Are your cows paying for themselves? 7 factors to think about on your cow-calf operation
It takes 6 – 7 years for a breeding cow to pay for herself in any cow-calf operation, right? Not always.
Though that’s a widely held idea in the cow-calf business, it’s more complex than just a number of years. There are several components of the equation that show whether a cow is financially justifying her presence on your farm or ranch.
In years when drought or flood conditions are limiting feeding capacities for many cow-calf producers, it’s especially important to account for all relevant variables to make tough herd management decisions. In other words, if your cows aren’t performing regularly — producing a calf on time each year — it may be time to trim your herd and replace those cows with others that will. Doing so is critical for a cow-calf operation.
“Cows wouldn’t be worth what they are if they didn’t offer a reasonable return. If you plan on a $1,600 heifer staying on your operation for eight years and she’s not making you at least $200 per year, you’re wasting your time,” said Cowley, Wyoming, Rancher and Custom Ag Solutions President Brett Crosby.
Market stressors like drought- or flood-shortened forage supplies, expensive feed grain prices, high trucking costs and limited availability may already be causing a financial strain for cow-calf producers. If poor-performing cows are further draining your operation’s revenue potential, now may be a good time for herd adjustments that can contribute to long-term financial viability — like streamlining your breeding herd. Here are a few situations to consider when determining if your cows are indeed paying for themselves.
1. Breeding percentage. Think in terms of your overall calving performance before you zero in on individual cows that may not be successfully breeding as they should. It is important to nail down your total breeding percentage for the upcoming calf crop, too.
“When we think about total breed-up, we’re going to want to limit our open cows to 10% – 15%. We want to see 90% of our cows bred up by end of year,” said South Dakota State University (SDSU) Extension Cow-Calf Field Specialist Olivia Amundson.
2. Breeding timing. Cows that calve outside of your normal calving season can cause mounting costs in managing your breeding program. It’s ideal to maintain a herd in which every cow calves within the first three weeks of calving season.
“Research shows that cows that calve within the first 21-day cycle of calving season remain in the herd longer than second or third cycles. The same is true for heifers,” Amundson said. “If we know which cows are breeding up in that first 21 days, we’re going to want to pay attention to them because they’re more likely to breed the next year. That’s more for cows than heifers. If you have a cow that’s calving early, you want to keep her because we know she’ll rear more calves than those that are calving late.”
Well-timed breeding and calving is especially important in a year with drought- or flood-shortened forage supplies, added SDSU Extension Beef Feedlot Management Associate Warren Rusche.
“If you’re spending extra inputs trying to synchronize a later-calving cow that is calving 82 days after your first calf is born, for example, you’re getting close to when you’re turning bulls out. In years when grass conditions are good, maybe you can hang on, turn her out and get her bred,” Rusche said. “But in a year like this when we have so many pasture shortages, that’s not a sure bet. The odds of moving her calving up start to get slim, and she’s taking up grass that could be consumed by a more productive cow.”
3. How you manage open or late-calving cows. This is very important in a drought or flood year. Since late-calving cows are likely to remain open in future years, it’s a good idea to market those animals by cutting overall numbers. Another option is to replace those cows with heifers from your own herd or purchasing bred heifers to better synchronize with the rest of your herd, whether it be via artificial insemination (AI) or naturally.
Keep an eye on the market when deciding whether or not to purchase bred heifers or to manage replacement heifers from your herd. If the market is high, it may not be financially responsible to purchase bred heifers unless that purchase is close to their calving date. And when deciding to raise and develop replacement heifers from your herd, consider the additional feed costs to get those heifers ready to breed within a short period of time.
“My philosophy in developing heifers is I want to be rough on them in terms of calving early in their first year. I’d keep what’s bred in the first 21 days and sell everything else. Those cows that calve early the first time stay on average an additional year in the herd,” Rusche said. “The tail-end calvers tend to be open more often later on. If you have a late-calving group, they’re not going to weigh as much, so you end up running those closer to breakeven. It’s probably better off to sell them.”
Crosby considers this type of cow liquidation part of maintaining overall year-over-year herd productivity. “I cull heavily because in the long run, the producers who survive are going to be the most efficient operators. And there’s nothing less efficient than a cow that doesn’t provide you a calf every year,” he said.
4. Feed cost management. Feed is the largest of all variable costs for a cow-calf operation, and with the current drought conditions in parts of the nation — and flood conditions in others — forage shortages can be a major drag on revenue potential. But it’s just one of several variable costs to keep an eye on and make quick adjustments to.
Depending on how you feed, you may be able to make changes to save on your overall feed bill, thus helping cows pay for themselves on your operation. For example, if you feed baled hay, a bale processor might add to your feeding efficiency and reduce hay waste, which can trim your feed bill. A vertical feed mixer may also help offset feed costs by allowing operators to add less expensive feedstuffs into cattle diets.
“We got lulled into a false sense of security when feed prices were low.” Rusche said. “Now those feed costs per day are magnified in their influence on profitability. Let’s make sure we’re not wasting feed, because it’s more valuable.”
5. Cow depreciation. This is an area Rusche said many producers don’t give enough consideration. After initial development costs, an open heifer calf typically gains in value through being bred up until about her third year, at which point depreciation kicks in. It’s fairly consistent as long as she calves every year or doesn’t run into problems with mobility, loss of teat structure, poor milking performance or other variables that would prevent her from raising a calf and maintaining a healthy body condition score. But if she remains open a year or calves late, it can cause depreciation to accelerate, making it easy to justify removing that cow from your herd.
6. How you maintain cows’ body scores. When forage supplies are tight, maintaining the necessary body scores of around five for cows and six for heifers may require supplemental nutrition, which can add to the overall cost to maintain each cow, stretching the time required for her to pay for herself. Amundson recommends having a game plan for how you’ll meet your cows’ nutritional needs and challenge them to breed regularly and calve on time.
“If we can challenge heifers now, it may program them to continue to perform in the future. If you already know a heifer is going to maintain body weight and need less feed, that’s going to benefit you in the long run. I will say once we breed that female, we want to make sure she stays on a positive plane of nutrition, otherwise there will be detrimental effects to embryo quality. No matter what the situation, you don’t want cows on a negative plane of nutrition for calving. You want them on a positive nutrition plane for breeding.”
7. Your herd genetics. Your breeding herd’s ) are key variables to watch and control in maximizing your cows’ productivity. Especially in times of tight or expensive feedstocks like today, balancing feed efficiency and milk production could go a long way to helping cows breed and calve regularly and early.
“Some of the EPDs we need to focus on are energy ($E), frame score and milk production in cows,” Amundson said. “We want our cow to be able to feed the calf, but we want her to be efficient. If we’re asking her to make too much milk, she’ll eat too much feed and won’t make us as much money.”
Do you need to sell and replace cows?
When determining if a cow is paying for herself on your operation, think beyond her performance in the current year. While attention to every individual cow’s performance is important, it’s just as important to view your cow-calf operation in the broader context of its overall financial performance. There’s likely a direct connection between every animal’s performance and your herd’s long-term viability. If you do have to make adjustments, it’s a good idea to target those that will have the most significant positive financial influence.
“If you have to downsize, sell assets to raise cash and sell assets that are least efficient,” Crosby said. “That means selling your old cows and the cows that produce smaller calves. Poor mothers and poor disposition — all those things should be the first to go. Whatever you have left, you want to be the premium.”
If you’re considering changes to your herd to help make sure your cows are all paying for themselves, contact Amundson for tips and pointers on starting the process.
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