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Sale of Economic Interest

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					        CowInvest
 Beef Cow Purchase Feasibility
               by
 Dr. James Cothern, CSU-Fresno




CSU-Fresno, October 22, 2000
   GRAZING-PRODUCTIVITY RELATIONSHIPS ACRES PER COW
                          <=15 Acres >15 and <=25  >25
 Calf Death Loss                 0.01         0.02     0.03
 Calf Crop                       0.95         0.92     0.90
 Beef Cow Rep. Rate              0.20         0.22     0.25
 Hay Per Cow-Tons                2.00         2.50     3.00
 Time on Summer Lease-Mo         5.50         5.00     4.75
 Time on Winter Lease-Mo         4.00         4.00     4.00
 Stocker Purchase Weight       350.00      350.00   350.00
 Stocker Sale Weight           725.00      675.00   600.00
 Sale Weights
 Steers-Lbs.                   650.00      625.00   600.00
 Heifers-Lbs.                  575.00      565.00   560.00
 Transport-Move Costs-Hd.       10.00        15.00   20.00
 Range Improve-Per AUM           1.75         1.50     1.25
 Bull Replacement Rate           0.20         0.25     0.30
 Cows Per Bull-Hd.              40.00        25.00   20.00


"This sheet provides flexibility in estimating key factors affecting
productivity and profitability with varying range conditions"
"You may change any of these best fitting your operating environ"
                        Budget Assumptions


Cow-Calf Production Costs,           N. Mountain Medium                    2000
 With Range Requirement of                                15        Acres Per Cow
              400.0 Cows                                0.95        Calf Crop
              15.00 Range Req-Ac/Cow                    0.01        Calf Death Loss
               1.87 BLM/Forest Fee-AUM                    15        Winter Grazing Fee-AUM
                 0.0 Stockers                           0.20        Rep. Rate
                 9.0 Cap.Mo's                          0.095        Short Term IR
                 0.1 LngTerm I.R.                      0.085        Savings Rate
              40.00 Cows/Bull                            100        Cows/Horse
                     Equity in Range(%)                 0.80        Eq. Equip.(%) (Owner Equity)
                     Equity Irrig. Pasture(%)           0.80        Eq. Livestock(%) (Owner Equity)
               0.60 Stocker Price In $/Lb              90.00        Hay Price/Ton


                        Purchase/Sale/Economic Assumptions

Discount Rate                   0.085   "See if we can return a given %"
Inflation Rate                  0.020   "Adjusts our annual costs for the inflation rate"
Cow Purch. Price                  750   "What the cow is worth today"
Salvage Value                     400   "What we will sell her for"

                        Mark "Sold" in
Sale Price/Lb. (Year) Year Cow Culled
         1         0.87                "Input prices you expect to average for sale calves
         2         0.84                of the weights you input in RANGE for the next
         3         0.83                XX years, up to 10 years
         4         0.80                "Last Planning Year-Mark Cow Sold in Col. D"
         5         0.81
         6         0.79 Sold           "Cow sold after weaning"
         7
         8
         9
        10
            Beef Cattle               Cow-Calf        Production Costs               N. Mountain Medium                    2000
                                      Quantity          Weight    Price/U.           Total Value Value/Ani.             Cost/Lb.

                                      -Number-         -Units-       -Dollars-       -Dollars-         -Dollars-       -Dollars-

INVESTMENT                            INVENTORY VALUE
 Livestock
  Cows-No.                                    400        1,000.0         $0.5000 $200,000.00               $500.00
  Calves-No.                                  380          550.0          0.6200  129,580.00                323.95
  Bulls-No.                                    10        1,400.0          1.5700   21,980.00                 54.95
  Horses-No.                                    4                         500.00    2,000.00                  5.00
 Sub-Total                                                                        353,560.00                883.90
 Equipment
  Pickup, 3/4T. 4WD                               1                    14000.00           14,000.00            35.00
  Trailer, Gooseneck                              1                     5000.00             5,000.00           12.50
  Tractor, Wheel, 50 H.P.                         1                    20000.00           20,000.00            50.00
  Trailer, 2-Horse                                1                     3000.00             3,000.00             7.50
  Sprayer, 100 Gal.                               1                      500.00               500.00             1.25
  Corrals,Gates,Chutes & Fence                    1                     7000.00             7,000.00           17.50
  Saddles and Tack                                1                     1600.00             1,600.00             4.00
  Equip. & Misc. Tools                            1                     3000.00             3,000.00             7.50
  Irrigation System                                                                               0.00           0.00
 Sub-Total                                                                                54,100.00           135.25
  Land, Range-Acres                                                                               0.00           0.00
  Land, Irrig. Pasture-Acres                                                                      0.00           0.00
 Sub-Total                                                                                        0.00           0.00
TOTAL INVESTMENT                                                                        407,660.00         1,019.15
-----------------------------------   -------------- -------------- --------------   --------------    -------------- ------------
         ***************************************************************************
             Beef Cattle                Cow-Calf Production Costs                               N. Mountain Medium                 2000
                                         Quantity      Weight           Price/U.                Total Value   Value/Ani.        Cost/Lb.
         ***************************************************************************
                                         -Number- -Units-              -Dollars-                -Dollars-         -Dollars-     -Dollars-


