Marketing "used" cows
October 13, 2009
The scenario is the same in most ranch country: a chilly November day spent pregnancy testing the cows results in a group that are open or being culled for other reasons. The paint mark or bobbed switch indicates that that cow is not going to be spending the winter with the bred cows.
Another example is a muddy, spring day, perhaps after snow storms and calf sickness, and there are dry cows in the bunch. They get sorted off from the pairs and plans are made to not run them another season.
In both instances, there is a marketing decision on the verge of being made. The cows in both situations are not in their peak condition, and the owner doesn’t want to have to run her any longer with no calf pending to show as a return on that investment.
The fall scene involves a cow that just weaned a calf and is a little thin from months of lactation. Perhaps she is an older, broken mouth cow. Missing grazing teeth made the fall grass hard to harvest for her, plus her big calf was still nursing and drawing a great deal of nutrition from her body.
The spring scene is one of a cow that might have wintered a little harder, perhaps feed was a little short, and the mud and snow of a cold spring further challenged her ability to maintain her body condition. She carried a calf to term, which required added nutrition, then calved and had to nurse that calf, which required even more. For whatever reason, she no longer has a calf, and has a low body condition score to boot.
The cows from both scenes are basically healthy, just underweight. What does the rancher do with her when he has her sorted off? Most will wait until sale day and haul her to town. She will run through the ring during the butcher cow sale and bring a low dollar amount because she’s thin. Just the way things are, just the way it’s always been, nothing much one can do about it, right? Maybe not.
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Let’s look at the dry/open cow again. Yes, she’s a little thin. Her ribs show, her hipbones are visible, and she’s a little hollow in the flank. But, she’s healthy, her eyes are bright, ears are up, she’s clean and hair looks good. She weighs about 1,050 pounds, though she has frame to be heavier. On sale day she brings 32 cents/lb and dollars out $336. Pretty disappointing, but not unusual. Several hundred cows just like her sold the same day for the same money, so it must be the way the market is.
Isn’t there a better way to deal with the “used cow” problem than just hauling them away? Producers need to put some thought into merchandizing the cull cows before the day they walk onto the trailer for the trip to town.
It all starts with the cow herself. What body type is she? Realistically, some cows aren’t going to look any better or worse, no matter what you do with them.
Retired cow buyer Darrell Hoar of Black Hawk, SD, who has bought literally hundreds of thousands of cull cows in his career, shared this quote, “You won’t win the Kentucky Derby with a Shetland and won’t win Daytona in a Volkswagon.”
“A cow should be chosen on the same criteria as a feeder calf, yearling, or bull,” Hoar says. “It all comes down to frame score, bone, substance, disposition and capacity.”
He recommends avoiding extremes in the frame score on a cow. One doesn’t want them to be light boned and narrow, nor is the coarse, masculine looking cow desirable. Heavy bone doesn’t make for a top yielding carcass. She needs to be long bodied, deep through the flank, and broad based, with enough gut capacity to be able to eat enough to gain, but not big bellied. Her disposition is important because a nervous, flighty cow isn’t going to settle down and eat and won’t gain weight when needed. The quiet, gentle cow can gain the weight when the opportunity presents itself, whether on pasture or in confinement.
“How they’re handled at the ranch makes a huge difference in the ‘feedability’ of the cow,” says Hoar. “Just as preconditioning is essential for the feeder calf, health maintainance for the cow is too.”
Preventing internal parasites is cheap and easy with the pour-on products, and increases the value of the cow at the sale barn. “I remember when they came out with a product that killed grubs back in the ’60’s and how that improved cow health,” says Hoar. “They didn’t have all the holes in the hides and they didn’t have those grubs burrowing through them. They just did so much better.”
On the subject of cow disposition, Hoar also had this advice about marketing, “Nervous, wild cattle need to be processed as soon as possible, so if you sell them at the end of the week and they’re not going to slaughter until the next week, they can succumb to dehydration. Either it won’t be a good carcass or she can actually go down and die before slaughter.”
With that in mind, those operators who run the wilder cattle can probably gain a better price by selling those cows at the beginning of the week. It would follow that buyers would give more for them when there is less risk of ruining or losing the carcass. With this cow-type, weather extremes of heat and cold are critically important as well.
There are some breeds that are more nervous and have less belly, but still are a heavily muscled animal. Those cattle, according to Hoar, are high yielding and bone out with 93 percent lean meat or better, which is very desirable. Those cows need to be killed as soon as possible though, to prevent shrinkage and damage to that carcass. Of course, being in good flesh is also essential, as a thin, slim gutted, nervous cow isn’t going to stir much interest from the packer buyers.
