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Calculate cost per calf when investing in new herd sires

Looking to update your bull battery in 2017? Here are four articles to help you make the best buying decisions.

Amanda Radke

January 9, 2017

3 Min Read
Calculate cost per calf when investing in new herd sires
Amanda Radke

My family and I spent this cold January weekend in the barn, gearing up for bull sale season. Saturday was dedicated to cleaning up bulls to photograph for upcoming consignment sales and to feature in the pages of our seedstock sale catalog. On Sunday, we collected yearling weight data and finalized performance data to provide to our customers.

Gearing up for bull sale season is always exciting for us. We are proud of the bulls we raise, and we value our customers who come back each year to invest in our genetics. It’s a family tradition that now spans four generations, and it’s a passion we hope to pass on to my kids as they grow older.

Market swings don’t just impact cow-calf producers, but seedstock operators as well. When the commercial cattleman receives less for his calves, it naturally also slows down sales and reduces prices for seedstock genetics, too.

The last year was tough on cow-calf producers, and it may be tempting to cut back on expenses such as purchasing a new herd sire. However, according to Miranda Reiman for the Angus Beef Bulletin, “A bull that services an average of 25 cows per year for five years typically accounts for less than 10% of total cow costs.”

In the grand scheme of things, this investment in genetics is an affordable management tool for adding pounds to calves and advancing your production goals.

But what is the best way to calculate the costs of a herd bull?

In an interview with Reiman, Jim McGrann, Texas A&M emeritus ranch management economist, recommends calculating the cost per calf to determine the value of a herd bull.

According to McGrann, “Increasing the bull purchase price by $200 only moves the annual cost per hundredweight (cwt.) of calf weaned by 42¢. A $2,900 bull covering 25 cows per year divides out to $9.31 per cwt. of calf weaned. For a $3,100 bull, that moves to $9.73. Add another $1,000 to the bull purchase price, up to $4,100, and that per-cwt.-of-calf cost would increase just $2.10 to $11.83.

“When genetics help add value to the herd, the cost decreases. The above figures are based on an average 550-pound (lb.) weaned calf. If a particular sire adds 20 lb. per animal, the cost per cwt. of calf weaned drops to $8.98 on a $2,900 bull and to $11.41 on a $4,100 sire. Notch that up by 100 lb. to a 650-lb. weaning weight average and that cost drops by $1.33, or more than 10%.”

READ: Investing in a new light, by Miranda Reiman

If you're on the fence about updating your herd bull battery this year, calculate the costs and consider saving money elsewhere within the operation.

For additional reading on this topic, BEEF has several recently published articles to assist in making a sound bull investment, including:

The 6 Ps of bull buying

Relationships are key to getting the most for your bull-buying dollar

Bull price trends appear mixed heading into the spring season

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Penton Agriculture.

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