Belinda Stronach

[cowman]

Grassfarmer: I don't know your production costs but I like to think I have a fairly good grasp on my own costs? Some times it gets a little muddy because I'm running two different enterprizes here and the oil service business ends up paying a lot of the bills!
In my area grazing costs about $1 day. That is what it is worth. I graze close to 200 days a year on average...So $200? Feeding in winter about a dollar a day including fuel for tractor, repairs etc. So overall $365 a year for feed per cow?
Now that 2 year old heifer costs me $1200 and ten years later she brings me $700...so $50 a year depreciation?
My $1200 heifer investment costs me what per year? Borrowed or my own money has to be around 7% or $84?
I have always been adverse to working for nothing? So maybe I need a bit of return for my labor? I put that at $75 per cow?
And unfortunately cows don't get pregnant by immaculate conception so breeding costs at $30?
Basically here it is:
Feed(winter and summer) $365.00
Breeding $ 30.00
Cow depreciation $ 50.00
investment interest $ 84.00
salt and mineral $ 7.00
vet costs(inc. RFID tag) $ 10.00
fence & corral repair $ 10.00
labor $ 75.00
utilities $ 5.00
sales costs $ 20.00
trucking $ 10.00
land taxes $ 5.00
Office expenses $ 5.00
death loss 3% $ 20.00

TOTAL $716.00

I did not add in the cost of a truck/quad/whatever to run around in checking cows but did consider the time in my labor costs.
I guess my costs are a lot higher than most or something? I try to be realistic in what things actually cost me?

[whiteface]

Bang on Cowman. And then if the calf prices are at or near a dollar a pound we sure better be getting these calves at 800 lbs plus at weaning. How much damage are we doing to these cows asking that much of them year after year...and many of us demand these kinds of weights on just grass and from tiny cows that are not really genetically programmed to put out that much calf, just made to milk harder, milk harder but still put out decent muscle expression. No wonder some come in open, they just get exhausted putting out that much calf year in year out just to try and be let past the cull gate.
Not trying to convince anyone that mine are perfect...
far from it, in fact, I usually tell people mine are all pets that I just enjoy looking at and haveing a reason to get up in the morning that I actually enjoy. My grandpa used to say that and I never really understood it until now. Pretty tough for a cow to be anything other than a pet around here but admittedly I managed to make some pretty darn good and efficient cows in my hope of makeing them "profitable" for this area. There's a challenge all by itself.
And land just keeps going up, and taxes just keep going up. Gas is down for a while but that will be short lived. Cows can't keep up and really no point in asking them to try. Have a good day all!

[grassfarmer]

I see two nonsense figures in your calculation right away Cowman, "In my area grazing costs about $1 day. That is what it is worth" - which is it is that what it costs you or is that what other people charge? I thought there were lots of ungrazed pastures in your area, surely that should be bringing the rental rate down?
"Now that 2 year old heifer costs me $1200 and ten years later she brings me $700"...yeah if only every heifer lasted 10 years and sold for $700 as a cull!

[kpb]

grassfarmer, I think your comment about "nonsense" figures might be a little harsh. I agree with cowman that some pastures are idle but the fact also remains that if you try to rent some you will pay at least $30 per pair per month in central Alberta. And if you are renting your pasture you are fooling yourself if you don't charge that much.

In regards to depreciation, I agree with you that it is most unlikely in today's market to average $700 for your cull cow. So the depreciation figure should likely be higher, therefore adding to cowman's $716 annual cost.

I think cowman's costs are pretty darn close to being right on. You may quibble here or there but you asked him if he knew his costs and apparently he knows them pretty well. It reminds me of our discussion a while back about backgrounding calves--it almost always looks good on paper but the practice is not always so favorable when you consider both prevailing market conditions and total costs. I think the 8's will be quite a bit lower than today next March.

kpb

[kpb]

after looking at cowman's figures more closely I think there are a few things he left out that should be included.

