Tag Archives: Economic analysis

Economics of Raising or Buying Heifers for Beef Cow Replacement

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Cow-Calf Cost of Production

  1. Winter feed = 37% of total costs
  2. Pasture = 24% of total costs
  3. Herd replacement = 10% of total costs

The cost of herd replacement accounts for about 10% of total cow-calf cost of production (based on the 2013-17 average). It is the third largest cost component for a cow-calf operation, following winter feed (37%) and pasture (24%). Because replacement heifers represent a major cost for cow-calf producers, choosing a herd replacement strategy has important implications on cow-calf profitability. While many producers raise replacement heifers on farm, buying replacement heifers could cost less depending on the production cost of the operation and current market situations.

Costs of Raising Replacement Heifers

The main costs of developing a replacement heifer include winter feed, opportunity cost of the heifer, and breeding costs. These are all impacted by reproductive efficiency.

Winter feed costs. Hay and barley prices are both higher in 2018 due to dry conditions and reduced supplies, increasing the cost of raising replacement heifers. In June 2018, Alberta hay price at $130/ton was 13% higher than last year, and Lethbridge barley was $245/tonne in July, up 23% from last year. Winter feeding costs in Alberta for 2018-19 are projected to be 9% higher than last year, on a per cow basis. Continue reading →

It can pay exponentially to have a precision rancher mindset

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How three 5% changes increase profit by more than 300%



A “precision rancher” is someone who, recognizing that agriculture operates on small margins, utilizes every technology, production practice and management technique that is appropriate for their climate, soil zone and production system in order to maximize their profits.

Producers make dozens of decisions every season to support the reproduction and productivity of their cow herd and the quality and yield of their forages, knowing that there are trade-offs with many choices. Incremental changes have great potential, both positively and negatively, to impact the bottom line. Monitoring and managing productivity, price and input costs can significantly increase competitiveness by helping ensure that valuable, incremental opportunities are not ignored.

The 5% Rule: Productivity, Price and Costs

In terms of net income, economists have found that the difference between the top 25% of agricultural operations and the average operation is typically small, as little as 5% on inputs, production or price. If you change input costs, productivity and price each by 5%, it makes a tremendous impact on the bottom line. Continue reading →

Costs of siring calves: artificial insemination compared to natural service

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As the breeding season approaches, some producers will consider using artificial insemination (AI) and estrous synchronization in their breeding herd; others will not because of the extra time, labour and management required in an AI program, the perceived costs of implementing AI, or they are unaware of the potential advantages of AI.

In this article, we will review economic analysis that compares the costs and benefits of fixed-time AI and natural service and discuss how recent changes in breeding bull and butcher bull prices affect the cost of breeding programs. We will also look at a recent study that addresses the question of how many clean-up bulls are needed in a fixed-time AI program.

Economic Benefits and Hurdles of Using Fixed-Time AI

Compared to natural service, an obvious potential advantage of fixed time AI is to have more calves born in the first 21 days of the calving season, which allows producers to market larger, more uniform groups of calves. Some studies have shown as much as a 10 to 17 day calf age advantage and 20 to 44 lbs more per calf at weaning as a result of estrous synchronization (Johnson and Chenoweth). Despite the extra costs of an AI program , fixed-time AI is estimated to have a net benefit of $11,110 for a 40-cow herd compared to natural service because of improved conception and wean rates, as well as heavier weaning weights (Lardner et al., 2015). Continue reading →

Economics of Preg-checking: a 2017 Update

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The major economic benefit of preg-checking is the cost-saving of wintering open cows. However, it has been noted that preg-checking is not always worthwhile, as the increased revenue due to higher prices in the spring and the additional weights put on in the winter could more than offset winter feeding costs.



The economics of preg-checking depends on the cull cow market price, the management system employed by the producer, feed and overhead costs, and veterinary costs. As market dynamics change every year, it is important to consider the current market situation when making preg-checking decisions.

Alberta cow prices experienced an impressive rally in the first half of 2017 but the seasonal decline has been sharp since Continue reading →

The economics of pregnancy testing: Webinar September 15th

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Update: Missed the webinar? Find the recording and check for future webinars on our Webinars page: http://www.beefresearch.ca/resources/webinars.cfm

Join this free webinar to better understand the economics of choosing to pregnancy check and whether it is more profitable for your operation to cull cows in the fall or spring.

When

Pain control in beef calves. Photo supplied by Tamara Carter

Thursday, September 15 at 7:00 pm MT

  • 6:00pm in BC
  • 7:00pm in AB and SK
  • 8:00pm in MB
  • 9:00pm in ON and QC
  • 10:00pm in NS, NB and PEI 

Watching on a tablet or mobile device?

If you plan to join the webinar using  Continue reading →

Call for Proposals: Beef Production Economics (2017-2018)

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Canfax Research Services (CRS) invites proposals for Beef Production Economics. The deadline is June 24, 2016 at 11:59 PM MT.

CRS is partnering with the Beef Cattle Research Council (BCRC) whose mandate is to establish research and development priorities for the Canadian beef cattle industry and manage national check-off funds allocated to research.

The BCRC developed the second Beef Cattle Industry Science Cluster under Agriculture and Agri-Food Canada’s Growing Forward II Strategy.  The Beef Cattle Industry Science Cluster was a Continue reading →

Managing calves for improved productivity and reduced antimicrobial use: Webinar September 28

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Update: Missed the webinar? Find the recording and check for future webinars on our Webinars page: http://www.beefresearch.ca/resources/webinars.cfm

The ways cow-calf producers manage their calves can have a big impact on how well they’ll perform on feed and whether they end up in the feedlot’s sick pen.

Join this free webinar for practical tips and strategies to increase fed calves’ productivity by lowering their stress and disease susceptibility. This session will also walk through the economics to help producers better understand how and when the extra efforts improve their own profitability.

When


Monday, September 28th at 7pm MDT

  • 6:00pm in BC
  • 7:00pm in AB and SK
  • 8:00pm in MB
  • 9:00pm in ON and QC
  • 10:00pm in NS, NB and PEI

Duration
Approximately 1 hour.

Cost
BCRC webinars are available and free of charge thanks to Continue reading →

Calculator: What is the Value of Preconditioning Calves?

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Preconditioning is a management method that prepares calves to enter the feedlot, reducing stress and disease susceptibility. Preconditioned calves are weaned at least 30-45 days prior to sale, put on a vaccination program, and introduced to processed feedstuffs, feedbunks and waterbowls. The intent is to spread out the stressors that calves experience: weaning, vaccination, transportation, unfamiliar animals and environment, dietary changes, etc., so that the immune system is not overwhelmed.

Many studies have shown that preconditioned calves have a lower cost of gain at the feedlot with improved rates of gain and feed efficiency, as well as lower treatment rates and death loss. These attributes contribute to higher profits in later phases of beef production and allows cattle buyers to pay a premium for preconditioned calves. Additional weight gain during the preconditioning phase as well as reduced shrinkage associated with stress during transportation and the marketing process also contributes to higher returns from preconditioned calves.

While there are clear benefits to the feedlot for purchasing preconditioned calves, is it worthwhile to the cow-calf producer to retain ownership? Continue reading →