September is that time of year when cow-calf producers are starting to gather in the calf crops, look at weaning strategies, vaccinate cattle and pregnancy-check cows. It should also be a time when marketing strategies and plans are determined. This means taking some thoughtful time and looking at the options that are available, and making decisions based on the best market and time frame for the operation — not necessarily the most convenient.
Get a plan
When looking at a marketing plan for your cattle, it all starts with knowing your cost of production. Knowing cost of production moves you from worrying about trying to capture top dollar and allows you to make decisions based on expected returns. Knowing your cost of production also allows you to compare various marketing options with a higher degree of confidence. The Wisconsin Beef Information Center has various decision tools and software that can help you determine cost of production and explore other marketing options.
When you look at marketing for a cow-calf enterprise, selling feeder calves is obvious, as that makes up the largest share of income. Options to explore are preconditioning, backgrounding, private treaty sales and retained ownership.
There is another revenue source from a cow-calf enterprise that can add extra value when you know your cost and markets, and that is the sale of cull cows. Cull cow sales typically represent 15% to 20% of the gross revenue for cow-calf producers. One option that may be considered is feeding out cull cows. This is not always the best option, but under the right set of circumstances, it could provide some added value to the right cows.
What are the right cows? The right cows are healthy cows. The cows that do best in this scenario are those that tend to be on the thin side due to periods of negative nutritional balance, but are still in good health. In general, look at taking cows that are healthy and have a body condition score of 4 or less up to 5.5 or 6, at the most. Cull cows that are too fat are discounted just like ones that are too thin.
Slightly thin cows will experience compensatory gains and will aid in the second factor of a successful cull cow feeding program. Being able to add pounds of gain efficiently with low feed cost is the key to making this system work. According to the Ohio State University publication “Feeding Cull Cows,” the most efficient gains are made in the first 30 days of feeding, and by feeding cull cows out for at least two months, you can improve the carcass quality, making it more valuable.
The third situation that will make this decision is the cull cow market versus feed prices.
The real question becomes does it pay? The answer is, it depends. In 2009, Iowa State University published a “Seven Year Summary of Feeding Cull Market Cows.”
In this summary, data was collected from nine groups. Five groups were placed on feed in November and December, and four groups were placed on feed in May. Cull cows were fed for 70 to 90 days. As expected, there was quite a variety in profit per head. The overall summary average for the seven years was a profit of $16.54 per head. The range was from a loss of $91.45 to a profit of $174.36. The summer-fed groups had the highest average profit per head at $35.84, while the winter-fed groups averaged a $7.75 profit per head. This fully reflects that knowing your cost of production and what the market has to offer can help make your marketing plans and decisions just a little easier.
Hady is the Richland County Extension agriculture agent. This column is provided by the University of Wisconsin Extension’s Wisconsin Beef Information Center. Learn more at fyi.uwex.edu/wbic.