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 Introduction
 Evaluating a beef cow-calf...
 Is grazing profitable?
 Evaluating hay production
 Evaluating Florida swine produ...






Title: Evaluating livestock alternatives
CITATION PAGE IMAGE ZOOMABLE PAGE TEXT
Full Citation
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Permanent Link: http://ufdc.ufl.edu/UF00065558/00001
 Material Information
Title: Evaluating livestock alternatives
Physical Description: 31 p. : ill. ; 28 cm.
Language: English
Creator: Eason, Mark, 1957-
Publisher: Agricultural Research and Education Center
Place of Publication: Quincy Fla
Publication Date: 1983?
 Subjects
Subject: Beef cattle -- Economic aspects -- Florida   ( lcsh )
Beef cattle -- Marketing -- Florida   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
non-fiction   ( marcgt )
 Notes
Statement of Responsibility: James R. Simpson, F.S. Baker, Jr., Mark Eason.
General Note: Caption title.
Funding: Electronic resources created as part of a prototype UF Institutional Repository and Faculty Papers project by the University of Florida.
 Record Information
Bibliographic ID: UF00065558
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: oclc - 70860431

Table of Contents
    Introduction
        Page 1
        Page 2
    Evaluating a beef cow-calf operation
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
    Is grazing profitable?
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
    Evaluating hay production
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
        Page 23
        Page 24
    Evaluating Florida swine production
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
Full Text
*V. v v-j>





Evaluating Livestock Alternatives

Mark Eason
Area Farm Management Economist
Food and Resource Economics Department
Agricultural Research and Education Center
Quincy, Florida


Profit margins for livestock production are still tight even though

grain is relatively cheap and selling prices have improved. The producer who

is successful in the 1980's will have to be more efficient than in the past.

It has been stated that many cattle producers use only about 30 to 40 percent

of the available technology in their operations. A lending agency's records

indicate that efficiency varies as much as 100 percent among cow-calf

producers. The successful producers will be those who are skillful in

marketing and production practices and who use technical advances to manage

their business efficiently. The livestock producer who adopts proven

practices, techniques and processes will make the greatest advances during

the 1980's.

Livestock producers must critically evaluate and analyze performance

and cost effective production systems. Producers must know costs associated

with production so that a breakeven price can be calculated. The breakeven

price can help the producer determine how much profit or loss is being made

on a per unit basis.

This section contains decision making information that should be helpful

in evaluating various operations. The following are discussed:

-- A format for evaluating grazing calves on annual pastures.

-- Beef cow-calf budgets, breakeven analysis, and returns.

-- Cost reducing opportunities for making use of crop
residue.

-- Swine budgets for various farrow to finish operations.








2


-- Pasture and confinement feeder pig production budgets.

-- Budgets for finishing purchased feeder pigs.

-- Costs and returns of various hay operations.

Florida livestock producers should use this information to assist them

in analyzing their particular operations and evaluating other alternatives.

The current economic situation dictates prudent management by the successful

livestock producer; however, a profit potential does exist for the efficient

manager.








Evaluating a Beef Cow-Calf Operation


Many cow-calf producers have been forced to take a hard look at their

operations due to the cost-price squeeze that they have faced for the last

several years. Evaluations reflect disappointing returns many times because

of low markets and high input costs.

Producers need to plan their work and then work their plan. They can

start by producing an enterprise budget and then use these numbers to

evaluate certain practices such as dehorning, deworming, implanting, and

castrating. These are nothing new, but when all else fails, stick to the

basics. The value of these practices constantly change because of changing

interest rates, costs, and selling prices. "Beef Management Practices and

Economic Decision-Making" by Prevatt and Kunkle contains excellent informa-

tion on cost reducing practices. Another publication that is useful in evalua-

ting various production systems is "Evaluating North Florida Cattle Raising

Alternatives" by Simpson, Baker, and Eason. This publication contains detailed

budgets for backgrounding, sale at different weaning weights, grain finishing,

forage finishing, and a combination of forage/grain finishing.

This paper contains a beef cow-calf budget, Coastal bermuda hay budget,

break-even analysis and return tables for a 100 cow operation. The budget

can be used to evaluate the cost reducing opportunities of making use of crop

residue. An investment and fixed cost budget for a 100 cow herd is also included.


Types of Costs

Total costs of producing livestock include (1) variable costs and (2) fixed

fixed costs. The variable or cash costs include such items as feed, veterinary.

medication, repairs and labor. (In some cases labor is provided by the owner-

operator or his family and is not a cash cost.)






4

Fixed costs include depreciation, interest and taxes in building and equip-

ment. These costs are incurred regardless of the level of production; however,

the fixed cost per head varies depending on the number of head produced. The

investment and fixed costs for a 100 cow herd are given in Table 2.

Management is a necessary part of any livestock enterprise and a manage-

ment charge is included in each budget. There are many different ways of

valuing management and you may want to put in your own figure. In the

budgets management is charged at 5% of cash cost.

Land is one of the important inputs for enterprises utilizing pasture. In

the budgets the land charge used for pasture is the average pastureland rental

rate for Florida. There are many different ways of looking at land value and

you will no doubt want to use your own figure for land charge in your budget.

Below is an evaluation of utilizing crop residue in the cattle operation. A

producer who feels that he can use any of the cost reducing practices should

deduct that amount from the break-even price on the budget.


