South Dakota cow/calf enterprise saw negative return in 2019
Mitchell, S.D. — Cow/calf enterprises showed a negative return in 2019, according to annual report data recently released. “In 2019, there was a negative return in the cow/calf enterprise according to our annual report data and the backgrounding enterprise showed a negative return for the first time since 2016,” stated South Dakota Center for Farm/Ranch Management instructor Lori Tonak. This information is based on the enterprise analysis from the farmers and ranchers enrolled in the South Dakota Center for Farm/Ranch Management Program, administered through Mitchell Technical Institute.
The cow calf enterprise information showed a loss of $-204.97/cow in 2019 compared to a loss of $-40.73/cow in 2018. The total cost to maintain a cow, in the average herd, was $832.95/cow, an increase from $770.04/cow in 2018. Feed costs for the cow only increased $6.84/head but 2018 had seen a large increase due to weather, and the weather this spring was very similar. Once again, death loss of calves and breeding animals in the spring of 2019 were contributors for the losses in the cow/calf enterprise. A larger contributor to the loss on cow/calf this year was the purchase of breeding animals to replace cows lost due to conditions in 2018. Open cows were also a problem as the pregnancy loss percent went up almost 2%, with 5.3% open cows in 2019 compared to 3.5% in 2018. Tonak stated, “I feel we will see this same trend of open cows moving into 2020. Even though grass looked good in the pastures, cows needed some supplementation to meet nutritional needs. Shorting a cow’s nutrition in the breeding season leads to a larger percent of opens.”
Beef backgrounding enterprises had a loss for the first time since 2016. The loss on backgrounders dropped from a $19.87/head return in 2018 to a $-24.67/head loss in 2019. “Looking at the numbers across the enrolled farms showed that the market was relatively stable throughout 2019. What did change was the amount of feed per cwt of gain. That cost increased by $15.00/cwt of gain with a little less gain per head on the average. Once again, the weather and conditions in the spring of 2019 worked against the backgrounding enterprise,” stated Tonak. South Dakota Center for Farm/Ranch Management 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, percent of open cows, 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.
The Farm/Ranch Business Management Program is offered to farmers and ranchers in South Dakota through Mitchell Technical Institute. The purpose of the program is to assist farm and ranch operators in upgrading their management skills. For more information about the data in this article or about the programs offered, please call 1-605-995-7191 or send an email to email@example.com.