Representative Economic Budget for Northern Nebraska Panhandle - 400 Head Cow … · 2019. 12....
Transcript of Representative Economic Budget for Northern Nebraska Panhandle - 400 Head Cow … · 2019. 12....
Representative Economic Budget for Northern Nebraska Panhandle -400 Head Cow Herd
Background
In the Nebraska Panhandle, two representative size cow herds were identified by producers from the area. In the southern panhandle area, a typical cow herd is 75 head of cows and in the northern area, herd size of 400 head of cows is the norm. Managing a 400 cow herd would provide a large portion of a ranch’s revenue. Raising all of the hay utilized in the cattle operation is typical. Half of the farms and ranches in the area raise crops as well. Many producers in this area also count on off-farm jobs, with some managing hunting and/or recreational enterprises for supplemental income to meet family income.
This budget should only be used as a guide. Individual producers can utilize the cow-calf budget Excel template and enter information that reflects their operation.
It is important to note that feed and hay costs on owned ground, along with pasture and stalk rent expenses are considered separate enterprises. Therefore in this representative budget, feed, hay, pasture, and stalks are included cash feed expenses, valued at current market value. Individual producers may enter an opportunity cost for their land use for the cow-calf enterprise in lieu of cash rental expenses in their budgets.
Livestock Management Practices
Calving time for the 400 cow herd in the northern Nebraska Panhandle is in the spring months, starting in March and continuing in April and May. Weaning rates typically range from 85 to 90 percent per exposed cow with 15 percent of cows culled each year. Producers report that the general practice on these operations is to raise their own replacement heifers. Chart 1: Cow-calf production flowchart provides production numbers – page 3.
Weaning weights for calves range from 485 to 550 pounds. For steers, 550 pounds was entered into this budget and for heifer calves, 525 pounds was entered. Approximately 60 to 70 percent of calves are sold at weaning in the November timeframe. The other 30 to 40 percent of calves are backgrounded for 60 to 90 days on grass, gaining 1 to 1.5 pounds per day while typically on irrigated meadow ground and feed supplement. This representative budget indicates 120 calves backgrounded for 75 days.
In the northern panhandle, 60 to 80 percent of pasture is owned with the rest rented as needed. Cattle are on pasture from mid-May to the end of October, then winter on range or corn stalks with hay fed in March and April. Yearling heifers are typically on pasture for five months from June thru October, then on stalks with cake (dried distillers or alfalfa), from November to mid-March and hay for two months. A summer pasture rental rate of $55 per pair per month or $1.83/head/day without full care is used in this budget. Twelve acres of pasture per cow-calf is needed for the five months. A large percentage of operators rent stalk ground and transport their cows to the stalk fields or utilize winter range or pasture. This budget includes a seventy cents per head per day charge for this winter feeding period. Bred heifers are fed similar to the cows. Bulls follow a similar feed program to that of the cows, however they are kept separate for part of the year.
Machinery, Equipment, and Facilities
Basic equipment utilized for the cow-calf enterprise in the northern panhandle generally includes an ATV, pickup, tractor, stock trailer, feed wagon, portable chute, and panels. Facilities often include a barn, a calving shed, and corrals. The value of machinery and equipment allocated to the cow-calf enterprise is shown in the budget. Annual repair
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expenses for these assets are shown in the budget as fixed cash costs. Depreciation and opportunity costs of ownership are noted in the budget as non-cash costs.
Non-Feed Input Costs
Non-feed input costs can be entered into the budget on a “per animal” or a whole herd basis. In this representative budget, these costs were entered on a per animal basis and include labor, fuel, veterinary and medical cost, and marketing costs. Labor, fuel, and veterinary and medical costs are allocated to each animal category based on net increase in value during the production year. Marketing costs are broken down by each animal category of the herd and allocated accordingly. For example, cull bull marketing of $35 per animal is included on the bull budget page and the system budget which is a summary of all projected revenue and expenses at the end of the budget report. The cost of direct marketing and the costs per head to sell thru a nearby sale barn can vary tremendously. Marketing expense includes the sales commission, transportation and other costs to market. In this budget, both a commission and charge for hauling the cattle to sale are figured into marketing expense.