COST REDUCING OPPORTUNITIES
Thirty days on crop residue could reduce hay requirements by 25 oi

- Reduce coastal 5 acres @ $ 94 =$470
- Reduce hay making 25 tons @ $24 = 600
- Reduce land rent 5 acres @ $20 = 100
- Reduce interest ($1,170 @ 15% for 8 months) = 117
Total $ 1 2--7
Break-even cost reduced $3.87/

Rye planted for peanut rotation (one half of cost charged to cattle)
Fifty (50) acres grazed two hours per day for 110 days
Cost $100 per acre ($100 x 50 2) = $2,500

- Reduce hay 25 tons
- Reduce coastal 5 acres @ $94 = 470
- Reduce hay making 25 tons @ $24 = 600
- Reduce land rent 5 acres @ $20 = 100
- Reduce protein supplement 110 cwt. @ $12 = 1,320
- Reduce interest ($2,490@ 15% for 8 months) = 249
Total 2,739
Difference ($2,739 2,500) 239
Break-even cost reduced $.72/ci


r more tons.






cwt.


wt.







TABLE: 1


BEEF COW-CALF
ESTIMATED COST AND RETURNS
100 COWS & 3 BULLS ON 150 ACRES OF PASTURE
90% of Calf Crop (70 calves sold & 20 kept for replacements)


Item Quantity Price Value Your Cost

Ca &aCsq :Bermuda pasture 75 ac. 94.00 $ 7,050
Other permanent pasture 75 ac. 54.00 4,n n
Hay harvesting 125 tons 24.00 3,000
Protein supplement 150 cwt. 12.00 1,800
Salt & minerals --- -- 250
Veterinary & medicine --- ----- 800
Repairs & maintenance --- ----- 300
Tractor & pickup operation --- ----- 800
Labor 700 hrs. 4.50 3,150
Miscellaneous expense --- ----- 300
Interest on oper. cap. (8 mo.) $21,500 15% 2,150
Marketing cost 90 head 10.00 900
Total Cash Costs 24,550

Fixed Costs 9,282
Management Charge (5% of cash cost) 1,228
Land Charge 150 ac. 20.00 3,000

Total Fixed Costs 13,510

TOTAL COSTS 38,060


BREAKEVEN PRICES PER CWT. OF CALF SOLD
(Sell 70 calves, average weaning weight of 475 pounds)

Item Total Amount Price per Your Cost
cwt.


Total Cash Costs 24,550
Less: Value of Cull Cows 7,695
Net Cash Costs 16,855 50.69
Fixed Costs 9,282 27.92
Management Charge 1,228 3.69
Land Charge 3,000 9.02


Total 30,365 91.32


RETURNS FOR 100 COW ENTERPRISE AT VARIOUS SELLING PRICES


Price of calves ($/cwt.)
Price of Cull Cows ($/cwt.)


Receipts:
70 calves at 475 Ibs. (332.5 cwt.)
18 cull cows at 950 Ibs. (171 cwt.)
Gross Receipts
Less: Cash Costs
Return Over Cash Costs
Less: Fixed Costs
Returns to Land & Management


$19,950
6,840
26,790
24,550
2,240
9,282
-7,042


$23,275
7,695
30,970
24,550
6,420
9,282
-2,862


$26,600
8,550
35,150
24,550
10,600
9,282
1,318


$90
$55


$29,925
9,405
39, 330
24 550
14,780
9,282
5,498








BEEF COW-CALF

Investment and Fixed Cost (100 Cow Herd)
TABLE 2:

Years Annual Fixed Cost
Item New Average Of Life Depr. Interest Taxes & Ins. Total
14% 1.4%

100 Brood Cows at $450* $45,000 $40,000 $5,600 $560 $6,160

17 Replacement heifers 6,800 6,800 952 95 1,047
at $400*

3 bulls at $1,200* 3,600 2,400 4 600 336 34 970

Corral & loading chute 800 400 10 80 56 6 142

Feed racks 600 300 10 60 42 4 106

Miscellaneous equip. 500 250 5 100 35 4 139

Fencing (2.5 miles at $2,000) 5,000 2,500 15 333 350 35 718


$63,300 $1,173 $7,371 $738 $9,282


*The cattle prices represent an average expected price over the entire beef cattle cycle.







TABLE 3. Coastal Bermuda Hay:
North Florida, 1982.


Estimated Production and Harvesting Expenses per Acre,


Item Unit Quant. Price Value Your Cost

Cash expenses:
Fertilizer (5-10-15
equivalent) cwt 6 7.50 45.00
Lime ton .33 20.00 6.60
Nitrogen Ib 200 .26 52.00
Herbicide gal .25 11.50 2.88
Tractor (50 hp) hr 1.75 2.58 4.52
Equipment hr 1.75 .56 .98
Truck, pickup mi 10 .10 1.00
Labor hr 2.02 3.75 7.56
Land rent acre 1.0 20.00 20.00
Interest on cash expenses $ 140.54 15%(6 mos.) 10.54
Total Cash Expenses 151.08
a/
Harvest Expenses:-
Custom mow, rake, bale ton 6 24.00 144.00
Labor (machine loading) hr .5 3.75 1.88
Tractor (50 hp) & Equipment hr .5 3.23 1.62
Truck, pickup mi 10 .10 1.00
Total Harvest Expenses 148.50
Fixed Expenses:
Tractor and Equipment hr 2.25 4.24 9.54
Truck, pickup mi 20 .13 2.60
Establishment (Prorated
over 10 years) acre 1.0 18.25 18.25
Total Fixed Expenses 30.39

TOTAL EXPENSES 329.97

SAssumes hay harvested round bales (1000 lb.)

Coastal Bermuda Hay: Net returns per acre with varying yields and prices.

Yield Per Acre (Tons)
Price 4 5 6 7 8


$ 50
60
70
80
90
100


- 80.77
- 40.77
- .77
39.23
79.23
119.23


- 55.40
- 5.40
44.60
94.60
144.60
194.60


- 29.97
30.03
90.03
150.03
210.03
270.03


- 4.53
65.47
135.47
205.47
275.47
345.47


20.85
100.85
180.85
260.85
340.85
420.85


Coastal Bermuda Break-even Prices at Various Yields
Yield (tons/acre) Price/ton
4 $ 70.19
5 61.08
6 55.00
7 50.65
8 47.39











Is Grazing Profitable?


