  BeefTalk:
Review Numbers Carefully To Maximize Beef’s Profit Potential
By Kris Ringwall, Extension Beef Specialist,
NDSU Extension Service
Spring is breeding time and those in the beef cattle business set their schedule
by these reproductive events. The net result is a schedule that is full from
dawn to dusk--and there is always work to be done. As I assemble this column in
my mind, I am chuteside evaluating follicular growth within a beef heifer,
wondering if the follicle is dominant and ready to ovulate. If so, the potential
egg will need to conceive through artificial insemination to the sperm cell from
a bull that will never even be close to the ranch. These are the kinds of
situations that stretch the dichotomy in the beef business.
Survival within the beef business involves a keen insight for being frugal
and implementing new ideas and technology. Imagine this scenario: Two neighbors
in the cattle business in North Dakota have herds of just under 100 cows. These
neighbors have been good friends throughout the years, but tomorrow is a sad
day. One of the neighbors is selling out and the other helping at the sale.
What is the difference? Most would notice nothing and blame the tough times
in agriculture. But statistics from the North Dakota Adult Farm and Ranch
Business Management summary for the year 2000 reveal some interesting
statistics.
The 20 percent of agricultural producers outside of the Red River Valley
(raising all agricultural products) with the lowest net income had a loss of
$7,487 in North Dakota, the 20 percent with the highest net income had a profit
of $142,437, a difference of over $149,000. Statistics in the beef business are
equally eye-opening. In the beef business, the 20 percent of producers with the
lowest net income per cow had a net return of $7.58 per cow, the 20 percent with
the highest net income per cow had a net return of $219.32 per cow, a difference
$211.74.
What did those in the low profit group do that the high profit group didn’t?
In reviewing direct expenses, feed costs were similar: $205.24 for top
producers and $205.81 for bottom producers, but each group on average fed
differently. Top producers fed 3.01 bushels of barley, 1.30 bushels of corn and
2.67 bushels of oats per cow. Low producers fed 1.06 bushels of barley, 0.64
bushels of corn and 1.10 bushels of oats per cow. Top producers fed 6,359 pounds
of hay and 1,517 pounds of silage. Low producers fed 7,380 pounds of hay and
1,346 pounds of silage. Top producers spent more on protein and mineral
supplements, $10.87 per cow for the top producers and $7.24 per cow for the low
producers. In the summer, top producers provided slightly more AUMs (animal unit
month) per cow than the low producer. In other words, they pastured their cattle
longer.
After feed cost, which is generally the largest expense category, top
producers spent approximately the same on veterinary costs ($13 per cow) but
less on livestock supplies, fuel, oil, repairs, custom hire, livestock leases
and interest.
Given all the inputs, top producers had 550 pounds of marketable product per
cow, while low producers had 463 pounds of marketable product. Top producers
spent more money marketing their calves ($3.29 vs $1.84). Between more
marketable product and increased marketing efforts, top producers had gross
returns of $530 vs $392 for low producers. The bottom line, top producers have
(on a per cow basis) more product to sell. They fed more high energy feed
stuffs, fed approximately one half ton less hay, pastured longer, and provided
more supplements for essentially the same dollars as the low producers.
In addition, every category of overhead, including hired labor, farm
insurance, utilities, interest, depreciation and miscellaneous, was lower for
the top producers. The $31 per cow advantage in direct production, $42 per cow
advantage in overhead and $138 per cow advantage in gross income, means one
thing: survival.
May you find all your ear tags.
Your comments are always welcome at www.BeefTalk.com
For more information, contact the North Dakota Beef Cattle Improvement
Association, 1133 State Avenue, Dickinson, ND 58601 or go to www.CHAPS2000.COM
on the Internet. In correspondence about this column, refer to BT0039.
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Source: Kris Ringwall, (701) 483-2045, kringwal@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu
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