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 3 Farm 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.

8. Number of Farms per Year

9. Number of Cows per Herd

10. Culling Percentage

11. Calving Percentage

12. Calf Death Loss Percentage

13. Weaning Percentage

14. Weaning Weights per Calf

15. Pounds Produced per Cow

16. Weaning Weights vs. Pounds Weaned per Exposed Female

18. Total Feed Costs/Cow

19. Veterinary & Supplies/Cow

20. Total Direct Costs/Cow

21. Overhead Cost Breakdown/Cow

22. Direct & Overhead Costs/Cow

23. “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.

24. 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.

25. Net Inventory Change/Cow

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

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

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

29. Income with Net Inventory Change & Expenses/Cow

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

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

32. Income, Inventory Change & Expenses/Cwt.

33. 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

34. Net Return per Cow

35. Operator Labor & Management Charge per Cow

36. Net Return per Cow with Operator Labor Charge

37. Net Return per Cwt.

38. Net Return Beef 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 2001101.30 2002 62.82 2003 117.38

39. 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

40. 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.

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

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

43. Inventory Change Based on Profitability Levels

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

45. 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

46. 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.