South Dakota Center for Farm/Ranch Management release Livestock Report 2017

South Dakota Center for Farm
Ranch Management

Mitchell — Livestock producers across South Dakota showed profitability in 2017, according to an analysis of the farmers and ranchers enrolled in the South Dakota Center for Farm/Ranch Management program, administered through Mitchell Technical Institute.

“There was a positive return in cow/calf and backgrounding enterprises this past year for producers according to our annual report data,” stated SDCFRM instructor Lori Tonak.

The cow calf enterprise indicated a profit of $54.81/cow in 2017 compared to a loss of $-97.32/cow in 2016. The total cost to maintain a cow, in the average herd, was $725.85/cow, an increase from $698.20/cow in 2016. Even with the increase in total cost of running a cow, it was offset by the increase in value of calf and cull sales in the enterprise, giving the average cow/calf producer a profitable year.

Beef backgrounding enterprises showed slight profitability for the first time since 2014, with a net return of $15.97 per head; this was a big swing from the $-54.15 loss in 2016.

“This considerable gain can be attributed to a slight increase in market prices for calves at the end of the year. Besides the gain in value of cattle on hand on January 1, feed costs were reduced for the second year in a row and producers worked hard this year to trim overhead costs. All of these factors played into the increase in profitability,” Tonak said. The SDCFRM did not have a large enough data set to calculate beef and hog finishing operation profitability this year.

The major factors that affect the profitability in the livestock enterprises are death loss, feed costs and purchase/selling price. Controlling input costs, practicing good herd management techniques, and having a well-planned marketing strategy can potentially increase profits for livestock enterprises.