(la TECHNICAL ASSISTANCE PROJECT DOMINI STaJ^i -U.S. D£^ THE FEASIBILITY OF ESTABLISHING A FEEDLOT FOR THE ORGANIZED STATE- WIDE FINISHING AND MARKETING OF INDIAN -PRODUCED CATTLE IN NEVADA EDA Grant No. 07-6-01491 THE FEASIBILITY OF ESTABLISHING A FEED LOT FOR THE ORGANIZED STATE-WIDE FINISHING AND MARKETING OF INDIAN-PRODUCED CATTLE IN NEVADA This technical study was accomplished by professional consultants under contract with the Inter- Tribal Council of Nevada and an EDA Technical Assistance Grant. Statements, findings, conclusions, recom mendations, and other data in this report are solely those of the contractor and do not necessarily reflect the views of the Inter- Tribal Council of Nevada. Conducted by: EXPERIENCE, INCORPORATED 1930 Dain Tower Minneapolis, Minnesota 55402 January 1976 Digitized by the Internet Archive in 2012 with funding from LYRASIS Members and Sloan Foundation http://archive.org/details/feasibilityofestOOexpe TABLE OF CONTENTS Page I. INTRODUCTION 1 II. OBJECTIVE AND SCOPE 3 III. SUMMARY AND CONCLUSIONS 4 IV. CATTLE AND FEED SITUATION 6 A. Cattle Production 6 B. Feeder Cattle Marketing 8 C. Feed Production 9 V. RECOMMENDED CHANGE IN RANCHING OPERATION 11 A Recommendation and Implications 11 B„ Analysis of Recommended Changes 12 VI. FEEDLOT LOCATION 16 A. The Nevada Cattle Industry 16 B. Feedlot Site 16 C„ Environmental Considerations 17 VII. SIZE AND LAYOUT FOR THE PROPOSED FEEDLOT 21 VIII. ORGANIZATION/MANAGEMENT/EMPLOYMENT 24 A. Organization 24 B. Management 26 C. Employment 27 IX. FEEDLOT OPERATION 28 A. Rations 29 B. Marketing Finished Cattle 30 X. ECONOMICS OF FEEDLOT OPERATION 31 A. Capital Investment 31 B. Non-Feed Costs 33 C. Feed Costs 33 D. Evaluation of Profitability 36 E. Working Capital Requirement 38 F. Long Run Projections 38 G. Financing 41 H. Transportation 41 XI. RELATED BUSINESS ACTIVITIES 43 A. Current Indian Enterprises 43 B. Vertical Integration 44 XII. ALTERNATIVES 46 LIST OF TABLES TABLE 1. CATTLE PRODUCTION ON THE 13 NEVADA INDIAN RESERVATIONS 7 TABLE 2. ESTIMATED ANNUAL HAY SALES 9 TABLE 3. STOCKING CONDITIONS ON GRAZING LAND 10 TABLE 4. ADJUSTMENTS IN RESERVATION RANCHING ASA RESULT OF SHIFTING FROM CALF TO ALL- YEAR LING PRODUCTION 13 TABLE 5. ESTIMATED TOTAL INCREASE IN REVENUE FOR ELEVEN RESERVATIONS AS A RESULT OF SHIFTING TO YEARLING PRODUCTION -- VARIOUS CALF AND YEARLING PRICES 14 TABLE 6. APPARENT INTEREST IN FEEDLOT 25 TABLE 7. FEED CONSUMPTION AT VARIOUS LEVELS 30 TABLE 8. 2, 200 HEAD FEEDLOT INVESTMENT COST AND ANNUAL DEPRECIATION 32 TABLE 9. NON-FEED COSTS FOR 2, 200 HEAD CAPACITY FEEDLOT FEEDING THREE GROUPS OF CATTLE YEARLY 34 TABLE 10. SUMMARY OF ANNUAL FEEDLOT OPERATING COSTS, RETURNS, AND CASH FLOW AT VARIOUS LEVELS OF CAPACITY 37 TABLE 11. ESTIMATED RETURNS ON INVESTMENT UNDER DIFFERENT LEVELS OF FEED AND NON-FEED COSTS FOR FEEDLOT OPERATING AT 90 PER- CENT OF CAPACITY 39 TABLE 12. ACCUMULATION IN A CAPITAL ACCOUNT FOR 15 YEARS 40 TABLE 13. ESTIMATED ANNUAL COST FOR OPERATING A DIESEL TRUCK AND 40-FOOT CATTLE TRAILER 42 LIST OF FIGURES FIGURE 1. LOCATIONS OF NEVADA RESERVATIONS PRODUCING SIGNIFICANT AMOUNTS OF CATTLE OR FEEDSTUFFS 2 FIGURE 2. FEEDLOT SITE RESERVATION FALLON INDIAN 18 FIGURE 3. FEEDLOT SITE IN RELATION TO THE COMMUNITY OF FALLON 20 FIGURE 4. SCHEMATIC LAYOUT OF FEED MILL AND STOCK HANDLING FACILITIES 22 FIGURE 5. CATTLE PEN LAYOUT 23 FIGURE 6. BREAK EVEN BUYING AND SELLING PRICES FOR CATTLE 35 APPENDIX A SUPPORTIVE DATA TABLE A-l. DATA PROCEDURE FOR DETERMINING THE REPLACE- MENT OF COW-CALF UNITS BY COW-YEARLING UNITS TABLE A -2, EQUIPMENT AND FACILITY REQUIREMENTS TABLE A-3. NEVADA STATE TRUCKING TARIFF TABLE A-4, TABLE A-5, COST AND DISTANCE DATA ASSOCIATED WITH SHIPPING YEARLING CATTLE TO A FEEDLOT AT FALLON AND MARKET WEIGHT CATTLE TO YERINGTON PACKING PLANT FUND REQUIREMENTS BY MONTH DURING PROJECT START-UP BIBLIOGRAPHY I. INTRODUCTION The 13 Indian reservations in Nevada with significant cattle and feed resources are relatively small in size and scattered throughout the state (see Figure 1). Cattle raising has been an important enterprise on all the reservations for many years but only 11 presently have Indian ranching operations. Sales consist primarily of calves and lightweight feeders. Alfalfa hay production and sales also have been important sources of income for several reservations and a small volume of grain is sold from a few of the reservations. One of the problems experienced in attempting to stimulate economic development on the reservations has been the fact that their resources are individually small and scattered geographically. The Inter-Tribal Council of Nevada was organized to provide a vehicle for combining and coordinating these resources in a collective or cooperative effort to stimulate economic development. Similar development programs in other parts of the United States have met with greatest success where business enterprises developed have been compatible with the Indian culture. Because the Nevada Indians are experienced cattle ranchers, but be- cause the volume of cattle, hay, and grain produced on any one reservation is insufficient to justify individual development beyond present activities, the Inter- Tribal Council has chosen to explore the potential for a joint effort of all the tribes. Duck Valley „ . mmm . _ , Mou/«o.n Ofy r I i ; South Fork • W ^*H r ! Goshute PortOCO LINCOLN I Fresno. i. j>»"i FRESNO ie \mJ'>' K H CO W « c i — i < P «S > W 2 W S3 H Z c o I — I u Q c K H J H Eh ■ I — I C C X a; rt U c «3 (X, rt cm) 01 'a; > > ° r- +-" c «m rt 3 O t. z a O w CD K n * O to co m ■^ o o a> o •* ri< m in m ^ tD to to T3| o o o o m o m o in o oo o * m m in to o in m o co o in m h mm m to n to h tn n o o o in o o m co co o I T-t o o o o o 00 CO o o o tO CO M ■* tf O O O .-i o m co in o ^t* h n h n m o o o o m m m o co co co ■* m ^f m o co ^ 1^- r}< m aj cm co tO'ftoooo^mtONO) co^-iincocommincococN ooo.-ir~oooooo coooinoino--ioo CN CO O C~ .-J co o m CO H co a tc m to CN CO co ■<* CD -m -(-> 3 3 O O X> XJ OJ 0) CO CO OJ OJ 0) OJ CuO bo C C tO" tfl CM s * £ OJ OJ 3 ^■2 OJ OJ s q rt cj 3> c o A! 5 fc > § rt b oj rt ^ rt a C c .S -3 6 co CJ 3 o t. rt u ^ ^z; ^ 2 g o 3 o 3 O o ^•5 0, £ rt OJ rt 3 CO a Q cvo. Q fc s >H h >H £ CO 03 tN m in CO in < o X) OJ rt cj fi c o o cj rt o OJ uo -l-s o a •a o 4) a O a ai (1) o c cj o a a co c OJ ° m « a S ^ to ■D (J 3 w „ •° fl 5 » rt « -^ s rt S o W O o 0) B w rt ft X) 0) rt bo t< G O r a 0! C ,c rt CJ 4J c G rt ■M PES to OS Li . 3 tcO nS |Xi I 0|xi| The smallest operation is that on the Yerington Reservation --4 operators, 116 cow herd, and annual sales of 75 yearlings. 2. The average number of cows per operator varies from a high of 114 on the Duckwater Reservation to a low of 29 on the Yerington Reservation. 3. The total number of calves and yearlings from current pro- duction available to a feedlot operation would be 7, 841 head per year. Sales from ranching operations have been primarily calves rather than yearlings. Currently, calves represent 83 percent of the number of head sold. 4. The relatively low average calf crop of 62 percent (Table 1) exhibits generally poor performance of ranching operations. On five reservations, the calf crop is in the 50 percent range. The highest calf crop (75 percent) is achieved on the Duck Valley Reservation but this is well below the Nevada state average of over 85 percent. Several reasons can be cited for the poor performance, all of which are reflected in management performance. These include insufficient number and low quality bulls, ineffective pregnancy testing, poor culling practices, overstocking, the management/ organization structure (tribal land ownership, association management of land and cattle but individual livestock ownership), and the need to adopt modern livestock production technology that is available. Small scale ownership seems not to be a factor among the reservations because the smallest herds do not have the lowest percentage calf crop and the largest herds do not have the highest percentage calf crops. On the other hand, for the industry as a whole, a cow herd of 53 is relatively small. B. Feeder Cattle Marketing One of the problems experienced by the Indian cattleman has been in the marketing of his calves. Part of the problem stems from the fact that each producer markets his calves individually and in competition with one another rather than combining their marketing effort in a cooperative or joint marketing program. Individual producers often do not have sufficient market information and strong contacts with cattle buyers to judge market alternatives effectively. During the reservation survey, a number of individuals interviewed suggested that Nevada Indians are cheated in the marketing of their products. It has been reported that Indian producers receive lower prices for cattle 8 and hay than non-Indian producers. While this is generally true, most objective observers would judge Indian cattle and feed to be of poorer quality than that of non-Indians. Whether or not the Indian producer is being cheated or prices received reflect the true quality of products marketed cannot be clearly determined by this study. It is clear, however, that at the present time, marketing is disorganized and less effective than it could be. This, in itself, may result in lower prices because it is more costly for buyers to make purchases from small unorganized sellers. One of the benefits or advantages of integrating into cattle feeding is that a cooperative feedlot will offer an alternative market for feeders and some hay. A well qualified manager will be able to judge the quality of Indian-produced feeders and hay compared with non-Indian cattle and hay to determine if, in fact, there are quality differences. This alone is valuable information for the Indian cattlemen. If there are no differences in quality, the Indian can be assured of receiving competitive prices. C. Feed Production Eight reservations produce a surplus of hay over and above that re- quired by current cattle raising operations. This is evidenced by annual hay sales of an estimated 12. 