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 Copyright
 Title Page
 Table of Contents
 List of Tables
 Introduction
 Assumptions
 Capital outlay
 Costs and returns
 Break-even price
 Discussion
 Reference






Group Title: Economic information report - Food and Resource Economics Department - 36
Title: Break-even price of steers fed on temporary pastures
CITATION PAGE IMAGE ZOOMABLE PAGE TEXT
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00027314/00001
 Material Information
Title: Break-even price of steers fed on temporary pastures
Series Title: Economic information report
Physical Description: 6 p. : ; 28 cm.
Language: English
Creator: Anderson, Charles L., 1927-1976
Muraro, R. P. ( 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 -- Prices -- Florida   ( lcsh )
Pastures -- Florida   ( lcsh )
Genre: bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Bibliography: p. 6.
Statement of Responsibility: C. L. Anderson, R. P. Muraro.
General Note: Cover title.
Funding: Economic information report (Gainesville, Fla.) ;
 Record Information
Bibliographic ID: UF00027314
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 - 000303673
oclc - 03001055
notis - ABT0231
lccn - 77620848

Table of Contents
    Copyright
        Copyright
    Title Page
        Title Page
    Table of Contents
        Page i
    List of Tables
        Page i
    Introduction
        Page 1
    Assumptions
        Page 1
    Capital outlay
        Page 2
    Costs and returns
        Page 3
    Break-even price
        Page 3
        Page 4
    Discussion
        Page 5
    Reference
        Page 6
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
R. P. Muraro


Break-Even Price of


Economic Information
Report 36
-, ^


Steers


on Temporary Pastures


Food ind Resource Economics Department
Cooperative Extension Service
Institute of Food and Agricultural Sciences
Unive.-Aity of Florida, Gainesville 32611


Fed


August 1975










TABLE OF CONTENTS


Page


INTRODUCTION .

ASSUMPTIONS .

CAPITAL OUTLAY .

COSTS AND RETURNS

BREAK-EVEN PRICE .

DISCUSSION .

REFERENCES .


. . . . . . . 1

. . . . . . . 1

. . . . . . .. 2

. . . . . . 3

. . . . . . ......... ... 3
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LIST OF TABLES
Table
1 Estimated costs for developing 200 acres of acid-muck soil
in Lake County, Florida, 1975 . . .

2 Estimated fixed and annual operating costs of development
items for 200 acres of acid-muck soil in Lake County,
Florida, 1975 . . .. . ...

3 Estimated feeding costs of a 400 steer growing and
fattening operation on 200 acres of acid-muck soil in
Lake County, Florida, 1975-76 .. .... ..

4 Examples of break-even prices with differing costs
for feeder steers . . . . ..










TABLE OF CONTENTS


Page


INTRODUCTION .

ASSUMPTIONS .

CAPITAL OUTLAY .

COSTS AND RETURNS

BREAK-EVEN PRICE .

DISCUSSION .

REFERENCES .


. . . . . . . 1

. . . . . . . 1

. . . . . . .. 2

. . . . . . 3

. . . . . . ......... ... 3
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LIST OF TABLES
Table
1 Estimated costs for developing 200 acres of acid-muck soil
in Lake County, Florida, 1975 . . .

2 Estimated fixed and annual operating costs of development
items for 200 acres of acid-muck soil in Lake County,
Florida, 1975 . . .. . ...

3 Estimated feeding costs of a 400 steer growing and
fattening operation on 200 acres of acid-muck soil in
Lake County, Florida, 1975-76 .. .... ..

4 Examples of break-even prices with differing costs
for feeder steers . . . . ..











BREAK-EVEN PRICE OF STEERS FED ON TEMPORARY PASTURES


C. L. Anderson and R. P. Muraro

INTRODUCTION

A number of Florida ranchers are interested in either feeding

their own calves on pasture or purchasing light steers in the fall

for feeding on pasture. In either case, a major management system

might be feeding the calves on temporary pastures until early fall

the following year. This paper is an attempt to evaluate such an

enterprise located on acid-muck soil in Lake County. An individual

trying a similar operation under different conditions would necessarily

have different costs and returns; however, the method used here

should be helpful in analyzing data and making similar decisions.


ASSUMPTIONS

For making decisions about whether to feed steers on pasture, the

rancher must consider a number of factors: (1) an estimate of the

cost of alternative systems--pasture development, including land

clearing, fencing, and water control; the feeding program to be used;

and related factors and (2) estimates of the productivity attainable

with alternative systems.


C. L. ANDERSON is an associate professor of food and resource
economics and farm management extension economist stationed at the
Agricultural Research and Education Center, Lake Alfred. R. P. MURARO
is farm management extension agent stationed in Polk County.











