Source: Government of Alberta
“This new cost and returns report, for the years 2018–2022, presents a multi-year summary of the economic, productive and financial performance of Alberta cow/calf producers who participated in the AgriProfit$ Business Analysis Program,” says Ian Ryan, senior livestock economist with the Alberta government. “Participating cow/calf producers received a customized business analysis of their operations for comparison to this multi-year benchmark report.”
The AgriProfit$ Program is free, and individual participant information remains confidential. This report presents the aggregated results of the cow/calf producers participating in the AgriProfit$ Business Analysis Program. This consists of a series of tables and figures with average historic provincial data showing the sales, production costs, and selected production and financial indicators for the past 5 years.
“The value of this cost of production analysis is not in the figures themselves, but in gaining a better understanding of the farm business in order to pinpoint areas for improvement,” says Ryan. “Profitability can vary widely from year to year, but keeping thorough records of costs and returns can help control profitability. Each year is different and dependent on the relationships between yield, price and costs, as well as the producers’ financial situation. Proactive cost management makes businesses better able to weather periods of fluctuation.”
The benchmarks summarize all sources of income and expenses related to cow/calf enterprises and covers all the activities related to producing and raising calves until weaning in a given fiscal year. The main sources of income for a cow/calf enterprise are sales of weaned calves, cull cows, heifers and bulls. The main expenses are winter feeding and grazing cost, veterinary services, buildings and machinery maintenance and repair, paid and unpaid labour, and more.
The economic performance indicators in this report are presented in the form of dollars per unit of production (dollars per pound weaned and dollars per cow wintered). Physical performance indicators are presented based on breeding and feeding information, as well as other physical measures such as conception, calving, weaning and calf crop rates and pounds weaned per cow (exposed and wintered).
The financial performance indicators provide a snapshot of the sector’s liquidity (ability to meet financial obligations as they come due); solvency (ability to meet long-term financial obligations); and profitability (the returns generated by the cow/calf business). Finally, this report includes a glossary providing definitions of the terms and performance indicators used in the tables.
The bottom line, says Ryan, is that benchmarking allows comparisons of cost of production based on production practices and marketing strategies, which can help drive efficiency and financial performance. This information helps improve decisions about what, when and how much of a commodity to sell.
For more information, see:
AgriProfit$ cost of production and business analysis program