INCOME
  Steers-No.                                   188            650.00               0.8700           106370.55         265.93
  Steers-Purchased-No.                           0            725.00               0.6500                0.00           0.00
  Heifers-No.                                  109            575.00               0.8500            53224.88         133.06
  Cull Cows-No.                                 80           1,000.0               0.4800            38400.00          96.00
  Cull Bulls-No.                                 2           1,400.0               0.5700             1596.00           3.99
  Cull Heifers-No.                              16             850.0                                     0.00           0.00
  SUB-TOTAL: WEIGHT
  TOTAL INCOME                                            281,282.5                                   199591.43      498.98       0.7096
-----------------------------------    ------------ ------------    ------------                ------------    ------------ ------------
EXPENSE
  Cash Costs
  Stockers-Hd.                                   0            350.00              0.6000                 0.00           0.00
  Hay, Cow Herd Maint.-T.                      400              2.00               90.00             72000.00         180.00
  Hay, Stockers-Tons-AUM                         0              2.00               90.00                 0.00           0.00
  Range, Winter-AUM.                           400              4.00               15.00             24000.00          60.00
  Range, Summer-AUM                            400              5.50                1.87              4114.00          10.29
  Cotton Seed, Min.- Per AU                    400                               13.2400              5296.00          13.24
  Salt Blocks-Blocks Per AU                    400            0.4000              3.5000               560.00           1.40
SUBTOTAL: FEED EXPENSE                                                                              105970.00         264.93       0.3767
  General Expense
  Vet. Med.-Per Hd.                            400                                  4.00               1600.00          4.00
  Gas, Propane & Fuel- Per Hd.                 400                                 12.57               5028.00         12.57
  Repair and Maint.- Per Hd.                   400                                 11.03               4412.00         11.03
  Labor, Men per Month                           1                 12.0           850.00              10200.00         25.50
  Employee Ins, FICA-% of Base                   1                 12.0             0.06                607.92          1.52
  Liab,Heal.Ins,Comp-% of Base                   3                 12.0             0.18               5358.06         13.40
  Range Improvement- Per AUM.                  400                 5.50             1.75               3850.00          9.63
  Fertilizer- Units Per Ac.                    150                 70.0             0.26               2730.00          6.83
  Telephone- Per Hd.                           400                                  0.92                368.00          0.92
  Power and Elect.- Per Hd.                    400                                  1.77                708.00          1.77
  Transport & Movemnt- Per Hd.                 400                                 10.00               4000.00         10.00
  Bull Replacements                              2                               1500.00               3000.00          7.50