Other Depreciation, Interest and Overhead Costs
Depreciation for bulls is figured in the difference of cost of purchased bulls to their sale value when culled. These figures are included in the bull budget page and are carried over into the total system budget page as income when sold and expense when purchased. Depreciation expense for tax
purposes would be handled differently and in consultation with a tax accountant. There is no depreciation expense shown for the cows as they are typically replaced by raised heifers.
Opportunity interest of 3 percent is figured on the value of investment total in the livestock herd. This is an economic cost reflecting what rate of return could be earned if the herd was sold and the money invested in its most profitable alternative use. Overhead expenses include the farm’s annual insurance premium and professional fees. Real estate value and taxes are not included in this example because, as stated previously, rental costs are paid for all hay, stalks and pasture. Therefore, this budget is making the assumption that no ground utilized for the cow-calf operation is owned by the cow-calf enterprise. There is a real estate tax included in the budget on the facilities and property tax figure included in other expenses for the vehicles and equipment. An annual management charge and other expenses that pertain to the cow-calf herd may be entered however they are not included in this representative budget. Prepared by: Glennis McClure, Extension Educator in Ag Economics Jay Parsons, Associate Professor, Ag Economics Aaron Berger, Extension Educator in Beef Systems Jack Arterburn, Extension Educator in Beef Systems
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400 Head Cow Herd Livestock Budget Worksheet pages attached include:
Budget Input sheets Bull budget Replacement budget Breeding herd cash budget Backgrounding calf budget (shows backgrounding cattle revenue and costs) Cow-calf System Budget report (summarizes all budget information)
Chart 1: Cow-calf production flowchart, 400 cow herd - Nebraska Panhandle (North)
* approx. 85% weaning rate per exposed cow
2% Death Loss
15% Cull Rate
88% Birth rate*400Cows
392 Cows
334 Cows
Calves352
Heifers176
Steers176
Heifers171
172Steers
marketed66 Repl. Heifers
Heifers marketed
105
4Bulls
purchased each year
16 Bulls
4 Bulls marketed each year
58 Cowsmarketed 0% Death Loss
Bulls culled after 4 to 5 years3% death loss
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This budgeting workbook is designed for the medium and small sized operator. It includes spreadsheets for analyzing the components of a beef production system separately but provides a combined analysis as well.
Extension is a Division of the Institute of Agriculture and Natural Resources at the University of Nebraska - Lincoln cooperating with the Counties and the United States Department of Agriculture. University of Nebraska - Lincoln Extension programs abide with the nondiscrimination policies of the University of Nebraska - Lincoln and the United States Department of Agriculture.
© The Board of Regents of the University of Nebraska on behalf of the University of Nebraska - Lincoln Extension. All rights reserved.