6 thousand tons (Table 2). This is more than three times the quantity of hay needed to supply the requirements of the feeding enterprise proposed and discussed in greater detail in a later section of this report. TABLE 2. ESTIMATED ANNUAL HAY SALES^ Reservation Tons Reservation — Walker River 450 Yomba 700 Fallon -- Yerington -- Washoe 300 Summit Lake 325 Tons Goshute Duckwater South Fork Duck Valley Fort McDermit Moapa Pyramid Lake Total 3, 100 6,716 670 300 12, 561 a/ Based on personal interviews conducted during the reservation survey. Other sources of feed are rangeland and some improved (irrigated) pasture. It was not possible within the scope of this study to conduct an in- depth investigation of the potential for increasing the carrying capacity of range and pasture land. However, from observations during the reservation survey and from discussion with professional grazing specialists of the Bureau of Land Management, it was judged that grazing land on only three reservations appears to be understocked (Table 3). TABLE 3. STOCKING CONDITIONS ON GRAZING LAND*/ Reservation Goshute Duckwater South Fork Duck Valley Fort McDermit Moapa Condition Reservation Understocked Normal Normal Understocked Normal No Grazing Pyramid Lake Walker River Yomba Fallon Yerington Condition Overstocked Overstocked Understocked No Grazing Normal a/ Based on personal observation during reservation survey. Three reservations are entirely irrigated: Moapa, Fallon, and Yerington. The Goshute, Duckwater, South Fork, Duck Valley and McDermit reservations possess only a limited amount of irrigated land. The three reservations which appear to be understocked do not have the surplus hay to maintain a larger herd during the winter months. Those reservations with surplus hay could choose to supplement the range by feeding the hay to a larger cow herd instead of selling the hay as they now do. The wisdom of that decision, however, would be questionable in view of the poor performance shown by the low calf crop on reservations with surplus hay. It is the general conclusion that cattle production can be increased only modestly, if at all, from current feed supplies without improved man- agement practices or a change in the overall ranching operation. The man- agement practices needing improvement are cited in Part A of this section. Assistance in establishing better practices is available from the Nevada Agricultural Extension Service. A change in the general ranching operation is suggested and analyzed in the next section. 10 V. RECOMMENDED CHANGE IN RANCHING OPERATION The marketing of calves as opposed to yearlings from the reservation ranches is a pattern not unlike the rest of the cattle industry. During the past two decades prior to 1973, relatively low and stable feed grain prices encouraged the expansion of feedlot capacity in the United States and the pro- duction of choice and high choice fat cattle utilizing high levels of concentrates. In the last two years, United States feed grain surpluses have virtually dis- appeared into profitable export markets and feed prices have increased sig- nificantly. Needless to say, cattle feeders have experienced heavy losses during these last two years. The result has been the marketing of some grass or forage-fattened cattle, placement of cattle in feedlots at heavier weights, feeding for shorter periods, and marketing at lighter weights. Out- side investors have all but disappeared from cattle feeding, and backgrounding has been reduced. Asa result, the total number of cattle in feedlots has decreased substantially. It seems unlikely that long term feed grain prices will return to the low levels of the past two decades. While feed prices remain high, the price of feeder cattle will stay relatively low with heavy feeders tending to sell at about the same price per pound or even above the price of calves. Under this situation, carrying calves to yearlings on the range produces more ranching income than selling calves even with the reduction in cow numbers that is required to prevent overstocking the range. Some ranchers have already begun to make this adjustment and did not sell calves in the fall of 1974. This is an adjustment that Indian producers will also have to make. A. Recommendation and Implications It is recommended that ranching operations on all the reservations be shifted to the sale of yearlings rather than calves. If a coordinated Indian- owned feeding enterprise becomes a reality, the feedlot simply will not be able to economically and profitably fatten calves to market weights on high-priced concentrates, unless calves are purchased from ranchers at severely depressed prices. The shift to sale of yearlings should be made even if an Indian- owned feeding enterprise does not come about. It is recognized that this recommended shift in production practices holds several important implications for the management of cow herds. 1. The first year, when the shift to yearlings is made, there will be reduced income from the sale of calves. While this will be partly offset by culling and sale of some cows, it may be necessary to seek some interim, outside financing for a short time. The cost of this financing and income lost the first year because of no calf sales will be made up by the greater income from sales of yearlings later. 11 2. Forage availability and quality of range land will be the principal determinants of the size yearling operation that can be supported. To the extent that range and forage are limiting factors, it will be necessary to reduce cow numbers in order to carry calves through to yearlings. 3. Animal nutrition must receive more attention in a yearling operation because instead of simple maintenance required in a calf operation, proper growth rations must be considered. This will require feeding some protein and energy supplements, a practice and cost not required in a cow- calf operation. 4. The wintering of calves will require a higher level of manage- ment and attention than for cows, B. Analysis of Recommended Changes An important factor in support of the recommendation to shift to a yearling operation is the low calf crop. Table 1 shows that the overall calf crop for the 11 reservations is about 62 percent. In other words, it takes 1. 6 cows to produce one calf. With a cow rated at one animal unit and a yearling rated at 5/8 of an animal unit, it is possible to support more year- lings than cows on the same resources. This alone is of some advantage but when considered in conjunction with the prevailing low calf crop, a substantial benefit in terms of total saleable weight of cattle results when the switch to yearlings is made. For example, a yearling is the result of a calf already produced and the resources required to maintain 1. 6 cows will support 2. 6 yearlings. Thus, by replacing some cows with yearlings, more total pounds of saleable cattle can be produced from the same resources. In Table 4 the changes in output and the required decrease in the cow herd are summarized. It is estimated that there would be an increase in total production of about 694, 000 pounds (22 percent). An estimated 2, 895 cows (23 percent) will have to be sold from the 11 reservations in order for the present hay and range capacity to support a shift to all yearling pro- duction. No reduction in sales of hay will be required for this adjustment. When yearlings sell at the same price as calves, the total revenue from Indian ranching activities would increase about $96, 000 at a price of $0. 26 per pound and $158, 000 at a price of $0. 35 per pound (Table 5). When yearlings are selling for $0. 03 per pound more than calves, the revenue from the cow-yearling operation is from $200, 000 to $300, 000 greater than the cow-calf operation. 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CD P" O. c T3 ci •rH ch c! ° a CD CO ° S3 m CD fj C cd g CD i — i a XI ■" ^ 'O CL, C 1 f-1 ^ ^ c; +j a if id CO W 3 GO S3 25 431 14 sell for $0. 02 to $0. 03 per pound less than calves. A brief example can further demonstrate the financial implications of the change to a cow-yearling type of ranching operation. Since the total number of calves to hold over to yearling age will need to be less than the present calf crop, some calves will be sold in addition to the substantial number of cows during the year in which the change is made, A summary of sales under the present ranching system and sales projected during the year of transition to a cow-yearling operation is outlined below. Prices prevailing in February 1975 are used in the projection. Present total calf and yearling sales: 3, 201, 950 pounds @ $0. 26 per pound = $ 832, 507 Projected sales during change in operation: 2, 895 cows (in addition to normal culling), 950 pounds each @ $0. 19 per pound= 522, 548 1,848 calvesi. , 380 pounds each @ $0.26 per pound = 182,582 Total $705, 120 The difference between the two levels of sales will presumably need to be financed. This amount is estimated at about $127, 000. By adding the estimated supplemental feed costs of $84, 546 for wintering calves, the total amount to be borrowed will be about $212, 000. Based on the total number of cows projected to be on the reservation after the change in type of oper- ation (9, 707), the financing needed would be under $22 per cow. This is only $1, 000 to $2, 000 for the typical Indian cow herd owner and would be available to most ranchers from FmHA or other sources of production financing. While the change appears to be very dramatic on the surface, it does not generate a large financial burden if the cows are culled in the proper number and about 25 to 30 percent of calves are also sold. 1/ The present sales of 7, 841 head of calves and yearlings less 5, 993 head of yearlings expected to be sold under an all cow-yearling ranching operation. 