IRM - An Opportunity to Proactively Reduce Costs and Improve Profitability

Floods, snow, $5.00 corn, $.50 calves, and a $55 fed cattle market—What is this, a list of reasons not to be in the cattle business? No, just a description of 1996. In addition to these factors, there has been consumer frenzy regarding outbreaks of E. coli and bovine spongiform encephalopathy (BSE) in the United States and Europe, respectively. All of these represent reasons why cattlemen need to cut costs and maintain better records in order to stay afloat during this portion of the cattle cycle. What are your costs? Do you know how much it costs to maintain a cow in your herd? As cattlemen, we tend to forget about those poorperforming cows and calves, as evident in a recent Cattle–Fax (1997) survey. Survey data collected from over 2,400 producers across the country provide a generous account of important financial and performance measures when compared to similar factors analyzed using the Standardized Performance Analysis (SPA; Table 1). Still, it is not enough to simply collect accurate information about a given operation. The data must be used to generate a game plan, which will allow a producer to minimize losses during the valleys of the marketing cycle and to maximize profitability as the cycle begins to turn upward.