In
these times of uncertain prices and economic
turmoil, we all want to maximize our profits,
operate as efficiently as possible, and look
for additional income and security.
There are a number of different options
for additional income, with several that may
make use of resources already on your farm.
However, some may not be as profitable
or feasible as others.
Following
is an economic comparison of four different
livestock enterprises:
Ø
Raising
Tend-R-Leen steers
Ø
Raising
steers on a conventional (roughage) ration
Ø
Raising
dairy replacement heifers
Ø
Milking
more cows
In addition to looking at the bottom line for each enterprise, there are also other factors to
consider when deciding which enterprise is the best option for you.
Theses factors are:
Ø Facilities requirement
Ø Labor requirement
Ø Time for return on investment
Ø Availability of calves (heifers, springers, etc.)
Ø Management considerations
Ø Manure handling
Ø Feed availability
You can use your own numbers in any of these budgets to
compare.
To run your own Tend-R-Leen Economic
Projection, visit our web site at
www.tendrleen.com to down-load the program.
Raise Tend-R-Leen steers:
$160 profit in 414 days = $0.38/hd/day
Raise conventional (roughage) steers:
$7.98
profit in 462 days = $0.02/hd/day
Raise dairy replacement heifers:
Selling
at $1800 gives $190 profit in 743 days
=
$0.25/hd/day
Milking more cows:
On
a 100 cow dairy, raising 50 steers is
equivalent in income to milking 19 more cows.
Which requires less labor, facilities,
and equipment? Consider the time and money it takes to harvest high quality
forages for lactating dairy cattle.
Per Acre Costs of Field and Forage Operations
Each figure reflects the total cost of the tractor overhead, implement overhead,
fuel & lubrication, and labor.
Operation Total/hour
Pull type mower/conditioner $12.80
Self propelled mower/conditioner $12.70
Small square baler $16.40
1,000 lb. square baler $14.20
Round baler $16.00
Pull type forage harvester
1st crop $12.40
Remaining crops $8.30
Corn silage $49.00
Self propelled forage harvester
1st crop $13.40
Remaining crops $8.90
Corn silage $46.60
Source: University of Illinois, Farm Business Management Handbook
Manure handling requirements:
The time and expense to haul manure is another consideration when
deciding which enterprise is best for you. The following chart details
the amount of manure you can expect for each animal category per head per day.
Animal Size Manure lbs./day
Dairy cow 1400 lbs. 115
Dairy heifer 500 lbs. 41
1,000 lbs. 82
Steer 500 lbs. 30
1,000 lbs. 60
Roughage steer Similar to dairy heifer
To
raise a steer from birth to market
(100
to 1270 lbs.)
| Item |
Unit |
Price |
Cost |
| Calf cost |
|
|
$125.00 |
| Feed costs |
|
|
|
| Shelled corn |
94.23 bu. |
$1.80/bu. |
$169.39 |
| Milk replacer |
24.50 lbs. |
$42.50/bag |
$20.83 |
| Starter |
50 lbs. |
$8.25/bag |
$8.25 |
| Grower |
181 lbs. |
$10.00/bag |
$36.20 |
| Finisher |
438.41 lbs. |
$10.50/bag |
$94.26 |
| Total feed costs |
|
|
$328.92 |
| Interest (9%) |
|
|
$30.84 |
| Veterinary |
per head |
|
$9.00 |
| Medicine |
per head |
|
$9.00 |
| Yardage |
|
$0.20/day |
$82.80 |
| Death loss |
|
5.0% |
$15.65 |
| Total cost |
|
|
$601.22 |
| Expected income |
1270
lbs. |
$0.60/lb. |
$762.00 |
| Expected profit |
|
|
$160.78 |
Cost
to raise Holstein steers on a conventional
(roughage)
ration.
(100
to 1270 lbs.)
| Item |
Unit |
Price |
Cost |
| Calf cost |
|
|
$125.00 |
| Feed cost |
|
|
|
| Milk replacer |
45 lbs. |
$45/bag |
$40.50 |
| Starter mix |
50 lbs. |
$.15/lb |
$22.50 |
| Alfalfa hay |
330 lbs. |
$60/ton |
$9.90 |
| Corn silage |
8447 lbs. |
$30/ton |
$126.70 |
| Corn |
4166 lbs. |
$1.80/bu. |
$133.90 |
| 40% protein |
1038 lbs. |
$325/ton |
$168.67 |
| Total feed costs |
|
|
$502.17 |
| Veterinary |
per head |
|
$9.00 |
| Medicine |
per head |
|
$9.00 |
| Yardage |
|
$0.20/day |
$93.20 |
| Death loss |
|
5.0% |
$15.65 |
| Total cost |
|
|
$754.02 |
| Expected income |
1270
lbs. |
$0.60/lb. |
$762.00 |
| Expected profit |
|
|
$7.98 |
Days on feed:
462
Average daily gain:
2.5
Lbs. feed/lb. gain:
12.03
Feed cost/lb. gain:
$0.43
Break even price:
$0.59/lb. at 1270 lbs.
