BULLETIN

428

FEBRUARY 1972

An Economic Analysis of Two Confinement Systems VS. a Conventional System of Reef Cow-Calf Production

uNr ,

AgricUltural

Experiment

Station
Auburn, Alabomo

AUBURN
E. V. Smith, Director

UNIVERSITY

CONTENTS
Page
INTRODUCTION -OBJECTIVES METHOD OF STUDY4--------MANAGEMENT PRACTICES, CONSUMPTION, FORAGE YIELDS, FEED - - - - - -- - - - - -- - - - - -- -

3

3--------------

AND REPRODUCTIVE RESULTS-4

Crop Management5-----------F orage Y ields ----- ---- -------- ---- ------- - -Supplem ental Feed-- --- - --- - ------ - -- - - -Calf Results
ESTIMATED COSTS AND RETURNS---

- 5 -7 8---10

----Prices Paid and Received ------------Machinery and Power Costs----Cost of Forage Production -------5-Year Test Results ---- - -- - -- - -- -- - -- --PROJECTED ENTERPRISE BUDGETS AND

-

-10 10 -10 -11

CAPITALIZED LAND VALUE .-----------------------------

15
19

Statistical Tests ---------------------------- -------- 17 Land V alu es -- - -- - - - - - - - - - - - - - - -- - - - - - - -- - - - - - - - -- 18
SUMMARY AND CONCLUSIONS

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

A PP EN DIX -- - - - - - - - - - - - - -- -

- - - - - - - - - - - - - - - - - - - - - - - - - - -2 1

This is a companion report to Agricultural Experiment Station Bulletin 411 "Confined Feeding of Beef Brood Cows." Bulletin 411 presented primarily the physical data from the experimental work while this report deals chiefly with the economic aspects of the different production systems. Bulletin 411 is available upon request from the Department of Publications, Agricultural Experiment Station, Auburn University, Auburn, Alabama 36830.

-LI

FIRST

PRINTING

3M, FEBRUARY

1972

An Economic Analysis of Two Confinement
Systems vs. a Conventional

System

of

Beef Cow-Calf Production
SIDNEY C. BELL, ELLEN VAUGHN, and V. L. BROWN'

INTRODUCTION
MPROVEMENTS IN FORAGE CROPS and beef cattle genetics have offered cattlemen the opportunity to produce more and heavier calves. However, efficient utilization of some of the new highyielding forages decreases when high stocking rates are used. Also, the full potential offered by genetic improvements and crossbreeding cannot be realized because of inadequate and seasonal feed supplies. As a result of this situation, new interest in research on the management of beef cows in confinement has been generated.

I

OBJECTIVES This study was designed to compare costs and returns involved in the production of beef under two confinement systems and a conventional system. A primary reason for conducting this study was to determine if crops grown by intensive production systems could be used to economically produce beef calves. Specific objectives were: (1) To determine costs and returns involved in the production of beef calves. Three systems were considered: a confined feeding system using sorghum silage; a confined feeding system using Coastal bermudagrass hay; and a conventional system using Coastal bermudagrass for
1 Professor and former Graduate Research Assistant, respectively, Department of Agricultural Economics and Rural Sociology, and Superintendent, Lower Coastal Plain Substation.

4

ALABAMA

AGRICULTURAL

EXPERIMENT STATION

grazing and hay. (2) To compare the feasibility of these systems when changes occur in land price and crop yields. METHOD OF STUDY This experiment was initiated November 1, 1963, at the Auburn University Agricultural Experiment Station's Lower Coastal Plain Substation and continued for 5 years. Forty-five Hereford cows, divided into three comparable groups, were used initially. After 3 years these cows were replaced with Angus-Hereford cows. Group I. Conventional System. The 15 cows of this group were allowed to graze on 15 acres of Coastal bermudagrass pasture from early spring until November. From November 1 until grazing was adequate in spring, these cows received Coastal bermudagrass hay plus 2 pounds of cottonseed meal per day. Calves in this group did not receive creep feed. Group II. Confined silage. The 15 cows of this group were confined to a 3-acre paddock. Their feedstuff consisted of NK300 sorghum silage year-round, supplemented with 1.5 pounds per day of 65 per cent protein supplement during the first 180 days of lactation and 1 pound per day during the balance of the year. Creep feed was supplied on a free choice basis for the calves. Group III. Confined hay. This group of 15 cows was confined to a 3-acre paddock on a year-round basis and was fed Coastal bermudagrass hay daily. These cows received 1 pound per day per cow of 65 per cent protein supplement only during the first 180 days of lactation. These calves received creep feed on a free choice basis. Forage yields and animal input-output data from the experiment were used in this economic analysis. Prices of resources employed in production were obtained from experimental data, equipment dealers, and previous publications. These prices were used to develop costs and returns for the three different feeding systems. MANAGEMENT PRACTICES, FORAGE YIELDS, FEED CONSUMPTION, AND REPRODUCTIVE RESULTS The assumption was made that high forage and crop yields combined with better cattle management could be more ad-

ANALYSIS OF BEEF PRODUCTION

5

vantageous in confinement systems than in the conventional production system.
Crop Management

The total acreage planted was based on the following assumptions: 1. One acre of sorghum, cut for silage, or 1 acre of Coastal bermudagrass for hay would provide enough forage to support two cows and their calves (two cow-calf units) per year. 2. One acre of Coastal bermudagrass would furnish sufficient grazing and hay for one-cow-calf unit per year. Based on these assumptions, the following acreages were assumed to be adequate: 15 acres of Coastal bermudagrass for the conventional system (grazing and hay), 12 acres of forage sorghum NK-300 for the silage system, and 8 acres of Coastal bermudagrass for the confined hay system. Extra acreage was planted for the confinement systems to ensure adequate feed supplies. The Coastal bermudagrass pasture for the conventional system was divided into three approximately equal parts. This procedure allowed rotation of grazing and harvesting. During the summer 'months, this pasture was fertilized with ammonium nitrate and 0-14-14. The total amount of nitrogen applied was approximately 200 pounds per acre, Appendix Table 1. The Coastal bermudagrass used strictly for hay was fertilized with 400 pounds of nitrogen per acre in split applications. The hay crop was harvested in successive 5-6 week intervals depending on moisture conditions. The silage crop was produced on a fertile river-terrace soil and rotated to prevent possible soil-borne diseases such as red rot. The amount of fertilizer needed was determined the first year from soil tests and the maximum recommended rate for each crop was used. The same fertilizer rate was used each year of the experiment.
Forage Yields

Records of total forage production for each system are shown in Table 1. The 5-year average yield for silage was 17.15 tons per acre. Silage yields in 1965 and 1966 were reduced by drought during the growing season. Coastal bermudagrass exhibited more drought tolerance since yields remained fairly consistent.

6
TABLE 1.

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

ANNUAL FORAGE PRODUCTION PER ACRE BY TYPE OF FEEDING SYSTEMS, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

Year

Confined silage

Feeding system Confined hay

Tons/acre
1963----------------------------------------1964 ------------------------------------1965 ----------- -------------------------1966 --------------------------------------1967------------------------Average------------------------------ ---------

16.38 18.40 12.30 14.50
24.18 17.15

Tons/acre 7.50
7.96 6.92 6.84 8.24 7.49

Tons/acre
2.82 1.37 .79 1.36 2.07 1.68

When comparing the amount of forage produced on 1 acre with the total consumption for 2 cows, it was found that silage yields had an annual deficit of 8.53 tons per acre and Coastal bermudagrass hay about 1.11 tons per acre, Tables 2 and 3. Lower than expected yields were attributed to drought.
TABLE 2. ANNUAL FORAGE CONSUMPTION, BY TYPE OF FEEDING SYSTEM, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

Feeding system Year Confined silage Confined hay

Tons

Tons

Tons

1963-64 ---------------------------------------------22.12 178.47 58.16 1964-65---------------------------------188.53 63.56 22.96 1965-66-----------------------178.956550 23.51 1966-67--------------------------------208.35 67.86 24.48 1967-68---------------------------208.35 67.80 24.45 Average-------------------------192.53 64.57 23.50
Av. tons/cow/yr.--------------------12.84 4.30 1.57 TABLE 3. ANNUAL NET DIFFERENCE BETWEEN PRODUCTION AND CONSUMPTION, BY TYPE OF FEEDING SYSTEM, CONFINED BEEF STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

Year

Confined
silage'

Feeding system Confined Cnetoa
hay
Cnetoa

1963-64---------------------------1964-65---------------------------

Tons -47.44
-41.34

Tons 1.84
.12
-

Tons 20.18
2.41

1965-66--------------------------1966-67--------------------------1967-68---- ----------------------Average.--------------------------Per acre .------------------------

-80.55 -92.35 -14.91 -55.31
-

-10.15 -13.14 1.88 - 4.64
-

-11.66 - 4.08 6.60 1.73
.11

8.53

1.11

1 Data for the confined silage system are based on the production from 71/2

acres, which was assumed to be adequate, and the actual consumption by 15 cows.

