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Factors Affecting Beef’s Economic Return

published: October 15th 2010
source: Kansas Beef Tips

Information continues to accumulate on factors affecting economics of beef herds. State averages for 2009 have been reported by the Kansas Farm Management Association. Herds were divided into those selling weaned calves and those retaining ownership through a growing period. Operations were divided into thirds based on net return to management per cow.

Compared to the low net return producers, for those selling at weaning the high return group had higher weaning weights and $113.62 more gross income/cow. The high return group had lower costs across the board, including for feed, pasture, interest, vet medicine/drugs, marketing/breeding, depreciation, machinery, labor, and miscellaneous, resulting in $243.82 less total cost. The mid-point producer realized $449.83/cow gross income with cost of $735.03, resulting in a loss of net return/cow of $285.20.

Results were the same for those selling after growing, except there was no difference in vet medicine/drugs. High return producers had $196.80/cow higher gross income and $242.00 lower total cost than the low return group. The mid-point producer had a loss of net return/cow of $367.91, an increased loss of $82.71 over selling at weaning.

NOTE: These results are for only one year in one state, but other studies also show the biggest factor affecting profit in beef cow operations is production cost. Also, comparisons based on profit per cow may be misleading when comparing herds where cow size, and hence stocking rate, is not the same. The most valid measure of profit, and production, is done on a whole enterprise basis.