Putting It All Together
For 2006
Tim Hewitt
University of Florida
Information Given:
– outlook
– budgets (costs)
– marketing
Putting It Together:
– manage costs
– know markets
– set price objective
– evaluate your situation
Cattle Revenue: Rank and Value
AL
2
$362 M
FL
GA
7
6
$358 M
$252 M
SC
6
$ 86 M
Total Farm and Forestry Receipts,
$5.5 B, Alabama, 2004
Percents By Commodity
Cotton, 4%
Greenhouse &
Nursery, 5%
Eggs, 5%
Broilers, 44%
Other, 8%
Cattle & Calves,
9%
Forestry, 18%
Livestock & Poultry Receipts,
$3.4 B, Alabama, 2004
Other, 2%
Dairy, 1%
Catfish, 3%
Eggs, 9%
Cattle &
Calves, 14%
Broilers, 71%
Cattle Operations By
Herd Size, Alabama, 2002
100+ Hd
14%
50-99 Hd
17%
1-49 Hd
69%
Cattle Inventory By
Herd Size, Alabama, 2002
1-49 Hd
26%
100+ Hd
53%
50-99 Hd
21%
Risk Management
–
–
–
–
–
–
budgeting
marketing alternatives
obtaining outlook
asking price
decision analysis
financing
Production Planning
–
–
–
–
–
have a production plan
have a marketing plan
know production costs
developing an asking price
be aware of break-even price
Budgeting
–planning tool
–helps with farm decisions
–way of looking at alternatives
–helps with price setting
35 Cow Herd Costs
Variable
Fixed
Total Costs
$13,700
$7,500
$21,200
Asking Price
Variable Costs
+ Fixed Costs
+ Management + Growth
= Asking Price
Asking Price
550 lb. Calf
Variable Costs
Fixed Costs
$.64 lb
$.40 lb
Management/Growth Fee
$.20 lb
Asking Price
$1.24 lb
Marketing Problems
– uniformity
– lack of cattle for group sales
– quality
– market knowledge
Follow Markets
– know supply/demand concepts
– know cow numbers
– obtain outlook information
– develop confidence in your abilities
– evaluate alternatives
Outlook Accuracy
– time horizon is important
– 15 to 20% margin of error
– all sources are similar
Try to Give Market What It Desires
(talk to buyers and market managers)
– type
– breed
– grade
Value Determining Factors
– sex
– frame
– weight
– condition
– muscling
– color
– horns
– vaccinations
– breed
Production Practices That Pay
(have marketing implications)
– breed choice
– dehorning
– castration
– de-worming
– vaccinations
– feeding programs
Does It Pay?
Research has shown that
these practices add
$4 to $8 per cwt
Cost Comparison of Hay and
Winter Grazing
Hay
Hay Cost
Winter Grazing
$60 per ton
Pasture Cost
$110 per acre
Total cost per/lb D.M.
$.055
$.04
Total cost per ton D.M.
$110
$80
Hay Feeding Costs
Hay costs
Storage and feeding cost
$60
$10
Losses
Hay Consumption per ton
20%
1600
Total cost per ton
$88
Total cost per lb D.M.
$.055
Total cost per ton D.M.
$110
Farm Management
–
–
–
–
–
–
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pull a net worth statement
evaluate last year
determine the why’s for the goods and bads
budget for the enterprises considered
study outlooks
look at markets
communicate with lender, market personnel,
and suppliers
Helping Cow-Calf Producers
Manage Price Risk
Thank you for your attendance and attention.
The floor is now open for questions to any of the speakers.
Please remember that the video streaming sites can
call (334-844-3504), fax (334-844-3501), or
email (prevajw@auburn.edu) your questions to us.
Also, please remember to compete the evaluation sheet.