Costs of Producing Organic Beef

New study outlines the cost of a 50-head cow-calf operation.

Published on: Apr 4, 2006
In the first study of its kind in California, the University of California has examined an organic beef cattle operation in depth, identifying management practices, revenues, costs and marketing.

The study outlines the cost of a 50 head cow-calf operation that produces 40 cattle for processing, describing the assumed practices used to raise the herd and returns having the rancher selling the finished product direct to consumers.

The cost study details when most major operations occur as well as when the cattle are sold. Pasture and winter-feeding, normal veterinary care, fencing, processing, and life cycles are represented in text, table and chart formats to show how an organic cow-calf operation works. Actual costs and returns are highlighted in tables in the text and at the end of the study. Laws, ordinances, and Internet sites relating to an organic production and certification, organic labeling claims, and marketing are discussed and locations for finding them are given.

A separate marketing section explores possible avenues for ranchers to sell organic beef products. Considerations about potential marketing decisions are discussed and Internet references for other more in-depth marketing scenarios are given.

The study is intended as a guide only and can be used to make production decisions, determine potential returns, prepare budgets and evaluate production loans. The study is based upon a hypothetical ranch using practices in the region. UC farm advisors, researchers, ranchers, equipment and medical suppliers, and other agricultural associates provided input and reviews.

Assumptions used to identify current costs for the cow-calf operation, establishing the grass-fed beef herd, material inputs, and ownership costs are described in the study. Tables show herd costs, monthly cash costs, profits/losses over a range of prices and yields, and annual investment costs.

The study -- Sample Costs for an Organic Cow-Calf Operation, 50 Head in the North Coast Region of Mendocino & Lake Counties is available online at coststudies.ucdavis.edu, from the Department of Agricultural and Resource Economics, University of California, One Shields Avenue, Davis, CA 95616, and from local UC Cooperative Extension offices.

The study was prepared by John M. Harper, UCCE livestock and natural resources advisor, Mendocino and
Lake Counties, Karen M. Klonsky, UC specialist, Department of Agricultural and Resource Economics, UC Davis, and Pete Livingston, UCCE staff research associate, Department of Agricultural and Resource Economics, UC Davis.