Economic impacts of space allowance per animal on beef cattle feedlot

Abstract

The objective of this study was to assess the economic outcomes of three space allowances (6, 12, and 24 m(2) per animal) for outdoor feedlots-finished beef cattle. Simulations considered confinement systems with a static capacity of 5,000 animals per cycle and two 86-day cycles per year. Performance data were obtained from 1,350 uncastrated bovine males. An increase in space allowance elevated the fixed cost per animal Fixed and variable costs represented 3% and 93% of the total operating cost, respectively. For variable costs, around 70% was used for purchasing cattle and 17% for purchasing feed. The operating profit per animal increased as space allowance increased (R$ 80.90, R$ 102.00, and R$ 109.00 for 6, 12, and 24 m(2) per animal respectively). The three feedlot systems recovered the initial investment and had a positive net present value. In addition, the internal rates of return were 22%, 27%, and 25%, and the probabilities of financial loss were 33%, 29%, and 26% for pen sizes of 6, 12, and 24 m(2) per animal, respectively. Therefore, larger space allowances improve profitability and reduce the risk of financial loss.