Costs of Production

There has been much hand wringing among ranchers about the sharp drop in calf prices. Accompanying comments about prices, I have also seen or heard quite a few comments on costs of production increasing significantly. If the cost of production includes health insurance, I might agree.

Let’s examine cost of production against the drop in calf prices. First, I submit there is no “one size fits all” when it comes to ranch costs and returns. So, I recognize any general discussion about ranch costs and returns is just that—general observation. My analysis of cow-calf returns might or might not reflect an analysis of any specific ranch in the U.S., but I believe it provides a benchmark of general trends. Over the years, I have databased many actual ranch budget data that I use as guides.

With that in mind, let’s shift the focus from prices and revenue to the primary costs of production in running cows— fuel, feed and labor—and compare the cost of the three over the period from 2013 to 2017. Cattle prices started to strengthen in 2013 and reached record levels in 2014 and 2015, then fell sharply in 2016. However, those major costs fell over the entire period from 2013 to 2017.

In 2013, diesel fuel (highway) averaged $3.92 per gallon, then fell from 2014 to 2016 averaging $2.31 per gallon for 2016. Hay prices averaged $191 per ton in 2013 and then fell from 2014 to 2016, averaging $145 per ton in 2015/16 and $132 per ton this year. Corn averaged $6.89 per bushel in 2013. It fell further during 2014, 2015 and 2016 to reach an average of $3.61 per bushel in 2015/16.

There is opportunity—though cattle prices have fallen significantly from the peak, so have the major inputs to cowcalf production. While I understand and appreciate the impact of death loss in this year’s calf crop, I think many producers are in the position to take advantage of lower feed costs to concentrate on selling more pounds of beef with a lower cost.

 

Editor's Note: This article originally appeared in the April 2017 issue of Drovers. 

Comments

Restricted HTML

  • Allowed HTML tags: <a href hreflang> <em> <strong> <cite> <blockquote cite> <code> <ul type> <ol start type> <li> <dl> <dt> <dd> <h2 id> <h3 id> <h4 id> <h5 id> <h6 id>
  • Lines and paragraphs break automatically.
  • Web page addresses and email addresses turn into links automatically.
7 + 12 =
Solve this simple math problem and enter the result. E.g. for 1+3, enter 4.
Submitted by Anonymous on Mon, 04/09/2018 - 12:29

Nice post. I study something more difficult on totally different blogs everyday. It is going to all the time be stimulating to learn content from different writers and practice just a little something from their store. I prefer to use some with the content material on my weblog whether you don’t mind. Natually I provide you with a hyperlink in your net blog. Thanks for sharing. UFABET

Submitted by Anonymous on Mon, 04/09/2018 - 12:30

Great job with the blog, I’ve been stopping by here for quite some time, just wanted to let you know! UFABET

Submitted by Anonymous on Wed, 04/11/2018 - 09:07

the air compressors that we use at home are the high powered ones, we also use it for cleaning~ Canary wharf printing London

Submitted by Anonymous on Wed, 04/11/2018 - 12:27

Oh my goodness! an excellent post dude. Many thanks Nevertheless I’m experiencing issue with ur rss . Do not know why Cannot join it. Can there be anyone finding identical rss problem? Anybody who knows kindly respond. Thnkx Umzugsfirma Berlin

Submitted by Anonymous on Thu, 04/12/2018 - 09:25

I do accept as true with all the ideas you have presented in your post. They are very convincing and will certainly work. Still, the posts are very quick for starters. Could you please prolong them a bit from subsequent time? Thank you for the post. story books for kids

Submitted by Anonymous on Thu, 04/12/2018 - 09:25

Estate Planning: HFG Wealth Management will work in concert with your legal, accounting and tax advisors to help create an estate planning solution that considers how and to whom you want to leave your legacy. Through every phase of the design and management of your plan, we’ll provide clarity and direction, ensure your financial and investment plans are cohesive, and avoid unnecessary taxation. help with estate planning the woodlands

Submitted by Anonymous on Thu, 04/12/2018 - 12:43

Many thanks for finding the time to go over this approach, I am boldy tends to make together with appreciate analyzing much more about now this topic. Whenever capabilities, since gain competencies, can you feelings posting to ones weblog with the help of further more tips? This is useful for all of us. 7-Figure Dream Life Review

Submitted by Anonymous on Thu, 04/12/2018 - 12:44

This is a great write-up. Thank you for spending some time to describe all of this out for folks. It really is a great help! Polypropyleen zwembad

