PROJECTIONS, PRODUCTION AND PROFITS
John Bonner Ph.D.
Land O’Lakes
What will be your return on investment be for 1999? You have probably checked the protein content of your forages. You have closely monitored your feedbunk and you have set production goals for your cattle, but have you checked out the overall cattle market outlook and situation? In a recent presentation sponsored by Elanco, Quality Liquid Feeds and Land O’Lakes, Mr. Randy Blach of CattleFax reviewed cattle and meat supplies and demand as well as the feed grain outlook for 1999. He presented several key graphs, charts and projections that should help you focus on maximizing your profits.
One interesting fact that you may have overlooked is that an average $20/head profit during the last three years would have translated to a 37% annualized return on investment, assuming 130 days on feed. This compares to an average $33/head loss that cattle feeders have experienced during that same time frame. The table below was presented and reflects the return on investment that your competition may be happy with over the course of time.
Annualized Return on Investment (ROI) vs. Per Head Profit
Given $150 per Head Collateral
|
Days On Feed |
$5.00 |
$10.00 |
$15.00 |
$20.00 |
$25.00 |
$30.00 |
$35.00 |
$40.00 |
$45.00 |
$50.00 |
|
80 |
15% |
30% |
46% |
61% |
76% |
91% |
106% |
122% |
137% |
152% |
|
90 |
14% |
27% |
41% |
54% |
68% |
81% |
95% |
108% |
122% |
135% |
|
100 |
12% |
24% |
37% |
49% |
61% |
73% |
85% |
97% |
110% |
122% |
|
110 |
11% |
22% |
33% |
44% |
55% |
66% |
77% |
88% |
100% |
111% |
|
120 |
10% |
20% |
30% |
41% |
51% |
61% |
71% |
81% |
91% |
101% |
|
130 |
9% |
19% |
28% |
37% |
47% |
56% |
66% |
75% |
84% |
94% |
|
140 |
9% |
17% |
26% |
35% |
43% |
52% |
61% |
70% |
78% |
87% |
|
150 |
8% |
16% |
24% |
32% |
41% |
49% |
57% |
65% |
73% |
81% |
Do you have a plan for a 20-30% annualized return on investment? A plan is only as good as the data that it is built on. We would like to send you a copy of the information that Randy Blach presented. Call Melanie at 1-800-369-3060 ext. 2825 for your free copy of the proceedings. For assistance in fine tuning your projections for production and profit contact your local Land O'Lakes Farmland Beef Specialist or contact us at webmaster@beeflinks.com