Fusion is an investment, not an expense, so you should expect a return on your investment.
Accurately accounting for the most expensive input in beef production (feed) is essential for accurate financial accounting. While major components like grains and forages can generally be added with precision, low inclusion ingredients such as supplements prove to be both the priciest per tonne and the most challenging to incorporate accurately. When striving to meet specific targets, feed personnel seldom error on the low side with supplements. For instance, if a supplement is included at 2% of dry matter (DM) and is priced at $600 per tonne, and with a ration cost of $217 per tonne, the resulting net cost would be ($600 – $217) * 10 pounds, amounting to $1.75 per feed load.
Taking into account varying mixer sizes, the compositions of rations fed, and the number of deliveries per pen, a 5000-head feedlot could produce anywhere from 10 to 20 loads of feed per day. At an average rate of 15 loads per day, these estimates translate to a monthly expense of approximately $787. This feature alone could cover most of cost of Fusion software. And that's only considering one ingredient.
Achieving maximum stable intakes is a primary objective of a finishing yard. While employing bunks as self-feeders and ensuring continuous feed availability represents a straightforward and intuitive approach, it may lead to greater settling of fine particles and increased feed deterioration, resulting in more shoveling and wastage compared to a clean bunk approach.
Amongst six nutritionists influencing the dietary needs of 3.6 million cattle in the US Midwest, variations in opinions on required protein, fiber, and mineral levels were noted. However, they all agreed that adopting a clean bunk management strategy ultimately enhances feed intake and performance (J. Anim. Sci. 74:2860-2870).
Studies have revealed that clean bunk approaches have yielded surprisingly substantial returns through reduced waste (Lawrence 1999) and amplified intake and performance (Oklahoma State University Extension, 1997 Research Report pp 68-72). Nonetheless, making bunk decisions that stimulate interest in feed while maximizing intake demands the discernment of an experienced bunk reader or a feeding protocol crafted by such an individual.
Fusion feeding protocols empower management to stipulate when and how rapidly cattle progress through rations based on animal weights and their historical and current intake levels. These protocols simplify bunk calls by using bunk sores and bunk score histories to make a bunk call. Additionally, they facilitate automated bunk calls to achieve a specified rate of gain for backgrounded cattle, contingent on the energy density of the provided ration.
Feeding protocols eliminate the guesswork associated with diet transitions and bunk calls, allowing seasoned feeding managers to define how less-experienced staff will manage their bunks. With the reduction in waste and the enhanced utilization of feed, a 1% improvement in feed utilization is a very conservative estimate of the value of improved bunk management due to feed protocols. In today's markets (as of 2023), a 1% improvement in feed utilization would translate to a reduction in cost of gain by approximately $0.01 per pound, or roughly $0.03 per head per day, amounting to $4500 per month for a 5000-head feedlot.
Growth equations that predict rate of gain based on energy intake are well-established, yet they exhibit imperfections owing to variations in environment, genetics, and, most notably, intakes. When energy density is increased in back grounding diets, intakes can be limited (controlled) to more accurately achieve target gains. Additionally, restricting the intake of higher energy diets consistently enhances feed efficiency and often proves more cost-effective than providing lower energy diets free choice.
While nutritionists may furnish a structured feeding regimen outlining the precise amount of feed required to achieve desired rates of gain, adhering to these schedules can be challenging amidst shifts in cattle populations, ingredient availability, and operational objectives. Fusion streamlines this process by automating bunk calls, enabling the consistent achievement of target gains. This functionality not only holds economic value by enhancing feed efficiency, but also bolsters the reputation of a custom feedlot through more accurate feeding practices. Assuming this translates into a combined value similar to a 0.5% enhancement in feed efficiency, the potential monthly benefit for a 5000-head feedlot would amount to $2250.
Sorting at the feedlot can be as simple as sorting into groups of cattle uniform in gender, weight, or frame size. More refined sorting has included genetic markers to sort cattle into groups based on their potential to deposit carcass fat (Can. J. Anim. Sci. 2007 77:153-156). Using ultrasound to group cattle based on yield and quality grade as well as predicted days to achieve target carcass composition increased returns by $15-$30 per animal in 1999 (Can. J. Anim. Sci. 1999 79:327-334), when cattle and feed were worth less than half of what they are in 2023.
The more uniform cattle are, the more pounds can be put on the group without suffering yield grade and over-weight discounts. Sorting protocols can be defined in Fusion to automate the process, even automatically controlling the sorting gates. A process that typically requires total focus and attention can be automated requiring little thought or effort by the processing crew.
Considering time saved with improved accuracy and the ability to more easily take advantage of sorting technologies, it is very realistic that this feature alone is worth $3/animal. For a 5000 head feedlot that cycles 1.5 times/year (7500 total/year) this feature is worth about $22,500 per year, or $1875 per month.
Between cattle, commodities and drugs, even small feedlots can have millions of dollars worth of inventory. Feedlots that have closely monitored and reconciled purchases in and billings out realize there can be costly discrepancies between the two. Ensuring these inventories are used as intended will obviously enhance profitability at the feedlot.