15 VI. FEEDLOT LOCATION A. The Nevada Cattle Industry The Nevada livestock industry is relatively small, producing on the order of 300, 000 head of feeder cattle annually. About one -third of these are fed out locally to slaughter weights making Nevada a net exporter of feeder cattle. The cattle feeding industry has become concentrated in west central Nevada to take advantage of available feed supplies and favorable weather; however, most of the grain is imported from states to the north and east. The climate in this area is dry and mild throughout most of the year with relatively light winds and moderate winter snowfalls. This area of the state produces substantial quantities of high quality alfalfa hay, much of which is shipped to California. Only three feedlots market over 5, 000 head of fat cattle annually: 1. Nevada Nile at Lovelock - Capacity of 15, 000 head 2. Nevada Cattle Feeding Yard at Fallon - Capacity of 12, 000 3. Ed Snyder at Yerington - Capacity of 5, 000 Assuming a turnover rate of twice a year, these three feedlots are capable of feeding more than 60 percent of the fat cattle marketed in Nevada annually. In addition to these three lots, the Peoples Packing Company feeds several thousand head a year and the remainder of the state's feedlot capacity is made up of scattered, small units. Many of the smaller feedlots have en- gaged primarily in backgrounding operations during the period of low feed grain prices. B. Feedlot Site It is apparent from the way in which the Nevada cattle feeding in- dustry has evolved that the logical place for a new Indian -owned feedlot is the west central part of the state. Several factors were given consideration in the process of site selection. These included: a. Feedstuffs availability; b. Centrality with respect to the reservations; c. Proximity to other feedlots, therefore the fat cattle market; d. Adequate supply of good quality water; e. Access to highway transportation and power supply; f. Pollution potential, drainage, and other environmental considerations; and g. The extent of local Indian preparedness to support a new activity. 16 Of primary importance is the availability of feed supplies. Especially important is the availability of alfalfa hay because it represents 40 percent of the feeding ration and because it is very costly to transport a bulky, low value commodity such as hay. Five of the reservations (Pyramid Lake, Washoe, Yerington, Walker River, and Fallon) lie in what has been referred to as west central Nevada, and two , Walker River and Fallon, were given serious consideration as a feedlot site. The other three did not have large quantities of hay available. Walker River has an adequate level of hay production to meet the needs of a small feedlot, but could not support any growth of feeding beyond the initial size lot suggested here. Further irrigation development to produce more hay at Walker River would present serious problems. If additional water would be drawn from the river for irrigation, the rate of decline of Walker Lake would increase and the drainage to the lake would be more saline. Walker Lake is a sport fishing area already faced with a decline of one foot per year. The Fallon Reservation is the better choice of location. More than enough surplus hay is currently produced on the Fallon Reservation to meet the requirements of the proposed feedlot, thus eliminating the need (and associated cost) of importing hay. Fallon is centrally located with respect to the other reservations. It is well located with respect to fat cattle markets. It is accessible to both north -south and east -west highways, adequate supplies of good quality water, and a power supply. Drainage, pollution, and other environmental problems do not offer obstacles for con- struction and operation of a feedlot on the Fallon Reservation. Figure 2 shows a suitable site in the northwest corner of the Fallon Reservation. This triangular shaped 20 -acre parcel is currently unused tribal land. It is bordered on the north and west by desert (public domain) and on the east and south by an irrigation canal. An all-weather road will have to be brought into the site along the north side or directly over the canal on a bridge. Little will be required in the way of land clearing and leveling to prepare the site. The soil is sandy loam; the vegetation, desert brush. Two low hills running east and west will require minor shaping to achieve adequate drainage away from the pens. The water is only 14 feet below the lowest ground but present wells in the same area are too salty for use. This will necessitate extending the nearest water line about one -quarter mile and providing some water storage at the site. Electric power and tele- phone would also have to be extended to the site. Three phase, 240 volt power is available at the main well. 2/ C. Environmental Considerations— The Fallon Reservation site should present little or no pollution 2/ See the Bibliography for a specialized reference used by this study as a guide in adequately allowing for environmental concerns. 17 FIGURE 2. FEED LOT SITE FALLON INDIAN RESERVATION -- Public Domain-- Reservation Boundary 1 Mile N W- E pollution control or other environmental problems. The annual seven-inch rainfall combined with the sandy loam soil precludes any problem from run- off. Land contouring and a drainage basin to the west are further planned precautions. Pollution of underground water is unlikely and of no conse- quence since it is already unusable. Manure from the lot will be accumulated and temporarily piled in the pens and removed periodically for application to nearby irrigated fields. Manure is an excellent fertilizer for typical desert soils which are low in organic matter. The nearest homes are scattered to the south and east with none closer than one quarter mile. Odor and dust from this size facility will not reach the City of Fallon, which is at least five miles away (Figure 3). 19 .l^ov eloc£ Kd gZgg? VII. SIZE AND LAYOUT FOR THE PROPOSED FEEDLOT Because this project was undertaken to determine the potential benefits to Nevada Indians from vertically integrating into a cattle feeding enterprise, the primary determinant of size for a feedlot must be the number of cattle produced on the 11 Nevada Indian reservations. Table 4 in Sec- tion V of this report shows that a yearling operation on all the reservations will yield a total of 5, 993 yearling feeders per year, applying the same re- sources now used to produce 7, 841 calves and yearlings. While fewer head of cattle are produced in a yearling operation, 22 percent more animal weight is produced. Based on a 120 -day feeding period to put on 275 pounds of gain (650 pound yearling to 925 pound finished animal) or a planned turnover of lot capacity of three times per year, it will be necessary to accommodate about 2, 000 head in the lot at any one time to feed out all the Nevada Indian -produced yearlings. In order to do this, from a practical standpoint, the actual capac- ity of the feedlot should be about 10 percent greater. This is to allow for timely cleaning of pens and the flexibility to start short lots at particular times and to allow some flexibility in procurement of feeders and sale of fat cattle. Thus, it is proposed that a feedlot of 2, 200 head capacity be considered for this project. It is on this basis that capital investment costs and associated operating costs are estimated. Figures 4 and 5 show a suggested layout for such a facility. While the size of the feedlot had to be sufficient to serve Indian - produced cattle from the 11 reservations, it was recognized that almost all of these cattle are now marketed in the fall of the year. By switching to a yearling operation and improved planning and management, it is not un- realistic to suggest or expect that marketings can be programmed for spring and fall. Furthermore, it is recognized that not necessarily all of the year- lings produced on the Nevada Indian reservations will be fattened in the pro- posed feedlot. Thus, it should be anticipated that in order to operate the feedlot at or near capacity, probably at least one third of the feeders (year- lings) will have to come from sources other than the Nevada Indian reser- vations. These other sources might include other Indian reservations such as the Apache San Carlos Reservation in Arizona (they hold a spring sale) or purchased feeders from non-Indian sources. 21 w -x. W H U \ D i — i i — i < -Q- ^l +-3 CD -a- O — i . — i < C u o > o o "IITIM P 99 ^ P UB B8jy §ui^joyv\- 23 Vin. ORGANIZATION /MANAGEMENT /EMPLOYMENT A. Organization The overall objective of the Inter -Tribal Council is to improve the economic returns to the Nevada Indian cattleman through vertical integra- tion in the beef industry. Vertical integration, in turn, will offer additional benefits such as employment opportunities, an alternative market for feeder cattle and surplus hay, and, in general, the opportunity to keep more pro- ductive activities in Indian hands. A coordinated cattle feeding enterprise is proposed principally for the benefit of the Indian cattleman. Thus, it seems reasonable that the enterprise be organized so that returns from the feedlot can be equitably distributed back to the cattleman. This suggests a cooperative form of organization. Thousands of cooperatives have been organized over the years in the United States to accomplish these very same objectives (benefit to the members) whether the business enterprise is cattle feeding, production of feeder pigs, grain marketing, meat packing, farm input procurement, cheese manufacturing, or soybean processing. The detailed procedure and legal documents required for organization of a cooperative can be found in several publications of the Farmer Cooperative Service (USDA). 1. Organizing a Farmer Cooperative , FCS Circular 18, Farmer Cooperative Service, USDA, Washington DC, November 1956. 2. Legal Phases of Farmer Cooperatives, FCS Bulletin 10, Farmer Cooperative Service, USDA, Washington DC, January 1958. 3. Legal Phases of Farmer Cooperatives - Sample Legal Documents, FCS Information 66, Farmer Cooperative Service, USDA, Washington DC, May 1970. 4. Farmer Cooperatives -Farm Business Tools, Agricultural Information Bulletin 275, Farmer Cooperative Service, USDA, Washington DC, January 1964. 5. How to Start a Cooperative, Educational Circular 18, Farmer Cooperative Service, USDA, Washington DC. Assistance may also be sought directly from the Farmer Cooperative Service or land grant universities (University of Nevada) in organizing a new cooperative. 