1 / 13

Costs and Profitability Outlook for 2006

This report provides insights into the impact of fertilizer and fuel prices on the cost of production in the agricultural industry. It also offers recommendations on how to increase profits by reducing variable costs and improving productivity.

gstrickland
Download Presentation

Costs and Profitability Outlook for 2006

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Costs and Profitability Outlook for 2006 Curt Lacy Extension Economist-Livestock University of Georgia

  2. Fertilizer Prices – 1997-2005 A.N. prices have increased 46% since 2002 Department of Agricultural & Applied Economics

  3. Impact of Changes in Nitrogen and Potash on Hay Fertilizer Costs Per Acre* *Excludes all other costs Department of Agricultural & Applied Economics

  4. Impact of Changes in Nitrogen and Potash on Hay Fertilizer Costs Per Ton* *Excludes all other costs Department of Agricultural & Applied Economics

  5. Fuel Prices – 1997-2005 Diesel prices are up 104% since 2002 Department of Agricultural & Applied Economics

  6. Impact of Fuel & Fertilizer Prices on Cost of Production Department of Agricultural & Applied Economics

  7. Impact of Fuel Costs on Hay Costs Per Acre* *Excludes all other costs Department of Agricultural & Applied Economics

  8. Replacement Heifer Development Costs

  9. Replacement Female Considerations • Current economic value = -$218.77 • Breakeven purchase price = $801.40 • Years to breakeven = 7 Department of Agricultural & Applied Economics

  10. Expected Profits and Breakeven Prices Department of Agricultural & Applied Economics

  11. Now What? Where can you increase profits? • Increase conception rates • Decrease Variable Costs • What is your hay cost • Where do you store your hay? • Do you have alternative fertilizer sources • Legumes • Soil ph • Decrease Fixed Costs – Equipment & Females • Cull unproductive cows • Purchase hay? • Custom hiring hay • Can you do custom work? • Increasing herd size  lease cows instead of raising heifers Department of Agricultural & Applied Economics

  12. Good News-Bad News • Most cow-calf producers should be able to cover their cash expenses for the next few years • Cost of production for beef cattle producers has risen considerably in the last 2-3 years • Fuel & fertilizer prices alone have risen from 46%-105% • Many will not be able to cover all expenses • Producers should focus on increasing weaning %, culling unproductive cows and reducing fertilizer and fuel needs Department of Agricultural & Applied Economics

More Related