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Group Title: Economic information report - Food & Resource Economics Department - 32
Title: Five-year estimated costs and returns on a highly improved ranch in Sumter County, 1970-74
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Permanent Link: http://ufdc.ufl.edu/UF00027310/00001
 Material Information
Title: Five-year estimated costs and returns on a highly improved ranch in Sumter County, 1970-74
Series Title: Economic information report
Alternate Title: Five-year estimated costs and returns on a highly improved ranch in Sumter ..
Physical Description: 8 p. : ; 27 cm.
Language: English
Creator: Anderson, Charles L., 1927-1976
George, Donald A., 1930- ( joint author )
Publisher: Food and Resource Economics Dept., Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Publication Date: 1975
 Subjects
Subject: Beef cattle -- Economic aspects -- Georgia -- Sumter County   ( lcsh )
Ranches -- Georgia -- Sumter County   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
statistics   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 8.
Statement of Responsibility: C. L. Anderson, D. A. George.
General Note: Cover title.
Funding: Economic information report (Gainesville, Fla.) ;
 Record Information
Bibliographic ID: UF00027310
Volume ID: VID00001
Source Institution: Marston Science Library, George A. Smathers Libraries, University of Florida
Holding Location: Florida Agricultural Experiment Station, Florida Cooperative Extension Service, Florida Department of Agriculture and Consumer Services, and the Engineering and Industrial Experiment Station; Institute for Food and Agricultural Services (IFAS), University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: aleph - 000303999
oclc - 03344465
notis - ABT0569
lccn - 77620846

Table of Contents
    Copyright
        Copyright
    Title Page
        Title Page
    Abstract
        Abstract
    Table of Contents
        Table of Contents
    Introduction
        Page 1
    Procedure
        Page 2
    Analysis
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
    Bibliography
        Page 8
Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida





C. L. Anderson Economic Information
D. A. George R..eport 32





Five-Year Estimated Costs and
Returns on a Highly Improved

Ranch in Sumter County, 1970-74


Food and Resource Economics Department
Cooperative Extension Service
Institute of Food and Agricultural Sciences
University of Florida, Gainesville 32611


July 1975














ABSTRACT


Returns to land and capital of a highly improved pasture in Sumter
County, Florida, varied on an acre basis from $15.63 in 1970 to $21.00
in 1974. The economic position of cow-calf producers has deteriorated
more drastically than those of the rest of the nation. This is due
mainly to the past practice of selling calves.

Key words: Costs and returns, beef cattle, Sumter County.


I I









TABLE OF CONTENTS


Page
,INTRODUCTION . . . . . . 1

PROCEDURE .... . . . 2

ANALYSIS . . . . 3

BIBLIOGRAPHY . . . . . 8





LIST OF TABLES
Table
1 Estimated per acre annual total income, return over
cash expenses, and return to land and capital of a
highly improved ranch with a carrying capacity of
1.88 acres per annual unit, Sumter County, 1970-74 3

2 Estimated costs and returns per acre of a highly
improved ranch, with a carrying capacity of 1.88
acres per animal unit, in Sumter County, 1970 . 4

3 Estimated costs and returns per acre of a highly
improved ranch, with a carrying capacity of 1.88
acres per animal unit, in Sumter County, 1971 .. 5

4 Estimated costs and returns per acre of a highly
improved ranch, with a carrying capacity of 1.88
acres per animal unit, in Sumter County, 1972 . 6
5 Estimated costs and returns per acre of a highly
improved ranch, with a carrying capacity of 1.88
acres per animal unit, in Sumter County, 1973 . 7

6 Estimated costs and returns per acre of a highly
improved ranch, with a carrying capacity of 1.88
acres per animal unit, in Sumter County, 974 . 8













,FIVE-YEAR ESTIMATED COSTS AND RETURNS ON A HIGHLY
IMPROVED RANCH IN SUMTER COUNTY, 1970-74

C. L. Anderson and D. A. George

INTRODUCTION

Cattle prices and hence returns to factors of production, includ-

ing land, capital, and.management, have dropped drastically in the

past year. Various factors, including changes in the level of prices,

the depletion of the nation's feed grain reserves, shifts in .demand,

and others have brought about drastic reductions in the profit picture

for cattle producers. Since a high proportion of Florida calves has

traditionally been marketed to cattle feeders, the huge drop in calf

prices has affected Florida ranchers more adversely than those in most
other states.

Currently fed cattle for slaughter are being sold at prices some

25 percent below those of a year ago [1]. Similarly, slaughter cows

culled from breeding herds are being sold at prices 30 percent below

those in previous years. The price drop for yearling cattle has been

substantially more than those for other types. Currently, they are

selling for about 40 percent under the level of a year ago. An even

greater drop in the prices of weaned calves 'cdurred. They are being

-sold at prices about 60 percent below the 1973 level.


