Many cattle producers are gearing up for the hay season. Spring can be hectic on the farm or ranch, but it’s also an important time to check on where you’re heading financially.
“With cattle prices as high as they have been, it can be easy to assume this will be a profitable year,” says Jacob Hefley, University of Missouri Extension agricultural business specialist. “However, high market prices aren’t guaranteed to last, and rising input costs can quickly eat into profits. Because of this, a budget checkup can help you assess where your finances currently stand and help you make more-informed decisions on things such as culling, marketing and calf retention.”
Where to start
If you made a beginning-of-year budget, revisit that and compare your estimates for cattle prices and input costs with what you are currently seeing in your market, Hefley advises. If you have already made it through your calving season, were your calving rates what you expected? Although your beginning-of-year budget might have shown promising indicators of profitability, it’s important to make sure your assumptions have not changed.
“If you did not make a budget at the beginning of the year, no worries!” Hefley says. “Don’t let this discourage you from putting some time aside now to do a wellness check of your operation’s financial future.”
Revisiting and updating your budget can also help you identify areas that might be affecting potential profitability. Ask yourselves these questions:
- How much did you spend feeding over the winter?
- Would improving grazing management, stockpiling forage or investing in improved hay storage make sense?
- Have you spent more than you expected on medical costs?
- Is this an issue you can address?
Taking a closer look at these areas now can help you make better decisions and stay on track financially.
MU Extension offers budgets for numerous cattle enterprises, including cow-calf, backgrounding, feeding, heifer development and direct beef sales. The budgets provide a simplified way to evaluate your operation’s income and expenses, assess how things have changed since the beginning of the year, and estimate your profitability moving forward.
Visit http://muext.us/MCLEB to view available budgets. As always, you can contact your local agricultural business specialist for help in finding, filling out and interpreting the budget, Hefley says.
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