time to re-think retaining heifers?

[cypressfarms]

It seems as if our high prices for calves may be here to stay for a while. With cattle inventories at a very low level, and demand still strong, prices are "expected" to remain high. I brought a couple of calves to the stockyard recently; the owner of the stockyard said that prices would remain high for as long as he could see. His theory was that (at least in our area) most calf producers are mom and pop operations. He told me the average age of those cattlemen was in the mid 60's, and they averaged under 50 head per herd. He told me that at 43 I was a rare breed because most people are getting out of the cattle business, and the amount of younger people getting in will not keep up. I realize that this is a bunch of "ifs", and we all know how that can turn out.

But let's assume the stockyard manager is right, and we're entering a long term period where cattle will be worth substantially more. My question is does that make you rethink retaining heifers as opposed to selling them to put them back in the herd. A quick look at my local market bulletin reveals a slew of bulls for reasonable prices, so changing bulls every three years or so is feasible if the price of slaughter bulls keeps high (I recently sold a "old" bull and got $2,000 for him. I only paid $2200 for him as a 2 year old)..

I'm interested in any thoughts out there. If we are in a new long term trend, I'd like to be outfront to make the most of any profit - just like anyone else...

Comments???

 

[Isomade]

I had those same thoughts a year ago Cypress. I sold the Char bulls and replaced them with some maternal Angus bulls and we are having calves born out of them now. Then I was terminal and wanted as many bull calves as I could get. I got heifers. Now I want all heifers and I've had 6 bulls in the mature cow herd in arrow and 0 heifers.

 

[highgrit]

How else would you build your herd up and replace your older cows. I feel heifers are the only way to go they know the system and the way it works around here. My problem is the cows that I want to keep heifers out of almost always have bull calves also. Been using Angus and Simmental bulls and you can get a good quality papered heifer bull ready for light service, for what a 4 year old bull brings at the sale.

 

[dun]

For the past 3-4 years it has been predicted that the US cow herd would be in an expansion phase. Ol Ma Nature stuck her nose in and pretty well has put that aside with the extensive drought. We still retain most of our good heifers and sell them as breeders, been doing that all along. A concern I have is that some folks will jump on the band wagon and start retaining heifers that should have gone to the feedlot.

 

[Tim/South]

I tend to agree that supply and demand will make cattle more profitable.
The only down side I see is beef pricing itself out of the family menu. Pork and chicken are less desired but much more affordable. Pork seems to be having a hard time right now with corn prices. Chicken seems to be doing well.

Many local cattlemen have liquidated. I can not blame them. Prices have reached record highs, children are grown and moved to town. Grand kids are allergic to sweat. Why keep hanging on and leave it to children who will sell out and profit from your years of work?

Our closest sale barn is concerned for their future. With the various cattlemen cashing in, who is going to be bringing cattle to market in a few years? They run 1,000 - 1,200 per week and do alright. First class operation, good folks. They do not expect those numbers to hold up in the future.
I have also seen a decline in cow hay prices in our area. The demand is just not there.

I have been saving my heifers. Can't afford to buy any at these prices.

 

[Caustic Burno]

It seems as if our high prices for calves may be here to stay for a while. With cattle inventories at a very low level, and demand still strong, prices are "expected" to remain high. I brought a couple of calves to the stockyard recently; the owner of the stockyard said that prices would remain high for as long as he could see. His theory was that (at least in our area) most calf producers are mom and pop operations. He told me the average age of those cattlemen was in the mid 60's, and they averaged under 50 head per herd. He told me that at 43 I was a rare breed because most people are getting out of the cattle business, and the amount of younger people getting in will not keep up. I realize that this is a bunch of "ifs", and we all know how that can turn out.

But let's assume the stockyard manager is right, and we're entering a long term period where cattle will be worth substantially more. My question is does that make you rethink retaining heifers as opposed to selling them to put them back in the herd. A quick look at my local market bulletin reveals a slew of bulls for reasonable prices, so changing bulls every three years or so is feasible if the price of slaughter bulls keeps high (I recently sold a "old" bull and got $2,000 for him. I only paid $2200 for him as a 2 year old)..

I'm interested in any thoughts out there. If we are in a new long term trend, I'd like to be outfront to make the most of any profit - just like anyone else...

Comments???

