![]() Note that based on the assumptions in our example, total specified expenses per cow are $440 and revenues per cow are $608. At an average value of $950 (halfway between bred heifer and cull value) over her lifespan on your farm, and assuming a 3% interest rate results in a $29/cow/year interest cost, or a total of $117/cow/year in combined depreciation and interest. With farm-raised replacements, this cost should be the revenue foregone had the heifer been sold with the other calves, plus all expenses incurred (feed, breeding, pasture rent, etc.) to reach the same reproductive stage as a purchased bred heifer. When buying bred replacement heifers, the initial heifer value is clear. The actual depreciation will vary across farms. $700 depreciation / 8 productive years = $88 cow depreciation per year. The average yearly depreciation is calculated as follows: As an example, assume a bred heifer is valued at $1300, has eight productive years, and has a cull cow value of $600. They are generally not cash costs that need to be paid on a yearly basis, unless you have a loan on them, but they are real costs that need to be paid at some point. Marketing costs are currently around $25 per cow, but larger operations may market cattle in larger groups and pay lower commission rates.īreeding stock depreciation and interest are major costs that are often overlooked. Breeding costs are $40 per cow and should include annual depreciation of the bull and bull maintenance costs, spread across the number of cows he services. Mineral cost is $35 per cow, veterinary / medicine costs $25, trucking costs $15, machinery cash costs for winter feeding and other miscellaneous jobs is $15, and other costs (insurance, property taxes, water, etc.) are $40. These spring calving cows will use 2.5 tons of hay per cow, and the estimated cash cost of making this hay (fuel, maintenance, repairs, supplies, fertilizer, etc.) is $35 per ton. high stocking rates will mean more hay feeding days), which has large implications for costs on a per cow basis. Stocking rate impacts the number of grazing days and winter feeding days for the operation (i.e. The pasture stocking rate is assumed to be 2.0 acres per cow, but producers should carefully consider the stocking rate for their operation as this will vary greatly. Producers who consistently apply larger amounts of fertilizer to pasture ground would see much higher pasture maintenance costs. Pasture maintenance costs are assumed to be relatively low at $20 per acre, and would include only basic cash costs of pasture clipping (fuel, maintenance, repairs), and a limited amount of reseeding, fertilizer, and fencing repairs. Based on these assumptions and adjusted for the weaning rate, average calf revenue is $608 per cow. Weaning rate was estimated at 85%, meaning that it is expected that a calf will be weaned and sold from 85% of the cows that were exposed to the bull. Therefore, a steer / heifer average price of $1.30 per lb is used for the analysis, which is actually the same price that was used last year. In the fourth quarter of 2020, steers in this weight range were selling for prices in the upper $130’s and heifers in the low $120’s, on a state average basis. Note that in this table we are not including depreciation or interest on equipment/fencing/facilities, as well as labor and land costs.Ĭalves are assumed to be weaned and sold at an average weight of 550 lbs. Every operation is different, so producers should evaluate and modify these estimates to fit their situation. Table 1 summarizes estimated costs for a well-managed spring-calving cowherd for 2020. The purpose of this article is to examine cow-calf profitability for a spring calving herd that sold weaned calves in the fall of 2020 and provide an estimate of profitability for the upcoming year. ![]() Author(s): Greg Halich, Kenny Burdine, and Jonathan Shepherd Published: February 25th, 2021 Shareable PDF
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