2016 Beef Cattle Budgets and Tools

The Farm Enterprise Management team from Manitoba Agriculture has a wide range of expertise and resources available to beef producers to help with financial management, production economics and marketing. These tools include comprehensive cost-of-production tables, templates and calculators that help increase producer knowledge and farm management skills, leading to increased profitability and success in farm enterprises. Ongoing development of innovative calculators is an excellent resource for producers and industry stakeholders. The calculators cover a range of topics, including full cost-of-production templates for cow-calf, backgrounding and raising replacement heifers. They are useful tools that offer considerable help with determining the costs and returns associated with individual enterprises. We encourage all producers to learn about these tools and share them with fellow producers. Below is a review of tools and resources.

This budget outlines the cost of production for a cow-calf operation with 150 cows, five bulls and a 95 per cent calf crop weaned.
  • Buildings and equipment are valued at new cost.
  • All feed is purchased.
  • Manure removal is contracted out.
  • Replacement heifers are valued at fair market value.
  • This budget assumes an average weaning weight of 575 lbs. (steer calves 600 lbs., and heifer calves 550 lbs.)
Summary Page:
  • Costs:
·         Feed ($316 per cow) is roughly half of operating costs.
·         Fixed costs are $182 per cow (18 per cent of total costs).
·         Total costs are $1,014 per cow.
·         Labour costs are $160 per cow (16 per cent of total costs).
  • Profitability Analysis:
·         The marginal return over operating cost is $272 per cow.
·         Breakeven market price over operating and fixed costs is $1.56 per lb.
·         Breakeven market price over total costs is $1.86 per lb.  
  • Cost Summary:
·         Feed cost is $1.63 per cow, per day.
·         Yardage cost (winter feed period) is $1.37 per cow, per day.
·         Total overwinter costs are $2.86 per cow, per day.
  • Winter Feed Page:
·         Rations and number of days on feed for pre-calving and post-calving.
  • Input Page:
·         market price for 600 lb. steer, $1.80 per lb.
·         market price for 550 lb. heifer, $1.65 per lb.
·         145 days on pasture, 30 days extended grazing, 190 days on feed
Backgrounding 500 to 900 lb. Cattle
Backgrounding involves feeding from the time they are weaned until they are switched to a high-concentrate finishing ration. An example of a typical backgrounding operation would be to feed 500 pound steers to gain 1.5 to 2.5 pounds per day for approximately 100 to 200 days to produce 800 to 900 pound backgrounded feeders. This guide is designed to provide you with planning information and a format for calculating costs of production of a backgrounding feeder calf enterprise in Manitoba.
·         Average daily gain (ADG) options are 1.5 lbs., 2 lbs. and 2.5 lbs. per day.
·         New feed ration options are corn silage, barley silage and alfalfa-grass-hay ration.
·         The default is a corn silage ration with a 2.5 lbs per day gain.
·         It is assumed the feeder steer weighed in at 500 lbs., shrunken weight.
·         The feeder is raised to 900 lbs. (873 lbs after 3 per cent shrinkage).
·         The number of days on feed is 160.
·         Investment in facilities and equipment is assumed to handle 500 steers.
  • Summary page:
·         Costs:
·         Total costs are $1,298 per head.
·         Profitability analysis:
·         Total revenue is $1,222 per head.
·         Break-even selling price over total costs is $1.49 per lb.
·         Break-even purchase price is $1.70 per lb.
Beef Replacement Heifer Costs
The term replacement heifer refers to heifer calves fed from when they are weaned until they are put onto pasture for breeding. An example of a typical replacement heifer operation would be to feed 550 pound heifers to gain 1.25 to 1.75 pounds per day for approximately 200 to 250 days, and then put them out on pasture for 120 to 140 days to gain 1.25 to 1.75 pounds per day. The goal is to produce a 1,200 pound bred replacement heifer.
  • Feedlot ADG is assumed to be two lbs. per day, pasture ADG is assumed to be 1.43 lbs. per day.
  • It was assumed the heifer calves weighed in at 550 lbs shrunken weight and were raised to 998 lbs. (feedlot) and 1,200 lbs. (pasture).
  • Days on feed were 224 and days on pasture were 140.
  • Investments in facilities and equipment are assumed to allow handling 30 head.
  • Summary Page
·         Costs:
·         Total cost is $1,683 per head.
·         Profitability analysis:
·         Loss per open cull heifer sold is $183 per head.
·         Break-even bred heifer selling price over total costs is $1,712 per head.
·         Break-even calf purchase price is $1.89 per lb.
These budgets may be adjusted by putting in your own figures. As a producer, you are encouraged to calculate your own costs of production. Good management assumes a balanced ration is being fed, livestock are on a herd health program and handling facilities are included.
General Manitoba Agriculture recommendations are assumed in using feed and veterinary inputs. These figures provide an economic evaluation of the livestock and estimated prices required to cover all costs. Costs include labour, investment and depreciation, but do not include management costs, nor do they necessarily represent the average cost of production in Manitoba.
Cow Overwinter Cost Calculator
This new tool helps producers with a calculation for costs associated with overwintering cows:
·         It is a one page calculator with changeable input values.
·         Cost summary:
·         winter feed, $1.51 per cow, per day
·         yardage, 91 cents per cow, per day
·         labour 46 cents per cow, per day
·         total costs, $2.88 per cow, per day
Cow Replacement Value Calculator
A farm management tool to calculate the value of a replacement animal with changes in future market values it considers:
  • calculated net present value of cumulative annual marginal returns plus cull value
  • approximately $1,000 to $1,200 per cow, break-even value (higher values have increased future price risk)
Cow Lease Calculator
This new farm management tool assists with calculating cow share lease agreements.
  • Total cost per calf $1,014
    • Revenue share based on owner’s contribution of $143 per cow is 15.1 per cent.
    • Revenue share based on lessee’s contribution of $802 per cow is 84.9 per cent.
  • Owner earns 1.3 per cent return on assets (ROA).
Standing Hay Calculator
This farm management tool helps calculate the standing hay value of a hay field that a producer wants to rent out as standing hay. It uses two different methods:
  1. the market value of hay minus the cost of putting up the hay
  2. the cost of production method using actual input costs amortized over the life of that hay stand
Pasture Rental Calculator
This farm management tool helps calculate pasture rental rates.
  • Calculation is based on grazing days, land values and stocking rates.
  • Range is from 74 cents to $1.35 per cow, per day.
Creep Feed Calculator
A new farm management tool helps producers decide whether creep feeding calves is economically sound by considering items such as:
  • input feed intake, feed conversion, feed cost
  • creep feed return at $5.74 per calf
  • 11 per cent marginal return on creep feed cost
The goal of Manitoba Farm Enterprise Management is to help improve farm enterprise profitability, enhance competitiveness and promote understanding and skill development in strategic business planning, production economics, marketing and financial management. Farm management tools and resources help producers maintain farm sustainability and profitability.