Cattlemen are interested in annual pasture grasses to provide high quality

forage during the winter and spring when other forage is in short supply.

Utilizing annual forages for grazing is not always profitable.

Returns calculated for the various calf purchase and selling prices indicates

that it is necessary to have a sale price that is greater than the purchase price

to obtain a positive return in most situations.

The return for grazing calves on annual pastures depends upon the marketa-

bility of the calves, the pasture cost, the nutritional value of the forage and the

quantity of annual grass produced per acre.

This paper is intended as a guide. Cattlemen may want to substitute their

estimates of production, costs, and selling prices into the general framework

presented to analyze their expected returns. This paper analyzes the costs and

returns of grazing 400 pound calves on rye-ryegrass pasture with and without

supplemental feeding.


RYE-RYEGRASS PASTURES

The grazing trials at Quincy A.R.E.C. and Chipley Beef Demonstration Unit

showed that rye-ryegrass can normally be grazed from about December 1 through

April in a normal crcp year. One acre of rye-ryegrass will carry from 1.5 to 2.0

calves weighing 400 pounds. The calves can gain from 1.0 to 1.5 pounds per day

without supplemental feeding. With supplemental feeding, both carrying capacity

and daily rate of gain are increased. Feeding one percent of the animal's body

weight per day of a 12 percent protein ration, the carrying capacity will range

from 2.5 to 3.0 calves per acre, and the daily rate of gain will vary from 1.25

to 1.75 pounds per day.





9

One acre of rye-ryegrass costs about $128 to establish on a prepared

seed bed (Table 1). The cost includes seed, fertilizer, lime, machinery opera-

ting expense, labor, land rent, interest, and depreciation on the machinery.






10


TABLE 1.--Estimated cost of producing one acre of rye-ryegrass, North Florida,
1982.


Item


I. Cash expenses:

Rye.seed

Ryegrass seed

Lime

Fertilizer, 5-10-15

Nitrogen

Machinery

Labor

Land rent, 6 mos.

Interest on cash
expense

Total cash expense

II. Fixed costs of machinery

III. Total estimated costs


Unit Quantity Price Amount Your Cost

------Dollars-------


bu.

Ib.

ton

cwt.

lb. N



hr.

acre

dollar


1.5

20.0

.33

5.0

75.0



1.5

1.0

108.25


9.70

.30

20.00

7.50

.26



3.50

25.00

.075


14.55

6.00

6.60

37.50

19.50

6.38

5.25

12.50

8.12


116.40

11.12

127.52


a/ 15 percent for 6 months.
- 15 percent for 6 months.


- -







11

DETERMINING THE PROFITABILITY OF GRAZING

To determine the profitability of grazing calves on annual pastures, the

manager must compare the costs and returns from grazing. A format for this

purpose is:


calf sale value = price X [(initial weight) + (daily rate of
gain X days of grazing )]

less calf purchase cost = initial weight X price paid

less pasture cost per calf = pasture cost per acre I stocking rate

less interest cost on calf = calf purcahse cost X interest rate X time

less death loss = percent death loss X calf purchase cost

less marketing cost = percent of sale value X calf sale value

less mineral cost = cost per calf

less labor cost per calf = labor cost per calf per day X number of days grazing

less veterinarian cost = cost per calf


For example, assuming that the calves cost 60 cents per pound, sell for

60 cents per pound, and gain 1.50 pounds per day for 150 days grazing on

rye-ryegrass stocked at 1.5 calves per acre, the return per calf for grazing

400 pound calves is calculated as follows:
Your Cost


calf sale value = .60 [400 + (1.50 X 150)] = .60 X 625

calf purchase cost = 400 X .60

pasture cost per calf = 128.00 1.5
150
interest cost = 240 X .15 X 1
360

death loss .03 X 240

marketing cost per calf = .04 X 375.00

supplemental feed cost (salt + minerals)

labor cost per calf = ($.035 X 150)

veterinarian cost per calf

return per calf


= $375.00

= -240.00

= -85.33

S-15.00

= -7.20

= -15.00

S-2.08

S-5.25

= -3.84

S 1.30






12

The return per calf where supplemental feeding is used along with the

rye-ryegrass pasture can be evaluated similarly. Supplemental feed cost $.06

per pound and it is assumed that the calves are fed an average of one percent

of their body weight per day. Thus, a 400 pound calf gaining 1.75 pounds

per day for 150 days would eat a total of 780 pounds of feed (5.2 pounds per

day for 150 days). Again, assuming that the calves cost 60 cents per pound,

sell for 60 center per pound, and gain 1.75 pounds per day for 150 days graz-

ing rye-ryegrass with supplemental feeding, the return per calf for grazing

400 pound calves in this situation is calculated as follows:
Your Cost


calf sale value = .60 [(400) + (1.75 X 150)] = .60 X 662.5

calf purchase cost = .60 (400)

pasture cost per calf = 128.00 2 2
150
interest cost per calf = 240 X .15 X 1
360
death loss = .03 X 240

marketing cost per calf = .04 X 397.50

labor cost per calf = ($.07 X 150)

supplemental feed cost per calf = (780 Ibs. X $.06)

veterinarian cost per calf

return per calf


= $397.50

= -240.00

= -64.00

= -15.00

= -7.20

= -15.90

= -10.50

= -46.80

= -3.84

= -5.74









Evaluating Hay Production


Hay remains an important winter feed for Florida livestock. As with

other agricultural enterprises, producing and harvesting hay is expensive.