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Budget Inputs Panhandle North Sept 2019
Breeding HerdHerd size 400 CowsAverage Cow Value 1,400 $ / headCows Culled per Year 59 CowsCow Deaths per year 4 headNumber of Replacements Needed 63Estimated Weaning Rate 90 percentExtra Heifers Retained for Breeding that Will Not Be Used as Replacements 15 headCulled Replacement Heifer Weight When Sold 900 poundsCulled Replacement Heifer Selling Price 135 $ / cwtCost of Marketing Culled Replacement Heifers 30 $ / headReplacement Females Purchased (<=63) headReplacement Female Cost (if applicable) $ / headCow Cull Weight 1,350 poundsNon-Fed Cull Cow Price 62 $ / cwtBulls Needed 16 Bull(s)Bull Purchase Price 3,000 $ / headBull use (years) (<10) 4 yearsBull Death Loss Rate 0%Cull Bull Price 83 $ / cwtCull Bull Weight 1,700 poundsCalves Weaned (<=360) 353 head/yearSteer Weaning Weight 550Heifer Weaning Weight 525 poundsWeaned Steer Price (>=10) 168 $ / cwtWeaned Heifer Price (>=10) 165 $ / cwt
Backgrounding CalvesDays Fed 75 daysDeath Loss (0-100) 0 percentRetained after Weaning (<=180) 70 headEnd Weight 650 poundsMarket Price (>=10) 173 $ per cwtRetained after Weaning (<=102) 50 headEnd Weight 625 poundsMarket Price (>=10) 168 $ per cwt
StockerDays Fed daysDeath Loss (0-100) percentRetained for Grazing (<=70) headEnd Weight poundsMarket Price (>=10) $ per cwtRetained for Grazing headEnd Weight poundsMarket Price (>=10) $ per cwt
FeedlotDays Fed daysDeath Loss (0-100) percentPlaced on Feed (<=0) headEnd Weight poundsMarket Price (>=10) $ per cwtPlaced on Feed (<=0) headEnd Weight poundsMarket Price (>=10) $ per cwt
Hei
fers (<=50)
Stee
rsH
eife
rsH
eife
rsSt
eers
It is assumed that herd size remains stationary so replacements will equal cow culls and cow deaths. If too few replacements are purchased, the worksheet automatically retains heifers.
Bre
edin
g Fe
mal
esB
ulls
Cal
ves
Stee
rs
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Fed Cull CowDays Fed daysDeath Loss (0-100) 0 percentPlaced on Feed (<=59) headEnd Weight poundsMarket Price (>=10) $ per cwt
Feed
NamePrice per Unit
PurchasedPriced Unit
(tons, lbs. etc)
Fed Unit (tons, lbs.
etc)Fed Unit per Priced Unit As Fed Price
1.83 day day 1 1.830.70 day day 1 0.70
95.00 ton lbs 2000 0.05110.00 ton lbs 2000 0.06250.00 ton lbs 2000 0.13960.00 ton ounce 32000 0.03
Corn 3.25 bu lbs 56 0.06Irrigated meadow /grass 0.50 day day 1 0.50
Non-Feed Input Costs
Name Cost per Year
Is This Cost Per Animal or
for All Animals?
Breeding Herd
Wintered Calf (Optional)
Stocker (Optional)
Feedlot (Optional)
Fed Cull Cow
(Optional)100.00 per animal
20.00 per animal30.00 per animal35.00 per animal35.00 per animal
per animal25.00 per animal25.00 per animal
- per animal- per animal
DDG Cubes
Summer PastureCorn Stalks/Winter Range-PasturePrairie HayAlfalfa
Salt and Mineral
Allocation Percentage
LaborFuelVeterinary and MedicalCull Cow MarketingCull Bull Marketing
Stocker MarketingFeedlot Marketing
Cull Replacement MarketingWeaned Calf MarketingBackgrounded Calf Marketing
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Budget Inputs (cont.)
Depreciable Input Costs
Name Current Value Future ValueTime
HorizonAnnual Repairs
Breeding Herd (Optional)
Weaned Calf Wintering (Optional)
Stocker (Optional)
Feedlot (Optional)
30,000 15,000 20 1,000 Machinery & Equipment 80,000 35,000 10 2,000
35,000 15,000 7 1,200
InterestOperations Interest Rate 6%Opportunity Rate 3%
Overhead Costs
Overhead Costs AmountBreeding Herd
(Optional)
Weaned Calf Wintering (Optional)
Stocker (Optional)
Feedlot (Optional)
Fed Cull Cow
(Optional)
Real Estate Value*Real Estate Tax 1,100 per yearAnnual Insurance Premium 2,500 per yearProfessional Fees 1,000 per yearAnnual Management Charge per yearOther 1,000 per year
* If cattle are grazed on owned land, either the value of the land and associated taxes or the grazing fees for that land should be included so costs arenot double counted. If grazing fees are used to calculate costs when land is owned, only the cost of and taxes on non-grazing real estate should beincluded as an overhead cost. A calving shed is an example of non-grazing real estate.
