44 NEBRASKA CATTLEMAN February 2026 • What happens to profitability if feed costs change up or down by a percentage? • How much pasture rent can the operation afford to pay? • Are veterinary and herd health costs in line with expected returns? • What is the economic impact of weaning calves at a given weight vs. a higher weight? Budgets also support conversations with lenders, partners and family members by grounding decisions in numbers rather than assumptions. One of the most valuable outcomes of budgeting is identifying which costs matter most. While feed is usually the largest expense, ownership costs of cattle, depreciation and opportunity costs often have just as much impact on profitability. Budgets also allow producers to test sensitivity to changes in: • Feed prices • Calf or feeder cattle prices • Interest rates • Production performance Sensitivity analysis helps identify which risks are most critical to manage and what profit levels may need protection through marketing or livestock risk management tools. An often-overlooked question revealed by budgeting is whether the cattle being produced align with market demand. Budgets can be used to compare different genetic or management systems, alternative feeding programs and/or retained ownership versus selling earlier. Profitability is not just about minimizing cost – it is about producing cattle that the market rewards. Making Budgets a Living Tool The most effective budgets are not static documents. They should be: • Built at the beginning of a production cycle • Updated as prices and conditions change • Compared against actual results Used this way, budgets become a roadmap for ongoing management rather than a one-time exercise. Cattle enterprise budgets and cost-of-production reports provide producers with a clearer picture of where money is being made and where it may be leaking out. By breaking costs into meaningful categories, calculating breakevens and comparing alternatives, producers gain confidence in decisions related to production, marketing, investment and risk management. In an industry where margins can be narrow and uncertainty high at times, understanding cost of production is one of the most powerful tools cattle producers can use to protect profitability and plan for the future. ~NC~ UNDERSTANDING CATTLE ENTERPRISE BUDGETS CONTINUED FROM PAGE 42 Good Things Are Hard to Find – except here. Generations of ranch-tested cow families backed by a program that pays on shipping day. Robert & Kara Campbell • 701-422-3721 Robby & Sara Campbell 5096 Campbell RD • McIntosh, SD 57641 campbellra@westriv.com • www.campbellredangus.com Producing Cattle That Perform For The Cattleman Since 1973! 51st Annual Bull Sale Monday, March 2, 2026 1 p.m. MST • At the Ranch Sel ling100 Registered Yearling Bulls Select Registered Heifers 50 Home-Raised, Fancy Commercial Red Angus Bred Heifers Request a catalog through our website or Facebook page ... or give us a call! He Sells! CBR 56 – # 5136363 Generations of ranch-tested cow families. Data-driven selection. A program proven on shipping day. At Campbell Red Angus, only the top bulls make the sale — bulls shaped by natural selection and cattlemen’s logic, then verified by ratios, real performance and DNA-profiled cow families. Their steer mates top the market each January, proving the value behind the program. This year we’re also offering 50 home-raised commercial bred heifers bred to sires known for fertility and longevity. Hardy and adaptable, these cattle are built to work and built to last. Campbell Red Angus ... Where legacy meets longevity – and both keep paying dividends.
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