Agri-Profit$

 
  From the January 18, 2016 issue of Agri-News
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 Cow/Calf operations can be complex, and Alberta Agriculture and Forestry (AF)’s AgriProfit$ program contains a number of measures to help operators manage for long-term profitability.

“Cow/calf operations are an integrated set of activities including land use with forage and grazing production,” says Ali Cagdas, production economist, AF, Edmonton. “How these are used is related to the production systems in the herd? How and what do you feed? When do you calve and how do you manage that?”

In building these measures, Cagdas says AgriProfit$ analysis takes an enterprise approach.

“We break the three elements into their own enterprise where each enterprise shows a profit on their own ability to create this. It’s important to make a choice between enterprises; if I can make more money selling my hay than feeding it to my cows, why would not I just raise hay? This also gives the manager clarity because the focus can be on what to do to make that one piece of the business profitable.”

When it comes to specific measures for the cow herd, Cagdas says he would start out with a few productivity measures like:

  • pounds of calf weaned per cow wintered
  • wean weight as a per cent of mature cow weight
“These sum all of the management activities and respect the balance between cow size, production and carrying costs.”

From there, he would add a couple of economic performance measures, like:
  • total production cost per pounds of calf weaned
  • return on investment for the enterprise
“These sum up the effectiveness in choices made over time from what kind of cows are carried to breeding choices, feeding systems and so on,” says Cagdas.

On the land base use, measures would include for each the forage and grazing enterprise:
  • total cost per tonne of feed or per animal unit of grazing
  • how well each of these businesses does in generating enough or more than the cow herd needs
  • return on investment for each enterprise
In addition to all these enterprise level measures, AgriProfit$ analysis also delivers measures
to track a farms’ overall performance.

“There are many indicators that we provide through our analysis. The first measure I would suggest is return on assets, which is an indicator of level of income generated on assets. It’s a good, long-term measure of farm financial and management performance. The next measure is net farm income. This is the dollars of profit your business could generate. It’s useful for you, in terms of what is left over to pay you for your time, re-invest in your business and buffer you against risk.”

For more information, contact Ali Cagdas at 780-422-2903, by email at ali.cagdas@gov.ab.ca or go to the Agri-Profit$ webpage. Similar analyses are also available for crops and oilseeds and dairy farmers. Enrollment for this year’s program closes soon Friday, January 15th.

Contact:
Ali Cagdas
780-422-2903
 
 
 
 
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For more information about the content of this document, contact Ali D Cagdas.
This document is maintained by Ken Blackley.
This information published to the web on January 11, 2016.