The flow of beef cows heading to market since September is becoming pronounced, even though the market isn’t providing much incentive to cull at present. But if hay and pasture are short, tough decisions must be made.
Those tough decisions are also at play when deciding whether or not to winter open cows and wait for a better market. Here’s a look at the options.
This decision must be analyzed based on each individual's location and access to feed and labor. Typically, the cull cow market reaches a seasonal low in November and December due to the large influx of cull cows and cull bulls on the market. Following the first of the year, the market routinely increases and reaches a high in July and August.
The simplest method of managing open cows is to sell immediately following pregnancy checking from September-November, while the cull cow market is on its descent. According to USDA NASS data, between 2016-18, national cull cow prices averaged $61 per cwt, placing the gross value of a 1,200-pound cow at $732.
With this marketing decision, there are no costs associated with an open animal after determining that she is not carrying a calf. During years of high feed prices, this may be the most financially responsible decision, provided the cull cow market isn't too depressed at the time of selling and that BCS is adequate.
Under this system, it is crucial to sell open cows immediately following pregnancy check, as a cow sold in September averages an $85 per head higher value than a cow sold in December at the same weight between 2016-18, not including the costs to retain the cow until December.
Under highly managed and low-cost, winter-feeding methods, profitability is possible by adding weight to cows to increase BCS and selling in better market conditions in the spring. There are many different feeding methods of overwintering cows, all of which have their pros and cons based on location and feed availability.
In the Midwest, grazing corn stalks with mineral and DDG supplements is widely abundant and can be a low-cost method estimated to cost 50 cents per head per day, or $75 per head over the 150-day winter-feeding period; with the added benefit of manure distribution for the following years' crop. This figure does not include the upfront costs of fencing supplies and means of watering, which will vary by producer and existing infrastructure.
Actual labor costs heavily influence management decisions, but labor can be estimated at $20 per cow in a 100-cow herd, making the cost of wintering $95 per cow. Historically, this method can realize a profit of $300 per open cow with a gain of 1.5 pounds per day.
Another avenue of adding value to open cows is to attempt to rebreed and sell in the spring as bred cows expected to calve the following fall/late summer. Steve Lira and Jon Biermacher found that by rebreeding cows, on average, producers in 2016-18 saw a $120 per head increase in cow value for bred cows compared to open cows in the spring.
Considering a $25 per cow cost of bulls for natural service, producers in 2016-18 have seen an average of $400 more per bred cow compared to selling as an open cow in the fall. The aforementioned feed protocol can be followed in this situation as well.
Retaining open cows throughout the winter has potential to be profitable through low-cost winter-feed systems. Cull cow prices in September 2019 were on average 4% lower compared to 2016-18. If a producer can keep labor costs low while maintaining efficient feed to gain, there is opportunity to realize additional profits by overwintering this year. Individual costs and feed availability vary by location and should be appropriately considered when making management decisions.
Buerck is a research assistant and Boetel is a professor in the Department of Agricultural Economics, University of Wisconsin-River Falls. Source: LMIC “In the Cattle Markets” newsletter, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.