ANALYSIS, OF BEEF PRODUCTION

7

Based on the 5-year average production, either 1.50 acres of silage or 1.15 acres of Coastal bermudagrass were needed to provide sufficient forage for two cow-calf units per year. conventional system of Coastal bermudagrass (grazing and hay) provided more than enough forage per annum. Actually, .93 acre per cow-calf unit was sufficient for this group.

The

Supplemental Feed

In addition to the forage produced, the cows and calves on both confinement systems received Auburn 65 feed supplement and creep feed as indicated earlier.
Formula for Auburn 65 supplement Per cent Cottonseed meal (41%) 59--U rea -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -1 5 G round snapped corn----------------------------------13 13---------------Dicalcium phosphate Vitamin A (10,000 IU/lb.) Creep mixture supplied to all confined calves G round shelled corn--------------------------------Ground Coastal bermudagrass hay----------------Cottonseed meal (41% )----------------------------------U rea- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - Cane molasses----- ----- ---- ----- ---- ---- - Sa lt -------------------------------- -0 M inerals -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - .65 15 -8 -1 -10 -0 .5 .5 Per cent

Consumption data for protein supplement are shown in Table 4. The reproductive data for the three systems are shown in Table 5. Results for 1963 through 1966 were from the original
cows and those for 1966 through 1968 were from the

Angus-

TABLE

4.

TOTAL ANNUAL

CONSUMPTION OF PROTEIN SUPPLEMENT,

BY FEEDING

S YSTEM, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68 Year Confined silage Feeding system Confined Cnetoa Cnetoa hay

Lb.
1963-64

Lb.
2,895

Lb.
4,395

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

6,855

1964-65---------------------------1965-66--------------------------1966-67---------------------------1967-68--------------------------5-yr. av ----------------------- ---.
5-yr. av. per cow.-------------------

6,510 5,835 7,050 7,050 6,660
440

2,085 2,220 3,300 3,300 2,760
184

4,335 4,065 4,410 .2,910 4,023
268

8

ALABAMA AGRICULTURAL

EXPERIMENT STATION

TABLE 5. NUMBER OF CALVES WEANED, PER YEAR BY FEEDING SYSTEM, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN SUBSTATION, 1963-68

Year Confined silage

Feeding system Confined hay Conventional No. 15 13 14 15 12 Pct. 100 87 93 100 80

No. Pct. No. Pct. 1963-64 15 100 13 87 1964-65 12 80 111 73 1965-66 13 87 9 60 1966-67-............................ 12 80 14 93 1967-68 _______ 14 93 14 93 1 There were 12 calves in this group but one calf did not eat was considered atypical.

-...............

creep feed and

Hereford cows. Two systems had a fairly high per cent calf crop weaned. The silage group averaged 88 per cent calf crop and the conventional 92 per cent. But the confined hay cows averaged only 84 per cent calf crop. Cows on the confined hay system had very poor reproductive results the third year. In 1965-66 the per cent calf crop weaned was only 60 per cent. 2 This same tendency was noticed in 1969 in the Angus-Hereford cows, which had a calf crop of only 60 per cent. Calf Results An important evaluation of cows on test was the weaning weights of calves. Calves were weighed at 250± 3 days of age and actual weaning weights recorded, Appendix Table 2. All weaning weights were corrected for age-of-dam and sex-of-calf according to factors listed in Appendix Table 3. The adjusted weaning weights in Table 6 were used for economic analysis purposes. Cows on the confined systems consistently weaned heavier calves than cows on the conventional system. The major reason for this was probably that calves on the confined systems received creep feed, Table 7. Since the Hereford cows were replaced with Angus-Hereford crosses in 1966, weaning weights of the calves were averaged for two separate periods, Appendix Table 4. The AngusXHereford cows weaned calves that averaged 32-53 pounds heavier than calves weaned by straight Hereford cows. Calves from each group were sold through auction markets. Most calves graded Choice as stockers. The value of the calves
'Data on the Angus-Hereford cows for 1969 were not included in this study. Calving data were the only data recorded.

ANALYSIS OF BEEF PRODUCTION
TABLE

9
SYSTEM,

6.

ANNUAL ADJUSTED CALF WEANING WEIGHTS, BY FEEDING CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN

SUBSTATION, ALABAMA, 1963-68

Feeding system Confined Confined silage hay Lb. Lb. Lb. 1963-64 --------------------------------------------------554 510 431 1964-65 -----------------------------------------426 521 454 1965-66 ---------------------------------------513 524 453 1966-67--------------------------------574 565 474 1967-68---------------------------- --- 590 490 484 5-yr. av. ----------------------------------550 509 454 Year
TABLE 7. AVERAGE ANNUAL CONSUMPTION OF CALF CREEP FEED, BY SYSTEM, CONFINED BEEF COW STUDY, LOWER COASTAL FEEDING

PLAIN SUBSTATION, ALABAMA, 1963-68 YearFeedingsystem

1963-64 ------------------------------1964-65 -----------------------1,255 19 65 -6 6 ---------------------------------------------------1,2 68 1,1 19 1966-67-----------------------1,583 1,564 1967-68-----------------------1,522 1,633 5-yr. av. 15----------------------------------------

Confined silage Lb. 1,355

Confined hay Lb. 1,266

1,343

TABLE 8.

ANNUAL AVERAGE ADJUSTED MARKET VALUE PER CALF, BY SYSTEM, CONFINED BEEF COW STUDY, LOWER COASTAL

FEEDING

PLAIN SUBSTATION, ALABAMA, 1963-68

Year

1963-64 --------------------------. 1964-65 --------------------------1965-66--------------------------1966-67------------------------_
--

Confined silage Dol. 109.54 124.60 128.24
142.24

Feeding system Confined Cnetoa Cnetoa hay Dol. Dol. 103.46 83.21 102.99 95.80, 123.38 115.62
139.32 1,15.83

1967-68--------------------------5-yr. av. --------------------------

146.39 130.20

122.50 118.31

116.09 105.31

was calculated from the adjusted weaning weights and market prices. This allowed a more accurate comparison among the three groups. The average market value by year is Table 8. Calves from the silage system brought approximately $25.00 per head more than calves from the conventional system and $12.00 more than the calves from the confined hay system. This difference in value was primarily a result of heavier weights of the calves in the silage system.

in

10

ALABAMA AGRICULTURAL EXPERIMENT

STATION

ESTIMATED COSTS AND RETURNS Tests results, along with projected prices, were used to compare costs and returns of the three feeding systems. Prices Paid and Received Prices paid for items used in producing calves were projected to 1971, Appendix Table 5. Costs of roughages were based on costs of production for all items that could be produced on the farm. Cost of calf creep mixture, Appendix Table 6, was based on purchase of inputs and custom mixing.
Machinery and Power Costs

Estimates of fixed and variable costs of machinery and power are shown in Appendix Tables 7-10. Fixed costs included taxes, insurance, housing, depreciation, and interest on investment. Variable costs were primarily operating costs and included fuel, repairs, and lubrication. The variable costs per hour and the annual hours of labor were based on previously published data.3 Prices paid for equipment were representative of dealer prices in the area. Depreciation was based primarily on the number of hours the item was used. Heavier equipment was depreciated over a 10year period while lighter equipment was depreciated over an 8-year period. Depreciation per hour of use was found by dividing the depreciation per year by the average number of hours used per year. Insurance, housing, and taxes were estimated to be 2 per cent of the average value of the equipment. The rate of interest was assumed to be 7 per cent of the average value of the machinery. Machinery requirements per acre for silage and Coastal bermudagrass production were obtained from the test, Appendix Tables 8-12.
Cost of Forage Production

Determination of costs associated with the production of roughages used as feed was necessary to make an economic analysis. Appendix Tables 13-16 show the costs of establishing Coastal bermudagrass, annual maintenance for pasture and hay, and the cost of silage production. Establishment cost for Coastal bermudagrass per acre was computed using estimated prices for
a SMITH, EASLEY S., AND JAMES D. OLIVER. 1965. Estimating Farm Machinery Costs. Virginia Polytechnic Institute Agr. Ext. Ser. Bull. 290.

