Cattle Baron Master Business Plan — Unit Economics
The economics of a single breeding cow: revenue per weaner sold, the cost stack, and the gross margin at each herd size.
Unit Economics
Jump to section
- Overview & contents
- i. Important Notice
- 1. Executive Summary
- 2. A Note on the Name
- 3. The Market and the FMD Crisis
- 4. Foot-and-Mouth Disease as a Business Risk
- 5. The Production System
- 6. Herd Performance
- 7. SWOT and Competitive Position
- 8. Grazing, Land and Water
- 9. Unit Economics
- 10. Route to Market
- 11. The Five-Year Build and Its Gates
- 12. Funding
- 13. People, Security and Stock Theft
- 14. Compliance and Traceability
- 15. Financial Projections
- 16. Break-Even
- 17. Sensitivity and Scenarios
- 18. Risk Management
- 19. Implementation Timeline
- 20. Returns
- 21. Key Performance Indicators
- 22. Key Assumptions
- 23. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital Schedules
- C. Appendix C: Funding and Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
|
Per breeding cow, Year 5 |
R |
% of cash revenue |
|---|---|---|
|
Cash revenue per cow |
10 162 |
100.0% |
|
Grazing |
(2 680) |
26.4% |
|
Licks and supplement |
(1 480) |
14.6% |
|
Veterinary and FMD vaccination |
(912) |
9.0% |
|
Marketing and transport |
(310) |
3.1% |
|
Cash gross margin per cow |
4 780 |
47.0% |
|
Fixed cost absorbed |
(4 500) |
44.3% |
|
Cash margin per cow |
280 |
2.8% |
A cash gross margin of R4 780 per cow against a fixed cost base of R1.80 million is what produces the break-even herd of 377 cows in Section 16. The margin per cow is not unusual for South African veld-based production; the fixed cost base is what a formal, compliant, secured operation costs, and it is the reason a smaller version of this enterprise does not work.
9.1 Weaner and cull economics
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|---|---|---|---|---|---|
|
Weaners sold |
29 |
28 |
58 |
112 |
231 |
|
Weaner weight, kg |
218 |
224 |
230 |
236 |
242 |
|
Weaner price, R per kg |
44.00 |
46.42 |
48.97 |
51.67 |
54.51 |
|
Revenue per weaner, R |
9 592 |
10 398 |
11 263 |
12 194 |
13 191 |
|
Weaner sales, R’000 |
277 |
287 |
649 |
1 361 |
3 050 |
|
Cows culled |
17 |
22 |
32 |
48 |
64 |
|
Cull sales, R’000 |
215 |
294 |
449 |
722 |
1 016 |
|
Cull share of cash revenue |
43.7% |
50.6% |
40.9% |
34.7% |
25.0% |
Cull cows contribute between 25 and 51 per cent of cash revenue across the plan, and 25 per cent in Year 5. That is a material line and it is often treated as a residual rather than as a managed one. Culling on a policy — age, condition, and any cow that skips a calf — produces both a better herd and a predictable revenue stream. Culling only when cash is short produces neither.