Page 31 - MWC 3-10-2022s

most recent Kansas Farm feed. As a result, high-profit The Midwest Cattleman · March 10, 2022 · P31
Management Association producers who spent $15 more But an equally if not more ex- cially since many operations
(KFMA) report, “Difference for pasture on a per-cow basis citing opportunity is to use the raise rather than purchase
Between High-, Medium- and were able to spend $145 less investment in reproductive replacements and therefore do
Low-Profit Cow-Calf Produc- on non-pasture feed costs per management as a leverage not exactly write a check for
ers,” which summarized years cow. Sounds like those “high point to decrease overall costs the real cost of replacements
2016 through 2020. In those pasture costs” were a pretty of production. each year. To approximate cow
data, we see that high-profit wise investment. For the vast majority of depreciation costs on a per-
operations have found a way cow-calf operations, the sec- calf basis, take the total fair
to lower costs of production Invest in reproduction
Much like the pasture cost ond-largest cost of production market value of replacement
– while also increasing reve- example, reproductive man- (after feed) is the loss in equi- females purchased or retained
nue, it should be noted. On a agement really needs to be ty in the cow herd that occurs minus the salvage value of
per-cow basis, high-profit op- thought of as an investment. during the production year. cull cows and/or any market-
erations surveyed had 23% That investment can lead to Cow depreciation can be a hid- ed females. Divide that dif-
($284) lower total costs on a increased revenue, of course. den cost of production, espe-
per-cow basis compared to continued on page 35
the low-profit operations. The
question becomes what we do
with that information. Are we
to slice away at every line item
in the budget so that it is at or SALERS
under each benchmark?
A quote comes to mind from
Brian Joiner’s book Fourth
Generation Management:
“Real benefits come when More Live Calves Means More Profit
managers begin to understand
the profound difference be-
tween ‘cost-cutting’ and ‘elim-
inating the causes of costs.’”
Good managers ask questions
when they see costs that don’t
line up with benchmarks.
What is the underlying cause
of the cost? What parts of the
system drive this cost up or
down? How does this one cost
affect revenue or other costs in
our cost structure? And here
is a fun one: What costs are so
comparatively affordable for
this operation that it might
be wise to build our system
around them as our “unfair”
advantage?
Incurring a higher-than-typ- Salers Influence gives you:
ical cost in one line item in the More Fertility = Better Breed up
budget isn’t unreasonable at Better Breed up = More Calves on the Ground
all if it reduces overall cost
of production. In that KFMA More Calf Vigor = Calves Get Up and Suck Faster
data, for example, there is More Live Calves = More Weaned Calves
actually one cost category in
= Mor
which high-profit producers = More Profit!e Profit!
incur about 10% greater costs
than low-profit producers:
their pasture costs per cow
are about $15 per cow per year
greater. Why do those opera-
tions do that? I would argue it
is because the high-profit op-
erations use that investment www. S a l er sUS A .o r g
in pasture costs as a leverage
SALERS… ENHANCE YOUR COWHERD!… ENHANCE YOUR COWHERD!
point to reduce costs associat- SALERS
ed with purchased feed inputs.
High-profit operations operate
with more realistic stocking Black • Red • Optimizer Composites
rates – about a 10% greater
number of acres per cow in the American Salers Association | 19590 East Mainstreet, #104 | Parker, CO 80138 | 303.770.9292an Salers Association | 19590 East Mainstreet, #104 | Parker, CO 80138 | 303.770.9292
Americ
KFMA data – and presumably
Performance data in partnership with International Genetic Solutions. The largest and most powerful genetic evaluation in the world. erformance data in partnership with International Genetic Solutions. The largest and most powerful genetic evaluation in the world.
achieve a greater number of P
days in which cows harvest all
or the majority of their own