Source: University
of Nebraska, Cooperative Extension, Feeding
and Managing Holstein Steers, G93-1177-A
*Figures were extrapolated from 1100 lbs. to 1270
lbs.
The
effect of diets with varying energy density on
finishing Holstein steers, Minnesota,
Steers fed from 500 to 1100 lbs
Percentage of corn silage in diet
90 60 25 5
ADG 2.47 2.91 3.26 3.50
Days on feed 244 206 184 171
Feed/gain 7.96 6.68 5.80 5.17
Raising
Dairy Replacement Heifers
Economic
cost and labor required to raise heifers on
Wisconsin
dairy
farms.
These
are actual numbers taken from real Wisconsin
dairy farms. We used a calf
cost
of $350, but often the availability of heifer
calves is limited, and the price can
be
much higher.
| Item |
Cost |
| Feed |
$705.63 |
| Bedding |
$34.64 |
| Veterinary |
$46.09 |
| Breeding |
$26.07 |
| Electric, fuel |
$34.74 |
| Interest |
$36.32 |
| Death loss |
$10.87 |
| Labor |
$188.78 |
| Management |
$23.00 |
| Manure storage |
$22.44 |
| Housing |
$104.32 |
| Equipment |
$25.98 |
| Total cost (without
calf) |
$1259.36 |
| Calf cost |
$350.00 |
| Total cost (with calf) |
$1609.36 |
Labor/management required: 18.2 hours/heifer
Average age at weaning: 7.4 weeks
Average age at calving: 24.6 months
Days on feed: 743 days
Source: University of Wisconsin-Extension, Pat Hoffman
Should
I Milk More Cows?
Economic
cost to produce milk
These
are 2000 production figures from the Center
for Dairy Profitability
(Wisconsin).
There were 620 farms that participated in this
study.
| Item |
Cost/cwt. |
Cost/cow |
| Breeding fees |
$0.13 |
$33.13 |
| Car & truck expense |
$0.07 |
$17.67 |
| Chemicals |
$0.17 |
$40.96 |
| Conservation expense |
$0.00 |
$0.00 |
| Custom heifer raising |
$0.14 |
$33.51 |
| Custom hire (machine work) |
$0.41 |
$100.67 |
| Feed purchase |
$2.11 |
$518.40 |
| Fertilizer & lime |
$0.26 |
$64.36 |
| Freight & trucking |
$0.14 |
$33.51 |
| Gas, fuel, & oil |
$0.28 |
$69.44 |
| Farm insurance |
$0.15 |
$37.78 |
| Mktg & hedging |
$0.14 |
$33.66 |
| Rent/lease equipment |
$0.11 |
$26.97 |
| Rent/lease other |
$0.51 |
$124.68 |
| Repairs & maintenance |
$0.66 |
$161.61 |
| Seeds & plants
purchased |
$0.23 |
$56.48 |
| Supplies purchased |
$0.40 |
$98.50 |
| Taxes -other |
$0.17 |
$42.43 |
| Utilities |
$0.25 |
$60.30 |
| Vet & medicine |
$0.37 |
$91.68 |
| Other crop expenses |
$0.08 |
$20.07 |
| Other livestock expenses |
$0.30 |
$73.53 |
| Other farm expenses |
$0.11 |
$26.35 |
| Change in prepaid expenses |
$0.09 |
$23.30 |
| Change in accounts payable |
$0.03 |
$8.40 |
| Cost of items for resale |
$0.04 |
$9.76 |
| Depreciation on purchased
breeding livestock |
$0.40 |
$97.98 |
| Mortgage interest |
$0.34 |
$84.43 |
| Other interest |
$0.50 |
$122.83 |
|
Employee
benefits
-dependents
-non-dependents
|
$0.15
$0.17 |
$37.62
$40.58 |
|
Labor
hired
-dependents
-non-dependents |
$0.30
$0.78 |
$74.13
$191.35 |
| Value of unpaid labor
& management |
$1.04 |
$255.60 |
| Machinery, equipment, bldg
depreciation |
$1.14 |
$279.81 |
| Interest on equity capital |
$1.03 |
$253.99 |
| Total expenses |
$13.20 |
$3245.48 |
How many more cows would I have to milk to make the same
profit as raising Tend-R-Leen steers?
Dairy farm profile
Number of cows 100 cows
Gross income $12.50/cwt.
Profit $2.00/cwt.
Data used to calculate Tend-R-Leen profit
Value of bull calf: $150
Corn $/bu: $2.00
Interest: 9.0%
Death loss: 5.0%
Vet & med: $18.00
Yardage: $0.25/day
Based on a conservative economic projection, assume you earn
$150 profit per steer.
50 steers x $150 profit/head = $7500 profit/year
If you make $2.00/cwt. profit on the milk your herd produces:
Your herd would have to produce this much more wilk without
increasing expenses:
$7500 divided by $2.00/cwt. = 3750 cwts. of milk
If your herd's average production is 20,000 lbs. per cow:
375,000 lbs. milk divided by 20,000 lbs. milk/cow
= 18.75 additional cows
Milking 19 more cows, plus making the additional forage required for
those cows, would be more difficult and labor intensive than raising
50 steers per year.
