Cost-volume-profit ratio of concentrate supplements in finishing diets for beef cattle

Abstract

The supplementation of the animals’ diet can increase the production costs of beef cattle, directly affecting the results of the production system. Using the cost-volume-profit ratio, this study aimed to determine the best level of replacement of corn by pearl millet in the concentrate supplementation of beef cattle finished in a crop-livestock integration system. Based on a previous study, we investigated the production performance of 64 uncastrated steers of an average age of 20 months and an initial average body weight of 388 ± 26 kg based on cost for the consumption of four different supplements distinguished by the amounts of pearl millet grain replacing corn grain (0%, 33%, 66% and 100%). The unit contribution margin, accounting and financial break-even points, margin of safety, and shutdown point were used as the components of the cost-volume-profit ratio in a criterion for determining the optimal supplementation strategy. The results showed that intermediate replacement levels (33% and 66%) can provide a greater return for the amortization of fixed expenses and profit generation and that cheaper supplements may not generate financial returns to the system. Therefore, a systemic cost-volume-profit analysis is useful in experimental evaluations. The concentrate feed supplement with 33% of corn replaced by pearl millet provides the greatest profitability to the production system.