Estimated costs and returns for alfalfa, coastal bermuda, and bahia are

presented in this study. Establishment, production, and harvesting expenses

are explained in budget form. Net returns per acre with varying yields and

prices, and break-even prices are shown.

Expenses

Land rent expense or opportunity cost for coastal bermuda and bahia grass

is assumed to be cheaper than for row crops because these grasses do not

require as fertile soil as row crops. Not only do net returns vary as prices

and yields vary, but also as input costs vary. The main input costs which

vary in this study are the cost of harvesting. Constant production inputs for

example can produce four to 8 tons of alfalfa per acre. The major difference

will depend on how many tons are actually produced and harvested.

This paper does not include land clearing cost in the regular budget. It

is assumed that it would not be feasible to clear land in order to plant grass

in today's economy. However, a custom land clearing charge is footnoted in

the coastal bermuda and bahia grass budgets.

Break-even Price

Break-even prices for each enterprise provide a more specific price that

one has to have in order to break-even at various yields. To determine break-

even price, simply divide total cost per acre by yield per acre.

Rainfall

Hay harvesting is largely affected by rainfall. Quantity and quality of

salable hay depends on whether or not it was rained on during harvest. Fifty










years of rainfall data (1932-1981) for the Quincy station was reviewed in

order to determine a historical basis for harvesting hay. Using a cut off

of .03 inch, the number of three-day dry periods in seven day intervals were

tabulated from April to September. Observing the rainfall table for example,

one can see that the first week in April that 36 out of 50 years had one 3-day

dry period, 27 years had two 3-day dry periods, 20 years had three, 10 years

had four and 9 out of 50 years had five 3-day dry periods. This information

is a tool and may be used with other decision making factors such as immediate

weather forecast.

Hay Making Systems

For simplicity, custom harvest rates are used in the budgets. The results

of a study by J.W. Prevatt, M.A. Eason, and C.G. Chambliss is included to

provide cost comparisons for different hay making systems. The study shows

what it cost to own and operate a hay harvesting system. The results show

that hay harvesting cost per ton decrease as increases of tons harvested

annually and tons per acre are realized. The total cost of hay making is expen-

sive, but there are factors other than cost which may influence the hay making

decision. The decision to custom hire or purchase a system must include such

factors as timelir:ss, convenience, and quality.

Summary

The hay market is thin; very little hay is bought and sold on a large scale.

As such, the prices reported may not be an accurate representation of the value

of the hay because of the quantity and quality differences. Net returns per

acre increase with increases in yield and price, but it is the amount of good

quality salable hay that will provide a positive return. Whatever the combination,

these results indicate that large yields of high quality hay which are marketed

at top prices are required for hay to be considered as a feasible cash crop.





15

Estimated Establishment Cost for One Acre of Alfalfa, North Florida,


1982.


Item Unit Quant. Price Value Your Cost


Cash expenses:


Seed
Inoculant
Fertilizer (0-10-20
or equivalent)
Lime
Boron
Herbicide
Insecticide
Tractor (80 hp)
Truck, pickup
Equipment
Labor
Land rent
Interest on cash exp.
Total cash expenses
Fixed costs:
Tractor (80 hp)
Truck, pickup
Equipment
Total fixed costs
Total costs


Ib.
pkg.

cwt.
ton
lb.
acre
acre
hr.
mi.
hr.
hr.
acre
$


hr.
mi.
hr.


18
1

6
1
2.5
1
1
3.5
20
3.5
5.0
1.0
224.26


3.5
20
3.5


2.90
.75

7.50
18.00
1.25
16.75
12.20
4.26
.10
3.02
3.75
30.00
.15


5.32
.13
4.86


52.20
.75


45.00
18.00
3.13
16.75
12.20
14.91
2.00
10.57
18.75
30.00
33.64
257.90

18.62
2.60
17.01
38. 23
296.13


Prepared by: Timothy D. Hewitt


I-- --~---






Alfalfa Hay: Estimated Production
(Based on 4 cuttings).


and Harvesting Expenses per acre, North Florida, 1982.


Item Unit Quant. Price Value Your Cost

Cash expenses

Fertilizer (0-10-20 or
equivalent cwt. 12 7.50 90.00
Lime ton .5 20.00 10.00
Boron Ib. 2.5 1.25 3.13
Herbicides acre 1.0 11.25 11.25
Insecticides acre 1.0 8.60 8.60
Tractor (50 hp) and machinery hr. 2.0 3.14 6.28
Truck; pickup mi. 20.0 .10 2.00
Labor hr. 2.0 3.75 7.50
Land Rent acre 1.0 30.00 30.00
Interest on cash expenses $ 168.76 15% (6 mos.) 12.65
Total cash expenses 181.41

Harvest Expenses- :

Custom mow, rake, bale ton 4 24.00 96.00
Labor hr. 8 3.75 30.00
Tractor (50 hp) and equipment hr. 4 3.08 12.32
Total harvest expenses 138.32

Fixed Expenses:

Tractor and Machinery hr. 6 5.45 32.70
Truck, pickup mi. 20 .13 2.60
Establishment (prorated
over 4 years) acre 1.0 74.03 74.03
Total fixed expenses 109.33

TOTAL EXPENSES 429.06

a Assumes hay harvested in rectangular bales (55 Ibs.).

Alfalfa Hay: Net returns; per acre with varying yields and prices.

