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Cow-calf KPIs and Benchmarks
Eric Jasinski avatar
Written by Eric Jasinski
Updated over 5 months ago

Getting the data required to create Managerial Financial Statements is the first step to unlocking a larger set of Key Performance Indicators (KPIs) – both financial and operational metrics that can be used to assess the performance and health of a business.

KPIs are useful both in the short-term, to understand if a ranch was profitable last year, as well as in the long-term, to help management see if a ranch is moving towards its operational goals. This guide aims to outline and discuss the following kinds of high-level metrics:

  • Production KPIs

  • Financial KPIs

  • Profitability Metrics

Included in our details will be benchmarks based on the analysis of a number of ranches and operations courtesy of Ranch KPI.

To conclude we will also highlight some other KPIs that require more detailed record keeping to calculate, but are both very achievable and very useful with the right tools.

Production KPIs

This group of KPIs covers operating metrics that can be calculated using a combination of your Stock Flow Workbook and other managerial data that should be available or tracked.

Market Value of Breeding Females

Calculation

Total number of breeding females multiplied by the current market rate for Heifers and Cows

Goal

Understand the financial coverage the operation has in the event of unforeseen circumstances

Benchmark

N/A

Comment

The January 1 number, or the timing right before an operations breeding season, is the most important time for this figure to be calculated

Pregnancy Percentage

Calculation

Number of pregnant females divided by the number of females checked for pregnancy

Goal

Measure the productivity of an operations fixed assets dedicated to breeding

Benchmark

Greater than 90%

Comment

Arguably the most important metric for a cow-calf operation

Calving Percentage

Calculation

Number of calves born divided by number of females intended to be bred

Goal

Proactively identify issues of productivity loss

Benchmark

Greater than 85.0%

Weaning Percentage

Calculation

Number of weaned calves divided by females intended to be bred

Goal

Proactively identify issues of productivity loss

Benchmark

Greater than 83.0%

Average Weaning Weight

Calculation

Total pay-weight of calves divided by number of calves weaned

Goal

Measure productivity of breeding assets in terms of sellable weight

Benchmark

Greater than 550 LBs

Pounds Weaned per Exposed Female

Calculation

Total pay-weight of calves divided by exposed females

Goal

Measure productivity of breeding assets in terms of sellable weight

Benchmark

Greater than 460 LBs

Acres per Exposed Female

Calculation

Total grazable acres divided by total exposed females

Goal

Calculate the effective stocking rate of an operation

Benchmark

N/A

Comment

Stocking rate is a very important metric for an operator to decide upon at the beginning of a given production season, so measuring it against annual performance is equally important.

Financial KPIs

Gross Revenue per Female

Calculation

Total Revenue from Weaned Calf Sales

+

Change in Value from Death / Sales in Breeding Stock

+

Gain (Loss) from Qty. Change in Replacement Heifers

Benchmark

Greater than $1,150 per female

Comment

Revenue for this KPI needs to include both cash received, costs related to deaths and sales, and non-cash internal sales via transfers between categories to produce a holistic number

Breakeven Price per Weaned Calf LB

Calculation

Total Expenses (including change in value from death, sales, and quantity of inventory)

÷

Total LBs of Weaned Calves

Comment

This number will fluctuate as other KPIs change but is important for knowing the selling price a cow-calf operation needs to breakeven per head. It is effectively the metric different operations compete on.

Profitability Metrics

These are not KPIs per se, but metrics that an operation can track to measure and communicate overall profitability both internally and externally. Some of these metrics require using market basis valuations on your assets, which we do not recommend for pure accounting purposes but be useful in communicating the current financial value of an operations assets.

Rate of Return on Assets (Cost Basis)

Calculation

Net Operating Income (incl. Interest payments)

÷

Average Total Assets

Benchmark

Greater than 5.0%

Comment

This is a metric that can be compared against other industries or investment opportunities. 5% is a hurdle rate that can be beaten in many assets, such as bonds

Total Investment per Breeding Female (Market Basis)

Calculation

Total Assets (market basis)

÷

Market value of breeding females

Benchmark

Between $5,000 and $25,000 per breeding female

Comment

This number contextualizes how hard it is for an operation to pay for its total assets (land is normally the largest factor). It could effectively be thought of as the breakeven cost needed per breeding female, the main productive asset

Equity to asset ratio

Calculation

Total Owner Equity

÷

Total Assets

Benchmark

Greater than 50.0%

Comment

This metric represents the percent of an operation owned outright by the operator. Many lenders do not want to be in a situation where they have more ownership than the operator.

Advanced KPIs and Metrics

In this guide we have established a framework and protocol to account for livestock assets and operations using the Base Value methodology. Using the Base Value method allows you to reliably calculate all the KPIs outlined in this guide. Comparing those metrics year over year is the best way to assess the performance and efficiency of your operation and to figure out where there is room for improvement.

Ultimately, there is a tradeoff between time spent bookkeeping and precision – for many operations, the Base Value method provides an adequate level of precision. The relative ease-of-entry of the Base Value method (compared to Full-Cost Absorption) makes the KPI and metric calculations discussed in this section achievable to operators of almost any financial sophistication. The base values selected are an approximation of the values the Full-Cost Absorption method would produce in terms of costs to raise an animal to a particular stage.

That said, if you have the inclination, using the Full-Cost Absorption Method can produce more accurate metrics as well as make it easier for you to effectively compare the cost basis of different production years within the same animal group – e.g. did I spend more per head to raise my 2023 Replacement Heifers compared to my 2024 Replacement Heifers? For larger operations, particularly those whose herd size fluctuates significantly, these numbers can and do vary more from production year to production year, so implementing the Full-Cost Absorption method becomes worth the additional effort.

For more information about how to implement these practices – either the Base Value or Full-Cost Absorption methods – for your own operation, reach out to the Ambrook team for a conversation. If you’d like to learn more about the accounting methods and metrics presented here, some of our top recommend resources include:

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