Managing Cattle Enterprise Risk with Electronic Animal Identification

* Replacement Heifers and Pairs
* Cow Bid Price
* Cow Calf Budget
* Cull Cow — Sell or Keep Analysis
* IRS Based Cow-Calf Cost of Production

Replacement Heifers and Pairs

This decision aid combines production and financial data to calculate estimates for: (1) the cost of a developing a bred heifer and (2) the cost of a developing a re-bred first calf pair (three in one package). This analysis covers a long production cycle that begins when the potential replacement is weaned and finishes when: (1) the heifer is pregnancy tested for sale as a bred heifer (2) the first calf is born or (3) the first calf heifer is diagnosed pregnant and sold as a three in one. The main economic questions addressed by this decision aid are what are the economically feasible selling prices to cover production costs for open heifers, bred heifers or pairs?

Download the Excel spread sheet and PDF documentation.

Cow Bid Price

What should you bid for a beef cow? This will always be a question for both the buyer and seller of beef cows. This decision aid facilitates the calculation of what can be bid for a cow, and allows the user to do “what if” analysis, given alternative expectations.

This financial analysis helps those considering borrowing money for the cow purchase. Both income and self-employment tax are included in this cow investment analysis. The estimates of tax implications are approximations. It is advisable to talk with a qualified tax practitioner to determine the actual tax implications.

This decision aid is based on a net present value approach to investment analysis. This capital budgeting approach takes into account the discount rate, or rate of return desired for the investment.

If the cow enterprise does not generate a taxable income or there is no taxable income from other sources, then tax credits would be zero. Be careful, as this may lead to the IRS classifying the cow-calf enterprise as a hobby activity. Call on your CPA when addressing tax questions.

Download the Excel spread sheet and PDF documentation.

Cow Calf Budget

Management is a dynamic process, which needs information to be effective. Budgeting can help a manager by providing economic information for decisions concerning a production period, an annual plan, or a long-run plan. Budgeting can also provide details about individual enterprises as well as information about the whole ranch. As a result, budgeting is used, in a variety of ways, in all phases of management, planning, implementation, and control. This publication describes the purpose of budgeting, budgeting terminology, examples of cattle budgets, and the availability of budgeting information.