The custom feeding charge is usually a yardage charge based on cents per head per day in the feedlot. In the finishing custom yards, this charge varies some from operation to operation but is usually $0.30 to $0.35 per head per day. This charge should be fairly similar in a custom backgrounding operation. The cost that will presumably be lower is the feed costs, assuming you can buy the forage or major component of the diet at a reasonable price. With price of corn fairly cheap, you might seriously consider stepping the cattle up to high-grain or grain and by-product diets instead of backgrounding diets this year.
If the charge is much lower, be sure you know if there is markup on feed ingredients and what that markup is. The best approach after that is to compare what previous performance has been at these operations, the management of your calves, the price of yardage, and then the total feed costs to calculate a cost of gain. If one backgrounding operation is lower on yardage but high on feed costs, your overall profitability may be the same or even poorer.
