The Cost of a Cow: Part 7 - The Summary

Well, it’s been a while, hasn’t it? What’s happened on KD Farms since I last posted? We finished harvesting, planted 49 acres of cover crops (39 acres were for nitrogen scavenging, 10 an experimental hairy vetch / winter wheat combo to see if we can get any nitrogen credit in the spring), cleaned up the equipment and put it away, we’re prepping for winter work which includes feeding the cows and horses we board over the winter, and I got engaged! :-)

The crops were OK. Not great. Our dill price is still pretty terrible thanks to some overproduction (putting it nicely) from another farmer. I can’t really blame them though. When a farmer sees a “win” for making money, they jump on it and try to bank as much as possible before the rest of the farmers find out the good thing and kill the market. Supply and demand rules the farming market and commodity prices. Well, supply and demand pretty much rules everything, actually. Hah!

So! Back to the cost of your beef, or cow, as I’ve been calling it. I’ve hashed out most of the details in previous blogs, so I’ll just use a summary here along with a couple caveats of numbers that I updated since the original version.

There was one item I underestimated: mineral costs, and one I updated to reflect more current costs: cow depreciation. Mineral I changed to $45 per year, which still may be a bit low, but more realistic than my previous number, and the depreciation I changed to $200/year, which means our cow is $1400 initial cost rather than $1500.

That said, here’s the breakdown of what it costs to raise a steer from birth, to finishing weight.

The detailed breakdown of the costs associated with raising a steer calf from a cow that was purchased. The cow initial cost was $1400, the butchering costs reflect local costs, and grazing and winter feed rates are in line with local costs.

All told, it’s $2,384 to get that steer to a finishing weight of 1300 lb. That steer will have an approximate hanging weight of 845 lb, and the cut and wrapped weight is approximately 550 lb. So, your meat costs the farmer $4.34 / lb to get it into your freezer.

Let’s simplify it a bit. Let’s combine the feed and mineral costs, the vaccinations, ear tags, fencing, labor, trucking and freezer space, and then combine the butchering costs. This gives us the following chart.

This is the same information as above, but simplified to larger categories.

As a keen observer will notice, feed is the majority of the cost of a cow. They eat a lot. They eat a lot to produce energy which either puts pounds on their calves, or if it’s a steer trying to finish, builds the frame to handle the 550 lb of meat it’s lugging around.

At KD Farms, we’re constantly trying new and innovative ways to feed cows to try to reduce the feed costs, or at a minimum, reduce the labor and fuel required to feed the cows. It’s the biggest expense, but it’s also an expense you cannot skimp on, particularly if you want to provide a good product. If you go too cheap on mineral or feed, your cows will start having health issues, guaranteed. A cow that is sick or is hurt isn’t making you any money, nor is it very kind to treat your animals in a way that doesn’t allow them to thrive and stay healthy and happy. But I digress.

Back to the numbers. So the beef in your freezer costs the farmer at least $4.34/lb to produce. So how much should you pay for it? $4.50/lb?

Lets look at that as an example. With 550 lb of meat, and a $0.16 / lb profit, that farmer makes $88 per animal sold. I believe the poverty level for a family according to the “affordable” care act is $45,000 per year, so lets use that as a point of talking. To make $45,000 per year, that farmer would have to sell 512 steers PER YEAR to make that amount of cash. That’s an insane amount of animals. That farmer would need 1000 mother cows to get that many steers, and approximately 3000-5000 acres of HIGH production land to feed them. For $45k/year? Forget it. That farmer should sell out if he/she could only get $4.50/lb for the meat.

How about if you paid $5/lb? That farmer would make $363 per animal sold. You’d need to sell 124 steers per year. $6/lb? 50 steers sold.

$6.50/lb? 38 steers sold.

$7.50/lb? 26 steers sold.

You get the picture.

Now, a cattleman would perhaps argue that you aren’t just selling steers, you’re selling heifer calves and whatnot too. Great point! The downside is that the costs are all the same and selling heifer calves at auction gets a far lower price per head than a finished animal. So it actually makes the cost per pound, in terms of the farmer, worse.

So, what idiot would ever want to raise cows if you have to do so much work, market your own product, have that product keel over and die on you sometimes, get sick sometimes, decide to tear down your fences and get in with the heifers, etc.? Well, this idiot, to be honest.

I love cows. They’re awesome. They’re like dogs but less needy. Though, you probably don’t eat dogs… wow. I went there. Sorry.

But I raise cows because I want to provide a quality product to local folks looking for cleaner beef, they’re good for our soil health, its awfully fun to watch them eat and play, and I hope to make some money so I can stay farming with my dad. That’s ultimately what it comes down to.

Why did I do this seven part series? I want folks to know what they’re paying for when they pay a little more than they do in the supermarket (for the inferior product). You’re helping your local farmer stay in business, and you’re helping guarantee you can get a good product the next time you’re looking for it.

So, how much is that worth to you?

Be blessed,

Kenny