  Interest on Oper. Capital                147832                                  0.0950                5913.20       14.78
TOTAL VARIABLE COSTS                                                                                  153745.18       384.36       0.5466
-----------------------------------    ------------ ------------          ------------          ------------     ------------ ------------
OVERHEAD COSTS: CASH                   Ave Val=
  Taxes                                    203830                                        0.01          2038.30           5.10
  Interest Costs                                     %Owed=
   Livestock                               353560                  0.20            0.1050                7424.76        18.56
   Equipment                                 54100                 0.20            0.0950                1027.90          2.57
   Land-Range                                      0               1.00            0.0950                    0.00         0.00
   Land-Irrig. Pasture                             0               1.00            0.0950                    0.00         0.00
TOTAL OVERHEAD COSTS                                                                                   10490.96         26.23       0.0373
-----------------------------------    ------------ ------------          ------------          ------------      ------------ ------------
TOTAL VARIABLE PLUS
CASH OVERHEAD COSTS                                                                                   164236.14      410.59       0.5839
-----------------------------------    ------------ ------------          ------------          ------------    ------------ ------------
OVERHEAD COSTS: NON-CASH
  Depreciation                                    Sal. Val.(%)       Life
   Equipment- SLN Depr.                   54100               0.10                  3         18033.30           45.08
   Horses- SLN                             2000               0.20                  5           399.96            1.00
   Bulls-SLN                              21980               0.33                  3          7326.56           18.32
  Interest                                        %Equity=            I.R.=
   Livestock                            353560             0.8000             0.0850           24042.08           60.11
   Equipment                              54100            0.8000             0.0850             3678.80            9.20
   Land-Range                                   0              0.0            0.0850                 0.00           0.00
   Land-Irrig. Pasture                          0              0.0            0.0850                 0.00           0.00
TOTAL NON-CASH OVERHEAD COSTS                                                                  53480.70          133.70         0.1901
----------------------------------- ------------ ------------        ------------       ------------        ------------   ------------
TOTAL: ALL COSTS                                                                              217716.84          544.29         0.7740
----------------------------------- ------------ ------------        ------------       ------------        ------------   ------------
INCOME MINUS CASH COSTS                                                                        35355.28           88.39         0.1257
----------------------------------- ------------ ------------        ------------       ------------        ------------   ------------
INCOME MINUS ALL COSTS                                                                        -18125.41          -45.31        -0.0644
----------------------------------- ------------ ------------        ------------       ------------        ------------   ------------
COST PER POUND SOLD AND B.E.        BASED ONSALE WT. =                       281283

BREAK EVENS AT VARIOUS              PRICE        QUANTITY        PRICES AND PRICE               QUANTITY
PRICES AND QUANTITIES                    0.6096           269427 QUANTITIES              0.6096     357161
CASH COSTS                               0.6596           249002 TO COVER                0.6596     330086
                                         0.7096           231457 ALL COSTS               0.7096     306826
                                         0.7596           216221                         0.7596     286629
                                         0.8096           202867                         0.8096     268927
                                         0.8596           191066                         0.8596     253284
----------------------------------- ------------ ------------    ------------ ------------      ------------ ------------
NORTHERN CALIFORNIA 400 COW RANGE OPERATION- 1ST YEAR OF A PLANNING CYCLE
          calfnmm.xls
                                   A Simple Discounted Cash Flow
                          Summary Data From Budget and Assumptions
Variable Cost/Cow                       $369.58 1/
Cash. O.H./Cow                            $5.10 2/
Weight Sold(#'s)                          581.9 3/ Lbs Beef Sold Per Cow
Weight Sold(#'s)                          612.5 4/ Lbs Beef Sold (No Calf Crop Effect)


                                           Net Present Value Calculation

       Purch/Salv.        Cow            Ann. Oper.    Cash           Annual      Ann. Inc.   Ann. Inc.
Year                      Value          Cost          O.H.           Income      - Exp. 3/   - Exp. 4/
                      0           -750                                                -750.00
                      1              0       $369.58          $5.10     $506.23      $131.56       $158.20
                      2              0        376.97           5.10      488.78        106.71       132.43
                      3              0        384.51           5.10      482.96         93.35       118.77
                      4              0        392.20           5.10      465.50         68.20         92.70
                      5              0        400.05           5.10      471.32         66.18         90.98
                      6            400        408.05           5.10      459.68        446.54       470.73
                      7              0          0.00           0.00        0.00          0.00           0.00
                      8              0          0.00           0.00        0.00          0.00           0.00
                      9              0          0.00           0.00        0.00          0.00           0.00
                     10              0          0.00           0.00        0.00          0.00           0.00


                                                       Net Present Value =>          $651.91       $767.22
                                                       Net Gain===========>          ($98.09)      $17.22      5

1/ Includes Feed Costs and General Costs
  i.e. Vet, Med, Labor, Fuel from BUDGET!
  Insurance, Wages Workmens Comp..See BUDGET
2/ Includes Taxes
3/ Calf crop effect that is XX % from ASSUME!f7
4/ Ignores calf crop effect no XX% from ASSUME!f7 "Everything lives"
5/ If g31 or h31 is positive, investment is feasible

				
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