Beef Cow-Calf Analysis Highlights for 2005

The 2005 Beef Cow Summary from the Ontario Farm Management Analysis Program (OFMAP) summarizes income and expenses as well as some production data for 49 cow-calf farms in Ontario. The results show wide variation amongst beef cow farms in scale of enterprise, net income per farm and net revenue per cow (Table 1). While the overall average for Net Farm Income (NFI) was negative (a loss of $305), the top 1/3 group of farms had an average NFI of $35,131, while the bottom 1/3 had an average NFI of -$33,219.

Why the large difference between these groups? An overview of the numbers highlights a few of the probable reasons. As shown in Table 2, the high NFI group had more cows (119) compared to the average (81) and the low NFI group (60 cows). With about twice the number of cows, the high NFI group sold about twice the value of market and feeder animals as the low NFI group. The high NFI group also sold a greater value of breeding livestock, other livestock and other sales. All of these factors contributed to the advantage in NFI associated with the larger scale operations. Interestingly, the number of calves weaned per cow was almost identical for the three groups, indicating that reproductive efficiency and calf survival rate were likely not important factors influencing the differences in NFI among the groups.

Figure 1: Expenses, Revenue and Net Farm Income, Ontario Beef Cow Farms, 1998 - 2005*

 

Figure 2: Average Net Farm Income Compared to Highest 1/3 NFI Farms, 2001 - 2005*

 

Figure 3: Feed Cost Per Cow, Average Net Farm Income Compared To Highest 1/3 NFI Farms, 2001 - 2005*

*Data from the Ontario Farm Management Analysis Project

The high NFI group generated $106 more per cow in cattle revenues than the average, and $293 more than the low NFI group. In addition to having higher income per cow, the high NFI group also had lower expenses. They had $50 less per cow in variable expenses than the average NFI group, and $158 less than the low NFI group. Feed costs were the biggest single reason for these differences. As well, the fixed expenses for the high NFI group were $8 and $50 per cow lower than the average and low NFI groups respectively.

On the crops side of the operations (Table 3), there was very little difference among groups in expenses per tillable acre. However, the high NFI group produced $27 more per acre than the average group and $47 per acre more than the low group. Most of the crops were fed to the livestock on the farm for all 3 groups.

Table 1: OFMAP Summary for Ontario Beef Cow Farms, Beef Cow Enterprise Basis, 2005*

Net Farm Income Category

	Low 16 Farms	Avg 49 Farms	High 16 Farms
Average Number of Cows	60.1	81.2	118.9
Calves Weaned	52.8	70.5	102.2
Cows per Person (whole farm)	60.1	81.2	99.1

	Low 16 Farms	Avg 49 Farms	High 16 Farms
Cattle Sales Less Purchases	595	624	648
Change in Inventory & Receivables	-98	60	141
Feed Costs Including Home Grown	713	641	595
Other Variable Expenses	327	291	288
Total Fixed Costs	165	133	126
Beef Enterprise Net Revenue	-708	-382	-219

Table 2: OFMAP Summary for Ontario Beef Cow Farms, Whole Farm Basis, 2005*

Net Farm Income Category

Revenue	Low 16 Farms	Average 49 Farms	High 16 Farms
Market Livestock	3,300	11,690	12,322
Feeder Livestock	26,770	39,282	63,850
Breeding Livestock	4,050	4,998	11,142
Cull Livestock	2,928	1,686	1,107
Other Livestock	9,518	17,887	37,619
Crop Sales	4,143	5,623	6,578
Other Sales	7,156	13,613	27,898
Total Cash	57,762	94,779	160,516
Change in Inventory & Receivables	-5,995	6,755	19,059
Total Farm Revenue	51,767	101,534	179,575

Expenses	Low 16 Farms	Average 49 Farms	High 16 Farms
Purchased Livestock	5,776	9,682	14,126
Purchased Feed	6,613	7,227	10,957
Animal Health & Breeding	2,386	2,697	3,913
Other Livestock Expenses	1,033	4,019	10,968
Seed	2,790	2,239	1,716
Fertilizer & Lime	6,190	5,743	5,675
Other Crop Expenses	1,584	2,316	1,943
Marketing & Transportation	3,454	4,779	8,009
Custom Work & Equipment Rental	2,913	4,187	7,975
Hired Labour	874	1,958	2,870
Machinery & Equipment - Fuel	6,554	7,688	10,654
Machinery & Equipment - Repairs	6,924	6,894	7,974
Motor Vehicle Expenses	1,586	1,801	1,818
Building, Fence Repairs	1,505	2,967	5,310
Electricity & Telephone	2,958	3,126	4,282
Accounting, Office Expenses	2,074	1,650	1,866
Property Taxes, Fire & Liability Insurance	3,688	4,196	6,254
Lease & Rent Payments	2,027	2,835	4,712
Interest	4,973	5,657	8,417
Other Cash Operating Expenses	1,989	3,610	7,177
Depreciation	16,825	16,528	17,828
Total Farm Expenses	84,986	101,839	144,444
NET FARM INCOME	-$ 33,219	-$ 305	$35,131

* Data from the Ontario Farm Management Analysis Project

Table 3: OFMAP Sumary for Ontario Beef Cow Farms, Crop Enterprise Basis, 2005*

Net Farm Income Category

	Low 16 Farms	Average 49 Farms	High 16 Farms
Tillable Acres	397	435	487

	Low 16 Farms	Average 49 Farms	High 16 Farms
Crops Fed to Livestock	99	110	135
Crop Sales & Inventory Change	8	16	19
Crop Variable Expenses	58	59	62
Crop Fixed Expenses	41	39	40
Crop Enterprise Net Income	9	29	52

* Data from the Ontario Farm Management Analysis Project

It's always interesting to look at trends over time. Figure 1 shows a graphical summary of average revenue, expenses and net farm income for OFMAP data collected for 1998 to 2005. Figures 2 and 3 compare the High NFI group with the Ontario average for NFI income and feed costs per cow, respectively for the years 2001 to 2005.

The complete report can be found on the OMAFRA website at: http://www.omafra.gov.on.ca/english/busdev/download/ofmap.htm

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