A Look ay High Profit Cattle Producers

(Dustin) Took a look the last 40 years, we went back and looked at the beef cow/calf enterprise data from the KFMA, Kansas Farm Management Association data. So, what we did is we took a look at just the last five years. We went back from 2010 to 2014 and we took those individual beef cow/calf enterprises, we broke them out according to the profitability. Effectively we ranked them from the most profitable to the least profitable. And then we divided that into thirds. So, we had your top third, or your high profit producer, your middle third and then your lowest profitable producers. And so that’s effectively what we did on the second half of the study is just comparing those high profit producers to those low profit producers. And we found some interesting things there. From the revenue side we found that the producers tend to allocate a higher percent of their labor towards livestock. So they specialize in livestock. The most profitable farmers compared to the least profitable farmers. Most profitable producers tend to have larger herds, more cows, tend to have slightly heavier calves when they sell them. And at the end looking at just your gross income of your top most profitable producers compared to your least profitable producers they generate about $135 dollars more revenue per head. So, thinking from a management standpoint, if a producer tracks our records, they can go in and dig down and figure out if there are any opportunities for improvement. And that’s probably going to come on the cost side. A lot of things a producer can’t control, whether consumer demands, etc. But what they do have control over is the cost. And so you have to know what your costs are and so you need to have those records so that you can do that. The producers that tend to specialize more in livestock production relative to crop production tend to have lower costs. Producers, like I said, they need to collect the data. That way they know where they stand relative to other producers, thus benchmarking as you pointed out, in identifying their own strengths and weaknesses. It is kind of the first step in deciding where to focus your management efforts.

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