Cow-calf producers should know their costs of production before they alter their operations.
Saskatchewan farmers who participated in the 1998 Beef Production Economics Project discovered that the average cost of production per pound of weaned calf that year was $1.04.
This included feed and the other costs of raising replacement heifers.
“If the cost of raising these heifers is equal to the loss in value of the cow herd due to aging, then $1.04 would be the total cost of production,” said Lyle Darwent, a farm management agrologist with Saskatchewan Agriculture.
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“With similar costs expected for 1999, cow-calf producers should have had a very profitable year.”
Participating farmers estimated the average amount of labor per cow to be 6.3 hours.
Darwent said this includes the paid and unpaid hours of feeding and working with the herd, but does not include the time required to harvest feed.
The Beef Production Economics Project began with 12 farm managers submitting their 1996 records to a program technician who entered the information into a central database. Each participating farmer received an analysis of their farm and had the opportunity to consult with a farm management agrologist to identify their farm’s strengths, weaknesses and trends.
The results have been divided into three herd sizes – more than 200 head, 90 to 199 head and less than 90 head – which allows farmers to compare their costs and returns with farmers who have similar herd sizes.
Although the 1998 revenue from each of the three groups was almost the same – less than $2 per head difference – there was a considerable difference in the total variable costs for each group, said Ian McNinch, a production economist with the Western Beef Development Centre in Saskatoon.
“For example, the total variable costs for the under-90-head herds were $586 per cow, compared to $424 per cow for herds with more than 200 head. The difference in total production costs between the large-herd group and the small-herd group was $186 per cow,” he said.
“In this project at least, there certainly appears to be a higher return per cow as herd size increases. There may be ways to improve the profitability of a herd without increasing herd size but before producers make changes, it would be useful to know their present costs to see what effect the changes to their cow-calf enterprise may have on their farm or ranching operation.”
Farmers wishing to participate in the Beef Production Economics Project should contact an extension agrologist or regional farm management agrologist. Participation is free.
