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Stocktalk Calculating Profitability in Manitoba Cattle Industry May - PowerPoint PPT Presentation

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Stocktalk Calculating Profitability in Manitoba Cattle Industry May Ben Hamm Farm Enterprise Management Specialist November 2018 Cow-Calf COP - Input Assumptions 1. This budget outlines the cost of production for a cow-calf operation. 2.

  1. Stocktalk Calculating Profitability in Manitoba Cattle Industry May Ben Hamm Farm Enterprise Management Specialist November 2018

  12. Cow-Calf COP - Input Assumptions 1. This budget outlines the cost of production for a cow-calf operation. 2. Buildings and equipment are valued at new cost. 3. All feed is purchased. 4. Manure removal is contracted out. 5. Replacement heifers are valued at fair market value 6. This budget assumes an average weaning weight of 575 lbs. (steer calves 600 lbs and heifer calves 550 lbs.)

  25. MANITOBA BEEF CATTLE BACKGROUNDING 500-900lb STEERS, ESTIMATED RETURNS, 1997-2017E Margin after Operating and Labour Average -30.90 350 274.96 239.27 250 DOLLARS PER CALF 150 50 -30.90 -50 -150 -202.63 -250 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 YEAR Manitoba Agriculture, Market Intelligence 2018-02-05 Data Source: Canfax, Manitoba Agriculture

  27. Input Assumptions • This budget outlines the cost of production for backgrounding cattle. • 500 hd steers • Buildings and equipment are valued at new cost. • All feed is purchased in at fair market value- allows costs to only be allocated to backgrounding enterprise

  28. Cost Breakdown • Operating • Fixed costs – Depreciation – Investment • Labour

  30. Feeding Options • Barley Silage • Corn Silage • Alfalfa Grass • Rate of Gain options • 1.5 • 2 • 2.5

  33. Corn Silage Ration

  34. Feed Prices

  43. Take Home Message • Take out the risk with BRM Programs – Western Livestock Price Insurance – Agristability and Agriinsurance Doing your cost of production for your own farm is the starting point for profitability-These • tools will Calculate • Total cost, Breakeven purchase price, Breakeven selling price, and cost per lb of gain sold Get a nutritionist to balance a ration to get the desired gains • Each year is different! Profitability and risk is dependent on the relationship between • yield/price/costs with your financial situation. (Plan for Prosperity)

  44. Tools and Calculators https://www.gov.mb.ca/agriculture/farm-management/production-economics/cost-of-production.html

  45. Questions? Contact me: Ben Hamm Farm Enterprise Management Specialist 204-392-9350 benjamin.hamm@gov.mb.ca https://www.gov.mb.ca/agriculture/farm-management/farm-business- management-contacts.html

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