Yardage revisited

Published 10:27 pm Thursday, October 22, 2026

Recently, I was calculating potential returns to retain calves on a backgrounding diet. Hypothetically, calves would be weaned in November and sold sometime in January. Calves would be appraised at $436/cwt as 5-wt and $379/cwt at 7-wt. The gross margin would be $253 per head.

Whenever we think of these options, the first thing that comes to mind is feed cost. Considering recent corn grain price trends and the effects of drought on forage prices, thinking of feed costs first is important. A diet containing (dry basis) 50% corn grain, 15% distillers grains, 32% hay and 3% supplement would cost $255/ton dry matter. At a rate of gain of 2.38 lb., a steer consuming 17.85 lb. dry matter would require $143 return to pay for the feed. That leaves $110 for the rest of expenses to get this steer to 700 lb.

What all goes into yardage then? Facilities depreciation, labor, and equipment costs (one could use rental rates to get a direct figure) and interest.

Using custom rates published by University of Nebraska or other universities, one can get a good idea of the rental rates for equipment needed to feed cattle and manage their pen environment. When the operation has the option to use manure derived from the cattle feeding operation, one can credit the value of manure as fertilizer. Yet, before this is done, the cost of bedding, scraping, and hauling manure must be included.

As the reader may have already determined, determining yardage cost is not easy. This is why I recommend using custom rates and a decent idea of hours involved in various operations around the feedlot to estimate yardage.

A crude example of the potential misconception in determining yardage cost is derived by simply estimating that it takes about one individual to feed and manage 1,000 head in a feeding operation. If we use custom rates to guide our idea of labor rates, then we simply divide the labor cost for an 8-hour day by 1,000 head for a per head daily yardage cost. Assuming that the payrate for general labor at the feedlot is $20, then the daily labor rate per head is $0.16 ($160 a day divided by 1,000 head).

Most tractor-driven equipment including mixers, scrapers, payloaders, etc. with 150 or greater HP costs $150/hour to rent. The implement, whether it is a mixer or even a manure spreader, costs about $3,000 a month to rent or close to $20/hour if operated 40 hours a week. So, nearly every hour operating equipment to feed cattle or manage pens costs $170.

Basing time calculations for feeding or managing pens is not easy for operations feeding fewer than 1,000 head because of the economies of scale. Yet, assuming a 0.25-hour daily feeding schedule and a 0.25-hour cleaning schedule (derived from dedicating 1.75 h a week for cleaning) for every 1,000 head adds $85 daily to yardage or $0.085/head.

Mileage rates for tractors are between 15 to 20 liters per hour. Using the 0.5 hours estimated above to manage 1,000 head daily results in an additional $54 of cost or $0.05/head.

Lastly, but not least, interest rates are affecting yardage calculations significantly. A $2,500 investment in a calf or yearling will cost $0.30 daily in interest at 8% rate.

Additionally, producers should consider adding a depreciation figure to yardage calculations to cover repair or replacement costs. The value of this depreciation cost is dependent on replacement cost not on initial cost of the facility. In most cases, depreciating a facility for 20 years with little to no salvage value results in yardage costs of $0.05 to $0.25 depending on the type of facility.

Adding the components of yardage cost using $0.16 for labor, $0.085 for equipment, $0.05 for fuel, $0.30 for interest, and $0.10 for depreciation results in $0.695 per head. If this value is applied to the example above, then another $44 is subtracted from the remaining margin permitting a net return of $66.

Calculating yardage costs is not easy. Keeping track of hours spent feeding cattle, managing bunks, and using custom rates to determine yardage is a simple alternative to guide this calculation. The alternative to not determining yardage costs is to permit the facility (and ourselves) to be worn out and to lose our capital over the long run.