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Estimating Profitability of Cow-Calf Operations and Retained Ownership Alternatives in North Dakota

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Title: Estimating Profitability of Cow-Calf Operations and Retained Ownership Alternatives in North Dakota
Author: Watt, David L.; Little, Randall D.
Description: The discussion of the potential benefits for the retention of the ownership of calf-cow operations was the focus of this article. Three alternatives for retained ownership were examined; cow-calf and back grounding; calf-cow, wintering and pasturing and, finally, the cow-calf, back grounding and custom feeding. Profitablity per cwt produced and per cow and the average return on production cost were estimated from 1958-84. Budgets used to estimate costs of production were based upon the opportunity cost of the resources that were used. The results discovered indicated that beef production and especially the cow-calf operation was exposed to a very significant price risk. Due to this increased risk factor, the constant scrutiny and informed management and marketing decisions would be necessitated. With increased supervision and monitoring, financial risk should be further minimized. Retained ownership was shown to be a viable production and marketing alternative that could drastically reduce the price risk inherent to the cow-calf operation that markets weaned calves. With the retention of ownership, more capital investment is required. A beforehand analyses of the retention of ownership must be considered, especially during the first year of operation, due to set up costs and operating costs. The cow-calf, back grounding and custom feeding had the least price risk and the highest average profit per cow of those options discussed. A mixed strategy should be considered for ownership.
Date: 1986
Subject: Farm management
Livestock production
Permalink: http://hdl.handle.net/10365/6926

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