The three C’s of making money

Most cattleman would agree this has not been the easiest winter to manage a cow/calf herd. Old man winter started early this year and has decided he’d flex his muscles a time or two just to prove he can still make it tough on us. Times like these do have a silver lining however because it requires us to review our actual costs and take note of what it takes to get mama cow through the year and show a profit.

Every cow/calf producer has different costs that make up their own specific annual costs. Despite these differences, five basic categories will cover all producers. Annual cow costs will normally be divided among feed, minerals, pasture needs, vet and health costs, and prorated bull expenses. The total of these expenses will be your annual cow carrying cost (CCC).

What is the average CCC of the cows in your herd? Sadly to say, but many producers have never really thought too much about it or don’t have a clue how much they are spending. Without knowing the CCC of your cows it is impossible to calculate if you are making a profit from your calves and if so, how much.

Depending on your specific situation, most local producers this year should be around the $500-$600 per cow range for CCC. If yours is drastically less, then you are skimping in some vital area. If it is drastically more, then you probably are spending too much on hay and feed costs.

A realistic breakdown of the five major cost areas for current CCC per year should be as follows:

Vet and Health – $16

Minerals and Fly control – $18

Pro-rated bull/A.I. costs – $50

Pasture maintenance – $122

Hay, Feed and Supplements – $360

Total CCC/year – $566

Although all five areas are important in their own way, vet and health, and mineral and fly control despite being the least costly may actually be the most vital to performance and net figures. Mistakenly, this area can often be the first place producers want to cut costs. When cattle begin to suffer from the lack of these areas being fulfilled the next consequence is a decrease in conception rates. Open cows are the biggest demise to profitable cow/calf producers. Without pounds to sell a producer has no chance to show a profit.

For example, Farmer A has 20 cows to breed. With a CCC of $550 per cow, his cost is $11,000 per year. If only 16 get bred and raise a calf to sell, his CCC cost has increased to $687 per cow because the four open cows still cost him $2200 (4 x $550) for the year with nothing to sell.

In conclusion, every producer needs to have a general idea as to what the CCC is for their herd. Adjustments can be made only after knowing these costs. Every day a cow is walking the pastures living, eating, and breathing, she is costing some money. To be a profitable cow/calf producer you simply must get live calves on the ground from a very high percentage of cows and then they must be able to raise a solid calf.

Till next time, keep putting on the pounds,

Steve