Vet’s Voice by Dr. Dave Barz: Think outside the box and up your numbers
March 24, 2015
After a great year in 2014, it appears the beef market may have peaked. We all knew this would happen, but none of us could predict when. Even with the decreased prices, there has never been a better time economically to fuel expansion. Feed costs have decreased and in our area it is easily possible to show $500 per cow-calf pair in profit. Hopefully the bar has been raised and prices will remain constant in the future.
For the past several years, we have all heard the reports of empty feedlot pens and an overbuilt portion of the beef complex. We have closed or repurposed nearly one million head of cattle feeding capacity. Three packing plants have also closed with a capacity of 2.5 million head annually. Cattle Fax analysts say there is still 25 percent overcapacity in the cattle-feeding sector.
Hopefully the demand for our product will continue to improve. As income levels rise in the world, more consumers will be able to purchase beef. Also the population of the world will increase, forcing us to continue to become more efficient in our production through use of new and existing technologies.
How will you be able to increase your profits during this time of expansion? Each ranch or farm will be different, but you must determine what technologies your herd will utilize.
In our area, pasture is the most common limiting factor in cattle production. The high grain prices in the past have driven farmers to break up pasture and plant crops. Not only has the number of acres available for grazing decreased, but competition for grass has driven rent prices up to $90 per acre. If you are going to expand your herd without renting more grass, you must think outside of the box. When I ask clients "How do you decide how many cows in your herd?" The answer is usually a function of range management. The number of cows by pasture will carry. Many also temper the answer by keeping some grass in reserve in case it is a dry year.
I'm not against good range management, but there are ways you can expand your herd without affecting your grass.
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1) Heifer development
On many farms in our area, the first calf heifers never see the pasture. They are developed in the feedlot, which allows easier handling for A.I. and feeding, bred and gestated in the dry lot. This assures they receive adequate nutrition for growth as well as fetal development. Heifers are the genetic potential for the future of your herd. If you breed extras, you will be able to market them as breds, pairs or add them to your herd. The extra heifers will give you the flexibility of marketing cows if needed to fill your herd needs next year.
2) Flip cows
Many of our clients purchase "flip cows" to increase their numbers. They are usually purchased in the fall and fed on stalks or in the feedlot through the winter. Most are calved out in the spring, but some may be resold as breds. Most of these cows never see a bull to be rebred. They are fattened in the feedlot while the calf also suckles and is fed the bunk ration. Some producers have grass traps and creep feeders allowing the calves to not be in the dust and mud of the feedlot while with their mothers. The cows are generally sold in the late summer and the calves are weaned right in the same lot. This early weaning works well.
3) Traditional purchases
Many of you will purchase cows and heifers to add to your herd. This is also lucrative at this point with the cow feed costs and high calf prices.
Economic conditions are great for herd expansion. Analyze the opportunities for your herd and tailor a scenario to fit your operation. Visit with your nutritionalist, veterinarian or extension specialist with any questions you might have. Now is the time to reap the profits in cow-calf production.