Effects of Size and Degree of Feedlot Utilization on Fixed Costs in Commercial Feedlots

Abstract

Feedlots with 10,000-head-or-more capacity in the Southern Plains (Texas and Oklahoma) generally enjoyed a cost advantage over smaller lots, especially those with less than 1,000-head capacity. Feedlots with a one-time feeding capacity of 1,000 head experienced total annual fixed costs of 2.4 cents per pound (5.3 cents per kilogram) of gain compared to 1.4 cents per pound (3.1 cents per kilogram) of gain for feedlots with a 10,000-head capacity. One of the major contributors of lower annual fixed costs per pound (kilogram) of gain in the larger feedlots was the level of feedlot utilization. Feedlots with 10,000 head and over capacity generally exhibited utilization rates of almost 80% compared to utilization rates of 40% and lower for feedlots with less than 1,000 head capacity.