ANALYSIS

OF

BEEF

PRODUCTION

11

1971 and present prices. This initial cost was prorated for a period of 15 years at a charge of $3.80 per acre per year. These costs were used to determine the cost per ton of roughage produced. Production cost of Coastal hay used for the confined feeding system included a high rate of fertilization along with the machinery cost for two cuttings per year. This accounted for the major cost difference between the two Coastal fields.
5-Year Test Results

When determining the costs and returns for three feeding systems during the years on test, some costs were held constant because there was very little change in the price of these inputs during the test. These items were tractor and equipment operating costs, fertilizer, labor, veterinary expense, and noncash machinery costs. Interest was charged at 7 per cent for a period of 6 months. Detailed lists of expenses and receipts by each system are shown in Appendix Tables 17-22. These tables show costs and returns for respective feeding systems for each year on the test. Prices used for forages and calf creep feed were derived from the costs of production. All other prices used were the average price paid and received by farmers in the State during these respective years. Noncash expenses included fixed machinery costs for forage production and fixed costs of the cow-calf enterprise, Appendix Tables 23-25. Returns to land, labor, and management were calculated by subtracting the total cash and noncash expenses from the total cash receipts. Based on these results, a summary table comparing the 5-year average receipts and expenses for each feeding system was prepared, Table 9. A comparison of the value of calf receipts was made among feeding systems. With one exception, results indicated the silage calves had more total receipts than the other feeding systems. This higher value was because these calves were heavier and averaged $.01 per pound more than calves in the other systems. Based on consumption data of cows in the conventional system, 15 acres of Coastal bermudagrass for grazing and hay was more than enough to furnish grazing and hay for the 15-cow unit. The excess forage was credited to the conventional system. Variations of excess forage that occurred in the two confinement systems were attributed to fluctuations in yield.

12

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

12

ALABAMA

AGRICULTURA

XEIEN

TTO

TABLE 9. FIVE-YEAR AVERAGE SUMMARY OF TOTAL RECEIPTS AND EXPENSES BY TYPE OF FEEDING SYSTEM, CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA 1963-68 Type of feeding system Item Confined silage Confined hay

Dol. Receipts -------------------------------Calves ---Excess forage .---------------------------------1,600 lb.-----------------------------1/4 bull Average total receipts.--------------------------

Dol.
1,471.17

Dol.
1,448.55

@

1,712.35 58.57
60.00

5.41

72.53

1,830.92

60.00 1,536.58

60.00 1,581.08

Cash expenses 169.32 131.05 ------ --- 314.95 ----Protein supplement 75.07 46.21 Forage purchased ------------------------------ 53.68 0 473.33 506.95 - Calf creep feed -----------------15.00 15.00 15.00 Veterinary expense-------------------------------. 16.50 16.50 16.50 Building and fence repair .-------------------159.30 170.00 167.88 Tractor and operating expense .--_-----_ 417.30 352.48 222.24 and seed .--------------------. Fertilizer, 75.00 80.00 106.80 Labor-------------------31.71 45.97 48.88 Interest on operating capital ----------Commission and yardage fee 45.26 45.94 53.17 (3% of gross receipts) 983.07 1,405.34 1,498.58 Average total cash expenses .---------------Noncash expenses 119.10 127.12 253.68 Noncash machinery cost----------------------105.00 105.00 105.00 1/4 bull -----------------------------------295.91 400.65 256.00 -----------------Fixed expenses .------------57.00 30.40 0 Establishment cost--------------------1,560.08 2,068.51 Average total cost of production-------------- 2,113.26

lime,

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

Average returns to operator's land, labor, and management ---------

_--_-282.34
-531.93

21.00

Differences in the cost of protein supplement resulted largely
from the controlled

feeding methods.

Each feeding system had

a different rate of protein supplement provided to the cows. The major difference among years (within the same feeding system) occurring in the cost of prowas the result of price tein supplement. A calf creep feed was supplied to those calves on the two confined feeding systems. The cost difference between the two confined feeding systems was a result primarily of the difference in number of calves eating creep feed. This also accounted for the cost variations among years that occurred within the same feeding systems. When 5-year average net returns of the three feeding systems were compared, only the conventional system showed a positive return to land, labor, or management. Therefore, the conven-

fluctuations

ANALYSIS

OF

BEEF

PRODUCTION

13

tional feeding system was more economical than either confinement system. Cows in the confinement feeding systems had a lower per cent calf crop and an additional cost of calf creep feed. These two factors along with the higher noncash expenses of the confinement systems accounted for the lower net returns. For a more detailed comparison between feeding systems, the variable feed cost for maintaining the cows was tabulated. The cost of forage consumption was assumed to be the variable costs of production minus the value of excess forage. This was added to the cost of protein supplement to obtain the variable feed costs for maintaining the respective 15-cow herds for each year. Interest was charged at 7 per cent annual rate for 6 months. The results indicated there was little difference between the variable feed costs incurred in the two confinement systems and the conventional feeding system, Table 10.
TABLE 10. VARIABLE Cow FEEDING COST, BY FEEDING SYSTEM PER YEAR, CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68 Feeding system Year Confined silage Confined hay

Dol. Dol. Dol. 1963-64 794.06 743.74 516.22 1964-65 ........................................ 739.11 721.56 885.94 1965-66-................ . 908.21 874.43 1,035.82 1966-67 984.12 994.50 945.24 1967-68 ..................................................... 711.97 817.32 668.16 Average -827.49 830.31 810.27 Average per cow 55.17 55.35 54.02

To determine total maintenance cost of the respective cow herds the following costs were added to the variable feed cost: veterinary expense, fence repair, and the noncash expenses. The total cow maintenance cost figures showed that the confined hay was the most expensive feeding system, while the conventional and confined silage were about the same, Table 11. The lower cost of storing silage and the higher cost of storing hay were reflected in these figures. To compare the three feeding systems with respect to efficiency of beef production, variable costs and total cost per pound of beef were determined. Variable costs included all annual expenses of cows and bull plus the cost of calf creep feed, Table 12. The most economical system based on variable cost per

14

14 ALABAMA AGRICULTURAL EXPERIMENT STATION
TABLE 11. TOTAL COW MAINTENANCE COST, BY TYPE OF FEEDING SYSTEM PER YEAR, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

Feeding system
Year Confined Confined

silage

hay

1963-64--------------------------------1964-65-----------------_--------------

Dot. 1,457.33
1,402.38

Dol. 1,455.50
1,433.32

Dol. 1,141.82

1965-66--------------------------------------------1966-67------------------------------------

1967-68---------------------------1,400.24 1,554.08 1,318.76 Average-- -- -- ------------------------------------- 1,495.76 1,547.07 1,440.88 Average per cow ------------------------------------ 96.06 99.72 103.14
TABLE 12. VARIABLE COST PER POUND OF BEEF PRODUCED BY TYPE OF FEEDING SYSTEM PER YEAR, CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

1,571.48 1,647.39

1,586.19 1,706.26

1,661.42 1,570.84

1,511.54

Feeding system
Year Confined silage Confined hay Dot. Dot.

Dol.
1967-68--------------------------------Average--------------------------------1966-67 --------------------------------.23..22

1963-64 ---------------------------------------- .16 .18 .20 1964-65 --------------------------------.21 .24 .17 196 5-6 6 -----------------------------------------------------.22 .2 6 .18 .19 .21
.15

.23 .23

.15 .16

pound of beef produced was the conventional feeding system. The'silage feeding system had the next lowest cost per pound of beef produced. The total cost per pound of beef produced is shown in Table 13. Fixed expenses (interest, annual depreciation, insurance, and taxes) are included in the total cost. The conventional system of feeding was again the most economical followed by the silage feeding system. The variable cost per pound indicated the price per pound that must be received by a producer to stay in business in the short run. On the other hand, it is the total cost per pound of beef produced that must be recovered if a producer is to stay in business over a long period of time. The average price per pound received was compared with variable and total costs associated with the production of a pound of beef, Table 14. On the average, the price received covered variable costs of all three systems. When fixed costs were added,

ANALYSIS

OF

BEEF

PRODUCTION

15

ANALYSIS OF BEEF PRODUCTION
TABLE 13. TOTAL COST PER POUND OF BEEF PRODUCED BY SYSTEM PER YEAR, CONFINED BEEF Cow STUDY, COASTAL PLAIN SUBSTATION, 1963-68

1
TYPE OF FEEDING LOWER

Year

Confined silage

Feeding system Confined
hay

Dol.
1 963 -64 ----------------------------------------------------1964-65--------------------------------1965-66 --------------------------------.26 .31 .31

Dal.
.30 .38 .41

Dol.
.2 4 .28 .27

1966-67--------------------------------1967-68 ---------------------------------Average------------- --------------------

.33 .27
.30

.30 .33 .34

.23 .26 .26

TABLE 14. AVERAGE VARIABLE AND TOTAL COSTS, AND PRICE RECEIVED PER POUND OF BEEF, BY TYPE OF FEEDING SYSTEM, CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

Feedingcost

Variable Dol.

