Cow-calf benchmarks
By Dr. Alan Wessler

For cow-calf producers to be profitable, they must make good decisions at the right times, but those decisions are not always easy to make. Follow this break-even model to help you make the tough decisions on your farm.

In today's marketplace, producers must avoid leaving money on the table. This means making sound business decisions. A useful tool to help with those decisions is the break-even model, which reviews your cost-per-cow unit budget. Review the accompanying example below.

BREAK-EVEN GOAL TO SHOOT FOR

Example 1
1. Number of cows bred	100	head
2. Number of calves born	95	head
3. Minus number of calves that died	- 5	head
4. Equals number of calves weaned	90	head
5. Multiplied by average weaning weight	500	pounds
6. Total pounds weaned	45,000	pounds

Each line represents a figure worth noting. The first line, number of cows bred, is the number of cows you exposed to the bull (100), not the number of cows you found to be bred at pregnancy-checking time. The number of calves born (95) is listed on the second line, and the number of calves lost (5) due to calving problems, scours, pneumonia, coyotes, etc. is noted on the third line. Subtracting the third line from the second line gives us line four--the number of calves weaned (90). We've inserted a 500-pound average calf weaning weight on line five. Multiplying line four by line five gives you the total pounds of beef weaned in your calf crop (45,000).

Now take the 45,000-pound total weaned on line six and divide by the number of cows bred (100). This 100-cow figure includes those exposed to the bulls and determines the total pounds weaned per cow bred (450). This is a key benchmark.

Total pounds weaned (45,000)

Divided by number of cows bred (100)

Total pounds weaned per cow bred (450 pounds)

Next, review the sample cost per cow unit budget graph. The table lays out a variety of costs from feed and operating costs to fixed overhead costs. Cattle Fax costs were obtained from their member surveys. Your costs may vary from this example.

ANNUAL COW COST BUDGET

Information from Cattle Fax
Feed costs:	Cash cost	% of total
Pasture	$98.00	30%
Other feed and supplements	$80.00	24%
Total feed	$178.00	54%
Other operating costs:
Labor	$35.00	11%
Vet/supplies/other	$62.10	18%
Operating interest	$8.56	3%
Total other operating	$105.66	32%
Fixed overhead costs:
Machinery/building/fence	$7.00	2%
Livestock	$39.00	12%
Management	$0	0%
Total overhead	$46.00	14%
TOTAL ANNUAL COW COST	$329.66	100%

Now, we're ready for our third key benchmark, the herd's break even. The break-even figure equals the annual cow costs ($329.66) divided by the total pounds weaned per calf (450). The break-even point is 73 cents per pound. This example is a goal to shoot for.

Annual cow cost ($329.66)

Total pounds weaned per cow (450)

Break even (73 cents per pound)

The second example on below demonstrates the negative impact on the break even when things don't go as planned.

NEGATIVE IMPACT ON THE BREAK EVEN

(When things don't go as planned)
Example 2
1. Number of cows bred	100	head
2. Number of calves born	91	head
3. Minus number of calves that died	- 8	head
4. Equals number of calves weaned	83	head
5. Multiplied by average weaning weight	460	pounds
6. Total pounds weaned	38,180	pounds

TOTAL POUNDS WEANED PER COW BRED

Total pounds weaned (38,180)

Divided by number of cows bred (100)

Total pounds weaned per cow bred (381 pounds)

BREAK EVEN COST PER POUND

Annual cow cost ($329.66)

Total pounds weaned per cow (381)

Break even (87 cents per pound)

What does this break-even number mean?
What factors impact it?

Consider these:

1. Poor nutrition: Just prior to and after calving, nutrition plays a big role in whether cows cycle in the first 60 days after calving and/or conceive on the first or second breedings. The result is open cows and lighter calves at weaning.
2. Open cows: Pregnancy checking 45 to 90 days after bulls are pulled identifies open cows. (If you only used your pregnant cows for the base above [line one], you would unrealistically skew your break-even numbers.) After identifying open cows, determine the best way to handle them, i.e., retain for the fall calving herd or cull. Culling, prior to winter feeding season, decreases your overall cow carrying costs, reducing your break even. Just finding two to three open cows that you won't carry through the winter can save you significant cash.
3. Health problems: Poor nutrition also plays a role in the incidence of scours, pneumonia and weak calves at birth. How so? Cows in good body condition and fed quality nutrition will produce the quantity and quality of colostrum that ensures healthy calves. That pays big dividends when it comes to keeping calves healthy to weaning time. (Note: Special nutritional care paid to expectant first-calf heifers also pays big returns to producers' bottom lines.) Also, attention paid to calves' weaning programs, regarding the feeding of a high-energy, low-starch product like Cattle Charge, boosts the immune system and helps them fight off disease and stress easily.
4. Cost-efficient weight gains: To capture the genetic potential of your calves regarding weaning weights, consider creep feeding. Illinois research cites higher percentages of creep-feeding calves grade choice. Creep-fed calves also weigh more at weaning, hence more overall dollars per head. Spring-born calves that aren't creep fed until late summer will have poorer feed conversions than those started on creep feed at 60 days of age. Selecting a cost-efficient creep feed, like Cattle Charge, puts on added weights at an economical cost of gain (generally 3:1 to 5:1 # feed/# gain, depending on size, condition and genetics of calves while creeping). This lowers your break even, putting more total dollars in the bank. What would an extra 40 to 80 pounds of weight per calf do for the break even of your herd?

Remember, pregnancy rate, calf survivability and weaning weight performance also are key benchmarks to the economic health of your business. Play "what ifs" with these tables. Factor in the effect of higher death-loss rates at calving, more open cows and lighter-weight calves on the production side of the break-even analysis. And factor in higher feed costs from harvested hay, etc. on the cost side. Five to 10 percent variances in factors make a big difference, especially when multiple factors are affected. And we haven't even talked about the effect of market price yet.

What's the bottom line?

1. Our cows must cycle, conceive and maintain their pregnancy once bred.
2. Our cows must deliver and raise healthy calves to weaning. Those that don't are profit stealers and impact the operation's financial state.
3. Efficient production from cost-effective nutrition helps drive overall costs down, lowers our break evens, captures additional revenues and usually profits.

How are your benchmarks doing?

Dr. Alan Wessler, a veterinarian, is director of feed marketing for MFA Incorporated.