Beef Cow-Calf Profitability, CREC, 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 Region 3 data for was also used for comparison charts & graphs.

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

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

Number of Farms per Year

Number of Cows per Herd

Culling Percentage

Calving Percentage

Calf Death Loss Percentage

Weaning Percentage

Weaning Weights per Calf

Pounds Produced per Cow

Weaning Weights vs. Pounds Weaned per Exposed Female

Total Feed Costs/Cow

Veterinary & Supplies/Cow

Total Direct Costs/Cow

Overhead Cost Breakdown/Cow

Direct & Overhead Costs/Cow

“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

Direct, Overhead & Net Inventory Change Costs/Cow

Direct, Overhead & Net Inventory Change Costs/Cwt.

Gross Income & Expenses (Direct & Overhead)/Cow

Income with Net Inventory Change & Expenses/Cow

Gross Income & Net Inventory Change plus Expenses/Cow

Gross Income & Expenses/Cwt. without Inventory Change

Income, Inventory Change & Expenses/Cwt.

Beef Cow-Calf, Net Return after Inventory Change Beef Cow/Calf

Net Return per Cow

Operator Labor & Management Charge per Cow

Net Return per Cow with Operator Labor Charge

Net Return per Cwt.

Net Return Beef Cow/Calf, Region 3 Beef Cow/Calf

Net Return per Head, Beef Backgrounding, Cgtn. Area Backgrounding/Hd

Comparing High and Low Profit Beef Cow Herds in East-Central, ND Herd data from 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

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

Inventory Change Based on Profitability Levels

Net Return per Cow Based on Profitability Levels,

Comparison of High Profit to Low Profit Herds, 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. 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.