This week’s online poll question at beefmagazine.com is: “What is your cow-calf herd’s management focus? Be sure to leave your thoughts in the comments section after voting:
It is very hard to cut costs right now. We have explosive inflation going on in my mind. I want to focus on Maximizing my resources as well as improving revenue generated per animal. This may mean selling heifers as feeders and brining in pairs in the spring as we did this year. Sell heifer for 1,000 and buy pairs this spring for 1800 is fairly easy math. No matter how good my heifers are this puts me farther a head. My cost per animal will be higher this year than last. Just can not find a way out of it.
Our cow/calf operations can't continue to increase the size of our brood cows by keeping as many replacement hfrs that we like to. The cost of keeping our hfrs until their bred, is cutting into fund's that have been allocated for Baling hay, planted crops, fertilizers etc. With the high calf prices we have been able to sell our 450 to 500 lb steers for over $2.10 a lb. Cost to maintain nice looking health cattle from start to finish.. Lets just say there's a fine line when it gets down to the profit margin.
Profit is NOT an easy thing to attain in any year with a beef cow/calf operation. To reach a profit level, There is a simple story I would like to describe to you all.
There are 3 men in a coffee shop discussing beef cow/calf farming/ranching. The 1st man explains that he made $10 profit this year so he is throwing in the towel. The 2nd man explains that he made $100 profit this year so he is throwing in the towel. The 3rd man explains that he made a million dollars profit this year so he is happy and continuing to farm/ranch. The 1st and 2nd men asked how did he do it? Man 3 replied that he has 1 million cows.
The gross margin per unit is the same for all 3 operations at $1 per head profit. Man 3 just has increased his turnover and quantity to make his efforts worth the time. Man 1 has 10 head, man 2 has 100 head.
Increasing turnover, increasing gross margin per unit, or lowering overhead costs are the 3 main methods to look at in detail if a profit is to be generated. Then a profit of only $1 is hardly worth pursuing. We have to get big or get out or be satisfied with the little profit that is produced. The alternative is a loss.
David Lee Schneider
Cutting costs and raising production both mean getting more efficient--increasing my profit margin. Making more income is affected by both revenue and costs. I can increase my profits quicker by reducing costs that don't reduce revenue because I get to keep every dollar saved. Most increased revenue requires some cost to create it so my profit margin percentage is lower when increasing revenue unless that can be done at no increased cost. Working both sides of the profit equation will generate the most profits. Not all of these increased profits will show up immediately.
I plan to live my remaining years (i'm 67 now) purely on raising cattle and sheep. To make my ranch successful financially have to focus on production.
Fixed costs remain the same following forced liquidation, so I need to build herd back to pre-sale numbers.
I am using the current high prices to make major infrastructure improvements so I can be a lower cost producer in the future. I'm going to be a higher cost producer for the next 2 years.
I cannot further decrease costs without affecting cow and pasture health, nor do I want weaning weights to increase. Instead, selecting for cow longevity and adding value to calves (e.g., instead of selling weaned heifers, sell them later as bred heifers).
more specifically, cutting production costs while increasing production per acre
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