Wednesday, May 5, 2010

How Does Calving Season Affect Cow Costs in Eastern South Dakota?

Here is a little teaser from some data I pulled out of the SDSU IRM database. A full write up will appear in the 2011 SDSU Beef Research Report.

Note: Click on the table to make it bigger.

How Does Calving Season Affect Cow Costs in Eastern South Dakota?

A Production and Financial Comparison of Four Calving Dates for Beef Cows in Eastern South Dakota from 2002-2009.

Eric Mousel, Range Livestock Specialist, South Dakota State University

The amount of harvested and purchased feeds required to maintain a cow herd in eastern South Dakota is related in part; to calving date. Cows calving during the dormant season cause lactation to occur when range and pasture forage are not available and therefore need to be fed supplemental energy and protein. The majority of the difference in total annual cow cost is in the difference in the amount of supplemental feeds fed before summer grass is available. The unknown question is, ‘how much does total annual cow cost vary between different calving seasons’? The objective of this research was to use the South Dakota Integrated Resource Management (IRM) Database to compare the production and economic efficiencies of the four major calving seasons that are found in eastern South Dakota.

Materials and Methods
Data collected from cow-calf producers in eastern South Dakota who participated in the SDSU-IRM-SPA program were used in this study. Additional data was collected through individual consultation. Data were collected for the 2002 through 2008 calendar years; data were from the cow-calf enterprise only. All production data, regardless of source, were collected using the SPA system, in accordance with the SPA guidelines, developed by the IRM Coordinating Committee of the National Cattlemen’s Beef Association. Financial data was collected using the SPA system, in accordance with SPA guidelines; information was collected from IRS Schedule F to calculate Operating Expense Ratio (OER). The OER is defined as the proportion of gross revenue used to cover operating expenses. The ratio was calculated as follows:

Operating Expense Ratio = Total Operating Expense – Interest Expense – Depreciation Expense/
Value of Farm Production

Where Value of Farm Production is defined as Gross Income minus the value of purchased feeder livestock and purchased feed.

Calf cost breakeven was calculated as follows:

Calf Cost Breakeven = Total Cow Cost/
Pounds of Calf Weaned per Cow Exposed

Return on Assets (ROA) was calculated as follows:

ROA = Net Farm Income + Interest Paid – Labor and Management + Capital Gains/
Total Farm Assets

Each herd represented one observation which resulted in a final database of 178 production and financial observations. Calving dates were categorized as 1) January-February (49 observations), 2) March-April (71 observations), 3) May-June (30 observations), and 4) August and September (29 observations). Producers who were involved with the program more than 1 yr may be included multiple times. Operations ranged from 47 to 1,125 cows.

Results and Discussion Points

Weaning weight
Calves born in JAN-FEB were 7% heavier than calves born in MAR-APR.
Calves born in MAR-APR were 24% heavier than calves born in MAY-JUN.
Calves born in AUG-SEP were 15% heavier than calves born in MAY-JUN.

Total Cow Cost
Total Cow Cost was lowest for the MAY-JUN calving cows.
Total Cow Cost for MAY-JUN calving cows was 30% lower than JAN-FEB, 23% lower than MAR-APR, and 29% lower than AUG-SEP.

Cow Feed Cost and Percent Feed Cost
MAY-JUN calving cows had the lowest Cow Feed Cost and the lowest percent feed cost.
AUG-SEP calving cows had the highest Cow Feed Cost and the highest percent feed cost.

Calf Cost Breakeven
Calf Cost Breakeven for MAY-JUN calving cows was 9.1% lower than JAN-FEB, 3.2% lower than MAR-APR, and 16.8% lower than AUG-SEP.

Return on Assets
Return on Assets was for MAY-JUN calving cows were 44% higher than JAN-FEB, 29% higher than MAR-APR, and 66% higher than AUG-SEP.

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