Maybe someday but not at this time. I picked up some fine heifers this year for an average cost of 900 bucks a head.
As you know I am not a heifer guy. These same heifers would be worth 1600-2000 a head with rain.
The problem right now there is no market until the weather pattern turns around everyone around here is hunkered down and holding minimum inventory. IMO here in S/E Texas it is time to sell everything with some age on it and hold younger proven inventory until this drought from he !! breaks.
Now Cresent Wrench I think your dead on about prices and the age of the Cattleman, you younger boys have an opportunity to make some money down the road again IMO.
Until this map changes all bet's are off we might be paying them to take them before this is over.
http://www.cpc.ncep.noaa.gov/products/e ... ought.html

 

[Anonymous]

Lots of good opportunities right now if you have the means,time, and an eye to the future. Both short term and long term.

 

[bigbull338]

no 1 can tell you to sell or keep your heifers when prices are high.what you have todo is figure out how meny cows you replace a year.an then keep 5 heifers over the # you need for replacements.an then sell the rest.i dont see the prices falling anytime soon.

 

[Arkansas]

USDA predicts cattle prices to stay high for a while but just 2 yrs ago they said the same thing that prices were exspected to do well into the following year. Not even 3 months later the prices dropped again, never tell with the way the market is I hope they do continue to stay up there though.

 

[SRBeef]

USDA predicts cattle prices to stay high for a while but just 2 yrs ago they said the same thing that prices were exspected to do well into the following year. Not even 3 months later the prices dropped again, never tell with the way the market is I hope they do continue to stay up there though.

I think prices dropped because of the flood of cattle going to market because of the drought - which the USDA nor anyone else could really have predicted to the extent it developed.

A thing to keep in mind is that retaining a heifer takes a carcass out of the next year cattle slaughter. Her first calf at 2 years old just replaces herself on the rail it is her calf at 3 years old that increase the herd, as long as her dam and all other old cows in your herd are still in production.

In reality it is about 4 years from the decision to retain a heifer that there is a net increase in the US beef supply.

Prices are likely to stay "good" for the next few years at least and maybe increase as feedlots compete for fewer feeders.

Jim

 

[Arkansas]

USDA predicts cattle prices to stay high for a while but just 2 yrs ago they said the same thing that prices were exspected to do well into the following year. Not even 3 months later the prices dropped again, never tell with the way the market is I hope they do continue to stay up there though.

I think prices dropped because of the flood of cattle going to market because of the drought - which the USDA nor anyone else could really have predicted to the extent it developed.

A thing to keep in mind is that retaining a heifer takes a carcass out of the next year cattle slaughter. Her first calf at 2 years old just replaces herself on the rail it is her calf at 3 years old that increase the herd, as long as her dam and all other old cows in your herd are still in production.

In reality it is about 4 years from the decision to retain a heifer that there is a net increase in the US beef supply.

Prices are likely to stay "good" for the next few years at least and maybe increase as feedlots compete for fewer feeders.

Jim

Sorry, I meant to say never tell with the market because SHTF all the time and when it does the Market goes to hell

Thanks Jim

 

[Brute 23]

I don't see a reason to make any adjustment if you are a cow calf producer in it for the long term. The theories for buying and or keeping replacements are the same no matter if the market is high or low.

 

[Caustic Burno]

Until this drought breaks that is gripping most of the country, I see this more as a drought survival stategy.
I have culled some mighty fine older girls in the last couple of years to hold on to young cattle. My thinking is they will be able to take the stress better and everything that is coming in or staying has Brimmer in it.
CAB might not like the Brimmer they might just have to have an attitude adjustment if this drought continues.
We all might be running Longhorn's and Brammers before this is over if we survive at all.

 

[plumber_greg]

Thanks, Jim. Never really thought of it that way. gs

 

[SRBeef]

Thanks, Jim. Never really thought of it that way. gs

You are welcome, Greg.

Some non industry people think that retaining a heifer leads to a quick increase in available beef.

Folks forget cattle with one calf per year and a calf that isn't usually ready for slaughter until 18 months old are very different from hogs (with large litters) or chicken (relatively short production cycles).

If you really get into details it is almost 5 years from retaining a heifer until there is a net increase in the beef supply, and other countries have the same basic biology of cattle to deal with.

There is no way to produce a quick increase in the worldwide beef supply. There is 4 or 5 years of time lag for any increase. And in the process the producer has a several year cut in income as he removes a heifer carcass from his income stream.

Meanwhile world population and hopefully prosperity continue to increase likely bringing an increase in beef demand.

Liquidations of cattle as we have had can occur quickly. Increases in the cattle herd only happen very slowly.