Allocation Percentage
Allocation Percentage
Vehicles
Barn
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Budget Inputs (cont.)
Bull Budget (16 Bulls)Income Herd Total
Amount Weight Price TotalCull Bull Sales 4.00 head @ 1,700.00$ 83.00$ 5,644
Gross Income 5,644
Variable Costs Herd TotalBreeding Costs Number Price TotalBulls 4.00 3,000$ per head 12,000
Bull Feed TotalSummer Pasture 165 day per animal 4,831Corn Stalks/Winter Range-Pasture 120 day per animal 1,344Salt and Mineral 1095 ounce per animal 526Prairie Hay 2000 lbs per animal 1,520Alfalfa 1000 lbs per animal 880
Total Feed 9,101
Other Variables Allocation TotalCull Bull Marketing 35.00 per animal 140
Operations Interest 273
Total Non-feed 413Total Variable Costs 21,514
Net Expense 15,870
Operations interest rate times feed and other variable expenses except marketing divided by two.
@ 0.70 per day
Amount per Year
Per Animal or Total Price
@ 1.83 per day
@ 0.03 per ounce@ 0.05 per lbs@ 0.06 per lbs
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Replacement Budget 78 Head*Feed Costs Herd Total
Summer Pasture 150 day per animal 21,411 Corn Stalks/Winter Range-Pasture 135 day per animal 7,371 Prairie Hay 1400 lbs per animal 5,187 DDG Cubes 350 lbs per animal 3,413 salt and mineral 1095 ounce per animal 2,562
Total Feed Costs 39,944
*The number of replacement heifers assumes constant herd size.
@ 0.13 per lbs@ 0.03 per ounce
@ 0.70 per day
Amount per Year
Per Animal or Total Price
@ 1.83 per day
@ 0.05 per lbs
Include only feed fed to develop heifers from weaning until the following crop of replacement heifers are weaned. These feed costs are carried forward to the "Breeding Herd" spreadsheet. Other expenses are included as part of that analysis.
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Breeding Herd Cash Budget (400 Cows)Revenue Herd Total Per Cow Per Calf
Number Weight Price TotalWeaned Steer Value 177 550 168.00 per cwt 163,548Weaned Heifer Value 99 525 165.00 per cwt 85,759Cull Cow Sales 59 1,350 62.00 per cwt 49,383Replacements Culled 15 900 135.00 per cwt 18,225
Gross Income 316,915 792.29 1148.24
Variable Cash Costs Herd Total Per Cow Per CalfBreeding Costs Number Price Total Total TotalBulls (This amount is the "Net Expenses" from the "Bulls" tab) 15,870 39.67 57.50Replacements Purchased $ per head
Animal Purchases 15,870 39.67 57.50
Cow Feed Total Total TotalSummer Pasture 165 day per animal 120,780 301.95 437.61Salt and Mineral 1095 ounce per animal 13,140 32.85 47.61Prairie Hay 2000 lbs per animal 38,000 95.00 137.68Corn Stalks/Winter Range-Pasture 120 day per animal 33,600 84.00 121.74Alfalfa 1000 lbs per animal 22,000 55.00 79.71
Replacement Heifer Feed 39,944 99.86 144.72Total Feed 267,464 668.66 969.07
Other Variable Amount Allocation Total Total TotalLabor 100 97% 38,951 97.38 141.13Fuel 20 97% 7,790 19.48 28.23Veterinary and Medical 30 97% 11,685 29.21 42.34Cull Cow Marketing 35 2,065 5.16 7.48Cull Replacement Marketing - Weaned Calf Marketing 25 4,050 10.13 14.67
Operations Interest 9,972 24.93 34.39
Total Non-feed 74,514 186.28 268.23Total Variable Cash Costs 357,847 894.62 1,294.80
Fixed Cash Costs Herd Total Per Cow Per Calf
Depreciables Input Costs Allocation Total Total TotalBarn 1,000 97% 974 2.43 3.53Machinery & Equipment 2,000 97% 1,948 4.87 7.06Vehicles 1,200 97% 1,169 2.92 4.23
