Growing Beef Newsletter
November 2025, Volume 16, Issue 5
Cow-calf production cost trends - Do you know your operation cost?
Russ Euken, ISU extension livestock specialist
Record calf prices and high volatility are the headlines. Low cow numbers and calf supply along with good beef demand will likely support relatively high prices for the near future. On the other side, what is the situation with cow-calf production costs?
USDA Economic Research Service publishes cost of production estimates annually for various commodities in different regions of the United States. The estimate for 2024 annual cow-calf operating costs for the northern great plains area is $950 per cow with feed cost being the major share at $610 per cow annually. In addition, fixed costs are estimated to be $900 per cow with labor being about half of that total. Since 2018 total costs have increased by about 33% with most of that increase occurring during 2021-2023. Many of the non-feed operating costs have had significant increases and that is not surprising with the inflation rate during those years.
While the trend of increasing costs may be similar across operations, are the average costs representative of any one operation? Historical data and common sense tell us that cow-calf costs vary a great deal by operation for several reasons. Three data sources (1) , using actual operation information, report an average cost for high and low profit groups reveal a difference of $562 per cow between the profit groups. Lower cost typically means higher profit. Different feed and feeding methods, variation in land costs, etc. drive variation. The point is an average cost is not accurate for any one operation.
Knowing your own operation costs rather than relying on an average is important to make cost efficient management decisions. Do you determine annual cost for your operation? Tracking inputs for a cow-calf operation and arriving at a fairly accurate cost can seem difficult but there are a few steps to get started.
First make a list of what inputs are used in the operation. Quantities used and cost are important for some items like feed. Using a cow-calf budget that are available from many sources can be used a starting place to list inputs.
The major inputs will be feed, plus other operating expenses like vet expense, fuel, and repairs. Some of the details may exist, like records of purchased feed or vet med expense. Other items like home-raised feed may need to be tracked throughout the year. While ideal, it is highly unlikely that all feed will be weighed so using bales, loads quantity and determining a cost per bale or load may be needed. Land used for grazing can be valued at the actual or expected rental rate. Other operating costs can typically be gleaned from Schedule F of a tax return. Some expenses like fuel may need to be allocated among different enterprises.
Fixed expenses, indirect cost, or sometimes called overhead are things like depreciation on buildings, equipment, and livestock. This also includes insurance and taxes. Making a list of all those items and calculating depreciation will get you started. Typically for enterprise analysis a straight-line depreciation will be used, which is purchase price - (minus) salvage value divided by years of life to estimate the annual cost. With higher value breeding stock, the depreciation on cows will increase as well. Equipment that is used in various farm enterprises may need to have those expenses allocated.
Gathering and recording the expenses for a specific period, for most this is a calendar year, will provide the information to calculate an annual cost number for the whole herd. The whole herd costs can be useful for your own operation but breaking it down to a per cow number allows some comparison to other operations. Costs per calf weaned or costs per lb. of calf weaned are other measures that may be useful as well but require keeping track of number of calves and weights.
As far as commercial software programs specifically for cow-calf there are several that track and analyze performance but not many exist that track costs or financial data. Some whole farm business record systems will allow you to split out costs for an enterprise like a cow-calf operation, but the quantities of inputs may not be available. By using data already available you may not need a specific program or system to calculate the cost for your operation.
With current calf prices many operations will be profitable but paying attention to the cost side is still important. Look back over the last year and determine what information you already have that is needed to calculate an annual cost and make plans to start recording information that may be missing in 2026. If you have questions about calculating or managing cow-calf production costs, contact your beef field extension specialist.
(1) Data sources for cow cost variation
- Kansas State publication - Differences between High, Medium, and Low profit cow-calf operation 2016-2020 (pdf)
- University of Minnesota FIN BIN data 2020 -2024 for cow-calf operations
- Iowa State University Cow Systems manual 2016
This monthly newsletter is free and provides timely information on topics that matter most to Iowa beef producers. You’re welcome to use information and articles from the newsletter - simply credit Iowa Beef Center.
