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Virginia Cooperative Extension -
 Knowledge for the CommonWealth

The Cattle Business: Records and Management

Livestock Update, February 2000

Bill R. McKinnon, Extension Animal Scientist, Marketing, Virginia Tech

As beef producers spend the early winter working with their records in preparation for tax filing, it affords them the time to evaluate the economic performance of their operations. Many times in the constant struggle of providing feed for the operation, managing herd health, calving cows, and fixing fence, etc. there is a tendency to fail to study the economic measures of the operation.

In a study of Iowa cow/calf herd records, the herds were divided into a low cost third and a high cost third based upon cost per cwt. of beef produced. The pounds of beef produced included both feeder calves and cull breeding stock. A summary of a few of the critical measures within this study are listed below.

Iowa Beef Cow Business Records

Analysis Item
Low Cost
1/3 Herds
High Cost
1/3 Herds
Total Cost per cwt. of Beef Produced$50.58$99.05
Feed Cost Per Cow in Herd$149.29$217.78
Fixed Capital Charge per Cow in Herd$65.03$76.70
Total Cost per Cow in Herd$309.27$452.53
Average Weight of Feeder Calves Sold552508
Pounds of Calf Sold per Cow541475
Pounds of Breeding Stock Sold per Cow223233
% Calf Crop Weaned of Average Herd Size92.794.0
Total Feed Fed per Cow39155863
Stored Feed Cost per Cow Day $.60 $.91

When studying the above table, it is obvious that the low cost herds simply do a better job of cost control while still producing more product per cow. The most glaring difference between the low cost and high cost herds appears to be in feed costs. It would seem that the low cost herds made better use of their pastures to reduce their stored feed needs. The high cost herds essentially needed an additional ton of stored feed.

The nationally utilized SPA (Standardized Performance Analysis)-EZ format provides and organized approach to determining the cost of production and other economic performance measures. The SPA-EZ form consists of a three page worksheet. The worksheet provides a step by step pathway to help the manager calculate what it costs to keep a cow or produce a pound of calf. In the process of completing the SPA-EZ worksheet, the operator will become more in tune with the economic and financial condition of the farm business.

The real power in using any herd analysis tool comes from comparing the results against the previous year's performance or with other herds within a region. For those producers who wish to participate, they can submit their analysis to become part of a Virginia SPA aggregate. The Animal and Poultry Science Extension group will create an aggregate analysis of SPA-EZ forms submitted. Those operations submitting a copy of their SPA-EZ form will be pooled with other Virginia operations to create average production and economic measures. The aggregate information will be distributed back to those farms submitting data. The process will allow managers to identify strengths and weaknesses of their cow/calf business compared to other Virginia operations. Individual farm identity and data is kept strictly confidential.

Whether the individual farm SPA-EZ data is included in a Virginia aggregate or not, the process of cost calculation will be a learning exercise for the business manager. The completion of the SPA-EZ worksheets will require some basic pieces of information to complete the task.

Current year's tax return
Depreciation schedules
Beginning of the year financial balance sheet
End of the year balance sheet
Cow inventory records
Basic cow production information (average weaning weights, etc.)

A copy of the SPA-EZ form is available by contacting Bill McKinnon, 368 Litton Reaves, Virginia Tech (0306), Blacksburg, VA 24061 or (540) 231-9160). The SPA-EZ forms are also available in a computer spreadsheet form to simplify some of the math work.

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