Total
cost

received

Price Dot.

Dot.

Confined silage ---------------------------------------.21 .30 .24 Confined hay------------------------------------.23 .34 .23 Conventional .16 .26 .23
---------------------------------------

however, the cost per pound received was not to cover total costs of any system. However, when value of excess forage was credited to receipts, the conventional system had a positive return to land, labor, and management during the years of the test. PROJECTED ENTERPRISE BUDGETS AND
CAPITALIZED LAND

sufficient

VALUE

The projected enterprise budgets for three feeding systems are presented in this section. Using the experimental data, a statistical analysis was employed to determine any important differences among feeding systems. The effect of land prices on the three systems and the economic aspect of the use of calf creep feed were also considered. The projected enterprise budgets, Tables 15-17, were calculated using the averages obtained on test for feed consumption, weaning weights, calf crop, and forage yields. The number of acres planted for each system was the number required to carry the cows 1 year. Interest was charged at a rate of 7 per cent on operating capital and 6 per cent on real estate. Taxes and insurance were considered to be 1 per cent of the average value of the items on which these costs were applicable.

16

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

16i

ALABAMA AGRICULITURLEPIMN

ST

IO

TABLE 15. ESTIMATED COSTS AND RETURNS FOR CONFINED SILAGE SYSTEM (ESTIMATED PRICES 1971), CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

Item

Amount

Price

Total

Dot. Cash receipts
Calves, 18.2 @ 550, lb., cwt. -----------------------72.60 4.50 Bull, 1/4 @ 1,800 lb., cwt.----------------------------Total cash receipts---------------------Cash expenses Protein supplement, cwt. 66.60 192.50 Silage NK-300, ton -------------------------------------Calf creep, ton.-------------------------9.22 $700 -- ---------------------------Bull cost, 1/4 $1.10 per cow unit Vet expense $1.26 Building. and fence repairs - -- p er co w -- - - - -- - - - -- -- - -- - -- --- - -- -- - -- - Commission and yardage fee (3% of gross receipts) Interest on operating capital @ 7% of cash expense minus yardage fee ----for 6 m onths---------------------Total cash expenses---------------------._31.97 18.00

Dot.
2,321.02 81.00 2,402.02 783.48 506.73 175.00
16.50

----------------------------5.14 342.32
4.07 54.96

@

@

@

-----

- - -- -1

8.9 0 726---------

-

58.38
1,973.37

Fixed expenses (See Appendix Table 26)--Returns to operator's land, labor, and management--------------------

345.78 ----82.87

TABLE 16. ESTIMATED COSTS AND RETURNS FOR CONFINED COASTAL BERMUDAGRASS HAY (ESTIMATED PRICES 1971), CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION,

ALABAMA, 1963-68

Item

Amount

Price

Total

Dol. Cash receipts
Calves, 12.6 @ 509 lb., 1,800 lb., cwt----.----------Bull, 1/4

Dol.
2,050.24 81.00

@

cwt.-------------

63.13 4.50
_ ___

31.97 18.00
____

Total cash receipts---------------------

2,131.24

Cash expenses Protein supplement, cwt.--------------Coastal bermudagrass hay, ton----------Calf creep, ton

Bull cost, 1/4 hull $700.------------$1.10 per cow unit-----Vet expenses $1.26 Building and fence repair @~c p er cow - - - -- - -- - - - -- - - - - - - -- - - -- -Commission and yardage fee (3% of gross receipts)------------ ------Interest on operating capital

@@

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

27.60 64.50
8.73

5.14 13.86
54.96

141.86 893.97
479.80

----

----

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

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

175.00 16.50 18 .90 63.94 54.29
1,844.26

@ 7% cash expenses minus yardage fee

of

for 6 m onths ----------------------Total cash operating expenses-----------

Fixed expenses (See Appendix Table 27)----Returns to operator's land, labor,
-----and management---------------------

----

-------

574.86 -287.88

ANALYSIS

OF

BEEF

PRODUCTION

17

ANALYSIS OF BEEF PRODUCTION
TABLE 17. ESTIMATED COSTS AND RETURNS FOR CONVENTIONAL BEEF Cow SYSTEM (ESTIMATED PRICES 1971), CONFINED BEEF Cow SYSTEM, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68 Item Amount Price

1

Total

Dol.
Cash receipts 454 lb., cwt.------Calves, 13.8 Bull, 1/4 @ 1,800 lb., cwt.---------------------------Total cash receipts Cash expenses Protein supplement 41 % CSM, cwt.----------Coastal bermudagrass hay and Bull cost, 1/4 bull @ $700---------------Vet expenses $1.10 per cow unit---$1.26 Building and fence repair per cow --------------------------- Commission and yardage fee (3% of gross receipts) --------------------------7% of Interest on operating capital cash expenses minus yardage fee and hay for 6 months -------------------------Total cash expenses -------------------------Fixed expenses (See Appendix Table 28)Return to operator's land, labor, and managem ent ------------------------------pasture, acre----------------------

Dol.

@

62.65 4.50 40.23 13.95
-----___

31.97 18.00

2,002.92 81.00 2,082----------39------2-222.87 834.35 175.00
16.50

5.54
59.81

@

@

-----------

18.90

@

62.38
32.89
1,362.89

------

- ------

-- -

424.63

296.40

The conventional feeding system showed the highest net return to land, labor, and management. The major variable cost difference between this feeding system and the two confinement systems was the cost of the call creep feed. The fixed costs incurred varied among systems. The'silage system had much less capital investment than either the Coastal hay confined or Coastal conventional system. The lower cost of the trench silo as compared with a pole barn to store the roughages was the main reason for the cost difference between the two confined systems. Statistical Tests For a statistical comparison of the three feeding systems, an analysis of variance was made for variable cow feed costs, total cow maintenance costs, and variable costs per pound of beef produced. The analysis of variance involved data for the respective feeding systems and indicated the amount of variation that could be expected among the three feeding systems. The following hypotheses were tested: 1. There was no difference among the three feeding systems with respect to variable beef cow feed costs.

18

ALABAMA AGRICULTURAL EXPERIMENT STATION

2. There was no difference among the three feeding systems with respect to total cow maintenance costs. 3. There was no difference among the three feeding systems with respect to the cost per pound of beef produced. Tests of the first and second hypotheses indicated that at the 5 per cent level of significance there were no differences among the three feeding systems. Testing of the third hypothesis indicated a significant difference existed among the feeding systems at the 1 per cent level. Land Values For some practical use of the results of this research work, the following question was posed: What effect does the increased value of land have on the economic feasibility of these three systems? With the problem of higher land value, most beef producers are interested in the effect of land price on the method of raising beef calves. If the price of land were high enough, it would become economical to use a confinement feeding system. A break-even price of land was needed to determine the point above which use of a confined feeding system would become more economical than the conventional system. This estimated value of land (break-even price) was determined by a comparison between the conventional system and each confinement system. Projected net returns to land, labor, and management, Tables 15-17, were used for these estimates. The difference in net returns between the conventional system and each of the confined systems was divided by the difference in the respective land requirements. The resulting value ($79.08 per acre comparing the conventional with the silage system) represented the annual return to land. With a 7 per cent interest rate, the capitalized land value would be $1,430. If a beef producer had to purchase land above this price, it would be more economical for him to use the confined silage as opposed to a conventional system. As the forage yields on confinement systems are allowed to increase, the capitalized land value decreases, Table 18. This means that the two confinement systems are becoming more competitive with the conventional system. With increased yields relative to the conventional system, consideration of changing from a conventional to a confined feeding system would occur at a lower land value.

ANALYSIS

OF

BEEF

PRODUCTION

19

NALYSIS
TABLE

OF BEEF PRODUCTION
18. THE BREAK-EVEN PRICE OF LAND' WITH CHANGES IN YIELD OF Two BEEF CONFINEMENT FEEDING SYSTEMS COMPARED TO THE CONVENTIONAL FEEDING SYSTEM
System

1

Systm

YieldBreak-eVenValue

Yeld er cre

of land per acre
Dol.