Submitted by Anonymous on Sat, 04/14/2018 - 13:33

I’m impressed, I have to say. Really hardly ever do I encounter a blog that’s both educative and entertaining, and let me inform you, you might have hit the nail on the head. Your thought is excellent; the difficulty is something that not sufficient individuals are speaking intelligently about. I am very comfortable that I stumbled across this in my search for something relating to this. digital agency

Submitted by Anonymous on Sat, 04/14/2018 - 13:33

Gucci Outlet Online Great post This saved us a considerable time. Great site I am going to return back for addional info. Great site anyhow. raja togel

Submitted by Anonymous on Sun, 04/15/2018 - 05:14

The write really emphasised on the topic and wrote in detail. I would like to costs incurred at โกลเด้นสล็อต, as I am a competitor. I would be very grateful if you replied me with what I asked.

Submitted by Anonymous on Sun, 04/15/2018 - 10:27

I must express my admiration for your kindness in support of men and women who really want help with this particular question. Your real dedication to passing the solution along had become quite important and have without exception allowed some individuals much like me to attain their desired goals. Your entire valuable instruction denotes so much to me and extremely more to my fellow workers. Thanks a ton; from all of us Gebäudereinigung Berlin

Submitted by Anonymous on Sun, 04/15/2018 - 12:26

including reasonable comments here... rizk

Submitted by Anonymous on Mon, 04/16/2018 - 13:16

housewarming Harmi bring about Frinel paraclete dubin sjankata poncela seeds best tea to lose belly fat

Submitted by Anonymous on Mon, 04/16/2018 - 13:16

contact lens are not only for fashion but it can also protect your eyes from dust and UV radiation. daily politics

Submitted by Anonymous on Mon, 04/16/2018 - 13:17

There are a few interesting points soon enough in the following paragraphs but I don’t determine if I see these people center to heart. There is some validity but I’m going to take hold opinion until I consider it further. Great write-up , thanks and now we want far more! Added to FeedBurner at the same time g suite basic promo code 2018

Submitted by Anonymous on Mon, 04/16/2018 - 13:17

my kids really like to play with those assorted pool toys, they specially like pokemon pool toys and stuff like that` RADIO JINGLES

Submitted by Anonymous on Tue, 04/17/2018 - 10:23

camping have been the best activity that we can have during the summer, i love to roast marshmallows on a campfire.. shoulder pain

Submitted by Anonymous on Tue, 04/17/2018 - 10:23

It’s best to take part in a contest for top-of-the-line blogs on the web. I will suggest this website! nyc computer repair

Submitted by Anonymous on Tue, 04/17/2018 - 13:16

Wait a minute? Why is it only showing my views? :O nairobi raha

Submitted by Anonymous on Wed, 04/18/2018 - 12:36

There’s clearly big money to discover more regarding this particular. I assume you’ve made certain great factors in options also. composite doors batley

Submitted by Anonymous on Wed, 04/18/2018 - 12:37

So next, click the Where’s The Money back guarantee website for the internet site. HVAC near me

Submitted by Anonymous on Thu, 04/19/2018 - 11:54

Nice blog here! Also your web site loads up fast! What web host are you using? Can I get your affiliate link to your host? I wish my website loaded up as quickly as yours lol DETECTIVES PRIVADOS ESPAÑA

Submitted by Anonymous on Thu, 04/19/2018 - 11:54

Usually I don’t read post on blogs, but I would like to say that this write-up very forced me to try and do it! Your writing style has been amazed me. Thanks, quite nice article. Schreinerei Berlin

Submitted by Anonymous on Thu, 05/17/2018 - 17:47

Why It Must be Panama for Dental Surgery? The factors for obtaining your dental surgical procedure accomplished in Panama are numerous, like: Most of your training dental surgeons in Panama speak English Panama has exceptional arrangements for diagnosing, screening and providers. There is no shortage of USA-trained doctors It costs far less to have your surgery carried out in Panama than in US or any other Western nation US dollar can be utilized And above all, your postoperative care is complimented by a visit on the pure beaches and pure forests of Panama. Article rocks

Submitted by Anonymous on Sat, 05/19/2018 - 05:30

Hello there! Do you use Twitter? I’d like to follow you if that would be okay. I’m absolutely enjoying your blog and look forward to new posts. prop rental New York

Submitted by Anonymous on Sat, 05/19/2018 - 07:05

hello!,I like your writing so so much! percentage we keep in touch extra about your post on AOL? I require an expert on this area to solve my problem. May be that is you! Having a look ahead to look you. reviews about water filter