Feed Prices Swing: What Angus Producers Should Know About Regional Costs

Few numbers matter more to a cow-calf budget than the price of feed. It also moves around a lot, and not in the same way everywhere. Industry articles have cited percentage increases over multi-year spans. We could not trace one widely repeated multi-year figure to a primary source, so this guide sticks to numbers we could verify and focuses on the more useful question: how a producer should plan when the cost of feed swings.

What the data show

Two USDA-related sources give a feel for the scale. The Economic Research Service reported that beef cattle feed prices were up 16 percent in May 2022 compared with May 2021. In the same chart of note, it described feed as the largest operating cost for cow-calf producers, at about 75 percent of costs in 2021, and said hay prices for the 2021 to 2022 season were estimated 16 percent above the average of the previous nine years. It also noted that about 46 percent of hay was growing in drought-affected areas as of August 2022.

Over a longer window, NDSU Extension reported that the USDA index of livestock and poultry feed prices rose 26.6 percent from September 2020 to September 2022. These are different measures over different periods, so they should not be added or compared directly. The shared message is that costs rose fast, and drought and fertilizer prices were among the reasons.

Why prices differ by region

Feed is partly local. Hay is heavy and expensive to move, so its price depends on local weather, local demand and trucking distance. A drought in one region can double the price of hay there while another region sees little change. Grain is more widely traded, but basis, the local price relative to the national futures price, still varies with freight and local supply. A few things drive the differences:

• Drought and rainfall, which change local forage and hay supply.
• Distance to grain, distillers grains and other byproduct feeds.
• Competition from other livestock, such as dairy, for the same hay.
• Fertilizer and fuel costs, which flow into hay and silage prices.
• Pasture length, since a long grazing season reduces how much you need to buy.

Hay costs more than the invoice

The Angus Journal has noted that the true cost of hay includes hauling, storing, labor and waste. One example given was that a $90 purchase price could grow to $140 by the time the hay was eaten. Treat that as an illustration rather than a rule. Your waste may be higher or lower, but the lesson is that purchased price and cost fed are different numbers. Our cow-calf budget guide shows where to record them.

Ways to plan around swings

1. Know your cost per cow per day. Track feed by category: grazing, stored forage, supplement. You cannot manage what you do not measure.
2. Compare feeds by nutrient. Price per pound of crude protein and energy can reveal a bargain that price per ton hides.
3. Extend the grazing season. Every day on pasture is a day without hauling or feeding hay. See farm.fm's page on pasture management for Angus herds.
4. Buy early where you can. Hay prices often rise as winter goes on in short-supply years, so securing supply early can save money. It also uses cash earlier, so weigh it.
5. Cut waste. Feeders, covered storage and right-sized portions reduce the biggest hidden loss.
6. Right-size the herd. A cow that is too big for your forage eats more than she is worth. The Angus Journal reported that a 1,400-pound cow eats about 40 percent more than a 1,000-pound cow.
7. Keep a reserve. Carry some extra hay and some working cash for the year the weather turns.

Regional questions to ask

A producer in a long-season region can lean on grazing and stockpiled forage. A producer in a short-season region may feed hay for a large share of the year and should be more exposed to hay prices. Someone near ethanol plants may find cheap byproducts. Someone far from grain may pay more in freight. None of this is a reason to change regions, but it is a reason to look for the lowest-cost feed that fits your own geography. Local extension offices publish hay price reports and budget templates you can adapt. The University of Nebraska beef program maintains tools for comparing feed costs, and agriculture.directory can help you find your nearest extension office.

A note on cattle prices

Feed costs only tell half the story. The same period that raised feed costs also saw strong cattle markets, so margins were not squeezed everywhere. A budget should look at both sides: what you pay to carry a cow, and what her calf will bring. Prices, drought conditions and policy all change, so check current USDA data before making a decision.

The takeaway

Feed prices will swing, and your region shapes how. You cannot control the market, but you can control waste, herd size, grazing days and how early you buy. Build a budget that survives a bad year, and revisit it often.