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The following article to the Editor was in the July Western Producer.
(After reading this article, most ranchers may ask, ‘Why do I continue to raise cattle?’)
ANSWER – BECAUSE IT IS THE BEST WAY OF LIFE!!!
To the Editor:
Many people don’t understand what is happening in the cattle business. Many consumers see high prices at the meat counter and can’t understand how cow-calf producers are crying poverty.
I hope I can shed a bit of light on the problem.
What does it cost to produce a calf that eventually ends up as food? These figures represent my costs and my income from each cow I own. I suspect they are fairly average costs.
First of all, a bred cow costs in the neighborhood of $1,000.00. At five percent interest per year, this costs me $50 against each calf produced.
That cow has a salvage value of about $600.00 at 10 years of age. Hopefully, I have eight live calves over her lifetime, so the depreciation costs me another $50 per calf.
To feed her on pasture for 185 days costs me $185.
To feed her in the winter costs me about $195. Throw in $10 for bedding, $205.
Salt and mineral $20.
Vaccine and vet $20.
Breeding costs $30.
Fence and corral repair $20.
Utilities $10.
Selling costs $25.
Cost to winter feed $40 (tractor, bale truck, whatever.)
Total: $655.
Now the income side:
Say we raise a 600 pound calf. Steers quoted Nov. 14, 2008, are $107.50 per lb. or $645. Heifers quoted Nov 14 are 95 cents per lb. or $570.
So the average return works out to $607.50
This is based on a 100 percent calf crop, which is rare in any commercial herd. Instead, I would say a 97 percent calf crop would be very good, so now our return is $589.28.
I have not included any labour in the equation, or any other costs for checking cows, calving cows, moving cattle around or processing calves.
I am real funny in that I hate to work for free.
I would hope I could get minimum wage for the work I do especially when it is -40 C with that old cold wind blowing. So let’s say 10 hours per year per cow at $8 per hour or $80 per cow per year.
Add that $80 to the $655 in costs and we are at a break even of $735.
This figure does not include operating interest costs or any kind of death loss for mature animals.
What this means is, on every ideal cow I am losing, out of my pocket, $127.50 to feed the consumer some very cheap beef. Clearly, this just isn’t sustainable.
In 2009 we will probably see much higher winter feed costs. The feed costs I quoted were based on $60 per ton hay in 2008.
I suspect economics will dictate that every cow in Western Canada should be killed before winter. Will it happen? No, it won’t. Many people have no problem paying to work.
I would be much better off selling my cows and getting a job as a greeter at Wal-Mart. Does anyone know if Wal-Mart is hiring?
----- Douglas J. Malsbury
Penhold, Alberta
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