As the 2025 calf crop is weaned and the calendar year begins to wind down, this is a good time for operations with spring-calving herds to look at what it cost them to produce a calf in the past year. The following are good questions for a producer to ask themselves:
• What did it cost to run a cow this year?
• How are those costs being calculated?
• How are raised feed, labor equipment and replacement females born and developed on the ranch valued?
These questions are some of the questions that are frequently asked when the conversation comes up of how to calculate annual cow costs.
The Estimated Annual Cow Costs for Nebraska 2025 is a one-page sheet producers can look at to compare their costs to and see the resulting total to produce a weaned calf under current market conditions in 2025. This budget values all feed at market value, as well as labor, equipment, capital investment and the market value of replacement heifers at weaning.
The Center for Ag Profitability’s Cattle Budgets are interactive budgets producers can download in Excel and calculate their own cost of production based on their location and herd size within the state. Frequently, when either of these tools is used and all expenses are tallied, the total surprises many cow-calf producers. A response often heard after totaling up the numbers is, “Does it really cost that much?”
Feed
Upon examining this budget, feed is the first and most significant expense. For many cow-calf operations, grazed and harvested feed makes up 40-70% of annual cow costs. The value of grazed feed was higher in 2025, while harvested feed prices decreased.
In this budget, when all pasture and feed are valued at market price, including what is needed for replacement heifers and bulls, annual feed costs are pushing almost $800 per cow unit!
Labor and equipment
Labor and equipment costs continue to increase. When labor is valued at the cost to hire someone to do the work, and the cost of owning equipment (depreciation and expenses) are calculated, it frequently makes up 15-30% of the total annual cow costs. Insurance, repairs, maintenance and operating expenses trended higher in 2025.
Cow depreciation, replacements
Whether replacements are raised or purchased, the costs associated with getting a bred female into the herd are significant. The economic cost of getting a bred replacement into the herd in 2025 is higher than it was in 2024.
When heifer calves are valued at market price at weaning and all costs from weaning to entering the herd as a bred female are calculated, this total frequently comes in as the second or third most significant cost in a cow-calf budget. In a herd where open or old cows are sold and then replaced with bred heifers, the cost to do this often is 15-30% of total annual cow costs.
A quick way to understand the significance of cow depreciation is to look at the market value of bred replacements entering the herd and the total value of cull cows leaving the herd, as well as those cows that died. Assuming the cow herd maintains a constant head count, this value difference, divided by the number of cows in the herd, gives a current depreciation relationship value.
Other costs are higher in 2025
Interest, breeding, veterinary, marketing and other costs often add up to 10-20% of total cow costs. Although not as large as other cost categories, they still require monitoring and analysis. Interest rates have been slightly decreasing over the last year.
The Bank Prime Loan Interest Rate reported by the St. Louis Federal Reserve as of Sept. 16 was 7.5%. This rate is what commercial banks typically charge customers who are deemed to be the lowest risk when lending money.
To put this in perspective, the reported prime loan rate from March 2008 through July 2022 was never higher than 5.5%. For several years during that period, it was 4% or less. Total interest as a percentage of annual cow costs is higher this year because of increasing input costs and sharply higher cow values.
Calculating annual cow costs provides information that can be used to make management decisions for the upcoming production year. What cow costs were for 2025 can’t be changed, but using that information for strategy and planning for the 2026 production year can be extremely valuable for finding ways to improve profitability. — Aaron Berger, Nebraska Extension
