New here but long time reader.
As most of you, I struggle with trying to make a profit in the cow/calf business. Here are my thoughts on costs:
Pasture/feed costs:
In my area(central Alberta) pasture costs are going to run you around $1/pair/day. It doesn't matter if you rent the land or own it...you could rent it to someone else for $1/pair/day. Common practice is about 165 days grazing/year...$165 annually.
Winter feed costs:
Using acceptable hay/straw for 200 days is also going to cost around $1-$1.25/day/cow.
If you throw in the cost to run a truck/tractor etc. add that in too, but we'll just consider the feed cost so about $200 to $250/cow/per year.
Breeding costs:
You buy a decent bull for $2000/$2500. You sell him three years later for $1100. You feed him for three years. I estimate the cost at $40/calf.
Salt and mineral:
I estimate this at $20/cow.
Fence and corral upkeep:
Around $10/cow.
Vet and ID:
Barebones 8-way, IBR/BVD, ID tag, RFID tag, occasional bottle of antibiotics, rubber bands(or a new knife every year that you lose anyway!) maybe some dehorning paste etc.
$15.
Cow depreciation and interest:
What is your cow worth? How many years does she last? The numbers I put here are very variable but lets say you bought that bred heifer for $1000. She has eight calves before going down the road. Now she weighs 1300 lbs. and brings 40 cents a pound(I realize the USA has much higher cow prices)...$520? Knock off another $25 to get her sold and you pocket $495. So each of those 8 calves cost you $63.12 in cow depreciation? Interest on your $1000...lets say 5%(again all over the map here, put your own numbers in) another $50/cow/year? So interest and deprciation $113.12?
Selling costs:
Each calf has selling costs. In Alberta the going commission rate is 2% of price,so a $600 calf would be $12. Add on ABP checkoff, hartford insurance, brand inspection, insurance for crooked cattle buyers not paying...about another $6? $18?
On top of this you need to haul them or hire someone to haul them? Say $6?
So selling costs $24?
I come up with $587.12-$637.12 cost. This does not include labor, cost of a truck/tractor/quad/horse to feed, check on cattle etc.? This does not include the cost of running a waterer in winter or lights at corral or calving barn expense. This does not include the cost of financing feed purchases/pasture rent etc. This certainly does not include things like fertilizer/weed control etc.
Now lets look at income? I'll base this on 100 cows for convenience sake.
50 steer calves at 600 lbs. 50 heifer calves at 575 lbs.
steer sells for $1.05 X 600 = $630
heifer sells for $.90 X 575 = $517.50
Avg calf price $573.75? Now in a perfect world all the calves live and all the cows get bred...but in reality world it doesn't happen so lets say 95%? This brings the income/cow down to $545.06?
Now I know we don't all follow the above numbers. If we did we would be broke? Swath grazing, stockpiling forage, retaining calves can all add to the bottom line although I sometimes wonder about some of these practices? If the neighbor will rent your good land for $80-$100 an acre for crops, does swath grazing make sense? The same would be true for growing hay?
Bottom Line: Cow/calf production, at this time, is not a sustainable business. It might be fun but it really isn't putting any money in your pocket. The truth is we'd be better off flipping burgers at MacDonalds, let the neighbor rent our land, and put our money into a good GIC? Just my opinion...and yes, I'm so dumb I intend to keep my cows!
