Risk Management Risk Management and the Cost of and the Cost of Production Production University of Florida Beef University of Florida Beef Cattle Short Course Cattle Short Course May 2-4, 2007 May 2-4, 2007 Dr. Curt Lacy Dr. Curt Lacy Extension Economist-Livestock Extension Economist-Livestock University of Georgia University of Georgia [email protected][email protected]
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Risk Management and the Cost of Production University of Florida Beef Cattle Short Course May 2-4, 2007 Dr. Curt Lacy Extension Economist-Livestock University.
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Risk Management Risk Management and the Cost of and the Cost of
ProductionProduction
University of Florida Beef Cattle University of Florida Beef Cattle Short CourseShort CourseMay 2-4, 2007May 2-4, 2007
Dr. Curt LacyDr. Curt LacyExtension Economist-LivestockExtension Economist-Livestock
4.4. Reduce the Cost of ProductionReduce the Cost of Production1.1. Evaluate economics of hay productionEvaluate economics of hay production2.2. Evaluate economics of annual foragesEvaluate economics of annual forages3.3. Consider alternative feedsConsider alternative feeds
University of Florida Beef Cattle Short Course
May 2-4, 2007
Know Your CostKnow Your Cost
1.1. $/Cwt. $/Cwt. ProducedProduced
2.2. $/Calf $/Calf MarketedMarketed
3.3. $/Cow$/Cow
Production Total
Costs Total Costs Variable $/Cwt.
WeanedCalves Total
Costs Total Costs Variable $/Calf
Exposed Females
Costs Total Costs Variable $/Cow
University of Florida Beef Cattle Short Course
May 2-4, 2007
Increase RevenueIncrease RevenueCalf ValueCalf Value
Forward price part of your Forward price part of your productionproduction
Yeah Buts:Yeah Buts: Must be able to match cows and calvesMust be able to match cows and calves Based on average cow costBased on average cow cost Borderline young cows may get a passBorderline young cows may get a pass
Cost Cow Total - Price) Calf Weight x (Calf Profit Cow Annual
3.3. CONFIRM INGREDIENTS OF BY-CONFIRM INGREDIENTS OF BY-PRODUCTSPRODUCTS
University of Florida Beef Cattle Short Course
May 2-4, 2007
Alternative Feedstuffs Alternative Feedstuffs Economics CalculatorEconomics Calculator
Excel spreadsheetExcel spreadsheet Users enter current or base feeding Users enter current or base feeding
scenario and alternative feeding scenario and alternative feeding scenarioscenario
Users also enter cost info for Users also enter cost info for additional facilities or equipmentadditional facilities or equipment
Net returns for the alternative Net returns for the alternative feeding scenario are calculated on feeding scenario are calculated on per herd and per cow basisper herd and per cow basis
SummarySummary 2007 and the next few years will be 2007 and the next few years will be
challenging for beef cattle producers.challenging for beef cattle producers. Don’t cheat on the important thingsDon’t cheat on the important things
HealthHealth NutritionNutrition GeneticsGenetics
MarketingMarketing High feed prices create economic incentives High feed prices create economic incentives
for “grass-weight” on calves and feeders. for “grass-weight” on calves and feeders. Retaining ownership MAY be an alternativeRetaining ownership MAY be an alternative
University of Florida Beef Cattle Short Course
May 2-4, 2007
SummarySummary
CowsCows Cull open and unproductive cows.Cull open and unproductive cows. Compare replacement female Compare replacement female
alternatives.alternatives. Production CostsProduction Costs
Examine your pasture costs.Examine your pasture costs. Revisit hay costs.Revisit hay costs. Consider other forage alternatives.Consider other forage alternatives. Look at alternative feedstuffs.Look at alternative feedstuffs.