Stocker Steve
Well-known member
talltimber":2n1ek425 said:That your fixed costs/cow goes up to where you can't sell off enough
You need to be able to pay for overhead costs like labor, interest, utilities, depreciation.... So you really need to look at the returns after paying variable costs with different stocking rates or different classes of cattle -- and you also need to cash flow the deeded ranch land and overhead costs.
Progressive Cattlemen put out an article that stated variable costs have increased an average of 5.3%/yr since 2001. But, when revenue dropped producers were not able to reduce their variable costs. I suspect fixed costs did not go down either.
So we need to find a better way.