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Calculate Cost to Carry
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<blockquote data-quote="MO-Ruminants" data-source="post: 1575505" data-attributes="member: 37980"><p>Bob will be moving the heifers to fresh forage daily. The heifers will cost him $1000. He will be buying at the local sale barn and selling them to a commercial cowman neighbor. He expects to own the animals 120 days.</p><p></p><p>Bob's cost to carry the animals may look like this: (sample numbers only, little thought given)</p><p></p><p>Pasture Charge $.50 </p><p>Labor/management - $.5 </p><p>Mineral/Protein/Supplement - $1</p><p>Depreciation on equipment & facilities - $0 This gets applied to all animals, not just the heifers. Bob's not sure how to include this in the analysis, so he doesn't.</p><p>Animal depreciation - $0</p><p>Interest - $.14 Bob will use cash, but wants to be fair in his analysis. ($1000 x 5% / 365)</p><p>Death loss - $.17 ($1000x2%/120)</p><p>Vet - $.10</p><p>Marketing/Transportation $.15</p><p>Fuel & misc. $.10</p><p></p><p>It costs Bob $2.66/day to carry the bred heifers. ($319.20 for 120 days)</p><p></p><p>Nobody really knows what the value of the heifer pairs will be in 120 days, so Bob does the only thing he can, and checks this week's price on heifer pairs. They are selling on average for $1350. After paying himself for his labor and management, Bob can expect a $30.80 profit per head. ($1350-$1319.20=$30.80) (3% ROI)</p></blockquote><p></p>
[QUOTE="MO-Ruminants, post: 1575505, member: 37980"] Bob will be moving the heifers to fresh forage daily. The heifers will cost him $1000. He will be buying at the local sale barn and selling them to a commercial cowman neighbor. He expects to own the animals 120 days. Bob's cost to carry the animals may look like this: (sample numbers only, little thought given) Pasture Charge $.50 Labor/management - $.5 Mineral/Protein/Supplement - $1 Depreciation on equipment & facilities - $0 This gets applied to all animals, not just the heifers. Bob's not sure how to include this in the analysis, so he doesn't. Animal depreciation - $0 Interest - $.14 Bob will use cash, but wants to be fair in his analysis. ($1000 x 5% / 365) Death loss - $.17 ($1000x2%/120) Vet - $.10 Marketing/Transportation $.15 Fuel & misc. $.10 It costs Bob $2.66/day to carry the bred heifers. ($319.20 for 120 days) Nobody really knows what the value of the heifer pairs will be in 120 days, so Bob does the only thing he can, and checks this week's price on heifer pairs. They are selling on average for $1350. After paying himself for his labor and management, Bob can expect a $30.80 profit per head. ($1350-$1319.20=$30.80) (3% ROI) [/QUOTE]
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