Embed Size (px)
Citation preview
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.?
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?
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.
Region 3Farm Business
Management Programs
Bismarck (Eastern)CarringtonJamestownCasselton (Western)NapoleonWahpeton (Western)
Crop Acres Including Forage Crops Have Grown to 2,625 plus
505 of pasture.
0200400600800
10001200140016001800
1995 1996 1997 1998 1999 2000 2001 2002 2003
Own Cash Rent Crop Share
Follow the Money, Carrington,Follow the Money, Carrington,Cash Farm Income $464,760Cash Farm Income $464,760
HRSW17%
Barley11%
Canola4%
Oil Sunf.7%
Soybeans15%
Conf Sunf3%
Durum1%
Flax3%
Corn4%
Other Crops6%
Direct/CC6%
Oth.Govt4%
Insurance3%
Beef Calves2%
Backgrd.5%
Finishing1%
Cull Lvstk2%
Other Lv.3%
CRP1%
Other Misc3% HRSW
BarleyCanolaOil Sunf.SoybeansConf SunfDurumFlaxCornOther CropsDirect/CCOth.GovtInsuranceBeef CalvesBackgrd.FinishingCull LvstkOther Lv.CRPOther Misc
Where is the Money Spent ? Where is the Money Spent ? Carrington Area, $367,819 Carrington Area, $367,819
Land Rent16%
Feedr Pur3%
Fertilizer11%
Chemical11%
Interest7%Repairs
7%
Fuel & Oil6%
Seed11%
Feed2%
Custom5%
Crop Ins5%
Labor3%
Crop M/M1%
Farm Ins2%
Utilities1%
Leases1%
Lvst Misc1%
RE Taxes1%
Vet1%
Misc6% Land Rent
Feedr PurFertilizerChemicalInterestRepairsFuel & OilSeedFeedCustomCrop InsLaborCrop M/MFarm InsUtilitiesLeasesLvst MiscRE TaxesVetMisc
Number of Farms per Year
0
5
10
15
20
25
30
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
No. Farms
Number of Cows per Herd
70
80
90
100
110
120
130
140
150
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
No. Cows
Culling Percentage
10
11
12
13
14
15
16
17
18
19
20
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Culling %
Calving Percentage
90
91
92
93
94
95
96
97
98
99
100
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Calving %
Calf Death Loss Percentage
0
1
2
3
4
5
6
7
8
9
10
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Calf Death Loss %
Weaning Percentage
85
86
87
88
89
90
91
92
93
94
95
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Weaning %
Weaning Weights per Calf
470
480
490
500
510
520
530
540
550
560
570
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Avg. Weaning Wt.
Pounds Produced per Cow
470
480
490
500
510
520
530
540
550
560
570
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Pounds per Cow
Weaning Weights vs. Pounds Weaned per Exposed Female
050
100150200250300350400450500550600
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Avg. Weaning Wt.
Lbs. Weaned/ExposedFemale
Weaning Weights vs. Pounds Weaned per Exposed Female
450460470480490500510520530540550560570
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Average Weaning Weight
Lbs. Weaned/Exposed Female
Total Feed Costs/Cow
$0
$50
$100
$150
$200
$250
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Feed Cost
Veterinary & Supplies/Cow
$0
$5
$10
$15
$20
$25
$30
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Supplies
Vet
Total Direct Costs/Cow
$240
$250
$260
$270
$280
$290
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Direct Costs
Overhead Cost Breakdown/Cow
$0
$10
$20
$30
$40
$50
$60
$70
$80
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Deprec.
Interest
Other
Direct & Overhead Costs/Cow
$0
$50
$100
$150
$200
$250
$300
$350
$400
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Overhead
Direct
“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.
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.
Net Inventory Change/Cow
30.16
43.07
17.48
47.4946.44
70.73
64.58
45.87 32.47
47.92
27.57
$0
$10
$20
$30
$40
$50
$60
$70
$80
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Net Inventory $
Direct, Overhead & Net Inventory Change Costs/Cow
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Net Inv.
Overhead
Direct
Direct, Overhead & Net Inventory Change Costs/Cwt.
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Net Inv.Change
Dir.& Overhead
Gross Income & Expenses(Direct & Overhead)/Cow
250
300
350
400
450
500
550
600
94 95 96 97 98 99 '00 '01 '02 '03 Avg.
Income Expense
Income with Net Inventory Change & Expenses/Cow
0
100
200
300
400
500
600
94 95 96 97 98 99 '00 '01 '02 '03 Avg.
Income Expense
Gross Income & Net Inventory Change plus Expenses/Cow
250
300
350
400
450
500
550
600
94 95 96 97 98 99 '00 '01 '02 '03 Avg.
Income Expense
Gross Income & Expenses/Cwt. without Inventory Change
40
50
60
70
80
90
100
110
94 95 96 97 98 99 '00 '01 '02 '03 Avg.
Income Expense
Income, Inventory Change & Expenses/Cwt.
40
50
60
70
80
90
100
110
94 95 96 97 98 99 '00 '01 '02 '03 Avg.
Income Expense
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
-100-80-60-40-20
020406080
100120140160
'93'94'95'96'97'98'99'00'01'02'03Av
Net Return per Cow
53.0939.02
106.07
156.47
71.18
89.98
61.27
-9.73-4.65-51
-82.46
-100-80-60-40-20
020406080
100120140160
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Net Return per Cow
Operator Labor & Management Charge per Cow
43.95
54.41
48.76
46.44
49.93
39.36
38.2
38.75
40.53
38.02
45.09
0
10
20
30
40
50
60
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Charge per Cow
Net Return per Cow with Operator Labor Charge
-140-120-100
-80-60-40-20
020406080
100120140160
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Operator Labor Avg. $43.95Net Return per Cow
Net Return per Cwt.
12.3818.01
14.3420.03
28.54
7.46
-10.03
-16.19
-1.94-0.9310.41
-20
-15
-10
-5
0
5
10
15
20
25
30
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 Avg.
Net Return per Cwt.
Net ReturnBeef Cow/Calf, Region 3
Beef Cow/Calf1993 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 -60
-40-20
020
4060
80100120
140160
180
'93 '94'95 '96'97 '98'99'00 '01'02 '03
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
-20
-10
0
10
20
30
40
50
60
70
'93'94 '95'96'97 '98'99'00 '01'02'03
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.
Weaning Wts. And Pounds Weaned per Exposed Female Based on Profitability Levels
400
420
440
460
480
500
520
540
560Average
Low Profit
High Profit
Value Produced and Costs (without Inventory Change) Based on
Profitability Levels
290
300
310
320
330
340
350
360
370
Value Costs
Average
Low Profit
High Profit
Inventory Change Based on Profitability Levels
0
10
20
30
40
50
60
70
80
90
Value
Average
Low Profit
High Profit
Net Return per Cow Based on Profitability Levels, 1995-1999
-140
-120
-100
-80
-60
-40
-20
0
20
40
60
Value
Average
Low Profit
High Profit
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
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. minimumPounds Weaned per Exposed 540 lbs. minimumDirect and Overhead costs $305-$325 maximumFeed cost of $200 to $210 per cow.Net Inventory Change of -$35 or less.
