Background and Assumptions

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1 2016 Costs and Returns Estimate. Cow-Calf Budget: 300-head Central Idaho Summer on Private Pasture & Federal Range Winter Feeding Necessary Ben Eborn, Sarah Baker and Neil Rimbey Background and Assumptions University of Idaho costs and returns estimates use economic costs all resources are valued based on market price or opportunity cost. This budget presents typical costs and returns per cow for a 300- head cow-calf operation in central Idaho plus total costs and returns for the ranch. The forage source is private pasture and federal range (BLM and Forest Service). Feeding is necessary in the winter. Livestock Investment The livestock investment consists of 300 cows, 12 bulls, and 6 horses. Cows have a useful life of 7 years after they enter the breeding herd. The culling rate is 14 percent and the cow herd has a 2 percent death loss. The ranch buys yearling bulls and replaces them every 4 years. The weaned calf crop is 92 percent of the number of cows wintered. Of the 54 weaned heifer calves selected from the calf crop as replacements, 6 are culled because of non-breeding or poor quality, leaving an annual net replacement of 48 head. Machinery and Equipment The cow/calf enterprise uses a 3/4-ton pickup (4x4), a 1-ton pickup, an 80 HP tractor with a loader, a stock trailer, and a gooseneck trailer (see Table 4). This equipment complement is minimal but considered adequate. Values on these investments are calculated at 50 percent of new replacement cost to reflect typically aged but functional ranch equipment. Haying equipment is not included in this budget as hay production is treated as a separate enterprise. See EBB1-AH-15 for costs and returns associated with hay production in central Idaho. Hay and other feeds used as inputs in this cow-calf budget are valued at the market price received by growers FOB the farm. Buildings and Improvements The ranch has 12 miles of 4-wire fence, one barn, one set of corrals with working alleys, a squeeze chute, a calf table and a normal complement of veterinary equipment. Water is supplied from natural sources. Buildings and improvements are valued at 80 percent of new replacement cost. Management Practices The cows calve in February and March. All cattle are fed alfalfa and grass hay beginning in mid-november until April 30. Replacement heifers also receive some supplemental protein. Typically, an operation uses a combination of deeded pasture and federal range. Approximately two-thirds of the cattle graze on BLM and Forest Service range while the remaining one-third graze on meadow pasture. The range cattle are moved from hay meadows to BLM grazing in late April

2 and to Forest Service grazing in June. Cows and calves are returned to previously harvested hay fields in September, after the cattle have been gathered and worked. The top 48 heifer calves are kept as replacements, while the remaining 84 heifers and 138 steer calves and cull animals are sold in October. The costs of selling cattle include checkoff/brand inspection, freight/trucking, and sales commissions. Checkoff/brand inspection costs pertain to all cattle sold in the enterprise including cull animals. Sales commission and freight costs pertain to cull animals only since they are sold through the sale yard. All steer and heifer calves are sold direct. Veterinary Care Veterinary care for calves includes viral treatments and 8-way vaccinations (given twice during the year). Heifer calves are also vaccinated for brucellosis. Cows, bulls, and replacement heifers receive vaccinations for viral infections, vibriosis and leptospirosis. The herd is treated annually for parasites and the cows are pregnancy checked in the fall. Bulls also receive a breeding soundness evaluation and trichomoniasis test. main categories: operating and ownership. Operating expenses are those that typically vary with the level of production and involve inputs that are used in a single production cycle. Ownership expenses include a systematic cost recovery over the useful life for inputs used in the production process that have a useful life of more than one year. Table 2 is a monthly summary of the cash flow of revenues and expenses based on when the operation occurs and when inputs are purchased. Table 3 is a monthly summary of feed requirements for the different classes of livestock. Daily feed quantities per animal are summarized below. Table 4 lists the purchase price and salvage value of equipment used in this operation, as well as annual capital recovery and interest on retained livestock. Labor Costs Labor provided by the operator is valued at $22.60 per hour, based on average wages for agricultural supervisors. Regular livestock labor is valued at $13.82 per hour. These hourly rates includes all applicable payroll taxes and benefits. Budget Format In addition to the Background and Assumptions pages, this publication has three tables presenting a variety of costs and returns information. Table 1 shows both expected revenue and expenses. Expenses are broken into two

