News
How 'Bout Them Cows?
By James Henderson
We have spent a lot of time as an industry focused on the size of the cattle that we are placing in feedlots and slaughtering in packing houses. I have said many times that as long as each segment in our industry figures costs on a per head basis and receives revenue on a per pound basis, the incentives are to make them bigger. As an industry, we have and are continuing to do a good job of making them bigger.
But, how about them cows?
It is fairly easy to get calves bigger if we get cows and bulls bigger. What is the size of your cows today compared to what they were 10 or 20 years ago? An animal unit was figured on a 1000 lb. cow. How many of those do you have in your herd? Twenty years ago when we talked about the carrying capacity of land and the cost to maintain a cow that was in animal units (that 1000 lb. cow) and today we look at cows that may be averaging 1500 lbs. (1.5 animal units), does it require 50% more land and or feed to run the same number of cows? Let's look at some quick numbers. A 1000 lb. cow that weans 60% of her body weight will produce a 600 lb. calf. If that calf today is worth $1.38/lb., the calf is worth $828. A 1500 lb. cow that weans 50% of her body weight produces a 750 lb. calf. If that calf is worth $1.30, that calf has a value of $975. A few years ago, we said that the 1000 lb. cow costs $300 per year to maintain so the 1500 lb. cow would cost $450 per year to maintain. That would make the return per calf about equal $528 for the 1000 lb. cow and $525 for the 1500 lb. cow.
Now, let's look at what would happen if feed costs double. (Can you guess that corn would ever go from $3.50/bushel to $7/bushel? Or, that hay would go from $75/ton to $150/ton?) If costs doubled, the cost for the 1000 lb. cow now goes to $600 per year and her calf returns $228 while the 1500 lb. cow costs $900 per year and her calf returns $75. Let's look at these numbers another way. In our area, and in a normal year, we can run an animal unit to 25 acres. Assume we get 85% calves weaned to cows exposed. The 1000 lb. cow will produce 20.4 lbs./acre at $1.38/lb. returns $28.15/acre while the 1500 lb. cow will produce 17.2 lbs./acre at $1.30/lb. returning $22.36/acre, a 26% difference in return per acre in favor of the smaller cow. The American Angus Association has provided a tool $EN that will point us toward the more efficient cattle. If you plan to keep any females, you should be looking at $B + $EN to determine the most cost effective cattle.
How about fertility and longevity? There is nothing more expensive than getting a cow into production and bred for the third time. My numbers show that if you can increase the average longevity of cows in your herd by six months, you will reduce the annual cost per cow by around $60 per head. It is very popular today for seedstock operators to sell their cows by the time they are five years old. Longevity is not factored into their decisions. At Bradley 3 Ranch, we sell our cows as bred 11-year-old cows and won't flush a donor cow until she is at least 10. In today's environment, that is worth a lot of money to your operation.
We would love to visit with you at any time about our cows and how using some of our genetics can reduce the cost of your operations.