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Cow cost per head....2020
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<blockquote data-quote="RDFF" data-source="post: 1659415" data-attributes="member: 39018"><p>Yup, it definitely would go up if fixed overhead costs are included... things that you've given examples of, like "paid off land" and "buildings/facilities". If you exclude "land value" just because it's paid off, is that land really "free"? Of course not, ...at the very least, you've got taxes that you have to pay. But what's the value of the land TO YOU if instead, you rented it out to somebody else for pasture, or if it's got that potential, for crop ground, and then they did all the "maintenance/management" on it, and you just took the check? No idea what pasture/cropland rent runs in your area, or what your stocking rate ends up at... but all of that has to come into play. For sure, you at least need to apply THAT value against what you "made"... cause you didn't really "make" that portion on the cattle operation, THAT was made on the land investment. Still in your pocket, I agree. But it wasn't made on the cattle operation. If you apply THAT value as "land costs", and the value of the use of your paid off buildings that are used to support the cattle operation against the cattle operation, THEN you'll know where are you at.</p><p></p><p>Anything less means that all that other "paid off stuff" that's not being accounted for is in reality "subsidizing" the bottom line of the cattle operation. THAT'S how we end up with plenty of cattle (supply) that cattlemen have been willing to raise, and SELL, at a value LOWER than it can be done for. As long as we're willing to keep on not including ALL of our real costs, the supply of cattle at a "losing money on 'em" price will continue to be there. What other business in the real world would do this? You can bet that every supplier you purchase things from includes all of their costs in the bottom line, and refuses to sell it to you for less than their true cost of production.</p></blockquote><p></p>
[QUOTE="RDFF, post: 1659415, member: 39018"] Yup, it definitely would go up if fixed overhead costs are included... things that you've given examples of, like "paid off land" and "buildings/facilities". If you exclude "land value" just because it's paid off, is that land really "free"? Of course not, ...at the very least, you've got taxes that you have to pay. But what's the value of the land TO YOU if instead, you rented it out to somebody else for pasture, or if it's got that potential, for crop ground, and then they did all the "maintenance/management" on it, and you just took the check? No idea what pasture/cropland rent runs in your area, or what your stocking rate ends up at... but all of that has to come into play. For sure, you at least need to apply THAT value against what you "made"... cause you didn't really "make" that portion on the cattle operation, THAT was made on the land investment. Still in your pocket, I agree. But it wasn't made on the cattle operation. If you apply THAT value as "land costs", and the value of the use of your paid off buildings that are used to support the cattle operation against the cattle operation, THEN you'll know where are you at. Anything less means that all that other "paid off stuff" that's not being accounted for is in reality "subsidizing" the bottom line of the cattle operation. THAT'S how we end up with plenty of cattle (supply) that cattlemen have been willing to raise, and SELL, at a value LOWER than it can be done for. As long as we're willing to keep on not including ALL of our real costs, the supply of cattle at a "losing money on 'em" price will continue to be there. What other business in the real world would do this? You can bet that every supplier you purchase things from includes all of their costs in the bottom line, and refuses to sell it to you for less than their true cost of production. [/QUOTE]
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