It’s good to pencil out the costs of your business once in awhile just to see where you are at on the balance sheet. But if you are a cattle rancher, you probably shy away from looking at how much money you have been losing especially in the last few years. There is a reason why cow/calf operations in Manitoba contracted by 7% in 2022.
So here’s some back of the napkin costs for someone thinking of keeping a few cattle. The assumptions are that you already have a small plot of land, say 80 acres, some outbuildings, and ready access. Many young families are already choosing this type of lifestyle out in the country.
The numbers will be for Manitoba in $CAD using costs from 2022. Your goal is to start out with 20 bred cows plus 1 bull calving in March with the weaned calves for October sale. Assumptions are that costs will be low end of the scale and you will be putting in a lot of sweat equity and will be able to be mostly available to look after the animals.
INPUTS
- 20 Bred Cows – $2000 each, these are low quality animals but you have to start somewhere – $40000
- 1 Two Year Old Bull – you got real lucky at the auction, stole this one – $4000
- Infrastructure – Upkeep of barn, sheds, fences, drinkers, tools, chute, headgate, cattle/calving supplies, etc. – $10000/yr
- Normal Vet Bills – vaccines, medicine, supplies, preg/semen checks, can’t even count taking an animal in or calling them out to the ranch – $2500/yr
- Pasture Rental (1/4 Section) – hopefully pasture is available close by or there’s a community pasture with space. BTW, two years ago the community pastures were kicking the animals out in August to save the grass. Also, you might have to improve the fencing for added costs – $6000/yr
- Manure Removal – if you haven’t got your own machinery, you’re either renting or calling in custom to clean your pens yearly – $2000/yr
- Transport – you have to move cattle back & forth to pasture, to market, to the vet, etc. We’ll assume you have a buddy that can help out and you can trade favours to cover these costs. But custom trucking is in the range of $300/hr.
- Feed – dry hay is your most cost efficient feed source. To get cattle through our Manitoba winters, we figure on 8 X 2000lb bales per animal. Feed has been in very short supply due to the drought years on the Prairies. They’re still using straw laced with molasses to get animals through this winter. You’re lucky and found reasonable priced bales with reasonable transport costs. BTW, the truckers pay full Carbon Taxes & guess where those costs get pass to. So $100/baleX8X21 animals = 168 bales – $16800/yr
- Bedding – hopefully you can source some straw nearby, we were selling ours for $50/bale last year. That’s going to be lots of forking for you since you don’t have your own front end loader. Let’s say 100 bales for the winter – $5000/yr
- Salt & Mineral – salt happens to be incredibly cheap, something like $8/50lb bag. Mineral more expensive at $50/40lb bag. Your animals need it plus some way to feed it other than just throwing blocks on the ground – $500/yr
- Operating Costs – we could assume you have a nice old farmer who is okay with unloading all your bales and setting it up so you could creep feed through the winter. You will still have to feed the cattle in their pens during calving but you could go old school and just fork the hay over the fence. Have fun doing that twice a day. The farmer could be paid in cookies baked by your wife and she could show him a little skin once in awhile. But you’ll have some extra fuel costs and electrical costs – $1000/yr
- Cost Year 1 – @$88000, yearly costs for subsequent years – @$45000
INCOME
- Will lose 1 calf (heifer this yr) due to accident, illness, predators
- Need to keep back 3 heifers as replacements
- Assuming 50/50 split, there will be 6 heifers/10 steers for fall sale
- Assuming really good gains on the pasture, steers will average 700lbs, heifers 650lbs
- Last years prices were the best we’ve seen in quite awhile, $2.40/lb for steers & $2.10/lb for heifers
- Assume about $1500/cull cow sold
- Assume about 5% costs for the auctioneer to sell the calves
- Gross Income – $8190 for the heifers/$16800 for the steers/$4500 for the cull cows minus 5% commission = $28000
Congratulations! Your first year losses are in the range of $60000 and each year after you are losing an additional $17000. Not to mention, you are tied to animals that could all die on you if you don’t constantly pay attention to them especially during calving season. Hope you enjoyed having a life before cattle cuz that’s your whole life now. You now have a time consuming, expensive hobby farm.
The smart people who think about going into cattle for a living just burn their cash instead of going through all this hassle.