South Dakota State Univ. scientists surveyed 148 cow-calf enterprises in eight Northern Plains states to analyze factors that influenced profitability. The data set was segregated into three profit groups based on return on assets (ROA). The three groups were: High (18.16% ROA); Medium (2.88% ROA); and Low (-15.55% ROA).

Results of the analysis revealed that high levels of profit are a function of lower than average investment, above average reproductive performance, lower than average total expenses, and above average market prices for calves. Neither high nor low levels of other biological production traits, geographical region, size of operation, or year were factors that explained differences in profitability.

The authors noted that profitability in the High Profit group is very competitive with other sectors of the economy. They went on to say, however, that the profit levels in the Medium and Low Profit groups are not competitive with other opportunities for investment in the economy. They concluded that the long-term viability of the operations in these two groups would be difficult without other sources of income or investment (Dunn et al. 2005. South Dakota Beef Report).