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Beef Cow-Calf Profitability, CREC, 7-13-04

Beef Cow-Calf Profitability, CREC, 7-13-04. Steve Metzger Farm Business Management Carrington Research Extension Center Carrington, ND. Beef Cow Profitability. What does it really cost to operate a beef cow-calf unit? Per Cow? Per cwt.?

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Beef Cow-Calf Profitability, CREC, 7-13-04

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  1. Beef Cow-Calf Profitability, CREC, 7-13-04 Steve Metzger Farm Business Management Carrington Research Extension Center Carrington, ND

  2. Beef Cow Profitability • What does it really cost to operate a beef cow-calf unit? Per Cow? Per cwt.? • What differences are there between high profit and low profit beef cow-calf herds? • How can a producer project profitability based on given costs and levels of production?

  3. Information for this presentation was gathered from farms and ranches participating in the Carrington Area Farm Business Management Program from 1994-2003.Region 3 data for 1995-1999 was also used for comparison charts & graphs.

  4. Region 3Farm Business Management Programs • Bismarck (Eastern) • Carrington • Jamestown • Casselton (Western) • Napoleon • Wahpeton (Western)

  5. Crop Acres Including Forage Crops Have Grown to 2,625 plus 505 of pasture.

  6. Number of Farms per Year

  7. Number of Cows per Herd

  8. Culling Percentage

  9. Calving Percentage

  10. Calf Death Loss Percentage

  11. Weaning Percentage

  12. Weaning Weights per Calf

  13. Pounds Produced per Cow

  14. Weaning Weights vs. Pounds Weaned per Exposed Female

  15. Weaning Weights vs. Pounds Weaned per Exposed Female

  16. Total Feed Costs/Cow

  17. Veterinary & Supplies/Cow

  18. Total Direct Costs/Cow

  19. Overhead Cost Breakdown/Cow

  20. Direct & Overhead Costs/Cow

  21. “Net Inventory Change” • The change in real dollars of value in the beef herd due to such things as lesser cull sale values, uninsured death loss and other items. • Usually measured per head or per cwt. of production.

  22. Determining Net Inventory Change per Cow • Assume a herd of 10 cows per year with a real investment of $800 per head or $8,000 total. • One cow is culled for $500 or a loss of $300 of real invested dollars. • $300 divided by the annual average of 10 cows equals a Net Inventory Change of $30.00 per cow. • This is applied to all breeding stock including cows, bulls and replacements after they enter the herd.

  23. Net Inventory Change/Cow

  24. Direct, Overhead & Net Inventory Change Costs/Cow

  25. Direct, Overhead & Net Inventory Change Costs/Cwt.

  26. Gross Income & Expenses(Direct & Overhead)/Cow

  27. Income with Net Inventory Change & Expenses/Cow

  28. Gross Income & Net Inventory Change plus Expenses/Cow

  29. Gross Income & Expenses/Cwt. without Inventory Change

  30. Income, Inventory Change & Expenses/Cwt.

  31. Beef Cow-Calf, Net Return after Inventory Change Beef Cow/Calf 1993 156.15 • 1994 53.09 • 1995 -51.00 • 1996 -82.46 • 1997 - 4.65 • 1998 -9.73 • 1999 61.27 • 2000 89.98 • 2001 71.18 • 2002 106.07 • 2003 156.47

  32. Net Return per Cow

  33. Operator Labor & Management Charge per Cow

  34. Net Return per Cow with Operator Labor Charge

  35. Net Return per Cwt.

  36. Net ReturnBeef Cow/Calf, Region 3 Beef Cow/Calf 1993 165.61 • 1994 47.67 • 1995 -40.46 • 1996 -50.16 • 1997 20.21 • 1998 8.52 • 1999 92.51 • 2000 114.80 • 2001 101.30 • 2002 62.82 • 2003 117.38

  37. Net Return per Head, Beef Backgrounding, Cgtn. Area Backgrounding/Hd 1993 64.24 • 1994 24.96 • 1995 11.23 • 1996 5.09 • 1997 68.92 • 1998 40.30 • 1999 43.59 • 2000 23.24 • 2001 6.30 • 2002 1.45 • 2003 -16.89

  38. Comparing High and Low Profit Beef Cow Herds in East-Central, ND • Herd data from 1995-1999 • 57 to 81 herds per year, total of 326 • 6,030 to 8,578 cows per year • Total of 35,252 cows in the five years. • 20% High Profit Group, 6,384 head. • 20% Low Profit Group, 6,556 head.

  39. Weaning Wts. And Pounds Weaned per Exposed Female Based on Profitability Levels

  40. Value Produced and Costs (without Inventory Change) Based on Profitability Levels

  41. Inventory Change Based on Profitability Levels

  42. Net Return per Cow Based on Profitability Levels, 1995-1999

  43. Comparison of High Profit to Low Profit Herds, 1995-1999 • Decrease in total expenses $50.89 • Decrease in Net Inventory Chg. $62.60 • Increase in value of production $60.13 • Total annual average economic advantage per cow in the high profit herds over the low profit. $173.62

  44. Goals for High Profit Beef Cow-Calf Producers • Pregnancy rate of 99+% • Culling rate of 12%-14% • Calving rate of 97% to 98% • Weaning rate of 94+% • Calf death loss of less than 5% • Average Weaning Weight 580 lbs. minimum • Pounds Weaned per Exposed 540 lbs. minimum • Direct and Overhead costs $305-$325 maximum • Feed cost of $200 to $210 per cow. • Net Inventory Change of -$35 or less.

  45. For More Information:Steve Metzger 701-652-2951smetzger@ndsuext.nodak.edu

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