For example, if 30% of cattle are treated, with a medicine cost of $20/animal, this equates to $45,000 worth of medicine. If 10% of purchased drugs disappear unaccounted for, this represents a loss of $4500.
Similarly, if just 2% above normal shrink of grain disappears, this represents a loss of about 11 tonnes of grain for 7500 animals finished, or $3850. This grain has likely not disappeared but has not been properly accounted for so the feedlot owner ends up paying for the loss.
It is very feasible that over $4000 of inventory disappears per month. Perfect monitoring of commodities is very difficult, but it is likely (based on our customer's experiences) that Fusion could cut these losses by at least 50% equating to $2000 per month.
(The above examples are based on a 5000 head feedlot that cycles cattle 1.5 times/year and maintains 80% occupancy, resulting in 7500 head fed per year [5000 * 80% * 365 = 1,460,000 head days]).
Ensuring the correct feed is delivered to each pen is critical to ensure performance and health of the cattle, and food safety of the meat produced. Although this seems like a simple task, the repetitive nature of loading, mixing, and delivering feed can reduce awareness occasionally resulting in the wrong ration being fed to the wrong pen. This can be very costly if a finishing diet is delivered to a pen of cattle currently receiving low energy diet, or if a medicated feed is delivered to a pen that will be harvested before completion of the required withdrawal period.
Fusion can communicate with GPS and alert the driver if the ration to be discharged is different than the ration the pen should receive. As well, details of each load of feed made, mixed, and delivered is recorded. This allows management to review and identify strengths and weaknesses of each step of the feeding process. This is an excellent tool to educate and train new feed personnel.
Although the catastrophic errors in feed delivery are rare, reducing or even stopping them by using Fusion’s “Feed Guard” has real value. If Feed Guard can stop $10,000 feeding errors that might occur once in 5000 loads, this is worth $2/load, or $900/month for a feedlot delivering 15 loads per day. Being able to monitor feeding details and find feeding errors and train new employees could be worth just as much. Together this would have $1800/month value.
There are several diseases that affect feedlot cattle, each with multiple treatment options. Given the varying weights, types, and treatment choices for cattle, selecting the best treatment protocol typically requires a veterinarian's assistance. Similarly, various vaccines are available to help prevent diseases. Ensuring that health crews accurately follow protocols for vaccination and treatment of diagnosed diseases is essential for the effectiveness of health management practices. Although a veterinarian cannot be present at every diagnosis and treatment, Fusion can display prescribed protocols when an animal enters the squeeze.
Due to high rates of Bovine Respiratory Disease (BRD) in fall-placed calves, this type of cattle most frequently receives antibiotic treatments. In fact, these cattle are often treated upon arrival to help prevent the onset of BRD. For a 600-pound calf, this mass treatment currently (2024) costs about $11 USD per animal. Additionally, most feedlot animals are vaccinated at an average cost of about $3.50 for calves. Even with mass medication, it is common to treat about half of these calves for BRD at a cost of about $18 per animal. Therefore, feedlots typically spend approximately $23.501 per animal on health for fall-placed calves. Although backgrounded and yearling cattle are not usually mass medicated, and the disease incidence is only about 25% that of newly weaned calves, their larger size increases treatment costs by about 45%, resulting in an average vaccination and treatment cost of about $4.362 per animal. The vaccine and medicine costs for a 5000 head yard that feeds one cycle of calves will be about $117,500 per year. The same-sized yard that feeds two cycles of backgrounders and yearlings will spend about $43,600 per year on vaccines and medications.
The cost of disease is clearly evident when it leads to mortality. However, the cost of reduced performance in cattle that survive health challenges is less apparent. Several studies have shown that gains, finish weight, hot carcass weight, and carcass fat decrease when cattle are treated for BRD3, and these negative effects intensify with an increasing number of treatments4. Research from 2014 estimated that these performance reductions cost about $112 USD per treated animal. Given that corn prices have risen by approximately 7.5% since 2014, the cost of performance reductions is likely closer to $120 USD per treated calf in today’s market.
It is plausible that the total cost of vaccinations, treatments, and performance losses for calves could average around $83.505 per calf. For backgrounders and yearlings, the costs would be approximately $34.366 per animal.
The annual total costs for prevention, treatment, and performance losses in a 5000 head calf lot would amount to about $417,500. In comparison, a similarly sized yearling lot with two cycles of cattle would face health-related costs of $343,600 per year.
By ensuring proper adherence to protocols, Fusion could feasibly enhance the efficacy of animal health protocols by 5%, which would equate to savings of $1,7407 per month for calves and $14328 per month for yearlings, averaging $1,587 per month—a 192% return on investment for using Fusion on a 5000 head yard. This calculation does not take into account the additional value provided by using an integrated dosing gun in Fusion, which allows for more accurate administration of injectables based on animal weight.
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