Cattle destined for the dinner table often spend time at a feedlot first, where they are fed and fattened up until they're ready for slaughter. A feedlot's profit is impacted by labor costs, the price of feed, the cost of cattle and the selling price of cattle. The high-quality feed required can be pricey, and calculating the daily profit per head of cattle can help business owners determine the number of cattle needed on the lot to remain successful.

## Step 1.

Determine the income derived from your feedlot for one year. This likely would be the amount of money brought in from selling cattle, but include any other income your business generates.

## Step 2.

Add together costs incurred -- feed, cost of purchasing cattle, labor, insurance, taxes, rent or mortgage payments, utility bills -- during the year. If you had losses, such as cattle deaths or property damage, include them with your costs.

## Step 3.

Subtract the total costs in Step 2 from the total income in Step 1. This is your profit for the year.

## Step 4.

Divide your profit, determined in Step 3, by the number of cattle on the feedlot over the course of the year. This represents your profit per head of cattle.

## Step 5.

Divide the profit per head of cattle, determined in Step 4, by the average number of days a cow stayed on the feedlot. This will give you the average cow's profit per day on the feedlot. Alternately, divide the profit per head of cattle by 365 to determine the average daily profit over the course of the year per head.

Tip

This calculation can help you determine whether to change the feed or the amount of time you keep cattle before selling.