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What is your cow-calf cost of production?

Sarah McNaughton Cow and calf in stall
OFFERING HELP: The North Dakota Farm Management and Education Program can offer help to producers when finding their production costs on their cow-calf operation.
Analysis: Producers can find how to lower their cost of production on their cow-calf operation.

As beef cow-calf producers struggle with the drought and all it entails, they will find that their cost of production is again pushed upward by the higher feed and associated costs. It is key that producers know where they stand on their total costs as they make decisions about marketing and, for some, herd reorganization.

Data collected from farms and ranches enrolled in the North Dakota Farm Management Education program gives us a good view of those costs and returns. The data reviewed and published for this North Dakota 2020 beef cow-calf enterprise came from 17 herds and included 3,755 cows. The data represents all cow-calf costs and returns for the year, with the calves either sold or transferred out at weaning time.

The retained post-weaned calves were usually set up as a separate backgrounding enterprise. All regions of the state, outside of the Red River Valley, were represented in the state report. Individual regional numbers are also available for the western, north-central and south-central regions of the state.

The total average net cost of production was calculated to be $781.67 per cow, or $144.90 per cwt of production. This represented an increase of 6% over the 2019 total costs of $738.05 per cow. The total cost per cow is all-inclusive and includes direct costs, overhead costs and those costs associated with replacing the breeding stock within the herd.

The average herd produced 531 pounds of calf per cow as measured at weaning time. The average weaning weight was calculated to be 564 pounds, with 493 pounds weaned per exposed female. Post-weaning costs for calf feeds and maintenance are not included in the above numbers as they are separated into a backgrounding or feeding enterprise at weaning.

Other key production numbers for these herds were:

  • pregnancy percentage of 96.5%
  • calving rate of 94.8%
  • weaning percentage of 87.4%
  • calf death loss at 7.9%
  • cow death loss at 2.5%
  • average culling rate of 13.2%

The 2020 direct costs of $104.53 per cwt made up the largest share of the total costs and averaged $566.24 per cow. The greatest share of the direct costs was for feed and grazing at $412, with the balance made up of:

  • veterinary at $40.10
  • supplies at $13.94
  • fuel at $18.73
  • repairs at $49.09
  • custom hire at $15.51
  • bedding at $7.73
  • miscellaneous at $9.12

Following this were the overhead costs at $21.06 per cwt, or $114.10 per cow. These included hired labor, farm insurance, interest paid on the investment, utilities, depreciation on machinery and buildings, and miscellaneous costs.

The final share of the costs came from what is known as inventory change, or the cost of maintaining the breeding herd itself with both male and female replacements. This amounted to $101.32 per cow, or $19.08 per cwt of production. It included purchases, transfers in or out, cull sales, government payments and other income.

Government assistance

The role of government payments through the various COVID-19 and disaster aid programs cannot be overlooked in the 2020 production year. The payments, which amounted to an average of $111 per cow, did help to eliminate a share of the total costs. The government payments helped offset 52% of the total inventory change costs, reducing it from $212.32 to $101.32 per cow. Total costs before the government payments were calculated to be $892.67 per cow and the highest per cow cost to date. 

As beef cow-calf producers struggle to maintain profitability, it is important that they know and understand not only their average weaning weights or production numbers per cow, but also the entire cost structure that goes along with raising that cow herd, including breeding stock replacement costs. 

To view various farm financial numbers and ratios, as well as crop and livestock enterprises, on a regional or state-wide basis, producers can visit ndfarmmanagement.com. Various regional and state reports, along with visual presentations, are available for producers to view or download at no cost. A listing of instructors and program locations is also included on the website.

Metzger is an instructor for North Dakota Farm Management Education, based in Carrington.

Source: North Dakota Department of Career and Technical Education is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

 

 

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