Tons
Silage-----------------------

Silage ------------- ------------------------Silage----------------------------Silage----------------------------------

17.15 20.00
25.00 30.00

Confined Confined Confined Confined
1 The

hay------------------------hay--------------------hay-------------------------hay--------------- -------

7.49 8.00 8.50 9.00

1,130 703 488 405 1,566 1,417 1,312 1,231

difference in net returns capitalized at 7 per cent interest rate.

SUMMARY AND CONCLUSIONS This study was undertaken to determine if the present intensive production of crops could be utilized to produce beef calves economically. Data for three systems of feeding beef cows, (two confinement and one conventional) for a 5-year period were used. In the confinement systems, one group of cows was fed sorghum silage all year and the other group fed Coastal bermudagrass hay, with both groups using some protein supplement. Calves from both confined systems had free access to creep feed. The conventional system had Coastal bermudagrass grazing from April to November and Coastal bermudagrass hay plus protein supplement during the winter months with no calf creep. The acreage required for the systems was determined by dividing the average consumption per year by the average production obtained. Results indicated that 11.25 acres of silage, 8.62 acres of Coastal hay, and 13.95 acres of Coastal for grazing and hay were required to support the 15 cows in each group. Records were kept on cow-calf performance and forage production for the 5-year period. Based on the results, the costs and returns for the respective feeding systems were determined. The costs and returns showed, on an average, that both confinement feeding systems had a negative return to land, labor, and management. When projected prices were used, the confined hay system was the only system that had a negative return to land, labor, and management:
Item
Average net returns on test------------$ Net returns, estimated prices for

Silage

Conf. hay.

1971--

-282.34 82.87

$-531.91 -287.88

Cony.
$21.00 296.40

20

ALABAMA AGRICULTURAL EXPERIMENT

STATION

Analysis of variance was run on variable cow maintenance, total cow maintenance, and cost per pound of beef produced. No difference among the feeding systems with respect to total and variable cow maintenance costs was indicated. There was, however, a significant difference among the three systems when comparing the cost per pound of beef produced. The conventional system was more economical than either confinement system. The net returns and land requirements of the respective feeding systems were compared. Use of an estimated break-even value of land indicated that at present production the price of land had to be exceedingly high before any consideration would be given to a confinement feeding system. As the yield on silage and Coastal bermudagrass hay varied, the break-even value of land decreased. With an increase in yield from 20 to 30 tons of silage per acre, the break-even value of land decreased from $703 to $405. A 1-ton per acre increase in Coastal bermudagrass hay in the confined Coastal bermudagrass hay system resulted in a decrease in the break-even value of land from $1,417 to $1,231. This depicts the increased competitiveness of the confinement systems with the conventional system as forage yields increase. However, as increases in yield occur in the confinement systems, fixing of the Coastal bermudagrass yield for the conventional system is not very realistic. Any increase of yield in the conventional system would result in a higher break-even value of land than indicated. The main advantage of the confinement systems was the lower amount of land required to furnish sufficient forage for the cows. As the price of land increases, the lower acreages required for confinement feeding become increasingly more important.

ANALYSIS

OF

BEEF

PRODUCTION

21

ANALYSIS OF BEEF PRODUCTION

21

APPENDIX
APPENDIX TABLE 1. FERTILIZER TYPE AND RATE OF APPLICATION BY TYPE OF FORAGE, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN

SUBSTATION,

ALABAMA, 1963-68

Type of forage Silage----------------------------------

Type of fertilizer

4-12-12 Am. nitrate Coastal bermudagrass hay ------------------------------0-14-14 400 Am. nitrate 1,212 Coastal bermudagrass pasture-------------------------0-14-14 400 Am. nitrate 634
APPENDIX TABLE 2. SYSTEM, ACTUAL CALF WEANING WEIGHTS PER YEAR, BY FEEDING CONFINED BEEF COW STUDY, LOWER COASTAL

Rate per acre Lb. 400 225

PLAIN SUBSTATION, ALABAMA, 1963-68

Year

1963-64------------------------ --1964-65------------------------ --1965-66------------------------ --1966-67------------------------ --1967-68------------------------ --5-yr. av.--------------------------APPENDIX TABLE 3. CONFINED

Confined silage Lb. 485 485 496 562 569 519

Feeding system Confined hay Lb. 434 431 473 547 479 473

Lb. 375 395 437 466 428

469

Cow

CORRECTION FACTORS FOR ADJUSTED WEANING WEIGHTS, STUDY, LOWER COASTAL PLAIN SUBSTATION,

ALABAMA,

1963-68

Age of dam Female
Years

Sex of calf Male 1.17 1.10 1.05 1.00 1.05 1.08

5-9 -------------------------- 10-12 - - - - - - - --- - - - - - - -- - - - - - - - -- - - - - - - 13 --- - - - - - - - - - - - - - - - - - - - - - -

1.24 1.17 1.11 1.06 1.11 1.14

22

22 ALABAMA AGRICULTURAL EXPERIMENT STATION
APPENDIX TABLE 4. TWO AND 3-YEAR AVERAGE CALF WEANING WEIGHTS, BY FEEDING SYSTEM, CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68 Feeding system

Item

Confined
silage

Confined
hay

Lb.
3-year average 1964-661-----------------------2-year average 1966-682--------------------------529

Net difference
1

+53 ±-------------------------------+ 32 +42

582

Lb. 496
528

Lb. 437
479

2

Hereford cows. Angus-Hereford cows.
APPENDIX TABLE 5. Item PRICES USED IN BUDGETS ESTIMATED IN 1971 Unit Price

Prices received Calves---------------------------- --Bulls-------------------------Prices paid Coastal bermuda hay (confined) 1 ---------Silage--------Protein

Dol. --

cw t. cw t. acre ton ton
cwt.

31.97 17.00 59.81 13.86 4.07
5.14

Coastal grazing----------------------

-

supplement-

Cottonseed

Fertilizer 0-14-14--------------------------4-12-12-------------- ---------- --Ammonium nitrate-----------------Lime (custom spread)--------_------B ull------------------------------- Cow s--------------------- ---------L abor----------------------------- -2
Establishment costs of Veterinary -------3 Building and fence

meal --------------

_-------

cwt.

5.54

cw t. cw t. cwt.
cwt.

2.00 2.15 2.81
8.00

expenses

coastal-----------_-------

head head hour
acre cow/unit
cow/unit

700.00 200.00 1.60
3.80 1.10 1.26

repair--------------

' James G. Hamill and Willard F. Wolf. 1968. Data for Farm Planinig in the Quachita River Valley Area of Louisiana. Louisiana State University Department of Agricultural Economics Research Report No. 374.

1 Cost of production cost does not include noncash expense. 2 Prorated over 15 years of life.

ANALYSIS

OF

BEEF

PRODUCTION

23

ANALYSIS OF B EEF PRODUCTION
APPENDIX TABLE 6. COsT OF PURCHASING AND CUSTOM 1 TON OF CALF CREEP FEED, 1970 PRICES, CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA

2

MIXING

Price per pound Total Dot. Dol. Corn, 1,300 lb.---------------------------------------.022 28.60 Ground coastal hay, 300 lb.--------------------. .016 4.80 Cottonseed meal 41%, 160 lb.---------------. .055 8.80 M olasses, 200 lb.----------------------------.016 3.20 Salt and mineral, 20 lb.--------------------------.033 .66 U rea 1%, 20 lb.--------------.045 .90 Custom m ix--------------------------------- - - -8.00 54 .96 --T otal cost ----------- -------- -----------------------

Item

--------------------ANNUAL FIXED

APPENDIX TABLE

7.

ESTIMATED NEW, AVERAGE, AND COSTS FOR SILAGE EQUIPMENT

Item

New

AverageHousing, Avae Interest valueinsurance Dol.
449.75
67.22

taxes, and Dot.
128.50

Dol. Dol. Tractor, large 9,740.00 6,425.00 Tractor, small-----------------5,970.00 3,940.00 Offset disk. ---------------------1,450.00 906.25 Tandem disk 300.00 187.50 Fertilizer spreader, 10 ft.-. 411.58 263.41 Planter, 4-row------------------1,165.38 728.36 Cultivator _ _--------223.00 139.38 Side dressing rig .------------267.25 167.03 Silage cutter------_----- 3,635.00 2,217.35 Self unloading wagon 2,204.12 1,377.58

------------- 275.80
13.12

78.80
18.12

--------------------- 5.27 18.44
3.75

------

50.98
9.75

14.57
2.78

11.69
155.21 96.43

5.01
44.34 27.55

----

APPENDIX TABLE 8. HOURS OF ANNUAL COSTS PER HOUR OF USE FOR SILAGE

ESTIMATED

EQUIPMENT

USE AND FIXED

Item

Housing, Average taxes, and hours used insurance per year per hour use
Hours Dot.

