Back in December you posted a nice little post on the costs of keeping beef cows and the profit & loss potential.  I thought your numbers were pretty reasonable at the time.   Obviously every operators situation is different  but in general the two items that vary the most were land costs (either as rent, or  taxes, interest& principal) and labor.  From my own experience and from listening to other cow farmers accounting for labor is by far the biggest discrepancy in the cost accounting.  You can account for you labor in two ways, either as lump sum profit or loss (return on labor & management) or wages (dollars/hour).  But if you don't account for it you are essentially giving it to the next levels in the supply chain (aka. the packers & grocery store companies).  At the time I posted a chart taken from a very comprehensive study done in 2007 & 2008 looking at costs of keeping beef cows.  At the risk of being boring I'll republish it.  The main conclusion of this report was that for any size operation under a couple hundred pairs there was very substantial unpaid labor.
  Now things have changed since then, calves are worth a lot more,  But when you look at things honestly I think we are just now getting to the point where you can break even for your labor costs. You aren't making money.  You're just now getting paid for your labor.
  But back to your question above.  A couple of points,  ten years ago I had available to me essentially free hay  (from unused hay land) and cheap pasture ($50/pair, fencing maintenance & care included).  That resource is no longer available to me with rise in the grain market.  If I had to pay market price for those resources today my cow costs would be much higher.
  What changed here is the ethanol plant 60 miles away and soybean export.  Our basis for corn is quite often positive.  Soybeans bring almost board price most of the time.  The fact is that depending on the particular field & soil I can make $150-200 per acre here raising corn & beans without the constant worry and bother of cattle.  Plus cattle require fences on land that I don't own and would not invest in or would be required to haul the winter feed harvested several miles to the home farm.  And then when you start figuring in the intangibles like having some time in the winter to rest & relax, travel, etc. there is really no comparison.

Edited by 1234 4/6/2014 09:58

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