Ag News

Surviving Low Cattle Prices

Paul Beck
Although cattle prices are not as low as they potentially can be, current prices for cattle are less than the highs of a few years ago. Moreover, most of us did not adjusted our operation to maintain profitability (or even economic sustainability) as prices came down. There are several steps that we can make to help maintain economic resilience in our cowherds.

First, we must know our cost of production. This enables us to make knowledge-based decisions for marketing, risk assessment, and cost management. Having benchmark production levels for comparison assists in making goals for improvement. Records of feed costs (stored forages and supplements), total direct costs (including equipment and land costs), and overhead cost; should all be considered. This along with the production records (weaning weight, weaning weight per cow exposed to a bull, and rebreeding efficiency) can tell us our direct cost per calf and the price needed for calves in order to break even or make a profit.

Having a defined calving season makes it easier to keep the important records mentioned above. Other benefits of defining the calving season are more uniform groups at marketing (large groups get a premium of $5/cwt over single head lots) and improves our ability to provide effective management (balancing supplements to fit nutrient requirements and timing of vaccinations etc.).
Closely related to having a defined calving season is pregnancy testing of cows and retained heifers. This helps identify infertile cows for culling and will help improve the reproductive efficiency of the cowherd. Unproductive cows continue to consume pasture, hay and supplements but provide nothing in return…much like a 1,200-pound armyworm.

Improving the grazing management of your pastures will help improve the carrying capacity of the ranch, increase forage quality, and enable other management techniques like stockpiling or planting complementary forages. A well-managed rotational grazing system can increase grazing efficiency by 50% or more. Forage quality is improved because plants that are highly preferred by livestock get rested from grazing and are more persistent under rotational grazing. When there are paddocks available for stockpiling or interseeding cool-season annuals the grazing season can be extended well into the winter, shortening the winter hay-feeding period.

Improving hay management can help increase our hay quality (reducing the need for supplements), increase out hay yield (decreasing the number of acres needed for hay production), and decrease the total cost of production. Research we conducted in Southern Arkansas indicates that total seasonal yield of bahiagrass can be increased by 100% (from 2,000 to 4,000 lbs total summer yield) when fertilized with 50 lbs of N per harvest, whether poultry litter was used along with commercial fertilizer or not. In bermudagrass hay fields, providing 50 lbs of N per harvest increased yields by 300% (from 2,000 to 6,000 lbs total summer yield).

The final step is adding value to calves through crossbreeding, preconditioning, and just plain good husbandry. Crossbreeding increases the fertility of the herd, increases weaning weights, and cow longevity. Crossbred calves also sell at a premium compared to purebred commercial calves. Preconditioning calves gives a market premium of $6 to $9/cwt compared to unweaned calves at the same market. Castration and dehorning can provide premiums of $10 to 15/cwt (or more) compared to horned bulls. If calves produced are somewhat plain, then calves can be kept to heavier feeder weights when the discounts are often much less than at lighter weights. If calves produced are of superior quality, then a producer may consider keep heifers longer and selling them as reputation bred replacements.
Producers need to keep a sharp eye and sharp pencil on all costs. Cost optimization is the key, least cost is not always the best cost solution.

To Top