Interest per hour use
Dot.

Dep. per Total fixed hour cost per use hour use

Dot.
.83
.51
.89

Dot.

Tractor, large -----------Tractor,
Offset

disk -------------4-row -----------

small--------

800
800
133

.16
.10
.13

.56
.34
.50

1.53
.95
1.52

Tandem disk.-------_---

Fertilizer spreader, 10 ft._Planter.

133

.03

.10

120
60

.18

.06
.24

.31

.15
.85

.31
1.82

.52
2.91

Cultivator--------------Side dressing rig ------- _ Silage cutter------------Self unloading

wagon ----125

208 147 125

.01 .04 .35
.22

.05 .09 1.24
.77

.10 .19 3.63
1.65

.16 .32 5.22
2.64

24

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

24

ALABAA

AGRICULTURLEPIMN
ANNUAL

STIO

APPENDIX TABLE 9.- ESTIMATED NEW, AVERAGE, AND FIXED COSTS FOR HAY EQUIPMENT

Item

New

AverageHousing, Avae Interest valueinsurance

taxes, and

Dol.
Tractor, 4-row------------------9,740.00 Tractor, 2-row--------------5,970.00 M ower 627.67 Side delivery rake-----------650.00 Fertilizer spreader, 10 ft.411.58 Baler --------------------------------2,696.67 Hay liner _----------------- 5,740.00 -------

Dal.
6,425.00 3,940.00 379.74 406.25 263.41 1,631.48 3,404.43

-----------------------------26.58
28.43
18.44

_--

Dal. 449.75
275.80

Dll.
128.50
78.80
7.59

8.12
5.27

114.20
238.31

32.63
68.09

APPENDIX TABLE 10. ESTIMATED HOURS OF ANNUAL USE AND FIXED COSTS PER HOUR OF USE FOR HAY EQUIPMENT

Item

Housing, Average taxes, and hours used insurance per year per hour use

Interest per hour use

Dep. per Total fixed hour cost per use hour use

Hours

Dol.

Dol.

Del.

Del.

Tractor, 4-row ------------800 .16 .56 .83 1.53 Tractor, 2-row --------------------800 .10 .34 .51 .95 M ower -------------------------------167 .04 .16 .30 .50 Side delivery rake 130 .06 .19 .26 .51 Fertilizer spreader--------------120 .06 .15 .31 .52 Baler ------------------------------------208 .16 .55 1.02 1.72 Hay liner -----------------------------208 .32 1.15 2.18 3.65

APPENDIX TABLE 11. MACHINERY AND LABOR REQUIREMENTS PER ACRE OF COASTAL BERMUDA Two CUTTINGS PER YEAR, CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-681

OeainTractor Opeatonsize

Times over

Machine hours

Man hours

Hr.
Fertilize-------------------

Hr.
1.2

----

small

3

1.2

Mow ------------------------R ake-------------------------Bale -------------------------Haul and stack ----------------T ota l -- - - - - - - - - - - - - - - - - - - - - - - Tractor hours L arge ---------------- ------Sm all -------------------1'Machine

sm all sm all large small - - - -1.4 8.6

2 2 2 2

1.4 1.0 1.4 5.0 - -1

1.4 1.0 1.4 5.0 0.0

hours from original test data used on confined heef cow study, Lower

Coastal Plain Substation, Alabama, 1963-68.

ANALYSIS

OF

BEEF

PRODUCTION

25

ANALYSIS OF BEEF PRODUCTION
APPENDIX TABLE 12. MACHINERY AND LABOR REQUIREMENTS PER ACRE OF SORGHUM SILAGE, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-19681

2

Operation

Tractor size

Times over

Machine hours

Man hours

Hr.
Break (offset disk) ----------------------------large 2 Disk ---------- --- ---- --- --- ---- --- ---- -----small 1 Fertilize ---------------------------------------small 1 Plant ---- ---- ---- ---- ---- -------- -------- ---large 1 Cultivate -------------------------------------small 1 .8 .4 .4 .7
.7 .8

Hr.
.8 .4 .4 1.4
.7 1.6

---------Cutting silage -----------------Cultivate and side dress

small

1

large small large ----- - - -3.1 4.1
data based on

1 2 1

.7 1.8 .9 -. -8

.7
1.8 .9 2 .9

Hauling silage with self unloading wagon.------------Packing ----------------------C ovening ---------------------T ota l-- - - - - - - - - - - - - - - - -- - - - - - - Tractor hours L arge -- -- - - -- - --- -- - - -- - -- - - Sm all -- - - -------------- ----1

Machine

hours from

original test

Lower Coastal Plain Substation, Alabama, 1963-68.
APPENDIX TABLE 13.

confined beef cow study,

(PROJECTED PRICES),
Item

ESTIMATED SORGHUM SILAGE COSTS PER ACRE
CONFINED BEEF Cow STUDY, LOWER

COASTAL PLAIN SUBSTATION, ALABAMA

Quantity

Price

Amount

Dol.
Cash expenses Seed, NK-300, lb.--------------------Lim e',

Dol.
1.60
2.00

8.00
.25

.20
8.00

ton.---------------------

Fertilizer 4-12-12, cwt.----------------------Ammonium nitrate, cwt.

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

4.00
2.25

2.15
2.81

8.60
6.32

Tractor operating expense Large tractor, hour----------Small tractor, hour----------------

3.1 4.1

Equipment operating expense, hour-------

Labor, hourCover, plastic sheeting-----------------. Total cash expenses----------------- -Noncash expenses Interest on operating capital

8.9 ---------

------

1.77 1.44

5.49 4.67
3.83

1.60 ---.

14.24 25 47.00 1.64 21.14 22.78

7% for 6 m o.----------------------Noncash machinery expenses-----------Total noncash expenses_--------------Total cost of 1

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

---

production

.-----------

-------

69.78

Lime required every 4 years, one-fourth of the cost charged per year.

26

26 ALABAMA AGRICULTURAL EXPERIMENT STATION
APPENDIX TABLE 14.

ACREl,

(ESTIMATED
Item

ESTIMATED COST OF COASTAL BERMUDA HAY PER PRICES 1971), CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA

Quantity -.25

Cash expenses Lime', ton-Fertilizer
0-14-14, cwt.

Price Dol.
8.00

Total Dol.
2.00

- - -

Ammonium nitrate, cwt. Tractor operating expense Large tractor, hour
Small tractor, hour-------Equipment operating expense_

4.00 12.12 1.40 8.60 10.00
------

2.00 2.81
1.77

8.00 34.06
2.48

1.44
------

9.80
8 .97

Labor, hour---------------Total cash expenses---------Noncash expenses
Interest on operating capital

1.60
----- ------------- --------- --------- --------- -----

16.00
81.31 2.85 3.80 15.89 22.54 103.85

7% for 6 mo. -----------Establishment cost2---------Noncash machinery costs----Total noncash expenses------

Total cost of production -------1 Lime required every 4 years, one-fourth of the cost charged per year. 2Prorated for period of 15 years.

APPENDIX TABLE 15. ESTIMATED COSTS OF COASTAL BERMUDA PASTURE AND HAY PER ACRE, ONE CUTTING PER YEAR, (ESTIMATED PRICES 1971), CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA Item Quantity Price Amount

Cash expenses Lime, ton---------Fertilizer

Dal. .25 4.00 6.34 1.70 4.30
---

Dol. 2.00 8.00 17.82 1.24 4.90
4.48

8.00 2.00 2.81 1.77 1.14
---

0-14-14, cwt.----------------------Tractor operating expense Large tractor, hour-----------------Small tractor, hour-----------------Equipment operating

Ammonium nitrate, cwt.--------------

Labor, hourTotal cash

Noncash expenses

expenses --------------------

-

expense -----------

5.00
------

1.60

8.00
46.44

Interest on operating capital

7 % for 6 m o..----------------------Establishm ent cost 2--------------------Noncash machinery costs--------------Total noncash costs--------------------Total cost of production .-----------1 Lime 2 _--- -

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

---

____ ------

___ --

1.63 3.80 7.94 13.37
59.81

Prorated for period of 15 years.

required every 4 years, or ye-fourth of the cost charged per year.

