Projected Cow Calf Returns to Decline

A rapid drop in cow/calf returns in 2016 and 2017 is cause for producers to think about or even ratchet back their beef cow expansion plans, says the Livestock Marketing Information Center’s Livestock Monitor.

LMIC’s estimated return peaked in 2014, surging to $530.22 per cow.

In 2015, the return was $303.08 a cow.  This was the second highest ever calculated by the LMIC, unadjusted for inflation, but it was down $227.14, or 42.8%, from 2014.

Over the last few months, cattle prices have been lower than expected.  LMIC’s price forecasts for calves to be sold this fall have been reduced and are currently about 15% below 2015.

With the recent adjustment down in LMIC’s forecast cattle prices, the 2016 return was lowered to $133.51 a cow, down $169.57, or 55.95%, from 2015.  If realized, this will be the lowest since 2013.  It also would be down $396.71, or 74.82%, from the 2014 peak.

While that is still a positive return over cash costs of production (including pasture rent), for some relatively high-cost operations the return may not cover all costs, and a further decline is forecast for 2017.




Year-over-year, the percentage decline in cull animal prices is even larger (dropping 25% to 30% from 2015) as seen in USDA Agricultural Marketing Service data.

Those lower prices to be received by cow-calf producers have caused 2016’s expected return over cash costs plus pasture rent to be revised lower, significantly.

Costs of production were projected to decline slightly, compared with 2015, because of lower feedstuff and fuel costs.  On a per-cow basis the year-on-year drop in these items will be only about 3% or roughly $25.00.




Since the mid 1970’s, the LMIC has estimated annual cow-calf returns based on a typical commercial full-time operation.  The estimates are not intended to represent an individual operation or resource base.  They are important because producer return is a key factor influencing national herd growth or contraction.

LMIC returns only include cash costs of production and pasture rent.  That is, return to owner management, labor, etc., are not included.