24 Traditionally, when a group of producers organize to form a co- operative, the members raise part of the capital to provide an equity in the enterprise and then seek sources of debt capital such as the Bank for Cooperatives, commercial banks, insurance companies, etc. The member- ship of this cooperative cattle feeding enterprise will be either the various reservation groups or the individual Indian cattlemen. In this case there is another potential source of capital funds for the cooperative. Application can be made to the Economic Development Administration for funds to con- struct the feedlot and provide some of the initial operating capital require- ments. If such a grant can be obtained, the traditional problem of raising equity capital from the members can be alleviated as well as the problem of seeking sources of debt financing (a particular problem in times of tight money and high interest rates). Requirements for membership in cooperatives vary. An obvious requirement is that an individual cannot be a member unless he does busi- ness with or uses the cooperative., In this case, unless an individual cattle- man ships his yearlings to the cooperative feedlot, he cannot be a member. Some cooperatives also require that members make an investment. The investment may be nominal or substantial. Another membership require- ment of most farmer cooperatives is that the member actually be a farmer or in this case members would have to be cattle producers or ranchers and actually engaged in raising feeder cattle (yearlings). This feedlot is proposed solely for the benefit of Nevada Indians and specifically for the benefit of Indian cattle producers and efficient feeding operations require that the lot operate as close to capacity as possible. This points clearly to the very first step that should be taken in organizing the feeding cooperative. A relatively small (six to eight) organizing committee of interested producers should be formed with one principal objective in mind --to determine how many other producers would be interested in the cooperative and the extent to which each would use the cooperative to fatten his cattle. During the reservation survey the principal investigator was able to gain some indication of interest in the feeding enterprise. TABLE 6. APPARENT INTEREST IN FEEDLOT Reservation Interest Reservation Interest Goshute Strong Pyramid Lake Strong Duckwater Some Walker River Strong South Fork Strong Yomba Strong Duck Valley Weak Fallon Strong Fort McDermit Some Yerington Strong Moapa Some Washoe Some 25 It appears that the reservation with the greatest number of cattle has the least interest. If there is insufficient interest on the part of Indian producers to generate enough yearlings to operate the feedlot at an efficient level, there is no point in organizing the cooperative and building the feedlot. Assuming there is sufficient interest in organizing the cattle feeding cooperative, the members would elect a board of directors. The board of directors would, in turn, be responsible for hiring a manager for the co- operative. The manager, under the direction of the board of directors, is responsible for the business operations of the cooperative, including hiring and firing of employees, purchasing, marketing, and handling of all products and supplies. After subtracting costs, each year, the profits (if any) are distributed to cooperative members in the form of patronage refunds ac- cording to the volume of business each member does with the cooperative. By law, at least 20 percent of the patronage refund must be paid in cash in the year it was declared. Payment of up to 80 percent of the patronage refund may be deferred to some future year. This ability to defer paying of patronage into the future has been a vital source of capital funds for many cooperatives. To be fair, it should be pointed out that many cooperatives have also found it difficult or impossible to pay these deferred patronage refunds when they come due, in which case they are usually deferred for payment at some date in the future, Once the cooperative has been formed and a financial commitment for construction and operating has been received, the subsequent steps in establishing the feedlot and approximate timetable are as follows (also see Table A -5): Mont h 1. Hire the manager. 2. Obtain lease or assignment of rights from the Fallon Reservation to the cooperative . 3. Develop detailed working design of the feedlot. 4. Site preparation and installation of utilities. 5. Construction. 6. Purchase equipment. 7. Hire labor. 8. Make arrangements with tribal office or individual farmers for the hauling and disposal of manure as fertilizer on adjacent irrigated land. 9. Begin operating. B. Management Topnotch management will be the key to successful operation of the proposed feedlot. Management in cattle feeding is more important today than it has been in the last two decades. The manager hired for this feed- lot should have a minimum of five years experience in all phases of a 26 1 1 2-4 5 6-12 10 11 11 13 feedlot operation, including buying of feeder cattle, feed ingredient pur- chasing, and the selling of fat cattle. The manager should have a college degree in Animal Science (or its equivalent in formal education). To assure successful initiation of the operation, the manager should be hired before the feedlot is constructed and should be involved in the planning and construction of the lot. To assure continuity in the first several years of operation, the manager should be hired under an irrevocable contract for three years. The manager must have complete control of the operations during these three years in order to act in the best business interests of the cooperative (within, of course, the general operating policies set by the board of directors). Because the objectives of this enterprise are to make better use of Indian resources and provide additional employment opportunities for Indians, and because it will be important to establish good rapport with cooperative members, the manager of the feedlot should eventually be Indian. If an Indian with the qualifications listed above cannot be located initially, an Indian counterpart should be assigned to the feedlot manager to learn the business. In this event, the manager hired would be responsible, during his three-year contract, for training his counterpart, and at the end of the three years, the Indian counterpart can take over management of the feed- lot. C. Employment It is estimated that, in addition to the manager, three other employ- ees will be required to operate the feedlot at capacity. In a small feedlot such as this, each employee must be expected to perform a variety of jobs. Cattle feeding is much more sophisticated than ranching operations. Poor performance shows up more quickly and has a greater impact on the oper- ation. A variety of skills will be required, including: 1. Receiving incoming cattle; 2. Weighing cattle; 3. Regular observation to detect sick cattle; 4. Treating sick cattle; 5. Inoculation of cattle; 6. Processing and mixing of rations; 7. Equipment operation- -hay and grain grinding; 8. Delivery of feed to the pens; 9. Cleaning pens and manure disposal; 10. Record keeping; and 11. Equipment and facility maintenance. Indians should, of course, be hired for these positions and if not experienced in cattle feeding operations, the manager will be responsible for training these employees. A part-time bookkeeper also will be re- quired, but this is a job for an outside experienced professional. 27 IX. FEEDLOT OPERATION There are basically two ways in which the feedlot can operate. 1. The feedlot can purchase feeders (yearlings) from [ndian cattlemen, feed them out, and then sell them. Returns over all costs would be distributed (in cash and deferred patronage) to the cattlemen who sold their yearlings to the feedlot if they are members of the cooperative. Under this method of operation there is one very important operating policy that must be established- -that is, the arrangement for purchasing feeders and the price to be paid. Farmers who organize cooperatives of this nature often are under the mistaken impression that because they own their own enterprise, a feedlot in this case, the cooperative can or should somehow pay a premium price for feeders (in this case) going into the lot. Cattle feeding is a highly competitive business. Whether the feed- lot makes money depends on three things; a. Price paid for feeders; b. Cost per pound of gain; and c. Selling price of the finished animal. To pay a premium for feeders is a very dangerous business practice be- cause if too much is paid, the feedlot will continually lose money. This makes it difficult to judge the true performance of the cooperative. Under this method of operation, one of two procedures should be followed: a. Pay the competitive market price for feeders; or b. Pay a percentage of the competitive market price for feeders. Because of market uncertainties, the second method is often used by cooperatives because the profits are returned to the members at the end of the year anyway. This method also alleviates working capital require- ments to some degree. 2. The second basic method of operating the feedlot is to feed cattle on a custom basis. Under this arrangement, the Indian cattlemen would maintain ownership of the feeder and would pay a fee to have them fed in the lot. There are a variety of methods for determining the fee to be charged but regardless of the method, the fee will cover all feed and non- feed costs plus a profit margin of some kind. There are several advantages to operating on a custom basis: 28 a. It alleviates the problem of determining what to pay for feeders. b. It substantially reduces working capital require- ments. c. It reduces the risk for the feedlot of price fluctuation in cattle markets. d. It allows the cattleman to maintain ownership of the cattle. Any profits from a custom feeding operation would, of course, be distributed to the members of the cooperative. These two methods of operation both have advantages and dis- advantages and one method may fit Indian customs better than the other. It ould be presumptuous to recommend one or the other method at this time. A. Rations w The decision on rations to be fed will be made by the feedlot manager and will depend on the availability and prices of ingredients. The ration will change as fattening progresses and may change from month-to-month, de- pending on availability and prices of ingredients. Locally available ingredi- ents and by-product feeds should be used to the greatest extent possible. There is sufficient high quality alfalfa hay produced on the Fallon Reserva- tion to meet the roughage requirements for the feedlot. Locally produced barley, wheat, and corn silage should be used when available but it should be recognized that at least half of the grain will have to be imported from other states. By-products such as molasses, almond hulls, beet pulp, potato skins, and apple pumice should be taken advantage of when available. Protein supplements and micro ingredients must be imported. For the purposes of estimating feedstuff requirements for this study, an average 40 percent roughage (alfalfa hay), 60 percent concentrate ration has been used, assuming that: 1. The beginning weight of the yearling is 650 pounds; 2. The finished weight is 925 pounds; 3. Average daily gain is 2. 