22 BULLETIN 1454, U. S. DEPARTMENT OF AGRICULTUBE 
It should be borne in mind that the data in Table 8 are intended 
only as illustrations of how the figures on costs in this bulletin can 
be used. Anyone wishing to make similar computations must de- 
termine the probable costs of the various items included in the carry- 
ing charges and the cost of the cattle when going on grass. The 
first example in Table 8 shows the application of these data to a herd 
of thin, aged steers which it is assumed weigh 750 pounds apiece and 
can be purchased at $7.50 per hundredweight or a total cost of $56.25 
per head. 
It is assumed that these steers will gain 300 pounds and be on 
grass four and one-half months. The steers will weigh 1,050 pounds 
when they go to market. The carrying costs are estimated as follows : 
Grass, $8; man labor, $0.35; horse work, $0.10; interest, $1.69; 
death loss, $0.24; other costs, $0.50, making a total carrying cost of 
$10.88. This carrying cost of $10.88 added to the initial cost of 
$56.25, makes the steer cost $67.13 at the local shipping point. To 
break even, the steer must sell for $6.40 per hundred or $67.20 a 
head. The initial cost per 100 pounds was $7.50. By selling at 
$6.40 per hundredweight at the local shipping point it is possible to 
break even. This gives a minus margin of $1.10, or the steer can be 
sold without loss for $1.10 less per hundredweight than it cost. 
It is estimated that it will cost $3.50 to ship the steer to the terminal 
market. This added to the cost of $67.13 gives a total cost at the 
terminal market of $70.63. The steer therefore would have to sell 
for $6.75 a hundred to approximately break even at the terminal 
market. 
A reduction of $1 in the cost of the grass would reduce the carrying 
charge to $9.87, with a total cost of the steer delivered at the terminal 
market of $69.63. This will make it possible for the steer to sell for 
$6.60 to $6.65 and break even. In other words, a reduction of $1 in 
the cost of the grass is equivalent to a difference in the purchase or 
sale price of about 10 cents per 100 pounds on steers of this weight. 
This shows the importance of buying and selling at the best ad- 
vantage to insure the profitable handling of the steers. Reducing 
the purchase price to $7.40 a hundredweight with ail other figures 
remaining the same would make it possible to sell these steers at 
$6.65 a hundred or 5 cents per hundred pounds less than with a 
purchase price of $7.50 per 100 pounds. A reduction of 10 cents in 
the purchase price is as important in its effect on profits as a reduction 
of $1 in the cost of the grass for heavy cattle. 
The second example in Table 8 is of aged steers fed on grass. 
It is assumed that these aged steers fed on grass weigh 900 pounds 
and cost $7.70 a hundred pounds. With the cost as given above, 
and assuming a gain of 250 pounds, it is necessary to sell these steers 
at $7.85 or 15 cents a hundred more than was paid for them. This 
illustrates the important fact that the higher the carrying costs, the 
more essential it is to have a plus margin or a very small minus margin. 
The other examples in Table 8 are for thin 2-year-old steers and for 
thin yearling steers on grass only. 
In the case of the thin yearlings the necessary margin at the local 
shipping point is —$1.45. This is a greater minus margin than for 
any of the other classes, and is due to the fact that the gain put on 
by the cattle more nearly equals the initial weight. The gain on 
these yearling steers was approximately 60 per cent of their initial 
