3-Area Cow Herd Profitability

Denise Schwab, Darrell Busby and Byron Leu, Beef Field Specialists, Southeast & Southwest


Problem Statement:
Cow herd profitability is a challenge with the rising costs of feed, fuel, and other inputs.  Estimating calf sale prices is also a challenge since the cow herd is downsizing, there is excess feedlot and packer capacity, a declining demand due to exports, the variability in exchange rates, and a weakening US economy. 


Since producers can’t control the feeder calf market, they need to focus on those production aspects they can control in order to remain profitable.  Cattle producers will need to use every tool available to control costs, minimize waste and increase productivity in order to make a profit from the cow herd in 2009. 


Programmatic Response:
A series of workshops was held in December and January to discuss various tools cattlemen can use to control input costs focused mainly on controlling feed storage and feeding waste, and feed ration costs.


291 producers attended. The workshops were held in Appanoose, Benton, Clinton, Davis, Harrison, Henry, Iowa, Jackson, Keokuk, Mahaska, Tama, Taylor, Van Buren and Washington counties.


Impact/Outcome:
Turning Point clickers were used during the presentation to involve participants and determine their interest in topics and their knowledge of production costs.  While clickers are a great tool to get participants involved in the presentation, they have some definite challenges to be used effectively.  On one computer they only worked about half the time and locked up the computer.   Some data was salvaged from a few of those sessions, but not from all the questions.  One possible cause could have been stopping the session to go back to a prior question resulting in locking the computer up.  Another cause could have been the use of a video clip embedded in the presentation.


On another computer only about half of the clickers were able to respond to any single question.  One concern was the clickers may have powered down and we did not remind producers to make sure the green light was on later in the presentation.  We allowed 30 seconds to answer the questions which may have resulted in the system being overloaded and not able to handle that many responders in such a short period of time.  With 87% of the participants using the clickers at some time during the program it appears they were attempting to respond to the questions. 


The first question, “How do you feel about new tools or gadgets?” (n=174 responses) was asked so the participants could experience the clickers.  72% said they either loved or were okay using new gadgets.  The second question, “Making a profit in the cow business will be a challenge in the next year?” (n=170) was included to get participants focused into the presentation topic and to determine their perception of the industry status.  50% strongly agreed, 43% agreed, 7% disagreed and 1% strongly disagreed. 


Next participants were asked to estimate their total production cost per cow, and 24% said $300-400, 46% said $400-500, and 11% said $600 to 700.  The 2005 SPA summary (the last year data was  summarized) showed the average financial cost per cow was $381.  Based on the limited participants, the 2008 cost of production was $378 per cow for the top producers, so many of the ‘average’ producers should be at production costs well above $400.   However, the shocking response is that 34% did not know their cost of production.  The next two questions were also to get participants thinking about their own costs.


Early in the meeting participants were asked if they separate cows into different feeding groups, and 65% said they did (n=168).  Two of the groups asked the same question again at the end of the meeting and 85% said they would separate cows into different feeding groups as a result of attending this workshop (n=103).  As a result of the program an additional 20% indicated they would separate cows into feeding groups.


The table below represents the paired responses to the questions regarding winter feeding program at the beginning of the meeting compared to the end of the meeting.


What best describes your winter feeding program?

Beginning Responses

% of Paired Responses (n=175)

End Responses

% of Paired Responses (n=163)

Full feed hay

48

27%

22

13%

Hay & corn or co-products

67

38%

79

48%

Corn stalks & corn or co-products

25

14%

30

18%

Corn silage and hay

17

10%

13

8%

Corn silage, stalks & corn or co-products

19

11%

19

12%

The percentage decrease in full feed hay and the percentage increase in the utilization of corn and co-products not only more appropriately supplement their rations but also make the rations more economical.


Participants were asked to estimate how much forage they lost during storage and feeding.  The table below represents the paired responses to these two questions. The presentation made producers aware that hay storage and feeding losses were greater than they initially believed.


Hay loss during storage & feeding

Beginning Responses

% of Paired Responses (n=172)

End Responses

% of Paired Responses (n=152)

< 5%

13

8%

6

4%

5 – 10%

35

20%

19

13%

10 – 15%

65

38%

55

36%

15 – 20 %

39

23%

47

31%

20 – 25%

18

10%

22

14%

> 25%

2

1%

3

2%

The increase in responses to the higher levels of forage waste shows that producer’s understanding of feed waste was increased.
The table below represents the paired responses to the questions regarding daily winter feed cost/cow at the beginning of the meeting compared to the end of the meeting. 


Daily winter feed cost/cow

Beginning Responses

% of Paired Responses  (n=166)

End Responses

% of Paired Responses (n=157)

< $1.00/hd/day

19

11%

10

6%

$1.00 to 1.50/hd/day

76

46%

79

50%

$1.50 to 2.00/hd/day

58

35%

60

38%

>$2.00/hd/day

13

8%

8

5%

At the end of the program participants were asked what economic impact this program would have on their winter feed costs.  38% said it would reduce their costs by $.10/cow/day, 50% said it would reduce their costs by $.25/cow/day, 3% reduced costs by $.50/cow/day and 28% said participation won’t change their feeding costs (n=165).   Also 54% of participants said they will modify their cow wintering rations as a result of participating in this program (n=159).


Participants were asked if they were interested in attending a computer workshop on BRANDS to learn more about ration balancing and how the software tool can be used, and 55% said they were interested.  They were then asked about their comfort level with using a computer and mouse to determine the teaching level needed at such a session, as well as if their computer experience might prevent their participation.  55% said they were very comfortable with using a computer and mouse, and 37% said they were OK with using a mouse (n=155).


These two questions were paired to determine if the reason they were interested or not interested in attending a computer workshop on BRaNDS was their comfort level in using a computer and mouse.


Would you be interested in a computer workshop?

Number Question 12 (n=163)

Comfortable with mouse

OK with mouse use

What’s a mouse?

Yes

90 (55%)

49 (54%)

22 (24%)

2 (2%)

No

30 (18%)

8 (27%)

10 (33%)

4 (13%)

Not sure

43 (26%)

13 (30%)

21 (49%)

3 (7%)

Based on these paired responses computer literacy is not the reason beef producers are not interested in attending a workshop utilizing computers.  


2009


141 Reduced feed cost for beef producers

Page last updated: April 20, 2009
Page maintained by Linda Schultz, lschultz@iastate.edu