Building a cow herd
May 31, 2014
We hear lots of news about the inventory of cows in the United States being the lowest in several decades, the unprecedented level of cattle prices, the influence of drought, the effect of high and volatile input costs, etc. We also hear that inventory numbers suggest we are in the early phase of herd rebuilding. Heifer calves are being held back and cull cow marketing is down. Cattle prices are expected to remain high making the opportunity for cow-calf producers to see record prices and profitability for several years. Each cattle producer needs to decide based on their specific situation if they are going to build their herd to larger numbers. Here are a few questions and associated tips to consider in making that decision.
How are you going to build your herd? You can choose between holding back heifers and reducing your culling rate to build internally, or you could purchase females of various age and quality.
Do you want to build the herd gradually or in a hurry? If you want to build fast, then internal building may not be an option. If you are going to purchase females, what age group and quality are you considering? If you buy additional heifer calves (presumably this coming fall when they are weaned), you are not going to build fast because it will be two years before you have producing cows. You can consider bred heifers or young cows, but they are expensive. Predicting the profitability of expensive cows depends on prices that will be received for future calves and expectations for input costs in future years. Work with your banker or other financial advisor using your records to determine prices that work for you.
You can buy older or cull cows, and they may be a short-term fix. This age of cows may only produce one or two more calves, but they can fill a gap at a tolerable price while you are building the genetics of the future in your herd from your own or purchased heifer calves.
An important issue to consider with purchased females is biosecurity. They will have the potential to bring diseases to your place that you don't currently have. Work with your veterinarian to develop a plan to ensure the health and safety of your existing cows. A plan to quarantine new cattle may be important. Vaccinations to bring the immunity of new cattle up to the standards of your existing herd will also be important.
As you are building your herd, you will need to consider the resources that will support them. If you are adding numbers based on good moisture and this looking like it is going to be a good grass year, what is your drought management plan? What contingencies do you have in place to be sure you can maintain the larger herd when the next drought happens?
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What feed resources are available to support a larger cow herd? Purchasing additional pasture is very expensive. In my opinion, it literally requires a separate source of investment wealth; income from the cows will only partially cover the cost of the mortgage. Rent for pasture is high and rentals are very competitive. You will need to be aggressive to find additional ground to rent. On the other hand, one of the reasons that pasture availability is so limited is conversion of a great deal of pasture to crop production in the last several years. Crop residue, whether it be cereal straw, corn stalks, or milo stalks, is currently a tremendously underutilized resource. Running cows on stalks or stubble can be a very cost effective way to provide several months of less expensive grazing, and using harvested stalks or straw with judicious protein supplementation can carry cows through the winter. This can allow restructuring the use of existing pasture to summer use only with residue grazing or feeding covering the rest of the year. In the extreme, complete drylot systems may make sense in some cases to support herd expansion.
Ultimately, there is a lot of promise for profitability in the cow-calf sector for a number of years to come. Innovative producers with out-of-the box ideas for increasing herd size and finding alternative resources to support them could have a great opportunity to reap big rewards during this period. F