By Julie Harker
A risk management strategy for buying or retaining cattle is the goal of a new tool from University of Missouri Extension.
The Beef Feeding Profitability Tracker, developed by MU Extension agricultural business specialist Rachel Hopkins, is a free Excel spreadsheet tool that lets producers track input costs of groups of cattle.
“You’ve got to have cash flow. That is the lifeblood of a business,” said Hopkins. “Cow-calf producers can use the tracker to identify the value of their calves at weaning and track the return on investment for preconditioning.”
A summary of all the lots will pinpoint a break-even price. If the cost of gain is getting higher, it can help producers figure out what to do to control costs.
Costs of production are entered into the tracker such as vaccine costs, feed management fees, interest and medicine. Yardage is also calculated, including facilities and equipment and their respective costs. The feed worksheet captures price fluctuations and can be updated quarterly.
“If you are using feed raised on your operation, always use the larger number: production cost or market value,” said Hopkins. By doing this, you do not subsidize one operation to feed another.
“When buying stockers and backgrounders, money is made on the buy,” she said. “Overpaying for cattle can have a huge impact on profitability.”
The free tool allows producers to identify areas of cost savings. It is completely customizable, whether a producer has five head or 200 head, Hopkins said.
“Buying cattle to add weight and resell or to finish and send to slaughter are both supported by this tool,” said Hopkins. “In addition, producers adding weight to thin cull cows and bulls can use this tool to analyze the profitability and efficiency of their operation.”
The Beef Feeding Profitability Tracker has a printable record sheet for use when cattle are initially processed. When filled out, the information can later be entered into the tool.
Source : missouri.edu