3 pounds which results in a feeding period of 120 days and makes it possible to turn over the feedlot capacity three times a year; and 4„ The finished animal will grade US Good. Table 7 shows the estimated feed consumption on the basis of these as- sumptions. This level of production, as shown in the table, will consume approximately half of the saleable hay produced on the Fallon Reservation. In order to accommodate all Nevada Indian cattle, should they be- come available for feeding, and to take advantage of opportunities at certain times to buy drouth-stressed or bargain-priced feeders, it may be necessary to provide for local pasturing to hold cattle until pen space becomes available 29 TABLE 7. FEED CONSUMPTION AT VARIOUS LEVELS Consumption Measure (Average) Alfalfa Concentrates Per Animal Per Day (Pounds) 7 5 U 25 Per 2, 000 Head Per Day (Tons) 7.5 11.25 Per 2, 000 Head per 120-Day Feeding Period (Tons) 900 1350 Per 6, 000 Head Annually (Tons) 2700 4050 in the lot„ Such grazing areas are available immediately adjacent to the pro- posed feedlot site. These areas can be leased for green grazing during the summer and as an area to hold surplus cattle during the winter months until pen space is available. Leasing on the reservation is regulated by the Bureau of Indian Affairs and leasing fees currently range from $5 to $25 per acre per year, depending on the quality of the pasture. It may be necessary to fence some of these areas but the cost would become part of the lease agree- ment. Water would have to be brought to these areas but the cost will be small. It will be important at times to have this supplemental pasture avail- able in order to insure a controlled in-flow of cattle to maintain feedlot ca- pacity throughout the year. B„ Marketing Finished Cattle The cattle from the proposed feedlot should be sold on the open market for slaughter cattle as are the majority of the market weight cattle in the United States, The market for slaughter cattle is one that is character- ized as having several buyers in any one location competing for the cattle available from the feedlots. Similarly, all feedlots are competing in the sale of their cattle. This competitive atmosphere is not likely to result in a premium for the cattle of any one feedlot unless a reputation for high quality has been established. The feedlot will provide a sufficient volume of finished cattle to attract both local and California packer-buyers and stimulate com- petitive bidding. Competitive bidding is what "makes the market". To the extent that Indian cattlemen feed out their yearlings in a cooperative feed- lot, they will be creating an organized marketing effort. The feedlot manager will provide valuable professional marketing expertise needed to obtain the best competitive prices possible for Indian-produced cattle. 30 X. ECONOMICS OF FEEDLOT OPERATION A. Capital Investment Detailed studies of feedlot investment requirements show that in- vestment per head of capacity decreases as the size of the feedlot increases up to about 20, 000 head. Feedlots of 15, 000 to 20, 000 head capacity can be built for a cost per head capacity 50 to 60 percent lower than the cost of building a lot of 2, 200 head capacity. However, even with feedlots of a given size, there is a wide variation in the manner in which a feedlot may be constructed and thus a wide variation in potential investment required. In this study, on-site evaluation and specific cost information were combined with information from several very detailed feedlot studies (see Bibliography) to determine total capital requirements. The estimated capital investment required and annual depreciation of this investment are summarized in Table 8. On the Fallon Reservation site, some land shaping will be required to remove knolls and contour the area downslope from the feedlot. The estimate for installation of the water system takes into account extension of the water main on the reservation and allows for water storage at the feed- lot. Pens, bunks, gates, and related installations are estimated to cost $85, 000. Several construction options exist but a concrete apron and feed bunk are considered a necessity. The feed storage-processing-distribution system presents the great- est number of options. The basic requirements are storage for grain and supplement, a grinder(s) with capability for hay and grain, and a self- unloading feed wagon or truck. A complete feed mill system for a 5, 000 to 10, 000 head capacity lot was estimated to cost $195, 000 installed, excluding grain storage. However, a 2, 200 head feedlot does not warrant a detailed feed mill design and engineering expense or a unit this large. Good used equipment is presently available and an experienced feedlot manager could assemble the components of the feed handling system to match the initial size or growth potential of the feedlot. It is estimated that $120, 000 is adequate to cover the required investment in feed storage, feed processing equipment, and feeding equipment. The cost of electrical installation at the Fallon site is estimated at $10, 000. The cost quoted by the power company was $2 per foot with a credit of 120 ($240) per permanently installed electrical horsepower. The nearest three-phase electrical power is about 2. 1 miles from the proposed feedlot site. It is suggested that one of the regular employees be housed at the 31 TABLE 8 . 2, 200 HEAD FEEDLOT INVESTMENT COST AND ANNUAL DEPRECIATION^/ Item Total Cost Cost Per Head Capacity Expected Useful Life Annual Depreciation!)/ Site Preparation $ 3, 000 $ 1. 36 (years) 15 $ 180 Water System 8, 000 3.63 15 480 Pens & Equipment 85, 000 38.63 15 5, 100 Feed Storage, Processing, & Feeding Equipment 120, 000 54.55 10 10,800 Platform Scale 11, 000 5.00 10 990 Tractors (2) 20, 000 9. 09 10 1, 800 Loader & Blade for Tractor 3,000 1. 36 6 450 Trucks 10, 000 4. 55 6 1, 500 Office & Equipment 6, 000 2. 73 15 360 Electrical Installation 10, 000 4. 55 15 600 Mobile Home 10, 000 4. 55 10 1, 600 TOTAL $286, 000£/ $130. 00 $22,860 a/ A list of suggested equipment is found in Appendix Table A -2. b/ Based on a salvage value of 10 percent and depreciable value divided by expected years of useful life. c/ Because of the need to have the manager on site during construction, the manager's salary of $18, 000 and incidental expenses of $2, 400 must be added to investment, resulting in a total capital requirement before operation of $306, 400 (see Table A -5). 32 feedlot site. An investment cost of $10, 000 is included for a mobile home. The total investment required is estimated at $286, 000 or $130 per head capacity. By comparison, feedlots in the 10, 000 to 30, 000 head range were built for $70 per head capacity two years ago. In 1974 anc early 1975, feedlots under financial stress have sold for a fraction of replacement cost. Feedlots with a capacity of 10, 000 head or larger and built in the late 1960's have recently been sold for or offered at $30 to $50 per head capacity. Feed- lots less than four years old have been sold for or offered at a price of $45 to $60 per head capacity or even less„ B„ Non-Feed Costs Non-feed operating costs total $23. 61 per head when the lot is ope- rated at 90 percent capacity. At 60 percent and 30 percent of capacity, operating costs are estimated to be $26. 25 and $36. 61 respectively (see Table 9). The labor and management categories of operating costs account for substantial declines in unit cost as a larger share of feedlot capacity is utilized. Per head costs decline as a larger percentage of capacity is uti- lized in all categories except veterinary expense, interest on operating capital, and nutritional consulting expense. The depreciation of capital represents an annual fixed cost of $22, 860, This is a cost per head of $3. 85 if the lot is used at 90 percent of capacity (5, 940 head annually). The per head cost increases when the facility is operated at less than 90 percent of capacity. At a use rate of only 30 per- cent, the depreciation charge per head would be $11. 55. A charge for interest on fixed capital might appropriately be included here. However, interest or return on investment is calculated later under alternative manage- ment situations. C. Feed Costs The cost of feed is of critical importance to feedlot profitability, Currently there is substantial uncertainty in the expected prices of feed- stuffs. Prices are declining from their highs of 1974 as the demand for grains and other feedstuffs decline in response to unprofitable feeding situations. Yet, no feed surpluses exist, export demand is strong, and the size of future crops is a matter of conjecture at this time. Feed costs, feeding efficiency, and non-feed costs are required to compute what a feedlot can afford to pay for feeder cattle based on expected slaughter cattle prices. This is demonstrated in Figure 6 for two levels of feed prices and the approximate feed requirements stated earlier in this report. 33 •J. £3 c « O W W K ffi H O P w w En c Q w w En u o u Jl u &, CU rt co ° CO CD ^ a o C-, ca cu D. Q_ nJ o U CO x> cd CD 0) cd +-» o T3 cd CD S-. CU Cu cd o T3 cd CU tn CU PL, O H CO i-i o in CO 6© o o o CO- 03 o o o a) o o: o to m CO o o f-« o CO i— i iti m in CD CM o o o o i> CO CM O o o CD o o CO o CO CM o o o o 00 o o CO CO T—t 03 ■* CM o in 00- o in r-i rt> O O O O O cu o > CU en he c a CU CU .M -^ O o n .3 S s C Cd CU p n cu •>-i o u c rrt 73 r CD cu s 73 4-J co cu a s CO c >. 73 CU u a X cd r cd w h -. , .^ cu ri) cd "cu > cu K 5 o m m CD CO CD o O m CO o o CM o CO CM r-l o in o in in CM o CO CM CO CM r-i O o o t> CD CM co- n o o o CD o o o o o o CO n o o CM CD CM in o CM co o ,n o o -? en CM ^j o en CO CD t> CTi m CO "* t- CO t- <* CM I-I 03 CO t-H »— < i— i CM o o o CD m CD o o m o in i-H CM »-H o r~i o c- CD CO 69- O CD 03 O in CM o o C33 o CD o 03 03 o in CO 03 co" co" cm" t-H CM CO f— I CO a ca -*-> 5 *j UJ cu a O CJ cd U cd i— , i— i cu U bjj bo C c as cd ID c rrt cu hr c u cu B o h rH CO •i-i Q 3 CU W h c

