This thesis investigates the effects of including co-products of grain-based ethanol production on feeding costs and gross margins in cow-calf farms in Ontario and Alberta. Two programming models were solved; a least cost ration model that minimizes feeding costs for cows and calves growing at five different rates of growth, and a farm level model that maximizes the present value of gross margins in cow-calf farms in Ontario and Alberta. Co-products of grain-based ethanol production have differential impact on feeding costs and gross margins depending on the growth rate of the animal, age of the animal, and the type of co-product used in the ration. Ethanol policies have had negative effects on cow-calf farmers by contributing to increases in feeding costs and decreased gross margins.