I generally have some mechanical repairs during the course of a year that cost money. Sometimes lots of money. And what about fuel costs--even the swath grazers use fuel to move that electric fence I assume. If you have any land debt you'd have some interest payments to make. And before you sell those calves you are going to have to pay a check-off, maybe an auction market commission or insurance, brand inspection, etc.

I'm not tryin to nit pick here but any other business would add in everything into costs that was at all relevant. They wouldn't just say well I like looking at the cows so I won't charge gas money!!

If you don't believe me get a bill from a lawyer or accountant itemized and you'll see every phone call and photocopied piece of paper on the bill.

kpb

[grassfarmer]

kpb, I think my accountant must charge for quite a few items they don't actually use, their bills are ridiculous!
I guess I just get fed up with the guys that take off farm jobs because they can't make their farm pay and then insist that no-one else can make money on cows either.
There are 101 ways to evaluate your business but I think the way some people do it is set up to prove that agriculture can't pay. I prefer to add up all my actual income and actual costs and see how it tallies at year end before I decide to abandon the enterprise and go work for someone else. Case in point would be grazing cost - assumed to be a $1 a day in this case. Well if I own all my land and have no debt on it it doesn't cost me $1 a day to graze. The cost of harvesting that grass is my cost - fencing, salt minerals, water supply etc. Why should I say it is costing me a $1 a day just because guys that don't own enough land chose to rent pasture at that price? That is their business cost not mine. It's like feeding your cows with an old Cockshutt but charging your business the maintanence cost of a new JD.
I'm not saying I don't allocate a value to my land use rather I prefer to add up all my costs compare it to income and at year end decide if there has been sufficient return to reward my investment of time and capital. Into this calculation would also enter land cost appreciation as a return on my capital investment.

[Willowcreek]

Canuck"Willowcreep is probably down south building Georges new fenceline.No doubt good practice for the one he wants to build along the Canadian border."

Canuck- We don't need to build no fence up here- instead they've put a new air flight of jets and a string of Predator robot planes- armed with missiles, so now when you try to sneak one of those diseased Canuck cows across they just zap you and the cow...LOL You be sure to get your USA Passport ID card- Ya here- wouldn't want your rear getting singed as a terrorist now--LOL....

Been great for the local and state economy tho- Bringing in big high tech bucks and high priced jobs...

[canuck]

Willowcreep,its strange you would use such a high tech solution on your northern border when it seems most of your illegal immigration is down south.As for your new passport requirements,LOL, I haven't crossed the border since the BSE bs began.No need to travel to the U.S. to see what you r-calfers really look like.I just look at one of my diseased cattle when they are facing away with their tail lifted.The resemblance is amazing.

[mb_rancher]

good post Canuck!!

[Cattleman]

kpb, I agree prices go up and down, and we react to these high prices. But since the US is the driver of this North American cattle price, why are we liquidating and the US expanding.....trade and other things influenced our herd not cattle prices. and really is the US still expanding? Check the heifer placements and cow slaughter, seems other things besides the "true drivers of the cattle cycle" (#'s of cattle)are making us react to price changes. It isn't the large glut of cattle caused by the cattle cycle driving this downturn. It is all the things I mentioned earlier.

[cowman]

grassfarmer: I don't know why those pastures are empty but the fact is I can rent out whatever I desire for those kind of prices? Can't we all? Just phone Weiller and Williams? I assume the owners are probably old and don't want to deal with the "slickers" who often rent pasture?
Not sure why you are upset that I "choose to work for someone else"? I don't work for anyone else! I work for myself. I am a contractor...you know its called business? Or do you know what business is?
Furthermore, according to your figures, I own a lot more land than you, its worth a lot more than yours, and I guess I'm running more cows than you...so where do I come off as some sort of halfwit that doesn't know what he's doing?
Maybe you need to spend a decade or two here and then tell us how much you know?

[grassfarmer]

Who is getting upset Cowman? you are an enigma - constantly whining how it is impossible to make money with beef cattle, how we should all give up straight away cos there is no money in it like their is in your great oil patch. But on the other hand you are also a smarter, bigger scale, wiser cattle producer than anyone else who has always made money at the business. Which are you or do you have one of those split personalities? like good cowman and bad cowman?