u C i— i 34 o C a: T r o c CO •J rt Fh bo H.S ^ ? U U CD en a O o w o \ \ \ o *-> a c c - a c _J a c cU CD CD \ \ \ a r /I 5 £ 5, g "* XI ■* P-l O o »— 1 CN \ \A \\ \ c cu o a o a. t: b c bo C s ° tj r- "RICE e feed ty V \ V a o •c 'c c S-i cu 2 S S"! cu CD a 09- O Mh -C -w "-; a. ™ \\ \ \ ro >. ■* CD o u co pu SELL tuffs, nt of c \ \ V n co bo a '>. CD 3 UYING AND es for feeds 90 perce C O N \ CO pQ * -• o o t— 1 \\ \ \\ CO o o t- CN «J CQ o & a W a > 7 CD U \ \\ \ \ \ 6 28 30 3 Feeder Catt: cu o c o o \ \\_ \ W to cc „ c o 4*9 \ x \\ \ to" W K \\ \ \ \ CM a i— ( K \ \ \' \ i CM • r CD C 3 O l< C! o o 3 ^ C 3 C c 3 o- a 1 CN ) ) cc c\ > i qi 001 J 3 d $ :aoTJd Sujuas ai^o paqsiuiji 35 D. Evaluation of Profitability To test the economic viability of the proposed feedlot is equivalent to projecting the average return above feed cost. Historic information of this type is not available for areas other than certain Corn Belt states. This information is not generally applicable to Nevada where feed conver- sion is somewhat better but the markets for feeder and finished stock are determined by somewhat different supply and demand factors. The most direct approach to identifying the economic viability of the proposed feedlot is to compare the estimated non-feed costs with the usual charges for custom feeding of cattle. Feedlots which feed cattle on a custom basis charge for feed and services rendered. These charges are indicative of the average returns to the feedlot under feedlot ownership of cattle since the feedlot management has the alternative of feeding his own cattle or feeding cattle for others. Several types of charges for custom feeding exist and are determined to some extent by mutual agreement. A common type is the feed mark-up system. This includes a basic mark-up on the cost of feed that is fed plus a charge to cover veterinary expense and certain receiving costs. A major corporation with feedlots throughout Texas and Arizona had a basic feed mark-up of $12. 50 per ton of feed in 1973 and a processing fee to cover medication and receiving of $3. 50 to $5. 40 per head. For this analysis $14 per ton is used to partially account for rising costs. With present underutilization of feedlot capacity, it is unlikely that the full increase in costs of the past two years will be passed on to feeders having cattle custom fed. Based on the feed requirements set out earlier, the estimated feed required per head would be 2, 250 pounds (1. 125 ton) and the mark-up per animal fed would be $15. 75. Adding a medication and receiving cost of $5 per head brings the total gross return (to the feedlot) per head of $20. 75. However, under a custom feeding program, the feedlot owner does not bear the cost of interest on the investment in the feeder animal. A lot feeding its own cattle would expect to recover this amount, which is approxi- mately $5. 25 (9 percent on $175 for four months). Thus, the equivalent gross return for a feedlot feeding its own cattle would be $26 ($20. 75 plus $5. 25). Table 10 shows a summary of the returns to the feedlot when operating at various levels of capacity. These are estimates of expected returns to a well-managed feedlot operating with either feedlot-owned cattle or performing custom feeding functions. Under the cost and return analysis presented, the return on invest- ment is negative. Three factors, discussed earlier, are largely responsi- ble for this negative return: rapidly rising construction costs, relatively 36 co P O i— ( K i O w s Q « p H W K CO H CO O U o I— I « W Ph o H O Q W w CD o H 0) >> * Jh o ^ oi d o Ph a ■* 03 CO O (J « a) >5 nj o £ « a; cd _ (L ftO o cj ro CO CO ^ rt «w nj O a, co rS as -a CO O a, •* nj co ° «" in a -a a; >5 nj o ."S > CO CD CO _ O (J ro CO j p CO a i— i H < W Ph o CO LO CO CD O O CO CO CM co C- CM CO CM •-H ID C- CM o CM CM t~ o o O • • • • , CO in CM CO co CM CO CM ^ o CO in co co o a v> cd Sh CD a O CO 0) +-> £ <*> •w Q O m co in <-i o o CO o CO CO eg (M o CO CO cm* CM CO CO CO CM o <* m o co co CM* O CJ 0) Ch a CD Q CO O O w -^ g.al 3 W cd to BJ O CO ID CD fn CD CM CM CO CO CO m CO co" CM co O CO o CO CO CO m CO c- >* CO co "* CO « « * « ^ CM CM m v-H CO l> CM CO m ■* <*3- M V- <- ° m rt 03 CD CO C > 3 S S-i co co +> ii 01 01 CD CD O O Z « U U « < P CO O a co < U CO CO in CO CM CM CO co c .2 3 o CD o «tJ col .nl 37 high per head construction costs for a modest size feedlot, and current industry-wide feedlot capacity substantially in excess of that required. The latter factor tends to hold down margins in the feeding industry. Because feed costs are expected to remain high relative to the past, the latter situ- ation is expected to persist, resulting in severe competition in the cattle feeding business. Efficient feedlots with low investment per head (some as a result of recent distressed sales and recapitalization) will be in the best position to make profits. Rate of return on investment is quite sensitive to variations in both feed and non-feed costs (Table 11). If feed costs five percent lower than the average can be obtained, rate of return increases to 6. 3 percent. Five per- cent higher feed costs result in a negative return. The results for non-feed costs (excluding depreciation) are similar but less dramatic. E. Working Capital Requirement While returns over feed costs are expected to be about equal to custom feeding or feedlot- owned cattle, on the average there is an important dif- ference in financial requirements. With a custom feeding operation, oper- ating capital would be no more than required for feed and non-feed operating costs. Since it would be wise to buy the yearly hay supply at harvest, the working capital required would vary from a high of about $252, 000 to a low of about $122, 000. A summary of maximum working capital required is as follows for a lot that did not own the cattle: Maximum hay inventory-2, 700 tons @ $80 $216, 000 Concentrates (inventory & fed) - 90-day supply, 675 tons @ $130 87, 750 Direct operating expenses 50, 000 $353,750 When feeding cattle owned by the feedlot, the basic working capital requirement increases by $300, 000 to $420, 000 depending on the price of feeder cattle. In addition, a substantial cash reserve or line of credit would be necessary to cover losses from feeding that occur periodically in the best- managed feedlots. This reserve should total $50, 000 to $100, 000. Thus, total operating capital required to operate a feedlot with feedlot- owned cattle would be approximately $850, 000. F. Long Run Projections The foregoing analysis indicates that this venture would have no chance of repaying a conventional loan. The sum of depreciation and return on in- vestment would not service a loan at current interest rates. However, if this facility were to be built with an economic development grant, the operation 38 § 125 Q ft h- 1 W K S w S H Q pu K o H <*> g H Eh w CO O ft i — i H ° Oq co pq ft H K Ph W K O Ph Q h H co O U 5 Q co w H Ph W pq H CD c o c 3 ttf 4j to (£ CD CD t+H I 1 o ** ojO •- 1 o 0) (J tuo d T3 03 CD Xi CD U Ph d d rt ojO d- d O 3 - Ah CD CO CO T-i CO c- LO d- CM CM CM O O t— I rH " + co ra to w o o d c rt ™ CD OJ u o ° CO C3 rH O "^ CO UO CM "tf o o 1 LO LO 1 t- O «* CD cd" CO 1 CO + CO ,£2 a-°J o ra S? CD T3 ^ CD CD CD & r° £ I Ph fe d . f. CD 5 5P rt CD > ID LO CO o o CD +-> CO ^ -l-> d M^ CJ d o o T5 G rt d o -tj u CD a o CO ^e- ^ •>■" O CD ° H rt 5 d J5 1! 'O rt CD d JS o -^ CJ T3 CD cd a CO CO •° d co a £5 £ P CD S-, ost qui: O CD X3 ^ S 'o V CD ««— i r. CD d 'h - • M o d ^ 1— I o -^ -o id T3 d a d rt T 1 rt !h 03 gs d CO > o -4-> CD -t-> I-H d Sh rO CD CD rt O Cm H ^ s s a 00 o cd ^e- u Ph H o rt| ^1 39 could, with above average management, keep the initial capital intact and be financially able to replace the facility at the end of its useful life or expand at some time in the future. This would be accomplished by placing an amount equal to annual depreciation into a capital account. Return on investment (after allowance for depreciation) could also be placad in the capital account. An alternative would be to return this amount to feedlot patrons as a patronage refund. The accumulation in a capital account is shown in Table 12. TABLE 12. ACCUMULATION IN A CAPITA L ACCOUNT FOR 15 YEARS Outlay for Accumulated Value Year Capital Account Deposits^:' Replacements' of Account^' 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 $22,860 22, 860 22, 860 22, 860 22, 860 22,860 22,860 22, 860 22, 860 22, 860 22, 860 22, 860 22, 860 22,860 22,860 $ 4,020 262,269 $ 22,860 47, 320 73,494 101,476 131, 445 159,497 193, 522 229, 928 268, 883 48, 295 74,536 102,614 132,657 164, 803 199, 199 a/ Equivalent to annual depreciation. b/ Outlays at end of useful life (from Table 8 ) are inflated at the rate of 5 percent per year. Capital account is assumed to earn interest at the rate of 7 percent per year. 40 G. Financing Financing for a project of this kind would not be considered by any type of conventional lender since it has no ability to generate adequate cash to service a debt. If the project was viewed as essential to further develop- ment of the Indian cattle industry, a grant for the facility, additional start- up costs, and some initial working capital would be required. Sources of grants for projects with such a relatively poor financial outlook are unknown. H. Transportation A feedlot requires the service of several types of transportation. Each type is somewhat specialized with respect to equipment required and the source and destination of the freight. Grain, by-product feeds, com- mercial feeds, and molasses will generally be bought on a delivered basis with shipping done by the seller or a commercial carrier, A truck with a 14-foot grain box and stock rack is a convenient and necessary part of the equipment for a feedlot of this size but it is not a large enough unit for major transport tasks. Shipping feeder cattle in and market cattle out constitutes the major single category of specialized trucking. Based on commercial trucking tariffs and assuming the feeder cattle are shipped into the feedlot from each reser- vation and are shipped out to a west central Nevada packing plant, the total commercial trucking bill would be $38, 104 (see Appendix Table A -4). For the feedlot to own a cattle trailer, lease a diesel truck, cover all operating costs, and transport all of their own feeder and slaughter cattle, the annual costs would be approximately $38, 674 (see Table 13), While it appears that commercial trucking would cost only slightly less than a feedlot-operated truck, there are several reasons why it is im- practical for a feedlot to operate trucks. 