Cash Ownership 4,090 10.22 14.82
Overhead and Management Allocation Total Total TotalReal Estate Tax 97% 1,071 2.68 3.88Annual Insurance Premium 97% 2,434 6.09 8.82Professional Fees 97% 974 2.43 3.53Annual Management ChargeOther 97% 974 2.43 3.53
Total Overhead 5,453 13.63 19.76Total Fixed Cash Costs 9,543 23.86 34.58
Total Cash Costs 367,390 918.48 1,329.38
Net Cash Income (50,475) (126.19) (181.14)
Non-Cash Costs Herd Total Per Cow Per Calf
Depreciables Input Costs Depreciation Oppor-tunity Allocation Total Total TotalBarn 750 900 97% 1,607 4.02 5.82Machinery & Equipment 4,500 2,400 97% 6,719 16.80 24.34Vehicles 2,857 1,050 97% 3,805 9.51 13.78
Opportunity Amount AllocationReal Estate 97%Livestock 19,886 100% 19,886 49.71 72.05
Total Non-Cash Costs 32,016 80.04 116.00
Total Cash and Non-Cash Herd Total Per Cow Per CalfTotal Costs 399,406 998.52 1,445.38
Total Net Income (82,491) (206.23) (297.14)
Amount per Year
Per Animal or Total Price
@ 0.05 per lbs@ 0.03 per ounce@ 1.83 per day
(From Replacement Spreadsheet)
@ 0.06 per lbs@ 0.70 per day
per animal
Unit
Repairs
per animalper animal
per animal
Calculations: Operations interest rate times feed and other variable expenses except marketing divided by two.
per animalper animal
1,000
Amount1,100 2,500 1,000
-
Representative Economic Budget for Northern Nebraska Panhandle - 400 Head Cow Herd 10
Backgrounding Calf Budget 75 DaysRevenue Herd Total Per Calf Sold
Number Weight Price Total TotalSteers 70 650 173 $ / cwt 78,715 1,124.50Heifers 50 625 168 $ / cwt 52,500 1,050.00
Gross Revenue 131,215 1,093.46
Variable Cash Costs Herd Total Per Calf SoldNumber Weight Price Total
Steer Calves Retained 70 550 168.00 $ / cwt 64,680Heifer Calves Retained 50 525 165.00 $ / cwt 43,313
Animals Purchased 107,993 899.94
FeedAmount Fed
per YearPer Animal
or Total Price Total TotalIrrigated meadow /grass 75 day per animal 0.50 $ day 4,500 37.50DDG Cubes 225 lbs per animal 0.13 $ lbs 3,375 28.13Salt and Mineral 225 ounce per animal 0.03 $ ounce 810 6.75
per animal
Total Feed 8,685 72.38
NonFeed Amount Basis Allocation Total TotalLabor 100 per animal 3% 315 2.62Fuel 20 per animal 3% 63 0.52Veterinary and Medical 30 per animal 3% 94 0.79Backgrounded Calf Marketing 25 per animal 3,000 25.00
Operations Interest 1,388 11.57
Total Non-feed 4,861 40.50Total Variable Cash Costs 121,538 1,012.82
Fixed Cash Costs Herd Total Per Calf SoldDepreciables Input Costs Repairs Allocation Total TotalMachinery & Equipment 2,000 3% 52 0.44Vehicles 1,200 3% 31 0.26
Total Cash Costs on Depreciables 84 0.70
Overhead and Management Amount Allocation Total TotalReal Estate Tax 1,100 3% 29 0.24Annual Insurance Premium 2,500 3% 66 0.55Professional Fees 1,000 3% 26 0.22Annual Management ChargeOther 1,000 3% 26 0.22
Total Overhead and Ownership 147 1.22217,480.07 Total Fixed Cash Costs 231 1.92
Total Cash Costs 121,769 1,014.74
Net Cash Income 9,446 78.72
Non-Cash Costs Herd Total Per Calf SoldDepreciable Assets Depreciation Oppor-tunity Allocation Total TotalMachinery & Equipment 4,500 2,400 3% 181 1.51Vehicles 2,857 1,050 3% 102 0.85
Real Estate - 217,480.07 Total Non-Cash Costs 283 2.36
Total Cash and Non-Cash Herd Total Per Calf SoldTotal Costs 122,052 1,017.10
Net Total Income 9,163 76.36
Calculations: Operations interest rate times feed and other variable expenses except marketing divided by two.