Yield Per Acre (tons)
Price 3 4 5 6 7 8


$ 90
100
110
120
130
140


-13-1.31
-101.31
- 71.31
- 41.31
- 11.31
18.69


- 69.06
- 29.06
10.94
50.94
90.94
130.94


- 6.81
43.19
93.19
143.19
193.19
243. 19


55.44
115.44
175.44
235.44
295.44
355.44


117.69
187.69
257.69
327.69
397.69
467.69


179.94
259.94
339.94
419.94
499.94
579.94


Alfalfa Break-even prices at Various Yields
Yield (tons/acre) Price/ton
3 $ 133.77
4 107.26
5 91.36
6 80.76
7 73.19
8 67.51







Estimated Establishment Cost for One Acre of Coastal Bermuda Grass in North Florida, 1982.a/


Item Unit Quant. Price Value Your Cost


Cash Expenses:


Lime
Fertilizer (5-10-15 or
equivalent)
Custom sprigging (sprigs included)
Nitrogen
Herbicide
Tractor (50 hp)
Truck, pickup
Equipment
Labor
Land rent
Interest on cash expenses
Total Cash Expenses


ton

cwt
acre
Ib
lb
hr
mi
hr
hr
acre


20.00 20.00


3.0
1.0
60
2.0
1.75
20
1.75
2.0
1


7.50
55.00
.26
3.75
2.58
.10
1.04
3.75
20.00


156.44 15%(6 mos.)


22. 50
55.00
15.60
7.50
4.52
2.00
1.82
7.50
20.00
11.73
168.17


Fixed Expenses:


Tractor (50 hp)
Truck, pickup
Equipment
Total fixed expenses
Total Expenses


1.75
20
1.75


3.12
.13
3.60


5.46
2.60
6.30
14. 36
182.53


ng, and heavy


a Add $300 per acre for custom land clearing; includes bulldozing, root raki
disking.


X- -----------L----ICI--L-------------X--










Table 3. Coastal Bermuda Pasture: Estimated Variable Costs Per Acre.

Item Quantity Price Value Your Cost

Establishment
(Prorated over 10 yrs.) -- $18.00

Fertilizer (5-10-15 or
equivalent) 5 cwt. $ 7.50 38.00

Nitrogen 120 Ibs. .26 31.00

Lime .33 ton 20.00 7.00

Total costs $94.00







Table 4. Other Permanent Pasture (Bermuda or Bahia): Estimated Variable
Costs Per Acre.

Item Quantity Price Value Your Cost


Fertilizer (5-10-15
or equivalent)

Nitrogen

Lime

Herbicide

Total costs


3 cwt.

80 Ibs.

.33 tons

.25 gal.


$ 7.50

.26

20.00

11.50


$23.00

21.00

7.00

3.00

$54.00


~--------c


- -







Estimated Establishment Cost for One Acre


19
of Bahia


Grass in North Florida, 1982.a


Item Unit Quant Price Value Your Cost


Cash Expenses:


Lime
Fertilizer (5-10-15 or
equivalent)
Seed
Nitrogen
Herbicide
Tractor (50 hp)
Truck, pickup
Equipment
Labor
Land Rent
Interest on cash exp. (1 year)
Total cash expenses


ton

cwt
lb
Ib
gal
hr
mi
hr
hr
acre
$


.33

4.0
20
40
.25
1.75
20
1.75
2.00
1.0
122.74


20.00

7.50
1.50
.26
11.50
2.58
.10
5.16
3.75
20.00
15%


6.60


30.00
30.00
10.40
2.88
4.33
2.00
9.03
7.50
20.00
18.41
141.15


Fixed Expenses:


1.75
20
1.75


T ractor
Truck, pickup
Equipment
Total fixed expenses

TOTAL EXPENSES


3.12
.13
10.04


5.46
2.60
17.57
25.63

166.78


raking, and heavy


Add $300 per acre for custom land clearing; includes bulldozing, root
disking.


111-- --~-----------------~--"~







Bahia Hay: Estimated Production and Harvesting Expenses Per Acre, North Florida, 1982.


Item Unit Quant Price Value Your Cost

Cash Expenses:

Fertilizer (5-10-15 or
equivalent) cwt 6.0 7.50 45.00
Lime ton .33 20.00 6.60
Nitrogen Ib 200 .26 52.00
Herbicide gal .25 11.50 2.88
Tractor (50 hp) hr 1.75 2.58 4.52
Equipment hr 1.75 .56 .98
Truck, pickup mi 10 .10 1.00
Labor hr 2.00 3.75 7.50
Land rent acre 1.0 10.00 20.00
Interest on cash expenses $ 140.48 15%(6 mos.) 10.54
Total Cash Expenses 151.02

Harvest Expenses:a

Custom mow, rake,bale tons 5 24.00 120.00
Labor (machine loading) hr .42 3.75 1.58
Tractor (50 hp) & Equipment hr .42 3.23 1.36
Truck, pickup mi 10 .10 1.00
Total Harvest Expenses 123.94

Fixed Expenses:

Tractor and equipment hr 2.17 4.24 9.20
Truck, pickup mi 20 .13 2.60
Establishment (prorated over
10 years) acre 1.0 16.68 16.68
Total Fixed Expenses 28.48

TOTAL EXPENSES 303.44


a Assumes hay harvested round bales (1000 Ib.).

Bahia Hay: Net returns pcFr acre with varying yields and prices.
Yield Per Acre (Tons)
Price 3 4 5 6 7


$ 50
60
70
80
90
100


104.25
74.25
44.25
14.25
15.75
45.75


- 78.83
- 38.83
1.17
41.17
81.17
121.17


- 53.44
- 3.44
46.56
96.56
146.56
196.56


- 28.00
32.00
92.00
152.00
212. 00
272.00


- 2.57
67.43
137.43
207.43
277.43
347.43


Bahia Hay Break-even Prices at Various Yields
Yield (tons/acre) Price/ton
3 $ 84.75
4 69.71
5 60.69
6 54.67
7 50.37







Cumulative Number of Three-Day Dry Periods for Seven Day Intervals between April and September, 50 years data,
Quincy, Florida, 1932-1981.