1, Cattle from ranches or reservations are frequently corraled for shipment in large groups requiring several trucks to accommodate the total number of cattle. Therefore, the feedlot-owned truck could not physi- cally move all of the reservation cattle and extra expense would be incurred to hire additional trucks, 2„ Opportunities to backhaul freight to reservations from the Fallon area have been explored and found to be nearly nonexistent. 3, A trailer suitable for hauling cattle is not suitable for hauling either grain or other feedstuffs. Thus, it is difficult to get other use from the truck investment, 41 TABLE 13. ESTIMATED ANNUAL COST FOR OPERATING A DIESEL TRUCK AND 40-FOOT CATTLE TRAILER Item Cost Per Unit Annual Cost 1 Lease (diesel tractor) Monthly Mileage Charge 998. 0. 00 094/mile(55810)^ / 2, Insurance 3 r Fuel 0. 10/mile 4, Driver 0. 15/mile 5. Cattle Trailer (40-foot double deck) Interest (10% of new cost) Depreciation (10% of new cost) Repair and Maintenance Total Annual Cost 11, 976 5, 246 4, 000 5, 581 8, 371 1, 400 1, 400 700 $ 38, 674 a/ See Table A -4. 4„ Servicing for the diesel truck would be at some point away from the reservation requiring additional time and expense. Commercial feedlots rarely undertake to provide their own trucking services. There is no special reason why an Indian-owned lot should under- take this task. The need for trucking services by the feedlot is sporadic and the types of services are somewhat specialized (transport hay, grain, cattle). Thus, truck operation is generally limited to convenience transportation. The fact that other feedlots have determined that commercial trucking is more practical than feedlot truck operation supports the analysis made here. A few Indian-owned trucking businesses are in operation in Nevada and these should be supported with feedlot business where practical. The transport of hay from the nearby Fallon Reservation to the feed- lot can be accomplished by either feedlot employees or Indian hay producers. This can be accomplished with wagons, farm trucks, a flatbed truck-trailer or a three- ton truck with a "stack retriever". The latter would cost about $13, 000 and would replace considerable labor in handling the hay. In view of the interest in maintaining Indian employment, the purchase of this type of unit may not be advisable. 42 XI. RELATED BUSINESS ACTIVITIES A. Current Indian Enterprises During the reservation survey, several other Indian enterprises were encountered that relate, at least in part, to the idea of vertical in- tegration in the beef industry. On the Walker River Reservation, one young enterprising Indian has established a small meat cutting shop and locker plant. He has had formal training in meat cutting and several years experience at the meat packing plant where he now has his cattle slaughtered. A fixed fee per head is charged to slaughter the animal and the packer keeps everything except the carcass, heart, and liver. This shop now cuts up and packages an average of four head of cattle a week and looks forward to moderate growth in the business. To suggest that there is an opportunity to vertically in- tegrate into meat packing at this point, before the proposed cattle feeding enterprise has proven successful or has even been initiated, would be pre- sumptuous. Furthermore, the size of feeding enterprise considered in this study is but a fraction of the volume needed to operate an economic -sized packing plant. This is not to say that such an enterprise should not be con- sidered but rather that any attempt at vertical integration should be taken a step at a time. The feasibility of such an enterprise must be examined in- depth but only after cattle feeding has proven successful. A steel fabrication enterprise observed on the Goshute Reservation has become quite successful under new management by a Salt Lake City firm. The enterprise manufactures cattle guards but can fabricate other items such as truck stock racks and gates. This enterprise may be able to supply several items and structures needed in construction of the feedlot. The company currently does its own shipping with a leased truck which costs approxi- mately $1, 000 per month plus 9.4 cents per mile, 15.5 cents per mile for the driver and 10 cents per mile for fuel. It was learned that present ship- ping volume could justify another "half truck". The trucking requirements for a feedlot of the size proposed in this study are not sufficient to justify ownership or leasing of a truck by itself. If the cooperative feeding enter- prise is implemented, a cooperative trucking arrangement should be dis- cussed with this company for delivering yearlings to the feedlot, shipment of fat cattle, and shipment of hay. It may also be possible to arrange back- hauls of grain for the feedlot. The Native American Construction Company is located on the Fallon Reservation. Although the firm deals principally in housing construction, it may be able to provide for some of the construction needs of the feedlot -- such as land shaping and construction of fences, pens, feed troughs, aprons, water system, roads, sheds, and offices. 43 Two other Indian enterprises may be able to assist in construction of the feedlot and provide shipping services. These are another small construction company and a trucking firm that hauls hay to California. B. Vertical Integration The vertical integration of the meat business from ranching through retail distribution presents complications and difficulties of considerable magnitude. Beyond the production of the feeder animal are the functions of financing, assuming risk, handling, shipping, fattening in the feedlot, ship- ping to market, slaughter, by-product utilization, shipment of carcass, and finally wholesaling, meat cutting, packaging, and retail selling. All of these are separate and distinct functions employing highly specialized management and working personnel, together with enormous fixed investment and working capital. In the existing economic scheme of things, numerous ranchers and farms are required to supply the animal and feedstuff needs of only one feedlot. Likewise, numerous feedlots are required to supply the needs of one minimum -sized packing house. After this pyramid effect of many units in supplying the needs of fewer but large and highly specialized units, the system reverses itself. One packing house can supply numerous beef retail outlets. It should be understood, however, that most meat retailing is not in small butcher shops but in massive supermarkets - where thousands of items from pre-cooked rice to canvas shoes are sold. In the past several months, an increasing number of small meat markets have been established by cattle feeders and ranchers in an attempt to capture part of the meat marketing margin. Most of these emphasize the sale of beef quarters or wholesale quantity beef packs. Several cattle feeders have claimed to reduce their losses from cattle feeding by this type of marketing. An operation of this type has been identified which slaughters, packages, and retails the beef from about 48 steers per week and employs about six people. It would take at least two such shops to direct -sell all the Indian -owned beef from a feedlot. Thus, this type of enterprise is sub- stantially more labor intensive than cattle feeding. However, such an oper- ation requires quality beef, good locations in population centers, and an entrepreneurial flair for merchandising in order to obtain prices high enough for profitable operation. Several Indian enterprises that could be part of a vertically co- ordinated Indian beef industry are already in existence and may offer bene- ficial services for the proposed feedlot. However, it must be recognized that the feedlot is designed to accept ALL yearlings produced in Nevada by Indians. As stated above, packing and related operations require the cattle 44 from several feedlots this size. Taking into account this factor as well as the capital requirements, risks, management and marketing expertise required to integrate beyond the proposed feedlot, it would be unwise to consider further integration at this time. 45 XII. ALTERNATIVES As cited earlier in this report, industry-wide feedlot capacity is presently greater than the demand for feedlot space. The purchase of a lot for this venture should be explored. However, no lots were known to be for sale in a size and location suitable for Indian operation at the time the field work for this study was underway. A larger feedlot would tend to have reduced operating costs per head if operated at capacity, but the capital and management requirements would be of a scope substantially greater than itemized here. A co-op or group of Indian ranchers should consider assembling a uniform group of feeder cattle to be custom fed in a commercial feedlot. Several of the functions that would be needed for their own feedlot would be necessary for such an interim enterprise. A cooperative that would engage in such an operation would undertake to group the cattle according to size and grade, arrange for co-op ownership during the feeding period, arrange financing, and arrange for the sale of cattle. The experience gained would be valuable and Indian cattlemen could compare the feedlot performance and saleability of their cattle with other cattle that were fed under identical cir- cumstances. However, no Indian labor or training would be involved in this type of activity. There would be no direct use of Indian feedstuffs. Thus, it has little long-run potential for development. Over the years, Indian groups have been funded for a variety of projects, many of which were not successful and many of which were not closely related to Indian tradition and resources. It is expected that the federal government will continue to extend funding to Indian groups. There is considerable merit in funding projects closely related to the areas of activity familiar to the Indian; land and livestock. The feedlot is such a project. Development in the past has frequently come at a high cost. The possibility of losses in the feedlot operation should be evaluated in view of the less tangible gains that may be obtained from the various tribes working together on this type of project. 