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Putting It All Together For 2006. Tim Hewitt University of Florida. Information Given:. outlook budgets (costs) marketing Putting It Together: manage costs know markets set price objective evaluate your situation. Cattle Revenue: Rank and Value. Total Farm and Forestry Receipts, - PowerPoint PPT Presentation
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Putting It All TogetherFor 2006
Tim Hewitt
University of Florida
Information Given:
– outlook– budgets (costs)– marketing
Putting It Together:
– manage costs– know markets– set price objective– evaluate your situation
Cattle Revenue: Rank and Value
AL 2 $362 M
FL 7 $358 M
GA 6 $252 M
SC 6 $ 86 M
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%
Livestock & Poultry Receipts, $3.4 B, Alabama, 2004
Broilers, 71%
Catfish, 3%Dairy, 1%
Eggs, 9%
Cattle & Calves, 14%
Other, 2%
Cattle Operations By Herd Size, Alabama, 2002
1-49 Hd69%
50-99 Hd17%
100+ Hd14%
Cattle Inventory By Herd Size, Alabama, 2002
1-49 Hd26%
100+ Hd53%
50-99 Hd21%
Risk Management
– budgeting– marketing alternatives– obtaining outlook– asking price– decision analysis– financing
Production Planning
– have a production plan
– have a marketing plan
– know production costs
– developing an asking price
– be aware of break-even price
Budgeting
–planning tool
–helps with farm decisions
–way of looking at alternatives
–helps with price setting
35 Cow Herd Costs
Variable $13,700
Fixed $7,500
Total Costs $21,200
Asking Price
Variable Costs
+ Fixed Costs
+ Management + Growth
= Asking Price
Asking Price
Variable Costs $.64 lb
Fixed Costs $.40 lb
Management/Growth Fee $.20 lb
Asking Price $1.24 lb
550 lb. Calf
Marketing Problems
– uniformity
– lack of cattle for group sales
– quality
– market knowledge
Follow Markets
– know supply/demand concepts
– know cow numbers
– obtain outlook information
– develop confidence in your abilities
– evaluate alternatives
Outlook Accuracy
– time horizon is important
– 15 to 20% margin of error
– all sources are similar
Try to Give Market What It Desires(talk to buyers and market managers)
– type
– breed
– grade
Value Determining Factors
– sex
– frame
– weight
– condition
– muscling
– color
– horns
– vaccinations
– breed
Production Practices That Pay
(have marketing implications)– breed choice
– dehorning
– castration
– de-worming
– vaccinations
– feeding programs
Does It Pay?
Research has shown that
these practices add
$4 to $8 per cwt
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
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
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
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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