C. L. ANDERSON is an assistant professor of food and resource
economics and farm management extension economist stationed at the
Agricultural Research and Education Center, Lake Alfred. D.-A. GEORGE
is extension director in Sumter County.








Evidence of previous cycles in the cattle industry indicate that

the current depressed condition could last for as long as five years

and, in all probability, will continue for a range of another two.to

four years [1]. All factors taken together indicate that the mainten-

ance and.breeding of cattle herds will be in difficult economic

straits in the next few years.

A series of budgets which show the effect of changing market and

other economic conditions is presented in this report. The future

profitability of the cattle enterprise is dependent upon market

demand, cattle numbers, and feed supplies returning to stable relation-

ships.

PROCEDURE

The-following five budgets were developed from data collected

from selected Sumter County cattlemen. They are based on an improved

pasture which is partially irrigated. The carrying capacity of 1.88
acres per animal unit is under conditions of excellent management.
Many ranches in Sumter County are not expected to have this high a

carrying capacity. Ranches range in size from 700 to 2,000 acres.

During 1975, when ranches are being forced to use less of

purchased inputs such as fertilizer and feed, the carrying capacity

is expected to be considerably less than the 1.88 animal units
estimated in this report.

The reader's attention should be called to severalVitems of

cost per acre which are not included in these budgets:

(I) Pasture renovation ----------------- $7.00 $13.00
2 Interest on pasture capital-----------7.00 13.00
3 Interest on breeding herd ------------ 9.00 12.00
SInterest on ope~iaing capital-------- 1.66 3,76
Ad valorem taxes-------------------- 1.96 2.06







All of these are legitimate costs of operation. Their inclusion

would show lower net returns than those noted.

ANALYSIS

A summary of the major income and return data contained in the

annual budgets from 1970 to 1974 is shown in Table 1. These indicate

that 1974 total income is at essentially the level of 1970 and 1971,

but that the returns over cash expenditures and the returns to capital

and labor are both in the red ink side of the ledger.

Table l.--Estimated per acre annual total income, return over cash
expenses, and return to land and capital of a highly improved
ranch with a carrying capacity of 1.88 acres per annual unit,
Sumter County, 1970-74

Year Total income Return over Return to
cash expenses capital and labor
------------------------ Dollars---------------------
1970 56.09 28.47 15.63
1971 53.73 24.27 11.54
1974 70.29 37.46 23.91
1973 106.22 59.61 45.57
1974 54.53 -8.23 -21.00


The actual budgets for each of the five years from 1970 through

1974 are contained in Tables 2 through 6.










Table 2.--Estimated costs and returns per acre of a highly improved
ranch, with a carrying capacity of 1.88 acres per animal
unit, in Sumter County, 1970

Item Dollars/acre

Income
Light calves 7.96 lbs. @ $39.62/cwt. $ 3.15
Calves 133.32 Ibs. @ $31.62/cwt. 42.16
Cows 14.04 Ibs. @ $21.70/cwt. 3.05
Bulls 18.32 lbs. @ $26.50/cwt. 4.85
Gross beef income $52.94
Less death loss (2%). 1.06
let beef income $518
Gross seed harvested 20.07 lbs. @ $0.21 4.21
Total income $ 56 -

Expenses
Cash:
Labor $6.16
Fertilizer 5.51
Feed 6.56
Machine hire 2.26
Supplies 2.14
Insurance 1.50
Seed 1.10
Gas and oil .81
Payroll tax .50
Legal and accounting .43
Contract labor .18
Utilities .19
Veterinary .15
Miscellaneous .13 $27.62
Return over cash expenses $28.47-
Fixed:
Depreciation (machinery & equipment) $7.31
Depreciation (irrigation equipment) 2.73 $10.04
Return to land, capital and management $18.43
Management charge (5% of gross income) 2.80
Return to land and capital $110












Table 3.--Estim::e-I costs and returns per acre of a highly improved
ranch, with a carrying capacity of 1.88 acres per animal
unit, in Sumter County, 1971


Item


Dollars/acre


Income
Light calves
Calves
Cows
Bulls


7.96 1bs.
133.32 lbs.
14.04 Ibs.
18.32 lbs.


$36/cwt.
$30/cwt.
$19/cwt.
$25/cwt.


