DH

Cattle Square

Is the market paying more for the gain than it costs you to put it on?

The trade

Your cost

BPCtK — your break-even:
Cost of gain with your required profit folded in. You don't make the trade if you can't make the profit, so clearing this is breaking even.

The square

Gross sale
Gross purchase
Weight difference
Net cash (sale − purchase)
Market pays for the gain
BPCtK — costs you to put it on
Excess
Margin on the value of the gain
Excess profit per head
Fill in the five numbers above.
Gross margin on trade*

* Not part of the cattle square — added because it is the number most ranchers already reason in. It is the same excess profit per head, measured against the whole sale instead of against the value of the gain: (sale − (purchase + BPCtK × lbs of gain)) ÷ sale. On the worked example at 20% profit that is $990.00 − ($580.50 + $0.96 × 320 lb) = $102.30, and $102.30 ÷ $990.00 = 10.3%, where the square's own margin reads 25.0%. Both are right; they answer different questions. The square's margin is the one this system ranks and alerts on, because it measures the trade itself rather than how much money the animal tied up.

Sell 750 lb @ $1.32, buy 430 lb @ $1.35, cost of gain $0.80, profit 20% → BPCtK $0.96/lb and $102.30/head at a 25.0% margin