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Offline r.n.reed

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How to Make a Profit
« on: July 22, 2013, 04:13:17 PM »
 Interesting reading in the July issue of beef magazine.The article summarized cow costs for the last year based on records kept on a substantial number of herds in North Dakota.These records had been kept for 18 years and the average herd size was 150 cows.
 A couple standouts were first there is little correlation between herd profit and high weaning weights.Second was that replacement costs for 2012 were 38% of the total annual cost per cow and this in a year when keeping replacements was not a high priority for most producers.
Could the day be approaching when cattlemen ask how many pounds/dollar input instead of what was his weaning weight,or begin to question the seedstock producer who replaces 25% plus of his herd every year or has an average age cowherd of 4 years or has built his herd on embryo producers instead of live calf producers.
 Also another article in the magazine stated that 80% of the cows in this country are in herds of 150 or more head.
Gary Kaper

Offline oakview

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Re: How to Make a Profit
« Reply #1 on: July 22, 2013, 04:59:30 PM »
Interesting article.  The author states in bold letters that the best indicator of profits is pounds weaned per female exposed.  That's basically true, but in our area, feed costs have been way out of line for several years, topped off by last year's fiasco.  Feed costs have perhaps become the most important factor.  The article shows a $172/head profit based on feed costs that are not even 1/3 of what mine are.  The stored feed costs (silage, grass and alfalfa hay) have been at least double what is shown in the graph for many years around here.  Last year, they would have been easily tripled.  You couldn't get alfalfa hay here for under $200/ton and prices were often well above that.  Grass hay approached $200/ton.  3.33 tons @ $150/ton compared to $45.67/ton equals a big loss instead of $172/head profit.  Unfortunately, there's a limit on the number of grazing days available.  I can get more days on pasture than someone in Canada, generally speaking, but somebody in southern Missouri can get a lot more than I can.  If you assign a reasonable value to your hay, there's not a lot of profit left, if any.  Smaller cows eat less, but there may be a reduction in pounds weaned/cow exposed.  Big cows might wean heavier calves, but they eat more.  We can feed cornstalks, been straw, etc., but now we have competition for the cornstalks from the new cellulose ethanol plant.  They have a government subsidy.  I do not.

Offline r.n.reed

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Re: How to Make a Profit
« Reply #2 on: July 22, 2013, 05:33:07 PM »
I am assuming that was their cost of producing the hay,they certainly left out the opportunity figure.It still makes a valid point though that should shake the maximum production boys a little.
« Last Edit: July 22, 2013, 07:38:50 PM by r.n.reed »
Gary Kaper

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Re: How to Make a Profit
« Reply #3 on: July 22, 2013, 06:54:08 PM »
With no consideration given to stocking rates, I don't know what all you can conclude.  Without question, if I culled my herd in half, next years weaning weights would increase substantially.  Lbs per acre relative to the price of land per acre in your area.   Almost like a cap rate. How many lbs or how much money can 1 acre return over or divided by the purchase price of 1 acre. 

 

Offline E6 Durhams

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Re: How to Make a Profit
« Reply #4 on: July 22, 2013, 07:11:35 PM »
IMO feeding cattle to finish on grain is a no win deal. Until ethanol is gone which I don't see happening. Cattle that can hit the target on minimum inputs is going to be the key. Mr Reed makes some great points about breeders. I've always wondered why a herd that has been around 100 years or do needs to go out buying donors and new herd bulls. I don't get it. After l those years the cow families should have been identified and propagated. Maybe occasionally a new bull is needed. But it is bred very similar. Perhaps line bred but not related. Hopefully line bred IMO. Modern day beef production is a flurry of buzzwords and confusing sales pitches.

Offline r.n.reed

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Re: How to Make a Profit
« Reply #5 on: July 22, 2013, 07:24:05 PM »
Some operators may want to cull their herd in half and substantially lower their weaning weights.Its all about finding the optimum.The only conclusion is that after hundreds of detailed records for a period of 18 years in one state weaning weights don't wag the dog and rapid turnover of the herd is expensive.
Gary Kaper

Offline oakview

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Re: How to Make a Profit
« Reply #6 on: July 22, 2013, 10:18:33 PM »
I think it is a good thing that "experienced" breeders purchase a new donor or herd sire every so often.  We've had Shorthorns almost 50 years and I will readily tell you I don't have all the answers.  I still have lots of questions. I try to pay attention to what's going on, with or without the fluff, and if I see something in another herd that I think may work, I might give it a try.  It is also a good practice to support your fellow breeders once in a while, especially those that have purchased cattle from you in the past.  I often wish I had a bigger savings account so I could do more of this.  I'm not talking about trading cattle, I'm referring to supporting your peers when you can.

Offline justintime

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Re: How to Make a Profit
« Reply #7 on: July 22, 2013, 11:18:13 PM »
this is a good article. I think each breeder has to find out what the best way to make a profit is, and for his/her herd, it may be totally different than someone else down the road or in the same breed as you. Making a profit is not the only reason people raise cattle, but it certainly is the main reason to be in business for most people. There are lots of other reasons people raise cattle, and making profit is not necessarily their main one. I agree totally that your highest performing calves are not necessarily the most profitable, and this is especially true with breeding stock.
Experience is what you get when you don't have it when you need it.

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