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Fall Back On Leverage

Amana Farms Inc. adds a fall calving season to better leverage fixed costs, utilize resources and manage risk.

“If you hear enough people say you can't, you start believing it,” says John McGrath, head of Amana Farms' beef division. That's one reason the High Amana, IA, — headquartered operation waited until two years ago to switch a growing percentage of its spring-calving cow herd to fall.

This far north, common logic held that feeding a lactating cow through the winter was cost prohibitive. But McGrath says the production costs on their fall calves aren't any higher than for their spring-born calves.

The lighter weaning weights of the fall calves (they're weaned sooner) means the cost/cwt. through weaning can run higher, he says. But because Amana feeds all its calves, they can potentially make it up on the other end. Plus, they have more calves to price in the high spring markets just ahead of summer grass season.

Leverage And Diversification

Amana Farms encompasses 26,000 acres, a 2,200-head cow herd and a 3,000-head capacity feedlot. They'd always had a fall calving herd of 100-300 cows, McGrath says, but they started moving a larger percentage of cows to fall calving the past couple of years.

Today, one third of the herd is fall calving. Ultimately, as much as half the herd will one day calve in August and September rather than mid-March to mid-May.

Amana Farms' decision to switch more cows to fall calving — once they'd proven to themselves that the cost was similar — was based on leveraging fixed resources and managing market risk. Two calving seasons dilute breeding cost by getting more use out of their bulls, McGrath says. Two seasons also milks more production from the fixed costs of labor and facilities geared toward breeding and calving.

Markets and market risk are other factors. Along with hedging risk by splitting the herd into two marketing groups, Amana potentially can capitalize on what typically are the year's highest feeder calf prices, as well as what are typically the strongest fed-cattle prices in February to April if they retain ownership. An added benefit is that preg-checking fall cows allows them to send any opens into what are typically the highest cull-cow markets of the year.

Indirectly, McGrath says the fall decision also helps manage calving and health risk on that portion of the herd. The lighter-weight calves might bring fewer pounds to the market table but it also means less dystocia, fewer calving problems and healthier calves.

Of course, there are trade-offs.

“I can't emphasize enough the nutritional aspect of it. It can be overcome, but you have to be aware of it,” McGrath says.

Specifically, since forage quality is declining at breeding time for fall cows, you must be ready to provide the extra protein and energy needed to maintain breed-back.

Carrying costs for fall cows aren't any higher than for spring cows, nor are they cheaper. Rather than supplement nutrition in the winter ahead of calving in the spring herd, he says added feed dollars are spent on the fall cows leading up to breeding.

“I don't think real large-framed, heavy milking cows are your best bet for fall calving,” McGrath says. “We've got primarily Gelbvieh X Angus crossbred cows, but we consider the milk EPDs and don't have much problem breeding back.”

Amana Farms breeds cows for replacement heifers back to Gelbvieh X Angus bulls. The others are bred terminal to Charolais, he points out.

A Ship Changing Direction

Switching a large percentage of a spring-calving herd to fall is akin to changing the direction of a freight ship — it isn't necessarily easy or quick. And, McGrath points out that, overall, they haven't lowered costs yet. “We're still in the adjustment phase,” he says.

Among the logistical challenges that accompany doubling herds, he says the headache and cost of managing replacement females separately for each herd is a test. And he emphasizes that there are no one-size-fits-all answers; the right decision for one operation may be wrong for another.

But thus far, the advantages of operating both spring and fall herds outweigh the disadvantages of hitching their wagon to one or the other, McGrath says.