“The bottom line is that you want a feeder cow that can convert feed into meat,” says Hoar. “She needs to be able to gain four-plus lbs/day and with optimum gain for every mouthful of feed she’s eating. Hustle is hard to measure, but, cattle have got to have hustle, whether on the ranch or in the feedlot.”
So let’s go back to the healthy, somewhat thin cow that brought $336 at the sale barn. What could have been done to increase her value before she was hauled to town?
First, the rancher has to examine his situation. Does he have some feed that could be spared to feed her, is there good pasture she could be put on and supplemented, is there some cheap grain based feed available? A cow can convert feed better than a growing calf because she is already mature and just needs to increase weight, so she can gain weight on poorer feed.
Hay left from the previous year might be available, either owned or bought very cheap.
Hayfields that aren’t large enough to benefit the main cowherd could be grazed with supplemental lick barrels to add fat and calories.
The producer has to use some imagination and ingenuity, but can usually come up with a way to put weight on the cull cow. Next, it’s important to figure out what it’s going to cost and if the weight gain is enough to pay for the added feed.
Let’s say that we are going to feed that 1,050 pound cow and she gains 150 pounds over the next 40 days. That works out to be 3.75 lbs/day. Most mature cows in good health will gain four or more pounds per day on feed, so she could conceivably gain 160 pounds or more.
Now she weighs 1,200 pounds or a little more.
Back we go to the sale barn, and even at 32 cents, she has increased in value by $48. However, now she is shiny and in good flesh, filled out over the ribs and hips, and much more desirable to the buyers. This time she brings 48 cents/lb and dollars out $576. That’s a $240 increase in value.
Providing that the cost of feed was nominal, and/or there was good pasture available, that’s a considerable improvement over the thin cow price she would have brought after weaning a calf or having a tough winter/spring.
The thin cow in the spring can be turned out on green grass and by summer have gained the needed weight on pasture alone. Even at $20/month for pasture, for example, running her from May 1 to August 1 would only be $60.
Hoar stressed this as well, “Sell them shiney off of grass if possible, before they lose any weight. If you know you’re going to cull her, why wait until she has lost weight in the fall? If she’s lame and isn’t going to improve, sell her. Same with bulls. If you know you’re going to sell that bull for whatever reason, why wait until you’ve wintered him and then sell him when he’s lost weight and looks bad. Always sell them in the best condition.”
A cow (or bull) that has gotten very thin is a poor candidate to try to turn around with feed in a short time, so feeder cow buyers will avoid them. If one has to be fed for 90 days or more, there is no margin in them. Another concern is that there could be an internal problem that would prevent that animal from being able to gain weight.
During drouths, many will try to hang on a little longer, just in case it rains. If it doesn’t, they are stuck with very thin, dried up cows that are probably weak as well. Trying to sell them is nearly impossible, and will lead to deep discounts and mere salvage prices.
It all goes back to this good advice from Hoar, “If they’re going to sell a used cow, sell her when she has some weight on her, when she’s in good condition. Put the feed in her.”
Another factor that is at play with the cull cow end of the business is simple lack of knowledge about the markets. If the only time a producer is at the sale barn is the day that the calves are sold, they are missing out on learning more about their business. The fact is, unless a cow dies on the ranch, she will eventually be sold as a used or cull cow.
Since she is potentially worth a decent price if managed right, it behooves the producer to study the market trends, ask questions, and learn all they can. Making educated decisions about marketing can certainly improve the bottom line.
Traditionally, according to Hoar, the numbers of available butcher cows are low just before Christmas and in March, for there is a lack of good quality butcher cows coming to town then. That’s not to say that there aren’t a lot of cows being sold then, but they aren’t in condition to bring top dollar. That fleshy, quality cow can top the market if the producer will do what it takes to have her in top condition and in the right place at the right time.
As Hoar points out, though, there are always variables, such as the dairy buyout, a meat recall, or other factors. “Even students of the markets get fooled at times,” he says.
So, the lesson to be learned here is to study the markets, fire up your calculator, and figure out if you can increase the value of your product. Like the inevitables of death, taxes, and tiresome political campaigns, every cow reaches the stage of her life when she is a cull cow. What you do with that “used” cow can greatly affect your bottom line. A little effort to improve her “sellability” is certainly worth the effort.