A new Farm Assistance study conducted by specialists with the Texas A&M AgriLife Extension Service shows that beef producers can add significant net cash farm income to their operations on top of already high cattle prices by implementing cost-effective calf management practices.
As prices for calves continue to reach historic levels, beef cattle producers could see increased revenue by implementing blackleg vaccinations, castrations and implants, as well as deworming. However, many ranchers decide against these strategies and could be missing significant additions to revenue, according to economists.
"Cow-calf producers in South Texas routinely make management decisions to adapt to weather, market and economic conditions," said Mac Young, AgriLife Extension economist. "Successful managers will find ways to improve their operations by adopting better and cost-effective approaches to doing things."
The study focused on a 2,000-acre ranch consisting of 1,800 acres of native pasture and 200 acres of established Coastal Bermuda used for grazing only. Under normal stocking rates, the cowherd included 200 cows or a stocking rate of one animal unit to 10 acres and eight bulls or one bull to 25 cows.
The study took in consideration production inputs, yields, costs and overhead charges based on typical rates for the region. In 2014, hunting income for the ranch was $10 an acre. Assets, debts, machinery inventory and scheduled equipment replacements for the projection period were the same in all management scenarios.
"We took in consideration all four scenarios, which were clostridial vaccinations, castration and implants, deworming and all calf management," Young said. "All four calf management practices that were evaluated offer potentially to significantly increase profitability of an operation."
With no selected calf management practices, average net cash farm income was $76,970 a year or $385 a cow per year and $428 a calf per year. An all calf management program of clostridial vaccinations, castration/implants and deworming led to net cash farm income of $89,360, representing $477 a cow per year and $496 a calf per year.
"This reflects a 16.1% increase or $12,390 increase versus no calf management practices," Young said.
He said while the financial performance and condition of most South Texas cow-calf operations will continue to be supported by off-farm income, implementing these practices can have a significant positive impact on profitability.
Source: Texas A&M