Cow/Calf Cost of Production Goals Oklahoma State University.

Cow/Calf Cost of Production Goals

Oklahoma State University

IRM-SPA

Goal setting starts with an evaluation of ranch performance….

Determine profitability of the ranch Identify areas where the ranch business

has excelled Identify opportunities for improvement

IRM-SPA

Provide for more informed decisions!

Why Evaluate Ranch Performance?

IRM-SPA

Standardized Performance Analysis (SPA) is...

A management tool to integrate production and financial data in performance measures.

Cow-Calf SPA ...helps identify possibilities for change in the cow-calf enterprise.

It is not a record-keeping program!

Benchmarks from SPA DataBenchmarks from SPA Data

SPA-P

FinancialRecords

QUICKENAccrual

Adjustments

ProductionRecords

Building Standardized Performance Analyses

SPA

SPA-F

IRM-SPA

Why is standardization needed?

IRM-SPA

Calving %April 1, 2000

81 calves/96 cows =

84.4 calving %

Right or wrong?

IRM-SPA

Calving %

How many females were exposed at breeding?

96 cows now, culled 8 since breeding, one died...

IRM-SPA

What We Are LearningFrom SPA Data

What We Are LearningFrom SPA Data

Production is important...Marketing is important...

Managing production costs is critical!

Production is important...Marketing is important...

Managing production costs is critical!

Production Performance

87 83

4

0102030405060708090

100

Calving % Weaning % Death Loss %

TX, NM, OK

%

1991-98

Production Performance

522

434

300

350

400

450

500

550

Avg. Weaning Weight Lb. Weaned/Exp. Female

TX, NM, OK

lb

1991-98

IRM-SPA

What are the differences between the most and least profitable herds?

1991-98

TX, NM, OK

291 herds

SPA Statistics

Weaning Percent

85 8581 82

0

30

60

90

Top 25% 2nd 25% 3rd 25% Low 25%

Income Quartile

Per

cent

SPA Statistics

Average Weaning Weight

539 528 523 500

0

100

200

300

400

500

600

Top 25% 2nd 25% 3rd 25% Low 25%

Income Quartile

Lb.

SPA Statistics

Pounds Weaned Per Exposed Cow

456 442 426 413

0

100

200

300

400

500

Top 25% 2nd 25% 3rd 25% Low 25%

Income Quartile

Lb.

SPA Statistics

Cost of Production Per Cow

$308 $357 $384$500

$0$100$200$300$400$500

Top 25% 2nd 25% 3rd 25% Low 25%

Income Quartile

Dol

lars

SPA Statistics

Grazing & Feed Cost Per Cow

$136$160 $166

$202

$0

$50

$100

$150

$200

$250

Top 25% 2nd 25% 3rd 25% Low 25%

Income Quartile

Dolla

rs

SPA Statistics

Net Income ($/Cow)

$140

$38

($30)

($181)-$200

-$100

$0

$100

$200

Income Quartile

Dol

lars

Top 25% 2nd 25% 3rd 25% Low 25%

SPA Statistics

ROA Market Value (%)

7.56

2.50

-0.43

-5.26-10

-5

0

5

10

Income Quartile

Per

cent

Top 25% 2nd 25% 3rd 25% Low 25%

IRM-SPA

What are the differences in production and financial statistics for small vs. large herds?

SPA Statistics

Pounds Weaned Per Exposed Cowby Herd Size

431 416 426 450 448 441 428 434

0

100

200

300

400

500

1-49 50-99 100-199 200-299 300-499 500-999 1000+ Average

Number of Head

Lb

.

SPA Statistics

Cost of Production Per Cow by Herd Size

$461$372 $393 $384 $408 $396

$317$387

$0

$100

$200

$300

$400

$500

1-49 50-99 100-199 200-299 300-499 500-999 1000+ Average

Number of Head

Do

llars

Data for TX, OK, NM

SPA Statistics

Grazing & Feed Cost Per Cow by Herd Size

$226$197 $190

$144 $145 $133 $127$166

$0

$50

$100

$150

$200

$250

1-49 50-99 100-199 200-299 300-499 500-999 1000+ Average

Number of Head

Do

llars

SPA Statistics

Net Income ($/Cow)by Herd Size

($80)

($31)($19)

($8)

$6$6$27

$42

($100)

($75)

($50)

($25)

$0

$25

$50

Number of Head

Do

llars

1-49 50-99 100-199 300-499 500-599 1000+ Average200-299

IRM-SPA

What We Are LearningFrom SPA Data

What We Are LearningFrom SPA Data

Production is important...Marketing is important...

Managing production costs is critical!

Production is important...Marketing is important...

Managing production costs is critical!

IRM-SPA

To be continued..… with your assistance!

IRM-SPA

Projections for one or more years lead

to better management decisions.

Control Implementation

Planning