Management — Determining Losses
Points to Remember When Estimating Losses
- Be honest with yourself. Try to avoid overestimating the value of lost animals and the costs of materials, repairs, etc. Make an honest assessment at the time of a loss. For instance, if hay cutter blades wear out twice as fast because of fire ants, don't hold ants accountable for the entire cost of new blades, just half the cost.
- Calculate your losses on an annual basis. Most current treatments control fire ants for a year or fraction of a year before they must be repeated. For instance, if fire ants cause a well pump to short out about every other year, include only half the cost in the analysis. If you lose an infested hay bale or two every time you cut hay, multiply the profit you would have made on those bales (remember it often varies) by the number of cuttings per year.
- Don't sell yourself short. Time is a big, hidden cost of fire ants. Ranchers often spend many hours dealing with fire ant problems but value their time at $10, $5 or less per hour. Even if you don't actually pay yourself, that time could be spent doing something else. Put a value on it. If it takes you all morning to load up a broken shredder and haul it into town for repairs, plus another morning to retrieve it, the cost was not only what the shop charged. You, or your hired help, lost two mornings of otherwise productive work.
- In analyzing cattle deaths and injuries, be sure to lay the blame correctly. A calf blinded by fire ants is fairly unmistakable, but the reason for a calf's death may not be apparent, even if the carcass is covered with ants. Ants will soon find a carcass whatever the cause of death. On the other hand, if an otherwise healthy calf was exhausted from a difficult delivery, couldn't get up for a few extra minutes, and was over- whelmed by ants, then blame the death on the ants. Only the producer can make this kind of judgment call.
- Value lost/injured animals accurately. If you paid for a pregnant heifer and ants killed the calf, don't just include the added purchase price of that calf. Include what that calf would have brought at sale time, minus production expenses. Also, don't forget any rebreeding costs for the mother or any other value she may have lost or gained as a result of not having a calf around.
- Be careful estimating one-time losses and expenditures. For example, a bull rendered sterile by ant stings is certainly a major loss, but it's a rare incident. As another example, many hay producers have switched from sickle-bar to disc-type cutters because of ant mounds. This is a very large expense, but it must be spread out over the life of the cutter and any other benefits or losses the cutter brings must be considered also.
- Be thorough. Include any unique losses or ones on which you put a particularly high value.
- This analysis is only as good as the time and information you put into it!