Fully two-thirds (66 percent) of stocker operators surveyed by Drovers said their business was profitable last year, with 16 percent calling their operation breakeven. But that's down some from 1999, as 74 percent of respondents called their operation profitable. Profitability in 2000, however, remained higher than the average of the past 5 years when 61 percent of respondents said their operations were profitable.
Drovers collected the information through a mail survey last fall of 1,000 subscribers who annually maintain stocker herds of 200 or more head. The response rate for the survey was 30 percent. Overall, respondents tended to have relatively large herds, as the average number of stocker cattle reported was 1,010 head, with a median of 450 head. The survey was conducted to better understand the management and marketing practices of today's stocker operators, and to help identify issues of concern for those producers.
In addition to questions about profitability, stocker operators were asked a variety of questions about health programs, grazing programs, cattle type preferred and months of the year that represent peak periods of activity.
For marketing year 2000, just 4.8 percent of stocker operators called their business unprofitable, while 10.3 percent were unsure. When asked to describe the profitability of their operations over the past five years, 8.9 percent said they were unprofitable while 4.1 percent said they were unsure.
Profitability was only slightly better for larger herds than for the smaller ones. Of those with fewer than 500 head, 64.6 percent called their operations profitable, while 69.1 percent of operations with more than 500 head called their operations profitable.
Profitability was, however, impacted by the size of the cattle at the start of the stocker program. Respondents who said their cattle weighed less than 425 pounds to start and those who said their cattle were heavier than 500 pounds were the least profitable. Just 59.7 percent of respondents with lighter cattle, and 60.4 percent of those with cattle over 500 pounds called their operations profitable. However, 76.3 percent of respondents who said their cattle started from 426 to 500 pounds (the middle range weight group), called their operations profitable.
Respondents also were asked to provide similar information for their operations over the past five years. Again, the larger herds were only slightly more profitable than those under 500 head, 62.6 percent profitable and 59.2 percent profitable, respectively.
Weight categories, however, found a shift in profitability. Reviewing the past five years, respondents found the heavier cattle were less profitable. Just 52.7 percent of respondents who started with cattle over 500 pounds said they were profitable over the past five years. Of those respondents who started with lightweight cattle (under 425 pounds) 64.9 percent were profitable, while 63.4 percent of those with cattle in the middle range weight group called their operations profitable over the past five years.
Some other highlights from the study that may influence profitability:
- 69.7 percent of respondents say they keep detailed financial information on their stocker operations
- 35.1 percent buy stocker/feeder cattle with known genetics
- 44.6 percent of respondents say, when possible, they buy source verified cattle from ranch of origin
- 49.8 percent keep detailed health treatment records
Additional results from the Drovers 2000 Stocker Study will be released in upcoming columns over the next few weeks. Complete results are available on a limited basis. To request the results, send an e-mail with your name, address and phone number to: email@example.com