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KFBM completes Beef Enterprise Analysis

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By Rick Greenwell

The Kentucky Farm Business Management Program (KFBM) recently completed the 2008 Beef Enterprise Analysis.  This study focused on two beef cattle enterprises, those in which calves are sold at weaning (calves sold) and those in which calves are retained for at least 45 days after weaning (calves backgrounded).  There were 8 farms in the calves sold group and 10 in the calves backgrounded group.  Although these results can not be extrapolated across all Kentucky beef operations, it is our belief that they accurately portray the beef operations on the KFBM program.

Livestock producers as a whole have faced difficult times in recent years, and beef producers have been no exception.  Input price volatility and declining export and domestic demand arelargely to blame.  Many producers also faced weather challenges in 2008 that resulted in higher hay prices, or the need to reduce herd size to survive the dry period.  On average, KFBM beef producers in 2008 saw negative returns over all costs for both enterprises.

Total beef returns include the following for both breeding and market animals: sales, inventory changes, purchases, and any other source of income attributable to the beef component of the operation.  Costs included feed cost (both purchased and raised), non-feed cash costs and such non-feed non-cash costs as depreciation and family labor.

Negative net returns (over all costs) resulted for the calves sold enterprise. Net returns above all costs were -$326. Excluding non-cash costs, however, returns per $100 feed fed were $121. Total returns per cow were $354 and feed costs per cow were $293.    

Price received per CWT for market animals was $92.21.  The average herd size was 104 cows that produced 58,105 pounds of beef or approximately 560 pounds of beef per cow. Pasture days were 241 per animal.

Negative net returns were also realized for the Calves backgrounded enterprise. Net returns above all costs were -$462. Excluding non-cash costs, however, returns per $100 of feed fed were $99.83.  Producers essentially broke even on feed costs. But again, net returns above all costs were -$462. Total returns per cow were$424 and feed costs were $424.  Price received for market animals in this enterprise was $96.00/CWT. This enterprise had an average of 108 cows producing 62,071 total pounds of beef for an average of 611 pounds of beef per cow. Pasture days were 206 days per animal.  (Jonathan D Shepherd)