Feedlot profitability through the integration of simulated rations and stochastic market dynamics

Accurately measuring feedlot profitability is critical for management and policy decisions, yet existing benchmarks often rely on limited closeout data and simplified feeding assumptions. We develop a High Plains feedlot simulator that integrates least-cost ration formulation with cattle performance and market dynamics using 2016 Nutrient Requirements of Beef Cattle manual. We use monthly feed, feeder cattle, and fed cattle prices from 2000 to 2024. Simulated performance aligns with industry benchmarks, with average daily gain of 3.72 lb/day compared with 3.59 and 3.67 lb/day reported by Kansas State and Iowa State, and estimated days on feed averaging 184 days versus 170 and 152 days. Cost-of-gain estimates closely track observed series, with correlation coefficients of 0.83 and 0.91 relative to Iowa and Kansas data, root mean square prediction errors of $12.87/cwt and $8.56/cwt, and mean biases of $0.71/cwt and -$0.03/cwt. Net margins average approximately -$5.62/cwt of finishing weight under a cash-to-cash framework without risk management. Ration composition is dominated by steam-flaked sorghum (≈36.4% of dry matter), steam-flaked corn (≈28.49%), and distillers grains with solubles (≈19.80%), with corn silage as the primary roughage. Sensitivity analysis shows profitability is most responsive to feeder cattle prices, with mean net margins shifting from -$14.58 to $3.33/cwt under ± 10% price changes, while corn price effects are more moderate and distillers grains and transportation costs have smaller impacts. Animal performance metrics remain stable across price scenarios. Ingredient substitution occurs primarily between corn and sorghum, with corn inclusion declining by 4.15% for each 1% increase in corn prices and sorghum increasing by 3.79%. Overall, the framework provides a transparent and regionally adaptable tool for profitability benchmarking and feedlot decision support in High Plains cattle feeding systems.