Decisions, decisions! For typical spring-calving cow/calf operation, the first fall chill in the air signals a time for major decisions. What to do with your cattle and what to do about winter feed needs are foremost decisions.
Never has the cost of being wrong – nor the benefits of being right – been so high. The sheer volume of dollars being handled is mind-boggling to those of us raised on $1.50 corn and 50-cent fat cattle.
Biggest decisions to make
No one has a reliable crystal ball. If they did, they wouldn’t need to own cattle on the hoof, would they? Half the battle is realizing you have choices to carefully analyze with the best information you can gather.
* Sell corn or feed it? If you're lucky enough to have corn on hand, it might be tough to resist high cash corn prices. If you value your feeders in the $1.25 to $1.35 per hundred range and you figure corn at $6.50 a bushel, you're probably looking at a breakeven sale price on fat cattle next spring or summer at around $1.25.
Most forecasters feel we'll see those prices by spring, with potential jumps to $1.30-plus. So, if you can stand some risk, even those high corn prices may result in more profit when fed to cattle.
* Sell or keep heifers? Do you want to grow the future size of your cow herd? If you want to forgo the immediate profit of selling weaned heifers now, it certainly appears there's room for a lot more cows in this business in future years.
On the other hand, you might also want to retain heifers for future sale to others. Demand for open and bred replacement heifers is growing. Prices commonly range from $1,000 to $1,500 for good quality commercial heifers.
* Over-winter weaned calves or sell now? This might be a good time to be in the “stocker” business where you plan to market yearlings next spring. You can winter or “grow” calves over the winter on cheaper rations than required for a finishing operation.
With the expected jump in the fed market about when grasses start to break next spring, yearling feeders could be a very valuable commodity. There's nothing like the spring flush of grass to "bloom" an optimistic demand for cattle. If you have the labor and feed for a wintering program, think about retaining weaned calf ownership.
Know your feed 'trigger price'
Even in years of very high feed prices; opportunities arise where you need to act quickly. For instance, if the corn market suddenly drops to $6.25, should you buy? What if your neighbor suddenly wants to sell excess round bales?
With feed in great demand, these opportunities quickly come and go. So you need to be ready to act. Know in advance what your future feed needs are going to be and the price you can afford to pay.
One gentle reminder: Carefully control feed storage and feeding losses through this winter. At current grain and hay values, they quickly mount.
If 20 cows waste 10% of their $100-a-ton hay each day over a five-month feeding period, you've just lost $300!
Also remember the adage: “Feed to requirements!” Group animals by production requirements. Spend a few dollars to have the nutrient value of your forages tested. Then use those results to feed cattle what they really need.
The bottom line is that beef herd owners should be in for several sustained years of profitability. Yes, there's great risk out there. But there's also great opportunity for those doing their homework and making smart decisions.
Harpster is a Penn State animal scientist and a beef cow-calf producer.