According to research conducted by Drovers, 67 percent of cow-calf operators earned a profit of at least $50 per calf during 2007, and 33 percent of cow-calf operators said they earned more than $100 profit per calf last year.
Those findings came from an extensive Beef Cattle Operations Study conducted during the fall of 2007 for Drovers by Irwin Broh and Associates. To identify and understand the needs of our readers from all segments of the industry, Drovers regularly conducts reader surveys. Fifteen-hundred Drovers’ readers were surveyed by mail, seeking specific information about management practices, herd health protocols and marketing methods. The survey generated a 24 percent response rate.
Among those responding to Drovers’ survey, about 75 percent owned beef cows last year, 79 percent marketed stocker cattle and 56 percent marketed fed cattle. The average respondent owned or leased 7,248 acres. Among cow-calf operators who responded to the survey, the average number of cows owned was 376. Among stocker operators who responded, the average herd size was 564, and among feedyard respondents the average number marketed was 6,167.
The average age of respondents was 59 years, with 38 percent younger than 54. Thirty-nine per-cent of respondents said they have earned a college degree, with 7 percent having a post-graduate degree.
Sixty-eight percent of respondents said they belong to their state’s cattlemen’s association. Fifty-one percent said they belong to the National Cattlemen’s Beef Association, and 17 percent said they belong to R-CALF United Stockgrowers of America.
Two-thirds of respondents have at least one family member working full-time on their operation, and 42 percent have at least one family member working part-time. Nearly three-fourths have at least one non-family member working full-time on their operation, and 55 percent have at least one non-family member working part-time.
Across all production segments — cow-calf, stocker and feedlot — respondents said beef production accounted for 64 percent of their total gross income during 2007. Thirty-nine percent of respondents said beef production accounted for at least 81 percent of their income in 2007.
Readers were asked to estimate the breakeven calf selling price needed to cover cash operating costs for 2007, and the average from our respondents was $96 per hundredweight. Specifically, 5 percent of respondents expected to lose zero to $25 per calf during 2007, while 6 percent expected their operation to break even. Twenty-two percent of respondents said their profits last year would be $26 to $49 per calf, while 34 percent said their profits would be $50 to $99 per calf. Thirty-three per-cent of respondents said their profits would exceed $100 per calf. Those responses provide a mean or average profit per calf of $82 for 2007.
Readers were also asked about their marketing methods, and, not surprisingly, 76 percent said they market at least some of their calves by auction. Fifty-four percent of respondents said they market at least some of their calves direct or by private treaty with buyers. Nineteen percent of respondents re-tain ownership on at least some of their calves. Video sales were used by 11 percent of respondents, and Internet marketing was used by 2 percent of respondents.
Regarding risk management practices, 35 percent of respondents said they utilize some form of risk protection. Of those using risk management, contracting and the futures markets were both listed by 49 percent of respondents, with 33 percent who utilize options on futures contracts. Forward pricing was listed by 21 percent of respondents.
When asked about marketing cattle through an alliance or other non-traditional program, just 8 per-cent of respondents said they utilized such a program last year. However, those who did said they discovered marketing premiums for doing so.
Eight out of 10 producers who said they marketed cattle through an alliance said they earned a price premium, and nearly 30 percent of those producers said their price premium exceeded 10 per-cent.
Nine percent of respondents said they produce cattle for a natural beef program, while just 1 per-cent said they produce cattle for an organic program.
Seventy-seven percent of respondents said they have implemented a herd health program, and 70 percent say they precondition calves before weaning or shipping.
Among those who precondition their calves, included in those preconditiong programs are: vaccina-tions, 94 percent; deworming, 83 percent; bunk broke, 59 percent; 45-day weaning, 44 percent; im-planting, 39 percent; 30-day weaning, 21 percent; other, 7 percent.
Eighty-eight percent of producers said they regularly use a dewormer, while only 39 percent say they regularly implant their calves.
Among other management practices, 67 percent utilize rotational grazing; 63 percent maintain fi-nancial or cost of production records; 19 percent feed ionophores; and 8 percent use electronic identi-fication.
Regarding breeding and selection practices, 60 percent of respondents told us their cows are crossbred, with 19 percent calling their cow herd unregistered purebreds. Thirteen percent of respon-dents said they have both registered and crossbred cows, and 8 percent of respondents said they have registered purebred cows. Thirty-five percent of respondents said they use more than one breed of bull.
Fifty-five percent of respondents said they utilize expected progeny differences to select breeding stock, and 41 percent maintain performance records on cows. Twenty-six percent of respondents said they utilize artificial insemination on all or part of their herd, and 25 percent have collected carcass data on all or part of their herd.
Seventy-seven percent of respondents said they own a computer, and 3 percent said they plan to within the next three years. However, 20 percent of respondents said they do not own a computer and do not plan to own one.
Among respondents who own a computer, 51 percent keep business records on their computer, and another 20 percent plan to do so in the future.
Based on respondents who own or have access to a computer, nearly 90 percent have access to the Internet. Among those, nearly three-fourths use the Internet for business research and informa-tion. Seventy-one percent use the Internet for access to e-mail. Thirty-four percent of those who have access to the Internet have purchased farm- or ranch-related items on the Internet.