| | This free, Excel-based software tool helps cow-calf producers make more timely management decisions. Download yours today.
In his years as a cow-calf producer, Bruce Viney spent countless hours wrestling with several critical questions. How profitable will I be this year? Should I raise fewer cows, more cows or none at all? What happens if cattle and feed prices rise or fall between now and the end of the year? Given all that, should retained ownership be considered?
Now, as Alberta Agriculture and Rural Development’s (ARD) Olds-based Risk Management Specialist, Viney and his team have made it easier than ever to answer these questions. This past summer, ARD launched Rancher’s Return, a downloadable Excel spreadsheet tool developed to meet some of the decision-making needs of cow-calf producers.
“The analysis is the same process I used when I farmed myself,” Viney says. “To get a view of your profitability, you estimate production costs, breakeven selling prices, gross margins and return to equity. From this base, you can then assess the impact of different management strategies and external price changes. What’s great is that an exercise that used to be very time-consuming can now be done very quickly.”
Inside the features
Viney is quick to note that no two producers have exactly the same operation or past experience. For this reason, Rancher’s Return has the flexibility to calculate feed and input costs based on the user’s own production systems and feed usage. It quickly assists users in converting their own past experiences into numbers to support their
management decisions.
The program uses the producer’s operating and capital cost estimates to generate detailed results for total cash costs as well as non-cash costs like depreciation. Rancher’s Return generates cow replacement or steady-state herd maintenance cost estimates in a non-traditional and simplified manner. Rancher’s Return will calculate the producer’s:
- total gross margin
- gross margin per head
- total returns to equity and management
- total returns to equity and management per head; and
- breakeven selling prices.
Ranch-to-packer analysis
Viney explains that Rancher’s Return creates breakeven prices for both steers and heifers based on weight expectations, weaning percentages and expected price spreads. That raises a further question: when’s the best time to sell? Using the breakeven prices generated by the program, producers can then use FIR$T, a Feedlot Investment Risk Simulation Tool software program to evaluate the additional risks and returns associated with taking the animals to finish.
“When you combine Rancher’s Return with FIR$T (www.agriculture.alberta.ca/FIR$T), the producer has a great way to assess their total production costs all the way from ranch to packing house,” says Viney. “It’s also a great way to explore the potential profitability of programs like natural or organic beef that also entail higher production costs.”
While its features and insights are powerful, Rancher’s Return is designed to be easy to use. If your computer system can run Excel on the Windows 2000, XP or Vista operating systems, you have everything you need to run Rancher’s Return. Step-by-step instructions are included with the program, and one worksheet makes it simple to convert your current information into data the program can use.
Best of all, Rancher’s Return is downloadable off the Alberta Agriculture and Rural Development website, at no charge. To download your copy, visit http://www.agric.gov.ab.ca/ranchersreturn |
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