BREAK-EVEN PRICE OF STEERS FED ON TEMPORARY PASTURES


C. L. Anderson and R. P. Muraro

INTRODUCTION

A number of Florida ranchers are interested in either feeding

their own calves on pasture or purchasing light steers in the fall

for feeding on pasture. In either case, a major management system

might be feeding the calves on temporary pastures until early fall

the following year. This paper is an attempt to evaluate such an

enterprise located on acid-muck soil in Lake County. An individual

trying a similar operation under different conditions would necessarily

have different costs and returns; however, the method used here

should be helpful in analyzing data and making similar decisions.


ASSUMPTIONS

For making decisions about whether to feed steers on pasture, the

rancher must consider a number of factors: (1) an estimate of the

cost of alternative systems--pasture development, including land

clearing, fencing, and water control; the feeding program to be used;

and related factors and (2) estimates of the productivity attainable

with alternative systems.


C. L. ANDERSON is an associate professor of food and resource
economics and farm management extension economist stationed at the
Agricultural Research and Education Center, Lake Alfred. R. P. MURARO
is farm management extension agent stationed in Polk County.







In the example considered in this report it is assumed that a 200

acre area of muck is cleared, fenced and a water control system developed.

The 200 acres would be divided into four 50-acre pastures. It is

further assumed that this pasture, when developed, will carry two head

per acre and that an average daily gain per steer of two pounds per day

be achieved.

The winter annuals will be planted in October and first grazed on

December 15. Grazing will.continue for 140 days and the summer pasture

would be planted in each 50 acre pasture as the steers are moved from

one pasture to another on their last rotation on the previous crop.

Steers will be grazed 150 days on summer pasture.

CAPITAL OUTLAY

Table 1 shows the estimated capital expenditures necessary to

develop 200 acres of acid-muck in Lake County. These costs will vary

in different locations and persons using this analysis should develop

costs for the particular area in question.

Table l.--Estimated costs for developing 200 acres of acid-muck soil
in Lake County, Florida, 1975

Item Cost

Land clearing (owner's estimate) @ $125.00 $25,000.00
Fencing, 3.61 miles
15 rolls of barb-wire @ $38.00 570.00
1271 posts @ $1.30 1,652.30
3 men for 4 days @ $3.00/hr. ea. 360.00
Misc. (staples, corner posts, etc.) 50.00
Ditching
.82 miles, 4 ft. ditch, 7,705 cubic yds. @ $0.35 2,696.75
15.34 miles of V-ditches @ $105/mile 1,610.70
Pump, drainage 20 in. pump and engine 4,500.00
Total $36,439.75







The estimated fixed and annual operating cost of the items in

Table 1 is shown in Table 2. Depreciation and interest on average

capital investment at 9 percent comprise the fixed or ownership costs

associated with establishing the pasture. Repairs and fuel costs for

the pump are the costs associated with maintaining the pasture. Both

ownership and operating costs of pasture are charged against the

feeding operation.

COSTS AND RETURNS


Table 3 shows total costs of the feeding program expected in

buying steer calves in October and selling the following September.
If a rancher has the same type animals available, his cost of using
them should be the same although he may have spent more on raising them

than he can buy steers for this fall. If his calves are heavier and

carrying a lot of finish, he should probably sell his and buy the
lighter animals.

BREAK-EVEN PRICE

The break-even price necessary for the above operation can be

calculated at varying steer prices (Table 4). Any return over the
calculated break-even price would be a return to labor,management and
risk. These inputs would have to be compensated before the operation

would show a profit.







The estimated fixed and annual operating cost of the items in

Table 1 is shown in Table 2. Depreciation and interest on average

capital investment at 9 percent comprise the fixed or ownership costs

associated with establishing the pasture. Repairs and fuel costs for

the pump are the costs associated with maintaining the pasture. Both

ownership and operating costs of pasture are charged against the

feeding operation.

COSTS AND RETURNS


Table 3 shows total costs of the feeding program expected in

buying steer calves in October and selling the following September.
If a rancher has the same type animals available, his cost of using
them should be the same although he may have spent more on raising them

than he can buy steers for this fall. If his calves are heavier and

carrying a lot of finish, he should probably sell his and buy the
lighter animals.

BREAK-EVEN PRICE

The break-even price necessary for the above operation can be

calculated at varying steer prices (Table 4). Any return over the
calculated break-even price would be a return to labor,management and
risk. These inputs would have to be compensated before the operation

would show a profit.







