MidAmerica Farm Publications
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573-547-2244 • FAX 573-547-5663 The MidAmerica
Farmer Grower
(ISSN 1040-1423) is published weekly by MidAmerica Farm Publications, Inc., 19 N. Main, Perryville, MO 63775. Periodical postage is paid at Cape Girardeau, MO 63701.
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Cow-Calf And Stocker Cattle Budgets E
DR. ANDREW P. GRIFFITH
KNOXVILLE, TENN.
ach year, we (i.e. me and a col- league under the
umbrella of the Uni- versity of Tennessee Extension) develop a cow-calf and stocker budget. This budget
is developed primarily with Tennessee producers in mind, but the Microsoft Excel versions are flexible enough to meet the needs of most any producer in the United States. Additionally, the stocker budget is such that any mar- gin operator could use it for a profit or loss projection or a break-even analy- sis. Heading into the second month of
the year appears to be a good time to report on general cost and revenue ex- pectations for cow-calf operators while also discussing variability in budgets across producers. In order to lay the groundwork, it should be noted that a budget is generally used for planning purposes and then to evaluate the fi- nancial success of the plan. Addition- ally, it is important to know that the values expressed in the base budget and discussed here are not specific to any operation. They are more of an outline to assist users of the budget to account for all possible expenses and revenues that may be experienced. Given the developed cow-calf budget ( O n
l i n e :
https://arec.tennessee.edu/exten- sion/budgets/), total expenses to carry a cow in 2021 are estimated to be $965 per cow with $624 of those dollars being variable expenses and the remainder being fixed expenses. Of the $624 per cow of variable expenses, $422 per cow is consumed by pasture and hay expenses. Thus, pasture and hay expenses make up nearly 68 per-
cent of expected variable expenses. The remaining variable expenses are made up of supplemental feed, salt and mineral, animal health, labor, marketing fees, and interest. It is im- portant to note that labor is assumed to be $80 per cow, because everybody wants to get paid for the work they do and interest on production expenses is assumed to be 6 percent, which means someone who is not borrowing capital is expecting to earn a 6 percent return on their investment. Fixed expenses in the base budget
example total $341 per cow and are comprised of working facilities and equipment, machinery and associated equipment, and purchased breeding stock. These costs are important to in- corporate into a budget, because all of these items require an initial invest- ment, depreciate, and eventually have to be replaced. And, the last time I checked, money does not grow on trees and $100 bills do not fall out of the south end of a north bound cow. (There is value in trees and what falls out of the south end of the cow, but that is another discussion.) Revenue estimates for 2021 are $630
per cow. This assumes a 90 percent calf crop, a 2 percent death loss, and steers (550 lb) and heifers (520 lb) sold at weaning. Based on the stated rev- enue and expenses, the return to vari- able expenses is $6 per head, but that also means a producer who does not borrow capital and does not pay out of pocket labor expenses would have a return of $103 per cow to labor, capi- tal, and management. This return does not consider fixed expenses. With certainty, there are a number of
producers reading this that are saying their costs are much lower than what is being estimated in the base budget. This thought may or may not be true. The first thing to do is to access the Excel based budget or pdf budget from the weblink listed earlier or the county Extension office and develop a budget to determine the spe- cific costs on an operation. It is clear through the budget we developed that managing pas- ture and hay costs could re- sult in a better return to the cattle operation. Similarly, managing fixed expenses can also contribute positively to the bottom line of the budget. The baseline budget is not
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meant to represent all produc- ers nor is it likely to represent any single producer. The baseline budget is constructed to lead others through the budget building process such that the budget an individual builds is specific to that oper- ation. Through this process, a producer will be able to evalu- ate costs that need to be man- aged and what price they will need to receive to achieve a desired profit in the cow-calf business. This is a stepping stone to becoming a better fi-
LETTERS TO THE EDITOR Letters to the Editor are requested and encouraged. Please include the writer’s name, address and daytime phone number. Letters should be sent to: Editor, MidAmerica Farmer Grower, P.O. Box 323, Perryville, MO 63775; faxed to 573-547-5663 or e-mailed to
editor@mafg.net. Letters will be edited for space and clarity.
4• MidAmerica Farmer Grower
www.mafg.net / January 15, 2021
nancial manager of the cattle opera- tion. This is not a unicorn pooping gold coins.
∆ DR. ANDREW P. GRIFFITH: Assistant
Professor, Department of Agricultural and Resource Economics, University of Tennessee
Focus Group Sessions Pinpoint
R
Farming Stressors STARKVILLE, MISS.
esearchers from the Mississippi State University Extension Serv- ice are looking to collect row-crop
farmers’ feedback on stress related to farming. The focus group sessions are part of
the MSU Extension opioid prevention campaign PReventing Opioid Misuse In the SouthEast, or the PROMISE Initia- tive. Participation involves answering a se-
ries of questions about farming, stress related to farming and the opioid epi- demic. If a row-crop farmer agrees to participate in a focus group, the total time commitment will be two hours. The focus group meetings will be held
Jan. 28 at the MSU Extension Coa- homa County office in Clarksdale and the MSU Delta Research and Exten- sion Center in Stoneville, and Feb. 2 at the MSU North Mississippi Research and Extension Center in Verona. The sessions in Clarksdale and Verona will begin at 8:30 a.m. The Stoneville ses- sion starts at 12:30 p.m. A meal will be provided at each loca-
tion. Participants will also receive a Yeti tumbler for their participation. Face coverings and social distancing will be required at each site. The MSU Extension Coahoma
County office is located at 503 East 2nd St. in Clarksdale. The Delta Re- search and Extension Center is at 82 Stoneville Road in Stoneville. The North Mississippi Research and Exten- sion Center address is 5421 Miss. Highway 145 in Verona. To participate in one of the focus
groups or learn more, contact Mary Nelson Robertson, PROMISE Initiative project manager, at 662-325-4447 or
mnr72@msstate.edu.
Participants
must be at least 18 years old. This project is supported by the
Rural Health and Safety Education Competitive Grants Program of the U.S. Department of Agriculture’s Na- tional Institute of Food and Agricul- ture, and the Substance Abuse and Mental Health Services Administration Rural Opioids Technical Assistance Grants. MSU is an equal opportunity institu-
tion. For disability accommodation, please
contact Robertson
mnr72@msstate.edu.
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at ∆
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