Feeder Cattle Financing Calculator
Feeder cattle are bought on weight and sold on weight, so the financing cost only means something once you express it against the gain. Work out the cost per head, per hundredweight, and what it adds to every pound you put on.
Gain is the product.
Finance cost per pound is the number that matters.
Why a feeder calculation is not the same as a general loan calculation
Buying feeders is not really buying cattle, it is buying the right to put weight on them. So the financing cost has to be judged against the pounds you expect to add, not against the purchase price. Two pens financed identically can have very different finance costs per pound of gain simply because one gains faster. Run the numbers in the cattle finance calculator, then divide the interest by the expected gain and you have the figure that actually belongs next to your feed cost.
The weight slide is the thing that catches people out
Heavier cattle sell for less per hundredweight. Plan for it before you bid.
A 600 pound steer and a 900 pound steer do not fetch the same price per hundredweight, and the heavier one fetches less. That is the weight slide, it is normal, and it is the single biggest reason a backgrounding plan that looked profitable on paper does not pay.
If you cost a pen by assuming you sell at the same price per hundredweight you paid, you will overstate the margin badly. Always cost the sale at the price for the weight you intend to sell at, not the price you bought at.
This is also why the finance cost per pound of gain is the honest number. It puts the loan alongside the feed, the yardage and the death loss - the other things that scale with days on feed - rather than alongside the purchase price, which does not.
What to have in front of you
Five numbers make a feeder calculation real.
In weight and out weight
What you are buying and what you intend to sell. The difference is the gain, and the gain is the product.
Expected daily gain
Days on feed come out of this, and days on feed drive feed, yardage and interest together.
Your feed cost per head per day
The largest running cost, and the one that makes or breaks the pen. Finance cost sits beside it, not above it.
Related Pages
More on financing cattle with Foothills.
Cattle Finance Calculator
Work out cost per head, per hundredweight and total interest before you bid.
Feeders Division
Support built around feeder cattle purchases.
Backgrounding Finance
Financing cattle through the backgrounding period.
Frequently Asked Questions
The questions producers actually ask.
How do I work out the finance cost per pound of gain?
Take the total interest and fees for the period, and divide by the total pounds the pen is expected to gain. That gives you a figure in cents per pound that sits directly alongside your feed cost, which is how feeder economics are normally judged.
Should I finance to the sale date or to a fixed term?
To the sale date wherever the lender allows it. Cattle are marketed when they are ready and when the market suits, and a term that ends before that forces a decision on the wrong date. Talk about the expected marketing window when you apply.
What happens if the cattle gain slower than planned?
Days on feed rise, so feed, yardage and interest all rise together while the sale weight stays where you wanted it. It is worth running the calculator at your planned daily gain and again at something pessimistic, because the gap is the risk you are carrying.
Do lighter calves cost more to finance?
Per head, no - they cost less because they cost less to buy. Per pound of gain the picture is different, because lighter cattle are on feed longer to reach the same out weight.
Does Foothills finance feeder purchases at auction?
The Feeders Division exists for exactly that. Speak to a fieldman before the sale rather than after, so you know your number when the bidding starts.
Want the real number for your purchase?
Call the Foothills team and describe what you are buying. We will walk through how the cost is built.