ANALYSIS OF BEEF PRODUCTION
APPENDIX TABLE 16. ESTIMATED COASTAL BERMUDAGRASS ESTABLISHMENT COST PER ACRE FOR ALABAMA, 1971 Item Cash expenses Lim e', ton .-- - -- - -- - -Fertilizer 0-14-14, cwt.-- - Ammonium nitrate, cwt. Sprigs and custom planting Tractor operating expense Large tractor, hour
Small tractor,

27

Quantity ~1L~ U~ l r\T~~LII 'l'~ J I~L~ ~I\~~ L
-- -

Price

Amount

Dal.
8.00

Dal.
8.00

1.00

--

-

2.00
4.00 1.00

2.00
2.81 20.00

4.00
11.24 20.00

hour Equipment operating expense, hour_

L abor, hour ------------- ,------Total cash expenses _------------Noncash expenses Interest on operating capital for 6 mo. ---------------Noncash machinery costs----------

1.77 1.14 -----------2.80 1.60 ----- -------------- ----------

.80 2.00

1.42 2.28 1.03 4.48 52.45
1.84

7%

Total noncash

expenses-__________

2.69

Establishment costs per acre.-------. --------Lime required every 4 years, one-fourth of the cost charged per year.

56.98

4.53

28

ALABAMA AGRICULTURAL EXPERIMENT

STATION

APPENDIX TABLE 17. COSTS AND RETURNS FOR CONFINED SILAGE FEEDING SYSTEM, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68 Item Receipts Number of calves (head)____________ Year 63-64 15.00

64-65
12.00

65-66 13.00

66-67 12.00

67-68 14.00

Price of calves (dol. /hd.)___-______-_

1,643.10 1,495.20 1,667.12 1,706.88 2,049.46 Value of calves (dol.) 81.81 0 0 32.26 18.08 Excess forage (ton)____------------------1.94 0 0 2.55 2.87 Price of forage (dol./ton) 158.71 0 0 82.26 51.89 Value of forage (dol.)-------------------60.00 60.00 60.00 60.00 60.00 _---------------------1/4 bull (dol.)----------1,754.99 1,637.46 1,727.12 1,766.88 2,268.17 Total cash receipts Variable cash expenses 70.50 70.50 58.35 65.10 68.55 ----------Protein supplement (cwt.) 4.96 4.47 4.86 4.60 4.70 Price protein sup. (dol./cwt.)-----_. 349.68 342.63 260.82 322.18 299.46 Cost of protein sup. (dol.) 0 34.35 31.35 0 0 Forage feed (ton). 0 3.24 3.82 0 0 Price of forage (dol./ton)0 111.29 119.76 0 0 Cost of forage (dol.)-213.08 189.96 164.84 203.25 150.60 Calf creep feed (cwt.).------------2.75 2.75 2.75 2.75 2.75 Price of creep feed (dol./cwt.)__,_ 585.97 522.39 453.31 414.15 558.94 Cost of creep feed (dol.)--------------51.24 52.67 47.68 43.47 49.33 Interest on oper. cap. (dol.) 63.28 53.01 51.81 46.66 51.09 Sales expense (dol.)----------------------933.38 1,081.99 1,050.17 981.54 803.74 Total variable cash exp. (dol.) Total constant cost (dol.)'_____________ 1,138.10 1,138.10 1,138.10 1,138.10 1,163.102 2,119.64 1,941.84 2,071.48 2,220.09 2,213.27 Total cost of production (dol.) Returns to operator's land, 54.90 -364.65 -304.38.-344.36-453.21 labor, and management

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

109.54

124.60

128.24

142.24

146.39

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

----------

------------_----------

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

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

1

2 Price

See Appendix Table 18. of bull increased to $500 per head.
APPENDIX TABLE 18. CONSTANT COSTS FOR CONFINED SILAGE FEEDING SYSTEM, CONFINED BEEF Cow STUDY, LOWER COASTAL

PLAIN SUBSTATION,

ALABAMA,

1963-68 Price Total

Item Cash expenses Veterinary expense, head, 15____________________
Building and fence repair, head,

Dol.

Dol.
15.00
16.50

---------Tractor and equipment operating expense, acre, 12__
15
Fertilizer, lime, and seed expense, acre, 12--------Noncash machinery costs, acre, $400--------------------------1/4 bull Fixed expenses (Appendix Table

1.00
1.10

13.99
18.52

167.88
222.24

Labor, hour, 106.8----------------------------Noncash expenses

1.00
21.14

106.80
253.68

@

12 -----------------23)---------------

---

---

100.00
256.00

Total constant expenses

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

1,138.10

ANALYSIS

OF

BEEF

PRODUCTION

29

ANALYSIS OF: BCEEF PRODUCTION
APPENDIX TABLE 19. COSTS AND RETURNS FOR CONFINED HAY FEEDING SYSTEM, CONFINED BEEF COW STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

2

Item

Item 63-64 64-65

Year 65-66

66-67

67-68

Receipts Number of calves (head) .__________ 13.00 12.00 9.00 14.00 14.00 Price of calves (dol. /hd.)__________ 103.45 102.99 123.28 139.32 122.50 Value of calves (dol.)-------------------1,344.98 1,235.88 1,109.52 1,950.48 1,715.00 Excess forage (ton) ._______________________ 1.84 .12 0 0 0 Price of forage (dol/ton) 13.85 13.05 0 0 0 Value of forage (dol.) 25.48 1.57 0 0 0 1/4 bull (dol.) 60.00 60.00 60.00 60.00 60.00 Total cash receipts (dol.)----------- 1,297.45 1,169.52 2,010.48 1,775.00 1,430.46 Variable cash expenses Protein supplement (cwt.).___________ 28.95 20.85 22.00 33.00 33.00 Price protein sup. (dol./cwt.) 4.70 4.60 4.47 4.86 4.96 Cost of protein sup. (dol.)------------- 95.91 136.06 99.23 160.38 163.68 Forage purchased (ton) ._______________ 0 0 10.14 13.14 1.88 Price of forage (dol./ton) 0 0 15.01 15.18 12.60 Cost of forage (dol.) _____________________ 0 0 152.20 199.47 23.69 Calf creep feed (cwt.) __________________ 164.58 147.73 100.71 218.96 228.62 Price of creep feed (dol./cwt.).___2.75 2.75 2.75 2.75 2.75

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

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

---------

------

---------452.60 42.79

Cost of creep feed (dol.) Interest on oper. cap. (dol.)-----

406.26 39.77

276.95 40.67

602.14 55.86

628.71 50.75

Sales expense (dol.)
Total variable cash exp.
Total constant cost

-___________

Total cost of production (dol.) .____
Returns to operator's land,
labor, and

(dol.)-------

(dol.)---

42.15
673.60

38.88
580.82

35.09
1,292.15

60.31

53.25
920.08

604.14 1,0'78.16

1,292.15 1,292.15

1,292.15 1,317.152

1,965.75 1,872.97 1,896.29 2,370.31 2,237.23
-535.29 -575.52 -726.77 -359.83 -462.23

management --------

'See Appendix Table 20. 2 Price of bull increased to $500.

APPENDIX TABLE 20. CONSTANT COSTS FOR CONFINED HAY FEEDING SYSTEM, CONFINED BEEF Cow STUDY, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963-68

Item Cash expenses Veterinary expense, head, 15 Building and fence repair, head, 15 Tractor and equipment operating expense, acre, 8 Fertilizer and lime expense, acre, 8_-----------_ Labor, hour, 80 -- - - -- - - -- - - -- - - Noncash expenses Establishm ent cost, acre, 8_-------------------_ Noncash machinery cost, acre, 8---------------1/4bull @ $400----------------------------Fixed expenses (Appendix Table 24) Total constant expenses----------

Price
Dol.