Table 2.--Estimated fixed and annual operating costs of development items for 200 acres of acid-muck
soil in Lake County, Florida, 1975


Total Total
Int. annual Annual annual
New Expected on fixed repair oper.
Item cost life Deprec. invest, cost cost Fuel cost

Land clearing $25,000.00 --- $2,250.00 $2,250.00 -- -
Fencing 2,632.20 10 $263.23 118.45 381.68 $131.62 --- $131.62
Ditching 4,307.45 10 430.74 193.84 624.58 142.75 --- 142.75
Pump and motor 4,500.00 10 450.00 202.50 652.50 315.00 $330.72 645.72
Total $3 908.76 $920.09



Table 3.--Estimated feeding costs of a 400 steer growing and fattening operation on 200 acres of acid-muck
soil in Lake County, Florida, 1975-76

Item Description Unit Amount Cost
Cash expense
60 day feeding period before temporary pasture
Mixed feed 14% protein 2% of body weight (daily) Tons 91.2 $11,400.00
Pasture Permanent, 60 days rent Acres 100 500.00
140 days winter pasture
Citrus pulpa 1% of body weight (daily) Tons 154 9,702.00
Rye seed 1 bu. per A. Cwt. 200. 1,600.00
Rye grass 20 Ibs. per A. Cwt. 40 1,400.00
White clover 20 Ibs. per A. Cwt. 4 800.00
Hubam clover 10 lbs. per A. Cwt. 20 1,200.00
Red clover 10 Ibs. per A. Cwt. 20 1,200.00
Fertilizer 2-10-10, 1 cu, 3 mn, .5 zn, .25 bo. Tons 50 6,004.00
Fertilizer 15-0-15 Tons 30 2,993.10
Dolomite Spread Tons 600 7,200.00
Disking 2 times over, 2A./hr. 1,516.00
Seeding Roller-seeder 1 time 758.00
150 days summer pasture
Disking 1 time over 2A./hr. 758.00
Seeding Roller-seeder 1 time 758.00
Millet 25 Ibs. per A. Cwt. 50 2,000.00
Aeschynomene 5 Ibs. per A. Cwt. 10 350.00
Fertilizer 0-15-15, 5 cu, 1.5 mn, .25 zn, .25 bo. Tons 50 4,462.50
Citrus pulpa 1% of body wt. (daily) Tons 252 15,876.00
Other costs From Table 2 4,828.85
Total $75-,30645


citrus pulp use would be 149 tons


alf steers are assumed to gain 1.75 Ibs. daily instead of 2 Ibs. daily,
and 236 tons for the 140 and 150 days periods, respectively.





5

Table 4.--Examples of break-even prices with differing costs for feeder
steers

Costs/break-even price Cost of feeder steer
$0.16 $0.20 $0.25

Dollars
350 lb. feeder steer 56.00 70.00 87.50
Cost of gain (Table 3) 188.27 188.27 188.27
Interest on operating capital @ 9% 21.08 22.29 23.80
Total cost (TC) 265.35 380.56 299.57

Break-even price (TC 980 Ibs.) per cwt. 27.07 28.62 30.56


DISCUSSION


The foregoing analysis depends greatly on the assumptions that

350 pound steers are available; that they will gain a pound per day

for 60 days while being fed 2 percent of their body weight of a 14

percent protein ration prior to grazing the temporary winter pasture;

that they will gain two pounds per day on both a 140-day period on

winter pasture and a 150-day period on summer pasture while receiving

1 percent of their body weight of citrus pulp.

If during both the 140 and 150 day grazing periods the steers

will gain 1.75 Ibs./day, an adjustment must be made in the break-even

calculations. Under this assumption the break-even prices for steers

costing $16.00, $20.00 and $25.00 per cwt. would be $28.82, $30.50 and

$32.59 per cwt., respectively.

Besides these assumptions, the risk of crop failure has not been

considered. There has been no attempt made here to determine the cost

of grain and roughage necessary to fatten these animals in the event

of a crop failure.

Today's volatile cattle markets contribute to price risk, which






6

even though considered, was not assigned a cost. As steer prices rise,

a smaller spread between purchase price of steers and sale price of

finished steers is required in order to show a positive return.

However, feed prices could rise enough to offset this trend. Any

cattleman contemplating a venture such as this might also want to

consider hedging the cattle on the futures market, or forward contract-

ing.

REFERENCES


[1] Baker, F. S., Jr. "Use of Forage for Growing-Finishing Calves in
North Florida." Univ. of Fla. AREC Quincy Mimeo, March 1975,

[2] Bertrand, J. E. "The Production of Slaughter Calves on Forages in
Northwest Florida." Univ. of Fla. ARC Jay Mimeo, 1975.

[3] Chapman, H. L. and F. M. Peacock. Growing Calves and Yearlings
in South and Central Florida. Univ. of Fla. AREC Ona
Research Report 76-6, April 1975.

[4] Hentges, J. F., Jr., and J. E. Pace. Recommendations for Grow-
ing and Finishing Beef Calves in North Central Florida.
Univ. of Fla. Animal Science Research Report No. AL-1975-3,
May 1975.

[5] Pate, F. M. et al. Programs for Producing Calves for Slaughter
with Forages on the Muck Soils of South Florida. Univ. of
Fla. AREC Belle Glade Report EV-1975-8, April 1975.


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