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The Cattle Connection

The cattlemen's connection to timely topics, current research, and profitable management strategies

Resource for understanding Unit Cost of Production

Posted by Travis Meteer - Economics

Cow/calf producers will forever remember the record profits of 2014. They may also vividly remember the "fall of the 2015 fall." Prices have quickly fallen off the last two weeks, this following a continual inching down during the months of July and August.

This collapse in prices leaves many heading back to the balance sheet to do some figuring. One of the most valuable keys for a cow/calf producer is knowing their cost of production. Understanding the cost to produce a weaned calf will allow a producer to better allocate dollars to expenses with the best return on investment. Understanding unit cost of production can allocate costs to certain enterprises and allow you to make decisions on what parts of your farming enterprise are the most valuable. Maybe there is an enterprise that needs eliminated or changed.

The following is a link to a video posted by UNL Extension. Credit to Rick Rasby and Aaron Berger. This video is a good resource for budgeting, evaluating inputs, market for profits, and benchmarking.



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