Total

Dol.
15.00
16.50

1.00 1.10 21.25 44.06 1.00 3.80 15.89

170.00 352.48 80.00 30.40 127.12 100.00 400.65 1,292.15

30

30 ALABAMA AGRICULTURAL EXPERIMENT STATION
APPENDIX TABLE 21. COSTS AND RETURNS FOR CONVENTIONAL FEEDING SYSTEM, CONFINED BEEF COW STUDY, LOWER COASTAL

PLAIN SUBSTATION, ALABAMA, 1963-68

Item

63-64

64-65

Year 65-66
14.00

66-67
15.00

67-68
12.00

Receipts Number of calves (head) 15.00 13.00 Price of calves (dol./hd.) .---------83.21 95.80 Value of calves (dol.)----------- 1,245.40 _------ 1,248.15 Excess forage (ton). 20.18 0 Price of forage (dol./ton) 13.85 0 Value of forage (dol.) 279.49 0
1/4

--------------115.62 115.83 116.09
1,618.68 1,737.45 1,393.08
0 0 6.60

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

Total cash receipts (dol.)------------- 1,587.64 1,305.40 1,678.68 1,797.45 1,536.24 Variable cash expenses Cottonseed meal (cwt.) 43.95 43.35 40.65 44.00 29.10 Price cottonseed meal (dol./cwt.) 4.08 3.95 3.86 4.47 4.88 Cost of cottonseed meal (dol.)_----_ 179.32 171.23 156.91 197.13 142.01 Forage purchased (ton)----------------. 0 2.41 11.66 4.08 0 Price of forage (dol./ton) 0 13.05 15.01 15.18 0 Cost of forage (dol.) 0 31.45 175.02 (1.93 0 Interest on oper. cap. (dol.)---------30.18 31.00 35.53 32.98 28.88 Sales expense (dol.)--------------- 39.16 _----47.63 50.36 53.92 46.08 Total variable cash exp. 1 (dol.)------ 257.13 272.84 417.82 345.96 216.97 Total constant cost (dol.) ------------- 1,255.11 1,255.11 1,255.11 1,255.11 1,280.112 Total cost of production (dol.) 1,512.24 1,527.95 1,672.93 1,601.07 1,497.08 Returns to operator's land, labor, and management --------------75.40 -222.55 5.75 196.38 39.16

bull

60.00 60.00 60.00 60.00 (dol.)--------------------------------

----------- 0 0 ------------------0 0

12.60 83.16 60.00

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

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

-------COW

x See Appendix Table 22. 2 Price of bull increased to $500.
APPENDIX TABLE 22. CONSTANT SYSTEM, CONFINED BEEF COSTS FOR CONVENTIONAL FEEDING STUDY, LOWER COASTAL

PLAIN SUBSTATION,

ALABAMA,

1963-68

Item
Cash expenses
Veterinary expense, bead, Building and fence repair, head,

Price

Total
Dol. 15.00 1 6.5(0

Dol. 15-------------------15--------------1.00 1.10

Tractor and equipment operating expense, acre, 15_Fertilizer and lime expense, acre, 15-------------Labor, hour, 75------------------------------Noncash expenses
Establishment cost, acre, Noncash machinery costs, acre, 14 bull $400-------------------------------

10.62 27.82 1.00
3.80 7.94

159.30 417.30 75.00
57.00 119.10

15 ---------------------

Fixed expenses (Appendix Table 25) --------------Total

@

15 ----------------------

------

100.00 295.91
1,255.11

constant

expenses ---------- ---------

ANALYSIS

OF

BEEF

PRODUCTION

31
FIXED COSTS

APPENDIX TABLE 23. INVESTMENT COMPONENTS AND ANNUAL FOR 15-BEEF COW HERD, SILAGE CONFINEMENT SYSTEM, COASTAL PLAIN SUBSTATION, ALABAMA, 1963

LOWER

Item

No.

Annual fixed costs Value New Average Interest Depre- Taxes & Average Inte elNew ation insur. Dol. Dol. Dol. Dol. 28.12 0 6.46 5.62 36.00' 5.71 81.91 Dol. 0 0 .32 .28 1.80 .57 2.97 2,250.00 2,137.50 149.62 100.00 72.50 5.08 64.57 32..28 1.94 750.00 360.00 375.00 180.00 1.97 10.80

Total Dol. 177.74 5.08 8.72 7.87 48.60 7.99 256.00

Cows 15 Bull 1/ Fences, ft..______ 7,051 Front end loader 1 Trench silo-------1 Feeding trough and shed-----1 Total . ____

-...........

28.57 1.71 57.14 2,581.71 2,825.85 171.12

APPENDIX TABLE 24. INVESTMENT COMPONENTS AND ANNUAL FIXED COSTS FOR 15-BEEF Cow HERD, COASTAL BERMUDAGRASS CONFINEMENT SYSTEM, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963

Item

No.

Annual fixed costs Value New Average Interest Depre- Taxes& New Average Interest ation insur. Dol. Dol. Dol. 2,250.00 2,137.50 149.62 100.00 72.50 5.08 64.57 32.28 1.94 1,549.87 774.94 46.49 3,964.44 3,017.22 203.13 Dol. 28.12 0 6.46 154.87 189.45 Dol. 0 0 .32 7.75 8.07

Total Dol. 177.74 5.08 8.72 209.11 400.65

Cows 15 Bull 1/4 Fences, ft. 7,051 Pole barn...... 1 Total

APPENDIX TABLE 25. INVESTMENT COMPONENTS AND ANNUAL FIXED COSTS FOR 15-BEEF Cow HERD, COASTAL BERMUDAGRASS CONVENTIONAL SYSTEM, LOWER COASTAL PLAIN SUBSTATION, ALABAMA, 1963

Item

No.

Value New Average Dol. Dol.

Annual fixed costs Interest epre- Taxes & ciation insur. Dol. Dol. 28.12 0 27.36 56.42 111.90 Dol. 0 0 1.36 2.82 4.18

Total Dol. 177.74 5.08 36.93 76.16 295.91

Cows-........ 15 Bull 1/4 Fences, ft...... 7,051 Pole barn..... 1 Total

2,250.00 2,137.50 149.62 100.00 72.50 5.08 273.58 186.79 8.21 564.17 282.08 16.92 3,187.75 2,628.87 179.83

APPENDIX TABLE 26. INVESTMENT COMPONENTS AND ANNUAL FIXED COSTS FOE 15-BEEF Cow HERD, CONFINED SILAGE SYSTEM, LOWER COASTAL PLAIN SUBSTATION, ALABAMA Value New Average Annual fixed costs
Depre-

Item

No.

Taxes &
insur.

Total

nteres

ciation

Cows'_________________: 15 Bull 1/4 Fences, ft. 1,664
Front end

----------------------loader -----------1 1,000.00 500.00 2.63 Trench silo 1 450.00 225.00 13.50 45.00
0 11.30 7.50 Feeding trough

Dot. Dot. Dol. 3,000.00 2,512.50 175.88 175.00 128.00 8.96 113.00 56.50 3.39

Dot. 60.93

Dot. 0
0 .56 .38

Dot. 236.81
8.96 15.25 10.51

and shed---Total__________

'Depreciated

__
1

2.25 .50
3.69

60.75 13.50
345.78

100.00

50.00

3.00

10.00
134.73

4,838.00 3,472.00 207.36

over 200 head for a period of 10 years.

APPENDIX TABLE 27. INVESTMENT COMPONENTS AND ANNUAL FIXED COSTS FOR 15-BEEF Cow HERD, CONFINED HAY SYSTEM, LOWER COASTAL PLAIN SUBSTATION, ALABAMA

Item

No.

NewVleAna Average Dot. Dot.

Interest Dot.

Depre- ot ie Taxes & ciation insur.

Total Dot. 236.81 8.96 15.25 313.84 574.86

Dot.

Dol.

Cows .---Bull.---- Fences, ft.-

15
1/4

Pole barn--

1,664 1

Total----- - --------------------- ----

3,000.00 2,512.50 175.88 175.00 128.00 8.96 113.00 56.50 3.39 2,324.80 1,162.40 69.74 5,612.80 3,859.40 257.97

60.93 0 11.30 232.48 304.71

0 0f .56 11.62 12.18

APPENDIX TABLE 28. INVESTMENT COMPONENTS AND ANNUAL FIXED COSTS FOR 15-BEEF Cow HERD, CONVENTIONAL SYSTEM, LOWER COASTAL PLAIN SUBSTATION, ALABAMA

ItemN New

Value

Annual fixed costs
e DepreInteresciation Taxes & inur.

v e Average

Total

Cows .___________
Bull Fences,

Pole barn-----Total _________

---ft.-----7,051

Dot. Dot. Dot. 3,000.00 2,512.50 175.88 15 8.96 14 '-------175.00 128.00
478.78 239.39 14.36

Dot. 60.93
0 47.88

Dot. 0
0 2.39

Dot. 236.81
8.96 64.63

1 __

846.26 423.08 25.38 4,500.04 3,302.97 224.58

84.62 193.43

4.23 6.62

114.23 424.63