Annual cow-calf returns: How do you compare?

After some abnormally good years, the cow-calf business is returning to normal returns over the long run.

Nevil Speer

May 11, 2018

1 Min Read
Annual cow-calf returns: How do you compare?

Last week, we looked at beef cow slaughter through the first quarter of 2018 and, indirectly, got a glimpse of producer sentiment. Thus far, the industry has liquidated just slightly more than 2.25% of the January 1 starting inventory – that’s right in line with historical equilibrium. In other words, producers are indicating they’re about done expanding the cowherd and that we’ll peak somewhere around 31.7 million cows. 

All that said, if the market outlook – and subsequent profitability – shifts unfavorably in the ensuing months, we may begin to see an uptick in beef cow slaughter.


The Livestock Marketing Information Center is currently estimating an average annual return of about $15 per cow over the course of 2018. That’s similar to the 2016 market but off sharply from last year’s favorable return of around $70 per head. Perhaps more important, following 2014 and 2015, the cow-calf business is returning to normal returns over the long run. 

Clearly, there’s a huge amount of variation across operations. The most important thing from this week’s illustration are the general differences from year to year. With that in mind, how do your return trends compare with this week’s graph? Will your cows prove profitable in 2018? And if not, how sharp do the losses need to be before you begin considering selling cows? Leave your thoughts in the comments section below.

Speer serves as an industry consultant and is based in Bowling Green, Ky. Contact him at [email protected]

About the Author(s)

Nevil Speer

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY.

Nevil Speer has extensive experience and involvement with the livestock and food industry including various service and consultation projects spanning such issues as market competition, business and economic implications of agroterrorism, animal identification, assessment of price risk and market volatility on the producer segment, and usage of antibiotics in animal agriculture.
Dr. Speer writes about many aspects regarding agriculture and the food industry with regular contribution to BEEF and Feedstuffs.  He’s also written several influential industry white papers dealing with issues such as changing business dynamics in the beef complex, producer decision-making, and country-of-origin labeling.
He serves as a member of the Board of Directors for the National Institute for Animal Agriculture.
Dr. Speer holds both a PhD in Animal Science and a Master’s degree in Business Administration.

Contact him at [email protected].

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