Setting a Feeder Calf Price Objective Max Runge Extension Economist Auburn University.

Setting a Feeder Calf Setting a Feeder Calf Price ObjectivePrice Objective

Max RungeMax Runge

Extension EconomistExtension Economist

Auburn UniversityAuburn University

What is your feeder What is your feeder calf price objective?calf price objective?

What is your feeder calf What is your feeder calf price objective?price objective?

All that I can get!!All that I can get!!

Is that enough?Is that enough?

Is that enough to…Is that enough to…

cover cost of production?cover cost of production?


cover cost of production?cover cost of production? allow for growth/expansion?allow for growth/expansion?


cover cost of production?cover cost of production? allow for growth/expansion?allow for growth/expansion? contribute to retirement/savings account?contribute to retirement/savings account?


cover cost of production?cover cost of production? allow for growth/expansion?allow for growth/expansion? contribute to retirement/savings account?contribute to retirement/savings account? provide a personal (financial) reward?provide a personal (financial) reward?


cover cost of production?cover cost of production? allow for growth/expansion?allow for growth/expansion? contribute to retirement/savings account?contribute to retirement/savings account? provide a personal (financial) reward?provide a personal (financial) reward? cover other items?cover other items?


meet meet youryour Goals and Objectives? Goals and Objectives?

Your Goals & ObjectivesYour Goals & Objectives What do you want to accomplish with your What do you want to accomplish with your

cow-calf operation?cow-calf operation?

Feeder Calf Price ObjectiveFeeder Calf Price ObjectiveSee Table 1See Table 1

Feeder Calf Production Cost, UCOPFeeder Calf Production Cost, UCOP Growth/Investment CapitalGrowth/Investment Capital Retirement/SavingsRetirement/Savings Personal RewardPersonal Reward

Feeder Calf Production CostFeeder Calf Production Cost

What does it cost me to produce feeder What does it cost me to produce feeder calves?calves?

Feeder Calf Production CostFeeder Calf Production Cost

What does it cost me to produce feeder What does it cost me to produce feeder calves?calves?

Accurate and Detailed RecordsAccurate and Detailed Records– ProductionProduction– FinancialFinancial

Schedule F FormSchedule F Form

Feeder Calf Production CostFeeder Calf Production CostSee Table 2See Table 2

Animal Production InformationAnimal Production Information– Exposed Cows (Beginning Inventory) - HeadExposed Cows (Beginning Inventory) - Head– Total Number of Weaned Calves - HeadTotal Number of Weaned Calves - Head– Total Weight of Weaned Calves - PoundsTotal Weight of Weaned Calves - Pounds


Animal Production InformationAnimal Production Information Financial InformationFinancial Information

– Purchased Feed CostsPurchased Feed Costs– Raised Feed CostsRaised Feed Costs– Grazing CostsGrazing Costs– Cattle CostsCattle Costs– Interest CostsInterest Costs– Indirect CostsIndirect Costs


Adjustments to Financial InformationAdjustments to Financial Information– Other Enterprise ExpensesOther Enterprise Expenses– Non-calf revenueNon-calf revenue– Opportunity Cost on Owned CapitalOpportunity Cost on Owned Capital– Unpaid Labor/ManagementUnpaid Labor/Management


Example Feeder Calf Production Cost:Example Feeder Calf Production Cost: $91.67 per cost hundredweight (UCOP)$91.67 per cost hundredweight (UCOP)


Feeder Calf Production Cost (UCOP)Feeder Calf Production Cost (UCOP) $ 91.67$ 91.67 Growth/Investment CapitalGrowth/Investment Capital $ 10.00$ 10.00 Retirement/SavingsRetirement/Savings $ 5.00$ 5.00 Personal RewardPersonal Reward $ 5.00$ 5.00

Feeder Calf Price ObjectiveFeeder Calf Price Objective $111.67$111.67

$ / Cwt.

Feeder Calf Price ObjectiveFeeder Calf Price Objective

Heifer Price ObjectiveHeifer Price Objective Steer Price ObjectiveSteer Price Objective


Heifer Weight RatioHeifer Weight Ratio– Total Heifer Weight/Total Feeder WeightTotal Heifer Weight/Total Feeder Weight

Steer Weight RatioSteer Weight Ratio– Total Steer Weight/Total Feeder WeightTotal Steer Weight/Total Feeder Weight

Steer - Heifer Price DifferenceSteer - Heifer Price Difference– Steer Price minus Heifer Price Steer Price minus Heifer Price


Heifer Price Objective =Heifer Price Objective = Feeder Calf Price Objective Feeder Calf Price Objective MINUSMINUS Steer-Heifer Price Difference TIMESSteer-Heifer Price Difference TIMES Steer Weight RatioSteer Weight Ratio


Steer Price Objective =Steer Price Objective = Feeder Calf Price ObjectiveFeeder Calf Price Objective PLUS PLUS Steer-Heifer Price Difference TIMESSteer-Heifer Price Difference TIMES Heifer Weight RatioHeifer Weight Ratio


Heifer Price Objective =Heifer Price Objective = $111.67/cwt – ($4.00 cwt. X .54)$111.67/cwt – ($4.00 cwt. X .54) $109.50/cwt$109.50/cwt

Steer Price Objective =Steer Price Objective = $111.67/cwt + ($4.00 cwt. X .46)$111.67/cwt + ($4.00 cwt. X .46) $113.50/cwt$113.50/cwt

Some Items That May Skew The Some Items That May Skew The Feeder Calf Price Objective EstimateFeeder Calf Price Objective Estimate

Accelerated DepreciationAccelerated Depreciation Buying inputs for future time periodsBuying inputs for future time periods Weaning earlier or later than normalWeaning earlier or later than normal Adverse weather (droughts, floods, etc.)Adverse weather (droughts, floods, etc.) Herd health situationHerd health situation And others…..And others…..


SummarySummaryDeveloping A Feeder Calf Price Objective WillDeveloping A Feeder Calf Price Objective Will::

Help you set Goals and ObjectivesHelp you set Goals and Objectives

Help you know your costs and production performance Help you know your costs and production performance measurementsmeasurements

Help you understand the sensitivity of the feeder calf Help you understand the sensitivity of the feeder calf price objectiveprice objective

Help you improve the profitability of your operationHelp you improve the profitability of your operation

Setting a Feeder Calf Price Objective Max Runge Extension Economist Auburn University.

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