3 Table 1: Cow-Calf Budget, 300 Cow Summer on Private Pasture & Federal Range, Winter Feeding Necessary No. of Cows: 300 Total Number Weight of Head Price or Total Value or Each Unit or Units Cost/Unit Value Cost/Head Your Value GROSS RETURNS Steer Calves 650 lbs , Heifer Calves 625 lbs , Cull Cows 1300 lbs , Cull Bulls 1800 lbs , Cull Replacement Heifers 900 lbs , TOTAL GROSS RETURNS $285,675 $ OPERATING COSTS Alfalfa/Grass Hay ton , Alfalfa Hay ton , Meadow Hay ton , Federal Range AUM 1, , Meadow Pasture AUM , Crop Aftermath AUM , Salt/Mineral cwt , Veterinary/Medicine $ 1 5, , Freight/Trucking head Machinery (Fuel, Oil, Repair) $ 1 3, , Vehicles (Fuel, Repair) $ 1 8, , Equipment (Repair) $ Hired Labor hour 2, , Owner Labor hour 1, , Commission head , Checkoff/Brand Inspection head Buildings & Improvements (Repair) $ Interest on Operating Capital $ 46, % 2, TOTAL OPERATING COSTS $187,958 $ NET RETURNS ABOVE OPERATING COSTS $97,717 $ OWNERSHIP COSTS Capital Recovery: Purchased Livestock $ 1 10,683 10, Buildings & Improvements $ 1 3,564 3, Machinery $ 1 3,120 3, Equipment $ 1 1,886 1, Vehicles $ 1 5,432 5, Interest on Retained Livestock $ 514, % 25, Taxes & Insurance $ General Overhead $ 1 5,000 5, TOTAL OWNERSHIP COSTS $56,241 $ TOTAL COSTS $244,198 $ NET RETURNS ABOVE TOTAL COSTS $41,477 $138.26

4 Table 2: Monthly Summary of Returns and Expenses. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Value Production: Steer Calves 152, ,490 Heifer Calves 86,625 86,625 Cull Cows 8,873 26,618 35,490 Cull Bulls 4,860 4,860 Cull Replacement Heifers 6,210 6,210 Total Receipts , , ,675 Operating Inputs: Alfalfa/Grass Hay 9,900 9,900 9,900 9,900 5,000 9,900 54,500 Alfalfa Hay 1,750 1,750 1,875 1,875 1,000 1,750 10,000 Meadow Hay 3,375 3,375 3,375 3,375 1,650 3,375 18,525 Federal Range ,701 Meadow Pasture 2,750 2,750 2,750 2,750 2,750 2,750 16,500 Crop Aftermath 4,352 3,026 7,378 Salt/Mineral ,800 Veterinary/Medicine 294 2, ,761 5,871 Freight/Trucking Machinery (Fuel, Oil, Repair) ,575 Vehicles (Fuel, Repair) ,225 Equipment (Repair) Owner Labor 2,511 2,511 2,511 2,511 2,511 2,511 2,511 2,511 2,511 2,511 2,511 2,511 30,128 Hired Labor 1,883 1,883 1,883 1,883 1,883 1,883 1,883 1,883 1,883 1,883 1,883 1,883 22,600 Commission ,164 Checkoff/Brand Inspection Housing & Improvements (Repair) Taxes & Insurance Total Costs 19,492 20,986 20,817 23,459 9,411 9,545 8,957 8,957 9,545 14,530 17,702 20, ,294 Net Returns -19,492-20,986-20,817-23, ,545-8,957-8,957-9,545-14, ,100-20, ,381 Table 3: Monthly Feed Requirements. Feed Units Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Alfalfa Hay Heifers ton Alfalfa/Grass Hay Cows ton Bulls ton Horses ton Meadow Hay Cows ton Federal Range Cows AUM Replacement Heifers AUM Bulls AUM Meadow Pasture Cows AUM Bulls AUM Horses AUM Crop Aftermath AUM Cows AUM Replacement Heifers AUM Bulls AUM 8 4 Salt/Mineral cwt Daily Feed Requirements by Livestock Category (lb fed/head/day) Alfalfa - Livestock Category Alfalfa Grass Meadow No. of Days Replacement Heifers Cows Bulls Horses

5 Table 4: Investment Summary. Total Value Salvage/Cull Value Livestock Share Useful Life Annual Taxes & Insurance Annual Capital Recovery 1 Buildings, Improvements and Equipment Fencing 24, $1, Working Corrals & Pens 10,000 3, $ Barn 20,000 3, $1, Calf Table 1, $ Squeeze Chute 3,500 1, $ Vet Equipment 1, $ Stock Trailer 5,000 1, $ Gooseneck Trailer 12,000 4, $ Total $77,500 $ $5, Purchased Livestock Horses 15,000 3, $1, Bulls 48,000 19, $9, Total $63,000 $10, Retained Livestock Beef Replacement Heifers 64,800 55, $3, Beef Cows 450, , $22, Total $514,800 $25, Machinery and Vehicles Tractor Loader 40,000 8, $3, Pickup 4X4 3/4 ton 20,000 5, $2, Pickup 4X4 1 ton 25,000 6, $3, Total $85,000 $ $8, Annual capital recovery is the method of calculating depreciation and interest recommended by the National Task Force on Commodity Costs and Returns Measurement Methods. 2 Interest on average investment. The Authors Ben Eborn is an Extension Ag Economist in Bear Lake County, Montpelier. Sarah Baker is an Extension Educator in Custer County, Challis. Neil R. Rimbey is an Extension Range Economist in the UI Southwest Idaho Research and Extension Center, Caldwell. Issued in furtherance of cooperative extension work in agriculture and home economics, Acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture, Barbara Petty, Interim Director of University of Idaho Extension, University of Idaho, Moscow, Idaho The University of Idaho provides equal opportunity in education and employment on the basis of race, color, religion, national origin, gender, age, disability, or status as a Vietnam-era veteran, as required by state and federal laws (revised)