Risk Vs Reward

Does anyone ever work out their risk vs reward in ag?

So I buy a cow/calf pair for £2500, with the potential reward of £800 for the calf as a weaning -

First Year
(Reward/Risk) 800/2500 = 0.32 i.e. £1 risk for potential 0.32p gain or 1.32 in odds format

Buy 10 = £25000
100% Strike Rate Reward = £33000
95% Strike Rate Reward = £31350
90% Strike Rate Reward = £29700
85% Strike Rate Reward = £28050
80% Strike Rate Reward = £26400
75% Strike Rate Reward = £24750 - Loss Point

Average 6 Weaning's achieved over lifetime

(Reward/Risk) 4800/2500 = 1.92 i.e. £1 risk for potential £1.92 gain or 2.92 in odds format

Buy 10 = £25000
100% Strike Rate Reward = £73000
90% Strike Rate Reward = £65700
80% Strike Rate Reward = £58400
70% Strike Rate Reward = £51100
60% Strike Rate Reward = £43800
50% Strike Rate Reward = £36500
40% Strike Rate Reward = £29200
30% Strike Rate Reward = £21900 - Loss Point

I personally think the Suckler cow has a 60% chance of reaching the 6 weaning's sold over a lifetime, So it basically turns into a £25000 bet at a true odd price of 1.66 = £41,500 = £1650 return each from the 10 cows purchased over their lifetime

ROI = ((41500-25000)/25000)*100 = 66% ROI - Quite a good investment!!

Obviously these figures does not factor costs and market variables into it, I'm trying to figure out a base price to offset the costs to find the true market value (If you know what I mean)
 
Tags
calf

Have you taken any land out of production from last autumn?

  • Yes

  • No

  • Don’t know


Results are only viewable after voting.

Fields to Fork Festival 2025 offers discounted tickets for the farming community.

  • 7,193
  • 2
The Fields to Fork Festival celebrating country life, good food and backing British farming is due to take over Whitebottom Farm, Manchester, on 3rd & 4th May 2025!

Set against the idyllic backdrop of Whitebottom Farm, the festival will be an unforgettable weekend of live music, award-winning chefs, and gourmet food and drink, all while supporting UK’s farmers and food producers. As a way to show appreciation for everyone in the farming community, discounted tickets are on offer for those working in the agricultural sectors.

Alexander McLaren, Founder of Fields to Fork Festival says “British produce and rural culture has never needed the spotlight more than it does today. This festival is our way of celebrating everything that makes...
Back
Top