Since 2008, the cattle market has made dramatic adjustments as calf and feeder cattle prices decreased and the feedlot sector experienced significant losses. At the same time, other input costs have risen, taking cow costs to historic highs. Throughout this period, cattle numbers have continued to decline.
Since cow-calf producers have little control over factors outside the ranch, the best approach is to focus on ranch management decisions. Keep in mind that some cow-calf operations will make a profit with $80/cwt., 500-pound calves, while others can lose money with 500-pound calves bringing $150/cwt.
Each operation must assess its viability by determining their unit cost of production. Calculating unit cost of production will also make known the margins generated by the operation's income and expense.
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