80 cent calves?

[cowman]

Okay obviously this is something that I have been thinking about since kpb first brought it up? So here goes?
Say a April calf from a British type cow, sold in early October? We'll be generous and say the whole works average 550 lbs. X $.80 =$440? Knock off $20 sales costs and you clear $420?
On another post here pasture is $.85 a day, so say we can ggraze for 165 days at that price...$140.25? Then we feed momma for 200 days at what? Well hay is cheap right now, but I don't think $1 day would be accessive if you use a tractor, truck or whatever? So $200?
Now momma has to be rebred so we'll say $25...which might be low considering bull prices? Then there is salt/vitamins/mineral at say $5(cheap)? Vet costs...well say $3 for RFID tag, $1.50 for regular tag, $.50 for 8-way, maybe a shot for IBR/BVD at $2.50 and throw in $2.50 for miscelaneous? So say $10? No vet work and no ivomec/fly control.
Now what is your cow worth? If she is $1200 then it would be reasonable to expect 7% interest on her? $84? What does it cost to replace her/depreciate her? We won't go with BSE prices but traditional... say over 10 years she goes from $1200 to $700 or a $500 loss or $50 a year?
Unfortunately most of us need corrals and fences so how about $5 for upkeep? Then there are the other things like waterers, lights, taxes, accountants and other micellaneous...we'll be generous and say $10?
We won't go into labor as we all like to work for free and we won't count interest on our feed supply or the cost of a horse, quad or pickup truck to check the cows! Or the fuel to run them!
Now that comes to $529.25 or in other words a loss of $109.25 on every cow? Now if you only have 100 cows then you only lose $10,925, but if you have 400 cows you lose $43,700! Why if you got rid of the cows you could live on the money you wouldn't be losing!
Now maybe my figures are all wrong or something? I think they are fairly cheap but then what do I know? Some people seem to think cows and grass are free and of course their chosen "breed" are so darned efficient they don't eat or need vaccines or salt, and they get in calf by immaculate conception!...all the while weaning 110% calf crops of all steers in 21 days and all right at the top of the prcies available? Maybe I'm not doing something right...

[wd9]

cowman, must be the rainy weather because you sure aren't a ray of sunshine this AM.

[farmers_son]

You have included some costs I would question.

If, and it is a big if, calves get to 80 cents I think you will find that pasture will be cheaper as well as winter feed. I think it is unreasonable to expect a 7% return on a $1200 cow at the best of times and I would not include a ROI in a budget such as you have listed. Example it is wrong to pencil in a $84 return at the same time as a $109.25 loss, just doesn’t make sense.

Using the numbers you posted I would say your costs are high by roughly $250 or more if at some point calves are only worth 80 cents. However there would be no question that contribution would not be sufficient to meet even conservative debt repayment needs and those with debt will find themselves in dire straits.

What you are really illustrating is the effect that a strengthening dollar will have on our operations. The benefit from a falling dollar and therefore the impact of a rising dollar is on our ability to repay debt. Our low interest rates as well as the struggles of the past few years may have encouraged a number of producers to take on more debt. They will find that debt is very difficult to repay as the dollar rises. There is no question a number of producers will not make it.

[farmers_son]

I don't necessarily agree that feed will be cheaper if calves are cheaper.

It sure hasn't worked that way before.

[kato]

That same post quoted a dollar a day for big cows with January calves. We have big cows with February calves, and if we were offered pasture at at dollar a day we'd turn it down. 85 cents is getting closer to reasonable, but still more than we've been paying. Custom grazing costs also require trucking costs to and from the pasture, so you'v got to watch that expense and factor it in.

Grassers in our area pay grazing on a pound of gain basis. I know one outfit that writes such a mean contract that it's possible to custom graze their cattle and not make a dime. They make the grazer cover the loss of weight going out in the fall that occurs from death loss. The amazing thing is that they still have all kinds of guys who pasture cattle for them.

[cswilson]

The price of hay and pasture have got to line up somehow-you can buy all the hay you want up here for 1.5 to 2 cents a pound-pellets are 6 cents/lb delivered-I can feed my cows 30 lbs of hay a day plus 5 lbs of pellets for what guys want to rent grass for. You can easily add a dime a day to the pasture rent to cover trucking etc.We drylotted our grass cattle last summer because it pencilled better than trucking them out to grass-strange times we live in for sure.

[cswilson]

cwilson, if cows are drylotted in Alberta the operator requires a Agricultural Operations Practices Act permit and the criteria may make drylotting them fairly expensive .

[cowman]

Not just sure where you are on this farmers son? You need to make $84 on cow investment no matter what? Yes that does come out of the total loss? How is that a problem, or do you like to just give your money away?
Is feed going to get cheaper with 80 cent calves? I don't think so...the guys growing hay aren't making it now?
Don't know how my prices are so "high" in your estimation? Tell me where I'm not getting it? I need to be enlightened?

[cswilson]

I'm sure you could feed them out on pasture and get by without the paperwork-I'm just saying that there is a big disparity between what grass guys charge in relation to what hay is worth. When COG on grass gets the same as the feedlot you might as well put your yearlings in the feedlot.

[cowman]

And cswilson...I agree with you! Something just doesn't gel right n this thing? Garst Bros. in Nebraska showed they could feed cows cheaper on silage than on pasture a long time ago? Like the sixties?
When our winter costs show less cost than grass, what does that mean?