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Putting It All TogetherFor 2006
Tim Hewitt
University of Florida
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Information Given:
– outlook– budgets (costs)– marketing
Putting It Together:
– manage costs– know markets– set price objective– evaluate your situation
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Cattle Revenue: Rank and Value
AL 2 $362 M
FL 7 $358 M
GA 6 $252 M
SC 6 $ 86 M
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Total Farm and Forestry Receipts,$5.5 B, Alabama, 2004
Percents By Commodity
Cotton, 4%
Greenhouse & Nursery, 5%
Eggs, 5%
Other, 8%
Cattle & Calves, 9%
Forestry, 18%
Broilers, 44%
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Livestock & Poultry Receipts, $3.4 B, Alabama, 2004
Broilers, 71%
Catfish, 3%Dairy, 1%
Eggs, 9%
Cattle & Calves, 14%
Other, 2%
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Cattle Operations By Herd Size, Alabama, 2002
1-49 Hd69%
50-99 Hd17%
100+ Hd14%
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Cattle Inventory By Herd Size, Alabama, 2002
1-49 Hd26%
100+ Hd53%
50-99 Hd21%
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Risk Management
– budgeting– marketing alternatives– obtaining outlook– asking price– decision analysis– financing
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Production Planning
– have a production plan
– have a marketing plan
– know production costs
– developing an asking price
– be aware of break-even price
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Budgeting
–planning tool
–helps with farm decisions
–way of looking at alternatives
–helps with price setting
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35 Cow Herd Costs
Variable $13,700
Fixed $7,500
Total Costs $21,200
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Asking Price
Variable Costs
+ Fixed Costs
+ Management + Growth
= Asking Price
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Asking Price
Variable Costs $.64 lb
Fixed Costs $.40 lb
Management/Growth Fee $.20 lb
Asking Price $1.24 lb
550 lb. Calf
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Marketing Problems
– uniformity
– lack of cattle for group sales
– quality
– market knowledge
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Follow Markets
– know supply/demand concepts
– know cow numbers
– obtain outlook information
– develop confidence in your abilities
– evaluate alternatives
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Outlook Accuracy
– time horizon is important
– 15 to 20% margin of error
– all sources are similar
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Try to Give Market What It Desires(talk to buyers and market managers)
– type
– breed
– grade
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Value Determining Factors
– sex
– frame
– weight
– condition
– muscling
– color
– horns
– vaccinations
– breed
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Production Practices That Pay
(have marketing implications)– breed choice
– dehorning
– castration
– de-worming
– vaccinations
– feeding programs
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Does It Pay?
Research has shown that
these practices add
$4 to $8 per cwt
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Cost Comparison of Hay andWinter Grazing
Hay Winter Grazing
Hay Cost $60 per ton
Pasture Cost $110 per acre
Total cost per/lb D.M. $.055 $.04
Total cost per ton D.M. $110 $80
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Hay Feeding CostsHay costs $60
Storage and feeding cost $10
Losses 20%
Hay Consumption per ton 1600
Total cost per ton $88
Total cost per lb D.M. $.055
Total cost per ton D.M. $110
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Farm Management
– pull a net worth statement– evaluate last year– determine the why’s for the goods and bads– budget for the enterprises considered– study outlooks– look at markets– communicate with lender, market personnel,
and suppliers
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Helping Cow-Calf Producers Manage Price Risk
Thank you for your attendance and attention.
The floor is now open for questions to any of the speakers.
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