Feeder: ‘No incentive to own cattle right now’

CARRINGTON, N.D. — If there’s one thing that excites Korby Kost, it’s cutting costs in the midst of a “pathetic” cattle market.

The owner-manager of Kost Feedlot at Carrington, N.D., says he’s lived through two major market disruptions in the past year — in Tyson’s Holcomb, Kan., beef packing plant in late 2019 and the COVID-19 market disruption in 2020.

Cattlemen find themselves in the risky situation of “betting on the come” — not being able to see profit in the futures market, and living on hope for higher prices.

“You’re always one headline away from a wreck,” he said, flatly. “There’s really no incentive for me to own the cattle” right now.

Kost, 42, originally from nearby Bowdon, N.D., has been around cattle his whole life. He has worked on feedlots in Minnesota and Nebraska and drove trucks out of Canada.

“I’ve been around the block,” he said, chuckling.

He rebuilt the feedlot in 2008 and is strictly a cattle feeder. The site north of Carrington had been a sale barn and another feedlot, prior to Kost taking over. The Kost operation usually houses a range of animals — somewhere between 100 and 1,000 head. They manage three groups of cattle a year, moving them every four months.

Kost owns some of the cattle, but mostly works as a custom feeder for up to a half a dozen clients in a year. Most want him to background-feed cattle — typically from 400 to 500 pounds and to “grow them” up to 850 pounds, when they’re shipped off to feedlots in Iowa or Nebraska.

The major demand is in background-feeding. The younger cattle need more health attention, and some need to be fed to grow the frame without adding excess flesh. Kost said he excels in detecting sick cattle and taking counter-moves.

One significant client is the Berger Cattle Co. of Mandan — Fred and Chad Berger.

“They’re just like everyone — short on labor,” Kost said.

Kost takes “high-risk” cattle and feeds them and keep their cost-of-gain in check. In backgrounding programs, Kost first works to ensure cattle have their vaccination shots to allow them to thrive.

On cattle heading to market weight, he tries to maintain a three-pound daily gain. Those cattle can come into the feedlot at 1,000 pounds and are shipped out at about 1,500 pounds.

Cheap feed sources keep the yard “competitive with anyone,” Kost said. And feed is plentiful this year.

“We don’t look for high-quality feed, we look for cheap feed, and there’s a pile of it around,” he said, with pride. He’ll acquire more chopped corn this year than other years, because corn prices are down.

Other locally available feeds include waste pasta from a nearby Dakota Growers Pasta manufacturing plant and screenings from elevators. He baled some 70-bushel-per-acre durum wheat last year that was heavily discounted for presence of vomitoxin. He hasn’t had any trouble with it in his background feeding ration, allowing two-pound daily gain, which is “right on the money.”

He’s cutting off using beet pulp as a feed. He’d been acquiring it for free from Red River Valley sugar beet plants. But a new ethanol fuel plant built in Grand Forks, N.D., is buying it as a feedstock, so now it’s $5 per ton.

“We can use it, but we can’t pay for it,” Kost said. “Especially with $3 per bushel corn, it ain’t worth any more than that — and freight.”

“The biggest thing we’re doing now is cutting ‘distillers’ (distillers grains) from our rations,” Kost said. “That’s taking 8 (cents) to 10 cents per pound of gain) out of our cost of gain. We’re pretty excited about that this year.”

In place of distillers grains, he’s going to a liquid supplement — molasses, urea, plus a full mineral package and Rumensin. The mixture includes 40% protein, coming from Quality Liquid Feeds Inc. of Menomonie, Wis. It’s used on dairies and feedlots farms, but he uses a “feedlot base.” His nutritionist is Ike Kvasnicka, of Aberdeen, S.D.

According to the U.S. Department of Agriculture , the price of 10% moisture dried distillers grains in South Dakota had shot up to about $200 per ton in the Dakotas in late March to early May, above the five-year average of about $130 per ton. In August it fell below the average to less than $100 per ton but had risen to about $130 again in September.

Distillers grain is a “nice feed,” but he feels it is often overpriced.

“We’ve always tried to cut it out of our rations somehow, and finally this year we’ve finally got it dialed in to know how,” he said.

He said he’d possibly reintroduce the feed, but asserts dried distillers grain prices would have to be “cut in half before they’d get my attention.”

He calculates dried distillers grain was accounting for about 10 cents per pound of his 75 cent cost of gain, and that dropping it is the “difference between making money and not making money. It’s huge, pretty exciting.” And, he adds, “I’m looking forward to it.”