Setting a Feeder Calf Price Objective Max Runge Extension Economist Auburn University

What is your feeder calf price objective?

What is your feeder calf price objective? All that I can get!!

Is that enough?

Is that enough to…  cover cost of production?

Is that enough to…  cover cost of production?  allow for growth/expansion?

Is that enough to…  cover cost of production?  allow for growth/expansion?  contribute to retirement/savings account?

Is that enough to…  cover cost of production?  allow for growth/expansion?  contribute to retirement/savings account?  provide a personal (financial) reward?

Is that enough to…  cover cost of production?  allow for growth/expansion?  contribute to retirement/savings account?  provide a personal (financial) reward?  cover other items?

Is that enough to…  meet your Goals and Objectives?

Your Goals & Objectives  What do you want to accomplish with your cow-calf operation?

Feeder Calf Price Objective See Table 1  Feeder Calf Production Cost, UCOP  Growth/Investment Capital  Retirement/Savings  Personal Reward

Feeder Calf Production Cost  What does it cost me to produce feeder calves?

Feeder Calf Production Cost  What does it cost me to produce feeder calves?  Accurate and Detailed Records –Production –Financial  Schedule F Form

Feeder Calf Production Cost See Table 2  Animal Production Information –Exposed Cows (Beginning Inventory) - Head –Total Number of Weaned Calves - Head –Total Weight of Weaned Calves - Pounds

Feeder Calf Production Cost See Table 2  Animal Production Information  Financial Information –Purchased Feed Costs –Raised Feed Costs –Grazing Costs –Cattle Costs –Interest Costs –Indirect Costs

Feeder Calf Production Cost See Table 2  Adjustments to Financial Information –Other Enterprise Expenses –Non-calf revenue –Opportunity Cost on Owned Capital –Unpaid Labor/Management

Feeder Calf Production Cost See Table 3  Example Feeder Calf Production Cost:  $91.67 per cost hundredweight (UCOP)

Feeder Calf Price Objective See Table 3  Feeder Calf Production Cost (UCOP)$  Growth/Investment Capital$  Retirement/Savings$ 5.00  Personal Reward$ 5.00  Feeder Calf Price Objective$ $ / Cwt.

Feeder Calf Price Objective  Heifer Price Objective  Steer Price Objective

Feeder Calf Price Objective  Heifer Weight Ratio –Total Heifer Weight/Total Feeder Weight  Steer Weight Ratio –Total Steer Weight/Total Feeder Weight  Steer - Heifer Price Difference –Steer Price minus Heifer Price

Feeder Calf Price Objective  Heifer Price Objective =  Feeder Calf Price Objective MINUS  Steer-Heifer Price Difference TIMES  Steer Weight Ratio

Feeder Calf Price Objective  Steer Price Objective =  Feeder Calf Price Objective PLUS  Steer-Heifer Price Difference TIMES  Heifer Weight Ratio

Feeder Calf Price Objective See Table 3  Heifer Price Objective =  $111.67/cwt – ($4.00 cwt. X.54)  $109.50/cwt  Steer Price Objective =  $111.67/cwt + ($4.00 cwt. X.46)  $113.50/cwt

Some Items That May Skew The Feeder Calf Price Objective Estimate  Accelerated Depreciation  Buying inputs for future time periods  Weaning earlier or later than normal  Adverse weather (droughts, floods, etc.)  Herd health situation  And others…..

Feeder Calf Price Objective Summary Developing A Feeder Calf Price Objective Will:  Help you set Goals and Objectives  Help you know your costs and production performance measurements  Help you understand the sensitivity of the feeder calf price objective  Help you improve the profitability of your operation