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The North Dakota Beef Industry Survey; Enterprise Management, Risk Factors, and Risk Management Strategies of Beef Cattle Operations
In the spring of 2012 a survey was distributed to 2,500 randomly selected North Dakota beef producers to evaluate their attitudes concerning risk factors and risk management on their operations. Five hundred twenty-seven surveys were returned (21.1% response rate), of which, 436 (82.7%) respondents indicated that they were active beef producers. Commercial cow-calf production (94.5%), and backgrounding (37.8%), were the most common enterprises on respondents’ operations. Thirteen percent of respondents grazed cattle on federal grasslands, 54.4% grazed crop residue, and 17.7% grazed cover crops. When asked about expansion plans, the majority of respondents indicated they would focus on commercial cow-calf (82.8%) followed by backgrounding (36.6%), feedlot (21.9%), stocker (19.4%), and purebred (15.4%) enterprises, respectively. For recordkeeping, most operations use a paper record book (60.4%), followed by computer spreadsheets (36%), and management software (9.6%), whereas 2.9% do not have a formal recordkeeping method. To determine per-cow cost of production, 23.9% of respondents balanced checkbooks, 22.7% use management software, 22.1% use tax returns, 15.5% do not calculate, 5.1% use a consultant, and 29.3% use other methods not categorized in the survey. On a scale of 1-5 (1=small negative impact, 5=large negative impact) respondents identified animal health issues (4.1) and severe weather (4.1) as having a large negative impact on profitability, and labor availability (3.0) was viewed as being a neutral factor. Variability in cattle price (4.3) and input cost (4.3) were factors identified as having the greatest potential negative impact on profitability, whereas variability in soybean price (2.8) had neither a small nor large negative impact on profitability. When asked about the effectiveness of management strategies in reducing risk (scale of 1-5, 1=not effective, 3 = neutral, 5=very effective), respondents identified maintaining good animal health (4.6), financial reserves (4.0), and having off farm income (3.7) as being effective strategies, whereas herd management programs (2.8) and hiring ranch management consultants (2.8) were viewed as neither effective nor ineffective strategies to reduce risk. Survey results identify the degree of risk that producers associate with different factors and highlight strategies used to mitigate losses from identified risks.
Keywords: Beef Industry, Profitability, Risk Management