As I have sat and watched online Brahman sales this past month, I began to wonder why more ranchers have not turned to the Brahman breed. It made me wonder whether people truly knew how profitable raising Brahmans can be, so I decided to do some research and put some real numbers into a scenario. Unsurprisingly, when I put pen to paper, the numbers came out in favor of raising Brahmans over traditional, commercial cattle. Let’s do some math, and I will show you what I mean.
Of course, the inputs of land cost and feed vary across the county, but I will use input costs from Mississippi for these scenarios. I did a substantial amount of research to get the numbers for this example but do note these examples are estimations.
Pastureland, in Mississippi, rents for $50 to $75 per acre, and we can run a pair per acre. The average cost of feed per ton is $250. Hay costs approximately $50 per 1,000 lbs. for good, quality hay. So, in this example, including vaccinations twice per year, the average inputs for one cow for one year is $500. To raise a calf on creep feed and feed him through the winter will be around $400. This leaves us with input costs of around $900 for each cow and sale-ready calf.
Price per Cow
|Pastureland||~ $62.5/acre||1 Pair/acre|
|Hay||$50||Per 1,000 lbs.|
|Vaccines||$137.50||2x per year|
For the sake of this example, let’s assume we have 65 acres with 50 head of commercial cattle. The cost of a commercial heifer ready to breed is close to $1,500, and a commercial bull would be around $3,000. For 50 heifers, we would need at least three bulls. The start-up cost of this herd would be around $84,000. According to our input calculations, our inputs would be $26,500.
|Year 1 Commercial||Item||Price|
|Heifers x 50||– ($1,500 x 50) = $75,000|
|Bulls x 3||– ($3,000 x 3) = $9,000|
|Inputs (feed, hay, land, etc.)||– ($500 x 53) = $26,500|
The second year, our cows would calve and input cost would be $47,700 (53 x $900). Inputs for year one and two combined total $74,200 before you sell your first calf. If all of your heifers calve, assuming a 95% survival rate, you will have 47 calves weighing around 900 pounds when taken to market. You would be bringing 42,300 pounds to market and hopefully sell them at $1.15 per pound for a gross income of $48, 645. However, this does not cover our inputs and year two would have a net loss of $25,555.
|Year 2 Commercial||Item||Price|
|Calves (42,300 x $1.15)||+ $48,645|
Year three would show a net profit of $875. At this rate, it would take you 29 years to pay back your year two loss. Even if you were able to lower your input cost of the cow to $300 and $200 for the calf, for a total of $500 per pair, it would still take approximately five years to pay off your cows and become cash flow positive. At this point, you would have six-year-old cows whose worth has now decreased significantly. In this scenario, after eight years, you will have made $70,000 on 50 head which averages $8,750 profit per year.
Now let’s see what the numbers look like for a similar herd of Brahmans. Registered Brahmans at last week’s sale brought $5,500 per head. Staying parallel to our commercial cattle example, let’s say we buy 50 head of registered Brahmans at that price. Our total for 50 head would be $275,000 without buying bulls. This initial cost to start a herd is significantly higher than the commercial cattle startup cost; however, let’s continue with our example to see their profitability compared to commercial cattle.
Like our commercial herd, our inputs for year one are $26,500 and once your heifers calve at the end of year two will be $74,200. Again, assuming a 95% calving rate, with half heifer calves born and half bull calves, we can assume we will have 22 heifer calves and 25 bull calves.
In recent sales, quality F1s out of a Brahman heifer brought upwards of $3,800 per head, so, for our example, we will use a conservative $3,000 value for a 900-pound F1 heifer. For steers, it is reasonable to assume they will be sold at $1.00 per pound, giving our 900-pound steer a $900 value.
Twenty-two heifers at $3,000 per head is a total of $66,000, and our 25 steers at $900 per head will sell for a total of $22,500. This results in a year-two gross income of $88,500 leaving you a net income of $14,000. Looking back at our commercial herd year-two we see a significant increase in profits early on.
|Year 2 Income||Number||Amount|
|Heifers||$3,000 per head (x22)||– $66,000|
|Steers||$900 per head (x25)||– $22,500|
|Gross Total||– $88,500|
|Net Total|| ||+ $14,300|
Year three leaves us with a net profit of $40,800! So, in six years, your herd is paid for. A Brahman cow can still be healthy and bred for at least another five years. Even at 12 years old, your cows would be worth $800 per head. In 12 years, these original 50 cows would earn you a profit of $240,000. This averages to $20,000 per year when using high input costs. When input costs are lowered to $500 per pair as we did in the commercial example, your profit becomes $40,000 per year.
One thing we failed to account for in this scenario is a bull. A bull will make the difference between what your cattle are actually worth. A $10,000 bull would probably produce a $4,500 heifer, but a $50,000 bull would produce a $7,500 heifer. Let’s say we use a registered Brahman bull on our registered heifers instead of a cross. We will say our heifers’ value would be around $4,500, so we assume we used a $10,000 bull.
Once again, using 22 heifers and 25 bull calves, our gross income the second year would be $186,500. Net profit for year one, breeding our heifers to a registered Brahman bull, would be $112,300. In year one alone, inputs of both year one and year two would be covered. Once again, in year three, our net income increases yet again, this time to $139,100. Registered heifers bred to registered Brahman bulls, in eight years or seven calf crops, will have a net profit of $946,900. Subtract cost of your heifers out and you have made $571,900 and you still have 10 year registered brahman cows that still have up to a $3,000 value per head.
In order to make the same profit on commercial cattle as registered Brahmans, I found it would take about 450 head of commercial cattle with an upfront cost of $650,000. Purchasing registered Brahmans would be an upfront cost of $375,000. Although purchasing registered Brahman cows at the beginning is more expensive, the profits are significantly higher much earlier on than raising commercial cattle.
When you look at how far the Brahman breed has come in the past 15 years, it truly is amazing. Brahman cattle have become the heartbeat of the southern U.S. cattlemen with the F1’S, Brangus and Braford cows being in high demand. Not only are Brahman cattle in demand, but the figures above show they are profitable to raise as well.