No. of 3-day
dry periods Number of Years Out of 50

ONE 36 43 45 47 45 42 39 38 37 37 36 32 32 25 26 22 25 23 32 35 25 29 33 42 38 41

TWO 27 34 40 35 40 32 32 26 28 32 26 20 20 14 15 11 13 12 21 22 12 18 24 35 31 33

THREE 20 20 29 27 29 22 31 20 19 23 19 11 11 5 10 3 7 6 13 10 6 12 15 29 21 19

FOUR 10 14 20 18 20 14 21 13 12 11 11 5 5 4 6 1 3 3 5 6 2 7 10 17 15 11

FIVE 9 12 15 13 17 9 17 7 6 8 10 1 2 1 4 1 1 1 4 5 0 3 7 12 9 8

Ln CN Z


3 C r -- OC OI rI CM I I n
1 I I I | I I I 0r I r 0 t r C
N I I .- N ININ I O I I I

L L (0 3 *









Evaluating Four Hay Harvesting Systems.


System 1 --


System 2 --


System 3 --








System 4 --


mower-conditioner (9-foot)
tedder (16-foot)
side delivery rake (9 foot)
small round baler (4.5' x 4.25')
bale fork
rear hydraulic bale fork
hay wagon
tractor (70 hp)
tractor (55 hp)
pickup (0.5 ton)

mower-conditioner (9-foot)
tedder (16-foot)
side delivery rake (9-foot)
large round baler (5.5' x 5.5')
bale fork
rear hydraulic bale fork
hay wagon
tractor (70 hp)
tractor (55 hp)
pickup (0.5 ton)

mower-conditioner (9-foot)
tedder (16-foot)
side delivery rake (9 foot)
rectangular baler (14" x 18" x 36")
pull type bale wagon (104 bales)
tractor (70 hp)
tractor (55 hp)
pickup (0.5 ton)

mower-conditioner (9--foot)
tedder (16-foot)
side delivery rake (9-foot)
rectangular baler (14" x 18" x 36")
self-propelled bale wagon (160 bales)
tractor (70 hp)
tractor (55 hp)
pickup (0.5 ton)


____







Operating costs per tons of four hay harvesting systems.
Operating costs per tons of four hay harvesting systems. 1981.


Tons
Harvested Annually Tons/acre System 1 System 2 System 3 System 4
-----------------------Dollars----------------

100 Tons 1 T/AC 22.00 20.84 16.65 32.35
2 T/AC 10.71 10.14 8.71 15.93
3 T/AC 7.05 6.67 5.72 10.54


500 Tons 1 T/AC 24.20 22.98 19.97 34.19
2 T/AC 11.53 10.94 9.47 16.63
3 T/AC 7.51 7.12 6.15 10.94

1000 Tons 1 T/AC 25.74 24.46 21.36 35.45
2 T/AC 12.10 11.49 9.99 17.10
3 T/AC 7.83 7.43 6.44 11.20


1500 Tons 1 T/AC 26.89 25.56 22.38 36.39
2 T/AC 12.53 11.90 10.37 17.44
3 T/AC 8.07 7.60 6.66 11.40


2000 Tons 1 T/AC 27.85 26.47 23.23 37.16
2 T/AC 12.87 12.23 10.68 17.73
3 T/AC 8.26 7.85 6.83 11.55

Operating costs per ton include the costs of inputs such as fuel, oil, lubricants,
repairs and labor.


Ownership Costs Per Ton of Four Hay Harvesting Systems. 1981.

Tons
Harvested Annually System 1 System 2 System 3 System 4
----------------------- --Dollars----------.---- .----

100 Tons 188.17 188.23 176.80 278.65
500 Tons 37.63 37.64 36.44 55.72
1000 Tons 18.82 18.82 18.22 27.86
1500 Tons 12.54 12.54 12.15 28,57
2000 Tons 9.41 9.41 9.11 13.93

BOwnership costs per ton include depreciation, insurance taxes and interest.








Total Cost Per Ton


24
of Four Hay Harvesting Systems. 1981.C


Tons
Harvested Annually Tons/acre System 1 System 2 System 3 System 4
--------------------Dollars-------------


100 Tons


1 T/AC
2 T/AC
3 T/AC


500 Tons


1000 Tons


T/AC
T/AC
T/AC

T /AC
T/AC
T/AC

T /AC
T/AC
T/AC

T/AC
T /AC
T/AC


1500 Tons


2000 Tons


210.16
199.88
195.28

61.83
49.17
45.15

44.55
30. 92
26.65

39.43
25.00
20.61

37.25
22.28
17.67


209.07
198.37
194.98

60.62
48.59
44.77

43.28
30. 31
26.26

38.11
24.44
20.21

35.89
21.64
17.26


193.46
190.92
187.98

56.41
45.91
42.59

39.57
28.21
24.66

34.53
22.51
18.80

32.34
19.79
15.94


311.00
294.61
289.31

89.91
72.35
66.66

63.31
44.96
39.06

54.96
36.02
29.97

51.09
31.66
25.49


The sum of
rounding erros.


Total cost per ton is the summation of operating and ownership cost.
operating and ownership costs may not exactly equal total cost due to








25

Evaluating Florida Swine Production


Hog production makes up an important and expanding part of Florida's live-

stock industry. In order to determine the profitability of a swine enterprise, it

is necessary to make an extensive economic evaluation. This paper (which is

taken from Tim Hewitt's "Cost Analysis For Swine Production for Florida") pre-

sents budgets which are helpful in evaluating existing hog enterprises and plan-

ning potential hog operations.


