What It Costs to Finance Cattle in Alberta
The interest rate is one line on a list. This is the whole list, and how to turn it into the only number that matters - what the market has to pay you per hundredweight to get your money back.
Break-even is the number.
Everything else is an input to it.
A rate you cannot convert into a break-even is not useful
Producers are quoted rates and compare rates, but nobody sells cattle in percent. The number that decides whether a purchase works is the break-even price per hundredweight - what the market has to pay for you to come out level once every cost is counted. Everything below is an input to that. The cattle finance calculator does the arithmetic; this page is about making sure nothing is missing from it.
The costs, in the order they hit you
Roughly in the sequence a set of cattle actually incurs them.
At purchase - the cattle themselves, the buying commission, brand inspection, and the haul home. These are fixed the moment you bid, which is exactly why the number is worth knowing beforehand.
While you own them - feed, yardage, bedding, vet and processing, mortality coverage, and the interest on the money. All of these scale with days on feed, which is why a marketing plan that slips is expensive in several directions at once.
At sale - selling commission, check-off, brand inspection again, insurance and the haul out. These come off the cheque rather than out of your pocket, which is why they are the most commonly forgotten and the most annoying to discover late.
Add all three groups, divide by the sale weight in hundredweight, and that is your break-even. Anything above it is margin. Anything below it is a lesson.
The ones people leave out
Not because they are hidden, but because they arrive at the wrong moment to be noticed.
Check-off
The national beef check-off plus the Alberta service charge. Deducted at sale, per head, regardless of what the animal made.
Brand inspection twice
Once in, once out. It is charged on ownership change, and a set of cattle bought and sold is two changes.
Interest on the days you did not plan for
Cattle rarely sell exactly when intended. Every extra week is feed, yardage and interest together.
Related Pages
More on financing cattle with Foothills.
Cattle Finance Calculator
Work out cost per head, per hundredweight and total interest before you bid.
Cattle Financing Rates
How a livestock loan rate is actually set, and the costs beside the interest.
Livestock Financing in Alberta
Financing for Alberta cattle operations.
Frequently Asked Questions
The questions producers actually ask.
What is a realistic break-even for cattle in Alberta?
There is no single figure, because it depends entirely on what you paid, what you feed and how long you own them. That is the point of working it out for your own cattle rather than using somebody else's number. Two producers buying the same pen on the same day can have break-evens twenty dollars per hundredweight apart.
Is check-off deducted even if I lose money on the cattle?
Yes. It is charged per head on sale, not on profit, so it belongs in the break-even like any other cost of sale.
How do I compare two financing offers properly?
Convert both to total dollars over the whole term including every fee and any required coverage, then divide by head and by hundredweight. Comparing headline rates hides fee structures. Comparing break-even does not.
Does yardage really need to be in the calculation?
If somebody else is feeding your cattle, absolutely - it is a daily charge that runs for the whole feeding period. If you are feeding them yourself it is still a real cost, it is just one you are paying to yourself in labour, fuel and facilities.
Can a fieldman help me work out my break-even?
Yes, and it is a normal thing to ask for. Call the office and describe the cattle you are looking at.
Want the real number for your purchase?
Call the Foothills team and describe what you are buying. We will walk through how the cost is built.