Representative Economic Budget for Northern Nebraska Panhandle - 400 Head Cow Herd 11
System BudgetRevenue Herd Total
Number Weight Price TotalWeaned Steers 107 550 168 $ / cwt 98,868Weaned Heifers 49 525 165 $ / cwt 42,446Backgrounded Steers 70 650 173 $ / cwt 78,715Backgrounded Heifers 50 625 168 $ / cwt 52,500Stocker SteersStocker HeifersFed SteersFed HeifersCull Cow Sales 59 1,350 62 $ / cwt 49,383Fed Cull Cow SalesCull Bull Sales 4 1,700 83 $ / cwt 5,644Cull Replacement Sales 15 900 135 $ / cwt 18,225
Gross Income 345,781
Variable Costs Herd TotalAnimal Purchases Number Price TotalReplacement Females $ per headBulls 4.0 3,000 $ per head 12,000
Total Animals Purchased 12,000
Feed Price TotalSummer Pasture 80,340.00 day @ 1.83 per day 147,022Corn Stalks/Winter Range-Pasture 60,450.00 day @ 0.70 per day 42,315Prairie Hay 470.60 ton @ 95.00 per ton 44,707Alfalfa 208.00 ton @ 110.00 per ton 22,880DDG Cubes 27.15 ton @ 250.00 per ton 6,788Salt and Mineral 17.75 ton @ 960.00 per ton 17,038Corn bu @ 3.25 per buIrrigated meadow /grass 9,000.00 day @ 0.50 per day 4,500
Total Feed 285,250
Other Variable TotalLabor 39,266Fuel 7,853Veterinary and Medical 11,780Cull Cow Marketing 2,065Cull Bull Marketing 140Cull Replacement MarketingWeaned Calf Marketing 4,050Backgrounded Calf Marketing 3,000Stocker MarketingFeedlot Marketing
Operations Interest 11,634
Total Other 79,787Total Variable Costs 377,037
Amount
Calculations: Operations interest rate times feed and other variable expenses except marketing divided by two.
Representative Economic Budget for Northern Nebraska Panhandle - 400 Head Cow Herd 12
Fixed Cash Costs Herd TotalDepreciables Input Costs Repairs TotalBarn 1000 1,000Machinery & Equipment 2000 2,000Vehicles 1200 1,200
Total Ownership 4,200
Overhead and Management TotalReal Estate Tax 1,100Insurance 2,500Professional Fees 1,000ManagementOther 1,000
Total Overhead 5,600Total Fixed Cash Costs 9,800
Total Cash Costs 386,837
Net Cash Income (41,055)
Non-Cash Costs Herd TotalDepreciables Costs Depre-ciation Opportunity TotalBarn 750 900 1,650Machinery & Equipment 4,500 2,400 6,900Vehicles 2,857 1,050 3,907
OpportunityReal Estate Opportunity Investment rate times real estate valueLivestock Investment rate times livestock value 19,886
Total Non-Cash Costs 32,343
Total Cash and Non-Cash Herd TotalTotal Costs 419,180
Net Total Income (73,398)
Representative Economic Budget for Northern Nebraska Panhandle - 400 Head Cow Herd 13
System Budget (cont.)