Costs

Two types of costs are involved in producing swine: variable and fixed.

Variable costs are the cash expenses necessary to produce swine and these costs

may vary depending on the level of production. The fixed costs are the owner-

ship costs of producing swine and include items such as depreciation, interest,

insurance, and taxes on buildings and equipment. Once a commitment has been

made to produce hogs and facilities are constructed, the fixed costs are incurred

regardless of the level of production. The budgets developed in this report

should be useful for planning and analyzing with some adjustments needed to fit

the budget to the particular farm situation.

Five budgets have been developed that should reflect most of the swine

systems in Florida. The budgeted systems include:

Table 1) Farrow to Finish Operation, total confinement

Table 2) Farrow to Finish Operation, pasture and confinement

Table 3) Pasture and Confinement Feeder Pig Production

Table 4) Pasture System Feeder Pig Production

Table 5) Finishing Purchased Feeder Pigs








26
Relatively high investments are required for some of the above systems.

Even though hog prices are encouraging at the present time, the price situa-

tion may change as producers expand their hog operations to take advantage

of high prices. If expansion occurs, prices are likely to decrease. Producers

need to consider the future price proposals in their economic evaluation of swine

enterprises. Good management dictates careful economic planning and subsequent

activity by the efficient swine producer.








Table 1. Estimated Costs and Returns, Farrow to Finish (Total Confinement)
200 Sows, 4.1 Farm Feed Efficiency, 8 Pigs Weaned/Litter,
2.2 Litters/Sow/Year.


Item Quantity Price Amount Your Farm

Cash Expenses:


Corn
Soybean Meal
Vitamins & Minerals
Veterinary & Medicine
Boar Purchase
Maintenance & Repair
Utilities
Machinery
Truck Expenses
Miscellaneous
Labor
Interest on Cash
Expenses
Total Cash Expenses
Fixed Costs:
Interest on Livestock
Capital
Interest on Other
Equipment
Other Overhead Costs
Machinery
Insurance & Taxes
Total Fixed Costs
TOTAL COSTS


49,060 bu.
251.3 tons
8,615 1bs

10
10


3,000 hrs

$235,190


$ 2.30
270.00
1.20

600.00
--
--


4.00

15%


$112,838.00
67,851.00
10,338.00
5,013.00
6,000.00
6,000.00
5,500.00
350.00
6,300.00
3,000.00
12,000.00

35,278.50
$270,468.50



$ 5,250.00

29,437.00
28,715.00
825.00
3,500.00
$ 67,727.00
$338,195.50


Break-Even Price Per Cwt. of Market Hogs Sold
Item Total Amount Price Per Cwt. Your Farm


Total Cash Expenses
Less: Value of 80 Cull Sows
Less: Value of 10 Cull Boars
Net Operating Costs
Fixed Costs


$270,468
15,360
1,912

67,727
3$2n Q923


$32.94
8.81
~a4 75


OUIAL COSTS 13
_~ -.


Returns from Operation:
Gross Receipts:
MIarket Hogs (3342 at 230 lbs. at $.52)
Cull Sows (80 at 400 lbs. at $.48)
Cull Boars (10 at 425 Ibs. at $.45)
Non-Breeding Gilts (36 at 280 Ibs. at $.50)
Total Gross Receipts
Less Total Costs
Returns to Management

Prepared by: T. D. Hewitt, Marianna, ARC.


$399,703.20
15,360.00
1,912.50
5,040.00
$47,9UT5.7
338,195.50
$-s3,-a0zoTz







28
Table 2. Estimated Costs and Returns, Farrow to Finish (Pasture and Confinement)
50 Sows, 4.2 Farm Feed Efficiency, 8 Pigs Weaned/Litter, 2 Litters/Sow/Year.


Item Quantity Price Amount Your Farm


Cash Expenses:
Corn
40% Complete Supplement
Veterinary & Medicine
Boar Purchase
Maintenance & Repair
Utilities
Machinery
Truck Expenses
Miscellaneous
Labor
Interest on Cash
Expenses
Total Cash Expenses
Fixed Costs:
Interest on Livestock
Capital
Interest on Equipment
and Facilities
Other Overhead Costs
Machinery
Insurance & Taxes
Total Fixed Costs
TOTAL COSTS


11,216 bu.
1,256 cwt.

3





1,272 hrs.

59,590.80


$ 2.30
14.00

600.00
D--




4.00

15%


$25,796.80
17,584.00
1,200.00
1,800.00
2,772.00
2,100.00
850.00
1,800.00
600.00
5,088.00

8,938.62
$68,529.42



$ 1,260.00

5,145.00
6,250.00
1,925.00
1,500.00
$16,080.00
$84,609.42


Break-Even Price Per Cwt. of Market Hogs
Item Total Amount Price Per


Total Cash Expenses
Less: Value of 20 Cull Sows
Less: Value of 3 Cull Boars
Net Operating Costs-
Fixed Costs
TOTAL COSTS


$68,529
3,840
574
$64,115 $37.87
16,080 9.50
$80,195 $47.37


Returns from Operation:
Gross Receipts:
Market Hogs (736 at 230 lbs. at $.52)
Cull Sows (20 at 400 Ibs. at $.48)
Cull Boars (3 at 425 Ibs. at $.45)
Non-Breeding Gilts (3 at 280 Ibs. at $.50)
Total Gross Receipts
Less Total Costs
Returns to Management

Prepared by: T. D. Hewitt, Marianna ARC.


$88,025.60
3,840.00
573.75
420.00

84,609.42
$ 8,7249.93


Sold
Cwt.


Your Farm


----- --------


.






29

Table 3. Estimated Costs and Returns, Feeder Pig Production (Pasture and Confinement)
50 Sows, 8 Pigs Weaned/Litter, 2 Litters/Sow/Year.


