Last updated on October 4th, 2022 at 01:51 pmReading Time: 3 minutes
6.5 minute video on offsetting the cost of Riomax
NOTE: The scenario and associated numbers presented in the video are relative to October of 2020 when it was produced. The average cost of Riomax is now 42 cents/hd/day (USD) and feed prices are trending higher as well. Check out the math below!
The term ‘offsetting your cost’ can be confusing. What exactly does it mean?
Basically, it means subtracting from your cost. If something costs you a certain amount, but you gain from your investment, you are offsetting the cost. You’re getting something back, so in reality, it’s not costing you as much. It ties right into return on investment.
Can you offset the cost of Riomax®?
You can! In fact, that’s what we’re all about. Let’s go through an example of how Riomax® offsets its cost through hay savings so you can watch it pencil out. There are a few main things to take into account when determining your offset percentage: the cost of hay, how much you feed, and how much you save.
What does hay cost?
Based on feedback we've been getting from ranchers, hay costs roughly $100 per ton. Obviously, it depends where you’re located and what time of year it is, but let’s use $100 as an example. Do some simple math, and hay that is $100 a ton is five cents a pound.
How much hay do you feed per day?
Again, this varies greatly across the country. In the northern climates, we tend to feed around 35 pounds per head per day, so we’ll use that number for the purpose of this example. Now, how much of that can you save per head per day, by using Riomax® and the Nutrizorb® science? which helps squeeze more out of every mouthful, and helps you run more efficiently.
How much hay can you save with Riomax®?
The main goal of the Riomax® and Nutrizorb® science is to help you run more efficiently. It helps your cattle squeeze more out of every mouthful of forage, which typically results in 15% - 30% hay savings.
For now, we’ll assume you achieved 15% hay savings. If you’re feeding 35 pounds and you save 15%, it equals out to 5.25 pounds of hay saved, per head per day. Now let's do some numbers.
5.25 lbs saved per day X $0.05 (the value per pound) = $0.2625
Suddenly you start seeing how the value of the hay saved can almost completely offset the cost of Riomax®.
Take it a step further, and based on the cost of Riomax® before any volume discounts, your average cost per head per day is 42 cents USD.
$0.42 - $0.2625 = $0.1575
So now that we've figured in the value of the hay savings and subtracted that off what the Riomax® average cost per day is, we're left with a cost per head per day of 15.75 cents. Granted, this could be higher, and it could be lower. If you saw hay savings nearer to the high end, 30%, your cost per head per day would be even lower.
A Complete Mineral Program
Now comes the best part. Many times, people don't realize that the Riomax® program is an all-encompassed, A to Z mineral program. When you use the Riomax® tub, you do not need to supplement any other mineral at all (just some free-choice salt). If you usually feed an average type of loose mineral throughout the winter, that’s more thing to subtract, as it’s no longer needed!
Let's say that loose mineral costs you 18 cents per head per day.
$0.1575 (the daily cost) - $0.18 (what loose mineral was costing) = $0.0225
That’s not a 2.25 cent cost. That is a 2.25 cent profit. Per head per day.
As a result of using Riomax®, you can make 2.25 cents per head per day, strictly from hay savings. And that’s just the beginning, because that doesn’t factor in any other benefits, like increased conception rates, tightened calving, better calving performance, calf health, fewer vaccinations, increased carrying capacity, and so on.
At the end of the day, if Riomax® can't earn its keep on your ranch, it more than likely doesn't have a place on your ranch. But, we’d love to at least have a chance to try. We are passionate about helping you squeeze more out of your existing resources so you can become more profitable.