Capital investments, such as machinery, are normally used by more than one enterprise, further complicating the analysis. In addition, the job of the cow-calf enterprise ends at weaning. Therefore, this enterprise needs to be analyzed separately from any backgrounding or feeding of the weaned calves that may be done on the same farm. Though returns over variable costs have at times been significantly positive for periods of several years, sustained periods of negative average returns can result in economic stress for the individual farm or ranch. Returns above variable costs are needed to maintain facilities, make capital improvements, expand the enterprise, and provide income for family living expenses.
Negative returns can result in large equity losses in a short period of time.
Table 1 presents performance, cost, and revenue data from a sample of herds across the United States from 1991 to 1994. The data reveal a wide variation between herds, which suggests there is a lot of room for improvement in net income in many of them. Similar findings are revealed when looking at data from individual states. In order to remain competitive and survive over time, individual producers should strive to be low cost per pound of weaned-calf producers. Weaning weight of calves.