Jim

 

[brihop]

Personally, I'm going to retain every heifer born, as long as she has 4 legs, a uterus and a heartbeat. Can't afford to buy very many nice additional outside heifers with the prices the way they are... most of the more affordable ones are junk, but occassionally I come across a good buy.

 

[Caustic Burno]

Seen some good heifers yesterday at the sale go cheap hardly any back to the farm buyer's.
Hundreds of long hair calves from up north went through yesterday along with cows.
Now if we ever get out of this drought might have to hire Brinks to guard the ones left.

 

[greybeard]

It seems as if our high prices for calves may be here to stay for a while. With cattle inventories at a very low level, and demand still strong, prices are "expected" to remain high. I brought a couple of calves to the stockyard recently; the owner of the stockyard said that prices would remain high for as long as he could see. His theory was that (at least in our area) most calf producers are mom and pop operations. He told me the average age of those cattlemen was in the mid 60's, and they averaged under 50 head per herd. He told me that at 43 I was a rare breed because most people are getting out of the cattle business, and the amount of younger people getting in will not keep up. I realize that this is a bunch of "ifs", and we all know how that can turn out.

I agree with most of that, and if you believe the USDA AG census, it bears that out, as it reports that the average US "farm" is 100 acres or less. 2 ac/cow=50 animals. And younger people who might want to get into ag will have a tougher time with the high price of buying in as far as herd stock goes. I really hate to see that, but 2-3 thousand for a bull and around $1000 each for good heifers is tough for someone just starting off. I sure don't see enough new young folks getting into the game in the near future.

But let's assume the stockyard manager is right, and we're entering a long term period where cattle will be worth substantially more. My question is does that make you rethink retaining heifers as opposed to selling them to put them back in the herd. A quick look at my local market bulletin reveals a slew of bulls for reasonable prices, so changing bulls every three years or so is feasible if the price of slaughter bulls keeps high (I recently sold a "old" bull and got $2,000 for him. I only paid $2200 for him as a 2 year old)..

I'm interested in any thoughts out there. If we are in a new long term trend, I'd like to be outfront to make the most of any profit - just like anyone else...

Comments???

Demand would be even higher for North American beef if China were to start buying direct, especially for breeding stock. China has been trying to become self sufficient ag wise, and making a big push to go to wheat, corn and beef instead of just relying on swine and poultry production. Last I read, they were buying Canadian replacements under the table thru Australia and New Zealand. I forget now how many heifers and cows they were buying each month, but it was a bunch. Beef has become pretty popular in China over the last 5-10 years. There's a good market potential there if they ever drop their restrictions from the mad cow fiasco we saw happen a few years ago. 1 billion new consumers is nothing to sneeze about.

 

[circlew]

As a young and upcoming cattleman, 21, it's hard for me to expand because of the cost of the animals and no land to rent. I have 40 acres at home, 10 acres at my folks place, and another 45 acres rented that doesn't have any cattle on it. Right now the cheapest cows I can find are open heifers that are ready for the bull for 900 a piece. Bred heifers are 1500 and up and bred cows are around the same. Also with farming booming everything you could cut hay on or run cows on is in cotton. I'm planning on keeping back 5 to 10 heifers every year to up my numbers. And with land I'm just gonna try to grab everything I can get my hands on.

 

[B&M Farms]

As a young and upcoming cattleman, 21, it's hard for me to expand because of the cost of the animals and no land to rent. I have 40 acres at home, 10 acres at my folks place, and another 45 acres rented that doesn't have any cattle on it. Right now the cheapest cows I can find are open heifers that are ready for the bull for 900 a piece. Bred heifers are 1500 and up and bred cows are around the same. Also with farming booming everything you could cut hay on or run cows on is in cotton. I'm planning on keeping back 5 to 10 heifers every year to up my numbers. And with land I'm just gonna try to grab everything I can get my hands on.

I started off trying to keep most of my heifers. Now I keep heifers from only my best cows and buy a few to grow my herd each year. When I can sale a weaned heifer for around 800 and buy a bred heifer for 1500 or a little more, I come out about the same. I think not feeding a heifer for 18 months before calving and getting another calf the same year makes up the cost. If I had my herd genetically were I wanted it totally, I might look at it different. Right now I know I can make improvements faster buy not keeping heifers from my worst cows, retaining heifers from only my best cows and buying better females. I know I have some good cows, but good cows can be culled for better ones if the cost is justified. As far as the market, I did just as well when they brought 500 and fertilizer, feed and diesel were alot less. Its just barely keeping up with cost if it is at all.