and Bunk Management Although feeding one time daily is sufficient in many production situations, cattle are frequently fed multiple times daily in a modern feedlot. Multiple feedings allow more cattle to be fed in a shorter period of time earlier in the day. This helps keep cattle from standing without feed for an extended period of time prior to the first feeding of the day, which ultimately reduces digestive disturbances for overly aggressive eaters in the feedlot. Multiple feedings in a single day reduce the amount of time in the day that the diet remains in the bunk exposed to heat or inclement weather, which keeps feed fresh and improves feed intake. Feed-truck traffic associated with multiple feedings in a single day can stimulate curiosity among cattle and encourage intake. www.annualreviews.org



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Regardless of feeding frequency, bunk management in feedlots is extremely important. Pritchard & Bruns (26) authored an excellent treatise on the subject, noting that bunk management affects (a) level and variation of intake, (b) incidence of binging or feed aversion, (c) frequency of digestive disorders, and ultimately (d) rate and efficiency of growth. Good bunk management is both science and art. In most feedlots, the objective is to maximize long-term feed intake through practices that minimize variation in daily intake of pens and individuals within pens. Most US feedlots use clean- or slick-bunk management programs. With these programs, the objective is to encourage each pen of cattle to consume the prior day’s feed allotment just prior to the first feeding of the day. This strategy stabilizes consumption patterns, minimizes carryover of feed from day to day, and reduces potential for binge eating when feed is delivered. In addition to judicious feed calls, essential elements of good bunk management include precisely manufactured feed, accurate and timely deliveries, uniform distribution of feed in bunks, and adequate bunk space. Bunk space requirements vary with the class of cattle and type of diet fed, as well as with feeding frequency. Cattle fed once daily require more bunk space than do cattle fed more frequently. High-roughage diets are bulkier than high-grain diets; thus, more bunk space is required when roughage-based diets are fed. Newly arrived cattle require more bunk space than do cattle that have been in the feedlot for several days. Yearling cattle, fed a high-grain diet in a timely fashion three times daily, may require as little as 20 cm of bunk space per head. Freshly weaned calves, fed a high-roughage diet once daily, may require 45–60 cm of bunk space per head.

Environmental Management Beef feedlots feed large numbers of cattle that are confined in relative close proximity to one another and produce large quantities of manure. If not managed properly, this nutrient-dense resource could damage the environment. Environmental management in feedlots focuses on two areas of primary concern: water and air quality. The first federal law aimed at reducing water pollution was the Federal Water Pollution Control Act of 1948. This act was amended in 1972 and became known as the Clean Water Act (27). The Clean Water Act established the regulations that would control and monitor water quality in the United States. Initially, these laws were aimed at point sources of pollution that dumped directly from manmade pipes and ditches into US waterways. The law also “recognized the need for planning to address the critical problems posed by nonpoint source pollution” (27, p.1). Additional amendments, passed in 1987 and finalized in 2008 (28), defined an animal feeding operation as an operation that feeds animals in one location for 45 days or longer in a 12-month period and at which forage growth is not maintained in the confinement area. There has also been a delineation of large, medium, and small confined animal feeding operations (CAFOs), as defined by species. Traditionally, large CAFOs were defined by animal units, but the Environmental Protection Agency (EPA) no longer uses this term and has since refined their CAFO definitions by species. For feedlots, any facility with 1,000 or more cattle is considered a large CAFO and is subject to the full requirements of the laws, including a permitting process and a requirement that each CAFO develop and institute a comprehensive nutrient management plan (CNMP). The CNMP manages nutrients (at this time nitrogen and phosphorus) that enter and leave an operation. Records of the amount of manure and effluent leaving a facility must be maintained. Application rates for manure and effluent to farm fields surrounding the feedlot are calculated on a phosphorus basis and may not exceed the capacity of the crop removed from the land to assimilate phosphorus. Additional sections of the Act dictate minimum capacities for effluent lagoons, limits on seepage of water through lagoon linings, procedures for reporting discharges, and recordkeeping requirements. 548

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The Clean Air Act of 1970 and the amendments of 1977 and 1990 (29) require the EPA to set National Ambient Air Quality Standards for six common air pollutants (30). These pollutants include particulate matter, ground-level ozone, carbon monoxide, sulfur oxides, nitrogen oxides, and lead. Sakirkin et al. (31) summarized issues surrounding ammonia emissions from cattle feeding operations. As a result, estimates of ammonia emissions are required for feedlot operations (32), primarily because of the potential of ammonia to form very small (

The modern feedlot for finishing cattle.

The modern beef feedlot has evolved into a complex system that is very dependent upon technology. Modern feedlots are organized into departments, ofte...
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