46 APPENDIX A SUPPORTIVE DATA TABLE A-l. DATA PROCEDURE FOR DETERMINING THE REPLACEMENT OF COW- CALF UNITS BY COW- YEAR LING UNITS Reservation (A) Current Calf Production a/ (B) Cows Calf*' (D) Cow-Calf to (C) Cows Required Cow-Calf to Number of For Current Cow-Yearling Yearlings (E) Number Calf , c / Production— Conversion Factor- To Replace Calves— (head) (head) (head) Goshute Duckwater South Fork Duck Valley Fort McDermit Moapa Pyramid Lake Walker River Yomba Fallon Yerington 150 1.58 360 1.56 150 2.00 3,201 1.33 540 1. 85 585 2.04 944 2.00 275 1.66 340 1.56 237 562 300 4, ,257 1. ,000 1, 193 1, 918 457 530 2. 20 2. 18 2. 62 1. 95 2. 47 2. 66 2. 62 2. 22 2. 18 108 258 114 2, 183 406 448 732 205 243 NOTE: The appropriateness of the procedure and figures used in Table A-l to compute equivalent range and feed requirements can be demonstrated by comparing the present number of animal feed units with those after the adjust- ment to yearlings. An example of how this works out on the Duckwater Reser- vation is given here. The current calf sales on the Duckwater Reservation require that 562 cows be maintained (with 64 percent calf crop). The feed required for this cow-calf production can be expressed as 562 animal feed units. Carrying a calf the extra year to yearling age and weight requires 5/8 or .62 of the range and feed of a cow and calf. The estimated 258 yearlings that can be raised instead of calves use 160 animal units (258 x . 62 = 160) for the year on range after weaning. The calving percentage is 64; therefore, 1.56 cows are required per calf. Thus, 258 yearlings will require 402 cows and 402 animal feed units under the present level of efficiency. The total animal units of feed required is the same as before the change (402 used by cows plus 160 used by yearlings). a/ See Table 1. b/ Based on calving percentage. c/ Calf production times cows per calf. d/ Column B plus . 62 (a yearling requires 5/8 or feed requirement of a cow-calf unit), e/ Column C divided by Column D. 62 of the range and TABLE A -2. EQUIPMENT AND FACILITY REQUIREMENTS A. Installation lo Three-phase power line to site from reservation headquarter s„ 2. Water piped from nearest source (one -fourth mile). Water storage --80, 000 gallons or 5 -day supply. Road graded from nearest asphalt to site (one -half mile). 3. Land leveling and sloping for pens. 4. Open hay storage shed. 5. Office -scale house (600 square feet). 6. Scales (10 x 34 feet --20 tons) with sliding rack (can be used to weigh both cattle and medium -sized trucks )<> 7. Hay and grain grinder, with 50 foot drag. 8. Overhead cyclone (dust collector) for grinder. 9. Overhead grain storage with gravity flow to grinder and dump pit and auger. 10. Overhead ground grain storage with gravity flow to feed truck (while on scales). 11. Overhead storage for optional concentrate ingredients, with pit and auger. 12. Overhead molasses blender (from grinder to truck). 13. Molasses storage, underground (35 -ton capacity), and piping and pump to blender. 14. Outdoor lighting for work area. 15. Water system Small flow -through heated water ers between each two pens, concrete apron, underground pipe. 16. Working corrals Squeeze chute, loading chute, two corrals for sorting. 17. Hospital pens Six small pens with water between, shade, and windbreak, small feed troughs. 18. Horse pens Four pens with shade, water, and feed trough. 19. Feed pens a. Physical capacity for 2, 200 head, with actual functional capacity (some pens must be vacant for cleaning, repair, etc. ) for 2, 000 head. Allow 125 square feet per animal, 60 animals per pen. b. Fenceline concrete feed troughs, with six-foot apron. c. Fencing of used 3-inch steel pipe set in concrete, 10 feet apart, connected at top and midway by 3-inch pipe. Two strands of one-half inch used cable above and below midway pipe. Adjustable collars for feed trough cable. d. Gates 14 feet wide, 2 per pen, metal. e. Work alleys, 14 feet wide. f. Feeding alleys, 20 feet wide. 20. Roads Graded for drainage but no surfacing. B. Rolling Stock 1. Harsh mixer truck. 2. Tractor, one front end loader, and one rear blade. 3. Large manure spreader. 4. Small tractor. 5. Bob-tail cattle and commodity truck. 6. Pick-up truck. 7. Standby feeding wagon. 8. Flatbed trailer (for hay). C. Other 1. Horses -- four head, saddles, and other gear, 2. Shop equipment and tools. 3. Office equipment. TABLE A-3. NEVADA STATE TRUCKING TARIFF, 45,000-Pound Average Load, Selected Distances Miles Cost Per Load 0-10 $ 50 10 - 15 54 40 - 50 88 70 - 80 121 110 - 120 167 150 - 160 208 170 - 180 225 200 - 220 265 260 - 280 303 300 - 325 333 330 - 350 358 CATTLE INGTON tn ^ < H W ^ J 6 < d. u fcH k— - i— !— 1 r w ££ ^H H * ^2 be CO ^ < <; < J ~ < W fc 5^H E- E- 2 22 C < qJJ ^ Q d Q W ,K 5S 5 g < fe § co ^ u OO^ U H d hh' 1 < w J cc < Eh ct T3 03 C o £ > u .5 co 3 8 CD CO «t-i o o cd U 43 "to ^ ^ n * rt U ^ _] ^ (D C CO fcuo O ■5 3 fe c • --J cd > Qj to 0) K ooooooooooo ^rocoooLC^^ l ocDO•^ COCOOcDOrTOC-CD'-Hi-H cm ^ m co th CO o c c. co LnLncx)OOLOt~o]<— < o i— i lON^COO'tCOCOmN ^COHOCOO]D-t-lfiNH CO rf -ee- ir: o OJ CI lO lO i— iLOCDOJCOOCOOCOiOi— I CO coincoooOi-HCOt-Oi-i OCDinrfOOMCOtDiniM CO N CO ^t CO Tf H »— I i—l ooooooooooo coc]^t H OiOLncoiOr-H 1 -ii> N (M CO Tt M ^ rH CO u u CL c 5 o t ^ > CO O 3 O 3 o >5 L, 0) 0) 3 Q CO O % OJ cd T3 u > •I-l K c o 3 O " >■> g £ CD 2- co ^ CO c. i—i cd co c W) Q O C est O cO 03 c O 03 CD o 1 — I DC ir. o xt o O to T-H * is lC CO tH CO €fi O CM O CO O r- QQMQfc^d^fc^ CO O +J x bjo c r-H cd o o o £ fcuo +j c j^ +j • 1— < a 0) 0) L ^ CO t^H o CO ■4-3 o Eh CO 1 T3 o C a; . — i CO i — i cd cd OJ a T3 >5 TO — c CO CO 0) CD o CU u CO c c CO 4-J CJ 0) CO 4-J • r— a cO T3 i — i s C cO X C H o T3 £ L QJ a 03 o a CO j-i T3 C P o . — ' CO o <; CQ fo Eh CO IX I O I'D -C p c O r~ B o Lf! o o in *| ^1 r. U-l Hi 01 r: rH ill < M-l XI C □ 0) !h 'J oi C rl 0> ij l(H E c Oi rH -rH ft rd C c. P •H •H JJ ■H a -H X M 01 .£ -P (U rd C £. 3 rH P w H rd m 171 Bi rd ■H V, HI 'J ■H •H W U Ul 1' rH rl rd 01 A 0) Q a P P ',i O 'D rd «; c hi ft 01 m U 0) 3 11, ft P Eh rrj (1) JJ 10 c IJ Ul M 0i O ■H .q o d) <1) ■H C 3 H M c ,i) C S3 o E u Q fc to H o l., £ PC ■ M H c t/l r. p tl 01 01 u c ■H p -I-' i: rd dl n h ill Oi ft •H 3 D 1 p di "i u 'H •H •-' <4H a H c •rH P ■H G P 3 U 3 ■a U 3) P ■--I 01 V: £ ;J o c ■H c ■H CI Ul r C 'ii ai 3 £ 1- 1 0) o a H i>: Si BIBLIOGRAPHY BIBLIOGRAPHY Agribusiness Opportunities --Khuzestan Meat Production Potential for Tehran and Persian Gulf Markets, Development and Resources Corporation, Khuzestan Water and Power Authority, Imperial Government of Iran, Prospectus Series No. 9, March 1971. Capener, William N., Gorman, William D., Greene, Charles H., Feasibility of Backgrounding Feeder Calves in the Four Corners Economic Develop ment Region, Agricultural Experiment Station, New Mexico State Uni- versity, Research Report No. 249, March 1973. Carter, H. O. , Dean, G. W., Maxwell, P. H., Economics of Cattle Feeding on Imperial Valley Field Crop Farms, California Agricultural Experi- ment Station, University of California, Bulletin No. 813, May 1965. Gum, Russell; Menzie, Elmer, The Arizona Cattle Feeding Industry , Agri- cultural Experiment Station, University of Arizona, Technical Bulletin No. 191, January 1972. Gustafson, Ronald A., Arsdall, Roy No, Cattle Feeding in the Unite d States, Economic Research Service, United States Department of Agriculture, Report No. 186, October 1970. Hulbert, L. S. , Mischler, Raymond, Legal Phases of Farmer Co operatives, Farmer Cooperative Service, United States Department of Agriculture, Bulletin No. 10, January 1958. Hunter, Elmer C, Madden, J. Patrick, Economies of Size f or Specializ ed Beef Feedlots in Colorado, Economic Research Service, United States Department of Agriculture and Colorado Agricultural Experiment Station, Agricultural Economic Report No. 91, May 1966. Kreis, R. Douglas, Shuyler, LynnR., Beef Cattle Feedlot Site Selection for Environmental Protection, National Environmental Research Center, United States Environmental Protection Agency, Corvallis, Oregon, No. EPA-R2-72-129, November 1972. Livestock and Meat Situation , Economic Research Service, United States Department of Agriculture, No. 201, February 1975. Malone, John W. , Jr., Rogers, LeRoy F. , Economies of Size of Warm-Up Cattle Feedlot Operations in Nevada , Max C . Fleischmann College of Agriculture, University of Nevada, No. B-6, November 1965. McCoy, John H. , Hausman, Calvin C, Economies of Scale in Commercial Cattle Feedlots of Kansas --An Analysis of Nonfeed Costs , Agricultural Experiment Station, Kansas State University of Agriculture and Applied Science, Technical Bulletin No. 151, April 1967. Menzie, Elmer L. , Hanekamp, William J. , Phillips, George. W. , The Economics of the Cattle Feeding Industry in Arizona , Agricultural Experiment Station, University of Arizona, Technical Bulletin No. 207, October 1973. Moran, Leo J. , Nonfeed Costs of Arizona Cattle Feeding, Agricultural Experiment Station, University of Arizona, Technical Bulletin No. 138, December 1959. Neely, D. Morrison, et al, Legal Phases of Farmer Cooperatives—Sample Legal Documents, Farmer Cooperative Service, United States Department of Agriculture, Information Bulletin No. 66, May 1970. Sanders, S. D. , Hulbert, L. S. , Mischler, Raymond, Hulbert, Helim H. , Organizing a Farmer Cooperative, Farmer Cooperative Service, United States Department of Agriculture, Circular No. 18, November 1956. Stanton, Beryle, Farmer Cooperatives. . . Farm Business Tools , Farmer Cooperative Service, United States Department of Agriculture, Agricultural Information Bulletin No. 275, October 1970. ■ . PENN STATE UNIVERSITY LIBRARIES A0DDD71Ea sai