Increasing Cost of Production

According to the Livestock Marketing Information Center (LMIC), the cost of producing a calf has increased from $384 in 2000 to $883 in 2014.   WOW… it way more than doubled in just 14 years.   Keep in mind, though, that this is an average cost of production.   Some cow-calf producers have a much higher cost of production, while others have a much lower cost of production.

 

I have asked several long-time PCC customers about their cost of production.   I am not surprised to learn that most of these producers have a cost of production that is less than half what the national average is.   It is no wonder they have a positive attitude while most producers remain concerned.   If need be, they could sell their calves for half what their neighbors sell their calves for – and still make the same profit their neighbors make.

 

In good times and in bad times… the most profitable cow-calf producers will be those who have a low-input, grass-based program with very efficient, low-maintenance cows – cows that fit their environment.   The only way to produce cows that fit your environment is to use bulls that were produced by moderate-sized, low-maintenance cows that fit their environment.   Like begets like!   As long as you continue to use bulls that were produced by high-maintenance, 5 to 7-frame cows that must be pampered to stay in production, you will never produce cows that fit your environment.