COM 0118.019 2002-2004 - Laserfiche WebLink

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DISCUSS10n of Gross Revenue Production Per Acre of Pasture Page 2 Analvsis: Attached is a simplified presentation intended to illustrate the range of gross revenues a rancher may expect to realize on a per-acre basis from the production of calves in a typical cow-calf operation according to by real property tax pasture assessment classifications (Good, Average and Poor). The analysis considers the best and the worst set of assumptions in terms of carrying capacity, calf crop, sales weight, and market price. It also assumes that in the average cow- calfproduction herd, approximately 70% of the animal units are breeding (brood) cows. The balance are non-calf producers (i.e. bulls, culls, and young replacement heifers). Therefore not all "animal units" are producing calves. The analysis concludes that the gross annual revenue per acre from acow- calfoperation based on the above assumptions can range from: Good Pasture: $226.80 to $13.86 per acre annually Average Pasture: $ 90.72 to $ 3.48 " Poor Pasture: $ 27.72 to $ L 17 " In teens of real property taxes paid as a percent of gross revenue per acre, this analysis concludes taxes paid for pasture land represent: Good Pasture: R. P. Taxes equal .93% to 15.45% of gross revenue Average Pasture: .66% to 17.24% of gross revenue Poor Pasture: .62% to 11.96% of gross revenue We should note that this simplified analysis does not attempt to address all economic factors. For example: (a) There are some additional revenues from the sale of culled cattle for their salvage value, although this is a fairly nominal and highly variable revenue source. (b) Operating expenses often exceed gross revenues leaving the rancher in a net loss situation; (c) The poorer pasture areas, in addition to being the lowest in terms of gross revenue generation are also the most expensive per animal unit to operate due to relatively high costs often associated with fencing, transportation, water systems, security and feed supplementation.