Daily News Update, Jan. 7, 2008

LMIC reports 2007 cow-calf returns slightly positive

U.S. cow-calf operations have seen their profitability decline in recent years due to lower calf prices and higher costs of production. Since 2004, Livestock Marketing Information Center estimated returns over cash costs plus pasture rent for a commercial cow-calf operation in the Southern Plains have declined by over $100 per cow.

Still, returns were slightly positive for 2007 (about $38 per cow), but the estimated cow-calf cash return in 2007 was the lowest since 2002 and the second lowest since 1999.

The upswing in production costs for cow-calf operations has been across the board, including winter feedstuffs, pasture, fuel, and labor. USDA's monthly Agricultural Prices report tracks the general prices paid for production items in agriculture.

In January 2007 USDA reported that costs for production items were two percent above a year earlier, by July the increase was 7 percent and in December the annual increase was 11 percent.