Item 'Quantity Price Amount Your Farm


Cash Expenses:
Corn
40% Complete Supplement
Veterinary & Medicine
Boar Purchase
Maintenance & Repair
Utilities
Machinery
Truck Expenses
Miscellaneous
Labor
Interest on Cash
Expenses
Total Cash Expenses
Fixed Costs:
Interest on Livestock
Capital
Interest on Equipment
and Facilities
Other Overhead Costs
Machinery
Insurance & Taxes
Total Fixed Costs
TOTAL COSTS


3,536 bu.
398 cwt.

3
m--




1,112 hrs.

27,104.80


$ 2.30
14.00

600.00
m--
D--


4.00

15%


$ 8,132.80
5,572.00
1,100.00
1,800.00
2,152.00
1,300.00
400.00
1,800.00
400.00
4,448.00

4,065.72
$31,170.52



$ 1,260.00

3,395.00
4,880.00
1,120.00
1,500.00
$12,155.00
$43,325.52


Break-Even Price Per Cwt. of Market Hogs Sold_

Item Total Amount Price Per Cwt. Your Farm

Total Cash Expenses $31,170 _
Less: Value of 20 Cull Sows 3,840
Less: Value of 3 Cull Boars 574 _
Net Operating Costs- $26,756 $60.53
Fixed Costs 12,155 27.50 __
TOTAL COSTS- $38,911 588.03__


Returns from Operation:
Gross Receipts:
Cull Sows (20 at 400 lbs. at $.48)
Cull Boars (3 at 425 Ibs. at $.45)
Non-Breeding Gilts (3 at 280 Ibs. at $.50)
Feeder Pigs (736 at 60 lbs. at $.70)
Total Gross Receipts
Less Total Costs
Returns to Management

Prepared by: T. D. Hewitt, Marianna, ARC.


$ 3,840.00
573.75
420.00
30,912.00
ST531741.7
43,325.52
- $-7- 7182


- --------~-------- -----







30

Table 4. Estimated Costs and Returns, Feeder Pig Production (Pasture System)
10 Sows, 6.5 Pigs Weaned/Litter, 1.8 Litters/Sow/Year.


Item Quantity Price Amount Your Farm

Cash Expenses:
Complete Feed 403 cwt. $ 9.50 $3,828.50
Veterinary & Medicine -- -- 136.00
Boar Purchase 1 350.00 350.00
Maintenance & Repair -- -- 240.00
Utilities -- 360.00
Machinery 200.00
Truck Expenses -- -- 270.00
Miscellaneous -- -- 250.00
Labor 340 hrs. 3.35 1,139.00
Interest on Cash
Expenses 6,773.50 15% 1,016.03
Total Cash Expenses $7,789.53
Fixed Costs:
Interest on Livestock
Capital $ 245.00
Interest on Equipment
and Facilities 110.00
Other Overhead Costs 330.00
Machinery 650.00
Insurance & Taxes 100.00
Total Fixed Costs $1,435.00
TOTAL COSTS $9,224.53


Break-Even Price Per Cwt. of Market Hogs
Item Total Amount Price Per


Sold


Cwt.


Your Farm


Total Cash Expenses
Less: Value of 2 Cull Sows
Less: Value of 1 Cull Boar
Net Operating Costs
Fixed Costs
TOTAL COSTS


$7,790.00
384.00
191.00
$7,215.00
1,435.00
$8,650.00


$1 .11 ____
.22
$1.33


Returns from Operation:
Gross Receipts:
Cull Sows (2 at 400 lbs. at $.48)
Cull Boars (1 at 425 lbs. at $.45)
Non-Breeding Gilts (2 at 280 Ibs. at S.50)
Feeder Pigs (108 at 60 lbs. at $.70)
Total Gross Receipts
Less Total Costs
Returns to MFanagement


$ 384.00
191.25
280.00
4,536.00
$5-39T72 5'
9,224.53
- $3572


Prepared by: T. D. Hewitt, Marianna ARC.


----~------ I ---


'


`-----






31
Table 5. Estimated Costs and Returns, Finishing Purchased Feeder Pigs (Confinement)
Facilities for 200 Feeder Pigs, 3.5 Feed:Gain, 2% Death Loss.


Item Quantity Price Amount Your Farm


Cash Expenses:
Feeder Pigs (55 Ibs.)
Corn
40% Complete Supplement
Veterinary & Medicine
Maintenance & Repair
Utilities
Machinery
Truck Expenses
Miscellaneous
Labor
Interest on Cash
Expenses
Total Cash Expenses
Fixed Costs:
Interest on Equipment
and Facilities
Other Overhead Costs
Machinery
Insurance & Taxes
Total Fixed Costs
TOTAL COSTS


800 head
6,928 bu.
776 cwt.


--


720 hrs.

68,572.40


$ 44.00
2.30
14.00






4.00

15%


$35,200.00
15,934.40
10,864.00
784.00
1,440.00
480.00
200.00
550.00
240.00
2,880.00

10,285.86
$78,858.26



$ 1,960.00
2,720.00
650.00
400.00
$ 5,730.00
$84,588.26


Break-Even Price Per Cwt. of Market Hogs Sold
Item Total Amount Price Per Cwt. Your Farm

Total Cash Expenses $78,815 $43.71
Fixed Costs 5,730 3.18
TOTAL COSTS $84,545 $46.89


Returns from Operation:
Gross Receipts:
Market Hogs (784 at 230 Ibs. at $.52)
Less Total Costs
Returns to Management


Prepared by: T. D. Hewitt, Marianna, ARC


$93,766.40
84,588.26
$ 9,178.14


--------


--- -------I---------




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