For many years, cow-calf producers were “poor cousins” as compared to grain producers.
That has changed, as financial returns for cow-calf producers have improved dramatically in recent years.
Back in 2020, I compared cow-calf producers with grain producers to see what was required for each to achieve $500,000 in gross returns.
For grain, I assumed a canola – wheat rotation with 45 bushel per acre wheat at the prevailing price of $7 a bushel and 40 bushel per acre canola at the $10 a bushel available at that time.
In this scenario, a grain farm with a little over 1400 acres would gross half a million dollars.
Meanwhile 550-pound calves were selling for only $2.20 a pound, meaning you’d have to sell over 400 calves to reach a gross of $500,000. A 1400-acre grain farm is considered pretty small, while a cow herd of over 400 is much larger than average.
Fast forward to 2025. Wheat is still around $7 a bushel while canola is now around $15 a bushel. Using the same yield assumptions as before, a grain farm can achieve a $500,000 gross return on just over 1200 acres. Not a big change from the previous 1400 acres.
However, for cow-calf producers, it’s reasonable to assume that 550-pound steers and heifers this fall will average $5.20 a pound. At that price, it takes only 175 calves to reach gross sales of $500,000. That’s a far cry from the 400 plus needed five years ago.
Putting it another way, a cow-calf producer selling the same number of calves this fall will likely gross nearly 2.4 times more money than five years ago.