Gross beef income
Less death loss (2%)
Net hif incomic
Seed harvested 20.07 lbs. @.$0.23
Total income


Expenses


Cash:


Labor $
Fertilizer ,
Feed
Machine hire
Supplies
Insurance
Seeds
Gas and oil
Payroll tax
Legal iid accounting
Contract labor
Utilities
Veterinary
Miscellaneous
Return over cash


7.19
5.58
7.18
2.26
2.10
1.51
1.11
.84
.53
.51
.21
.16
.15
.13
expenses


'Fixed:
Depreciation (machinery & equipment) $7.31
Depreciation (irrigation equipment) 2.73
Return to land, capital and manageme-nTE
Management charge (5% of gross income)
leture to land and capital


$ 2.86
40.00
2.67
4.58
$50.11
1.00
$T TT
4.62
.$53.73


$29.46
$24.27


$10.04

2.69
$TT5i"


" "' ~~""












Table 4.--Estimated costs and returns per acre of a highly improved
ranch, with a carrying capacity of 1.88 acres per animal
unit, in Sumter County, 1972


Item


Dollars/acre


Income
Light calves
Calves
Cows
Bulls
Gross beef
Less death


Expenses
Cash:


7.96
133.32
14.04
18.32
income
loss (2%)


Net beef income
Seed harvested 20.07
Total income


Labor
Fertilizer
Feed
Machine hire
Supplies
Insurance
Seed
Gas and oil
Payroll tax
Legal and accounting
Contract labor
Utilities
Veterinary
Miscellaneous
Return over casi


Ibs.
1bs.
1bs.
Ibs.


$52.28/cwt.
$39.98/cwt.
$26.94/cwt.
$29.26/cwt.


$ 4.16
53.30
3.78
5.36
$66.60
1.33
$65.27
5.02
$70.29


Ibs. @ $0.25


$8.22
5.24
8.62
2.53
2.72
1.52
1.22
.86
.56
.52
.24
.16
.15
.26
h expenses


Fixed:
Depreciation (machinery & equipment) $7.31
Depreciation (irrigation equipment) 2.73
Return to land, capital and management
Management charge (5% of gross income)
Return to land and capital


$32.82
$37.46

10.04
$27.42
3.51
$3TgFT










Table 5.--Estimated costs and returns per acre of a highly improved
ranch, with a carrying capacity of 1.88 acres per animal
unit, in Sumter County, 1973


Item


Dollars/acre


Income
Light
Calve
Cows
Bulls


calves 7.96 11
is 133.32 1t
14.04 1t
18.32 It
Gross beef income
Less death loss (2%)
Net beef income


)s.
)S.
)s.
3s.


Seed harvested 20.07
Total income


$66.50/cwt.
$66.36/cwt.
$36.70/cwt.
$42.30/cwt..


lbs. @ $0.28


Expenses
Cash:
Labor $11.16
Fertilizer 10.50
Feed 10.35
Machine hire 4.08
Supplies 3.96
Insurance 1.54
Seeds .1.46
Gas and oil 1.24
Payroll tax .71
Legal and accounting .53
Contract labor .35
Utilities .16
Veterinary .13
Miscellaneous .39
Return over cash expenses
Fixed:
Depreciation (machinery & equipment) $6.36
Depreciation (irrigation equipment) 2.37
Return to land capital and management
Management charge (5% of gross income)
Return to land and capital


$ 5.30
84.47
5.15
7.75
$102.65
2.05
$100.60
5.62
$T5b22


$ 46.61
$ 59.61


8.73
50.88
5.31
4-5737


-










Table 6.--Estimated costs and returns per acre of a highly-improved
ranch, with a carrying capacity of 1.88 acres per animal
unit, in Sumter County, 1974


Item


Dollars/acre


Income
Light calves 7.96 lbs. @ $40.20/cwt.
Calves 133.32 lbs. @ $26.32/cwt.
Cows 14.04 Ibs. @ $22.83/cwt.
Bulls 18.32.1bs. @ $31.00/cwt.
Gross beef income
Less .death loss (2%)
Net beef income
Seed harvested 20.07 lbs. @ $0.42
Total income


Expenses
Cash:


Labor $13.68
Fertilizer 15.31
Feed 13.97
Machine hire 5.96
Supplies 5.35
Insurance 1.77
Seeds 2.19
Gas and oil 1.92
Payroll tax .71
Legal and accounting .61
Contract labor .39
Utilities .22
Veterinary .15
Miscellaneous .53
Return over cash expenses


Fixed:
Depreciation (machinery & equipment) $7.31
Depreciation (irrigation-equipment) 2.73
,Return to land, capital and management
Management charge (5% of gross income)
Return to land and capital


$ 3.20
34.96
3.20
5.68

.94
$_467f
8.43
$5T453


$62.76
- $~8,2-


$10.04
- $1T8.
2.73
- $21.Wg


BIBLIOGRAPHY

[1] Nelson, Ted R. Coping with the 1974-76 Cattle Crisis. Okla,
St. Univ. A. E. 7416. Stil"water, Okla.: n.d., pp. 4.


495 copies


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