Bred Cow Market has been Trumped !

[RanchMan90]

I'm really liking the stocker cow deal right now

I like stocker stockers but they do take more capital and can have more risk.

I was at a state cattlemen's event last fall when the BTO were comparing notes. A couple admitted the only 2016 group they were making money on was old cows. The cows usually come out of the Dakotas and are moved to greener pastures or a TMR pen for one more calf. Some are man eaters so the TMR pen is preferred.

I agree. Ive been going back and forth between turning out stocker calves or young (3-5 year old) first trimester cows in April on a lease and care program. Calves cost 50¢ per lb of gain and cow costs 80¢ per day. Just looking for the most ROI on a load lot (48000 lbs) with a moderate risk level (borrowing against my property). For a 250 day grazing period ending in November.

 

[RanchMan90]

I'm really liking the stocker cow deal right now

I like stocker stockers but they do take more capital and can have more risk.

I was at a state cattlemen's event last fall when the BTO were comparing notes. A couple admitted the only 2016 group they were making money on was old cows. The cows usually come out of the Dakotas and are moved to greener pastures or a TMR pen for one more calf. Some are man eaters so the TMR pen is preferred.

I agree. Ive been going back and forth between turning out stocker calves or young (3-5 year old) first trimester cows in April on a lease and care program. Calves cost 50¢ per lb of gain and cow costs 80¢ per day. Just looking for the most ROI on a load lot (48000 lbs) with a moderate risk level (borrowing against my property). For a 250 day grazing period ending in November.

What do you think?

 

[J&D Cattle]

Cow sale last Friday night: highest bred heifers $1900, lots of 4-6 3rd period cows $1600, 7-SS 3rd period cows $1200, BM & Old 3rd period cows $900, open heifers $1150.

I bought 21 BM 3rd period cows that averaged 1270lbs for $890/head. All had good feet and bags and came from one guy.

 

[Stocker Steve]

What do you think?

Its all about land, capital, skilled labor. Need to ID where your limitations are:

- I have no idea about the quality and quality of land you have, but many folks don't have stocker quality pasture.
- Stockers require about double the capital per ACRE compared to cows. You should be able to borrow against the cattle - - not property.
- Not sure who or how or where you buy, but it is harder for me to pick off profitable stocker cows around the edges here, than it is to buy profitable stockers.

 

[WalnutCrest]

What do you think?

<snip>
- Stockers require about double the capital per ACRE compared to cows.
<snip>

Meaning to be fully stocked with stocker calves will take twice the purchasing power to fill-up than it would to be fully stocked with stocker cows? To fill up with calves, you'll invest $50,000 but to fill up the same pasture with stocker cows will cost $25,000?

Just trying to clarify as I read and re-read your comment three times before getting this far along to even be able to post a comment! HA!

Thanks.

 

[Stocker Steve]

- Stockers require about double the capital per ACRE compared to cows.

Meaning to be fully stocked with stocker calves will take twice the purchasing power to fill-up than it would to be fully stocked with stocker cows?

I used to work a lot on gross margin per acre - - which takes you to very different places than $ per head. Lots of variables here, but before the commodity price collapse, it was 2X the capital per acre to stock stockers in my system.

The other part was stocker gross margin per ACRE was about double that of commercial cow/calf. So average return on cattle investment was similar. IF you have stocker quality pasture (sunk cost), and you have surplus capital, then I think the trade offs were around risk and labor. I was 100% stockers when I needed more spring and summer work to keep teenagers off the street. I exited stockers for a couple years because I thought calves got too high. Hindsight says I exited one year too soon. Now I am back in.

Cattle men tend to be a bit optimistic. The area that few are willing to dig into is where will you lose the least equity when the commodity market collapses, again. A Money Ball guy would probably try to come up with risk adjusted expected values based on the phase of the cattle cycle. :shock:

 

[midTN_Brangusman]

I'm really liking the stocker cow deal right now

I like stocker stockers but they do take more capital and can have more risk.

I was at a state cattlemen's event last fall when the BTO were comparing notes. A couple admitted the only 2016 group they were making money on was old cows. The cows usually come out of the Dakotas and are moved to greener pastures or a TMR pen for one more calf. Some are man eaters so the TMR pen is preferred.

I agree. Ive been going back and forth between turning out stocker calves or young (3-5 year old) first trimester cows in April on a lease and care program. Calves cost 50¢ per lb of gain and cow costs 80¢ per day. Just looking for the most ROI on a load lot (48000 lbs) with a moderate risk level (borrowing against my property). For a 250 day grazing period ending in November.

Stick with the cows. By the time you bury a few and spend a thousand on medicine you will be money ahead.

 

[RanchMan90]

I like stocker stockers but they do take more capital and can have more risk.

I was at a state cattlemen's event last fall when the BTO were comparing notes. A couple admitted the only 2016 group they were making money on was old cows. The cows usually come out of the Dakotas and are moved to greener pastures or a TMR pen for one more calf. Some are man eaters so the TMR pen is preferred.

I agree. Ive been going back and forth between turning out stocker calves or young (3-5 year old) first trimester cows in April on a lease and care program. Calves cost 50¢ per lb of gain and cow costs 80¢ per day. Just looking for the most ROI on a load lot (48000 lbs) with a moderate risk level (borrowing against my property). For a 250 day grazing period ending in November.

Stick with the cows. By the time you bury a few and spend a thousand on medicine you will be money ahead.

Thanks

 

[WalnutCrest]

- Stockers require about double the capital per ACRE compared to cows.

Meaning to be fully stocked with stocker calves will take twice the purchasing power to fill-up than it would to be fully stocked with stocker cows?

I used to work a lot on gross margin per acre - - which takes you to very different places than $ per head. Lots of variables here, but before the commodity price collapse, it was 2X the capital per acre to stock stockers in my system.

The other part was stocker gross margin per ACRE was about double that of commercial cow/calf. So average return on cattle investment was similar. IF you have stocker quality pasture (sunk cost), and you have surplus capital, then I think the trade offs were around risk and labor. I was 100% stockers when I needed more spring and summer work to keep teenagers off the street. I exited stockers for a couple years because I thought calves got too high. Hindsight says I exited one year too soon. Now I am back in.

Cattle men tend to be a bit optimistic. The area that few are willing to dig into is where will you lose the least equity when the commodity market collapses, again. A Money Ball guy would probably try to come up with risk adjusted expected values based on the phase of the cattle cycle. :shock:

Ahhh...risk-adjusted expected values based on the phase of the cattle cycle. Not asking for too much there, eh?!

May I suggest two books --- Fooled by Randomness (2nd edition) by Nassim Taleb ... and ... Thinking, Fast and Slow by Daniel Kahneman. We, as a species, do a wonderful job of deluding ourselves about one thing or another all the time. Failure to trick ourselves would lead to death. Which is an interesting conundrum, as tricking ourselves also leads to our death. Not dissimilar from the trials faced by Buridan's donkey.

 

[Stocker Steve]

Stick with the cows. By the time you bury a few and spend a thousand on medicine you will be money ahead.

Some people like risk, and are really really fast with the pistol syringe...

If you put together a group of stocker cows be realistic about the weaning percentage.

If I was going to go (back) into stocker cows I would not source them locally. Too many hobby guys bidding too high for stocker cows here. I would put a black bull on the ones I trucked in, and resell the better cut in the fall, as replacements.

 

[RanchMan90]

Stick with the cows. By the time you bury a few and spend a thousand on medicine you will be money ahead.

Some people like risk, and are really really fast with the pistol syringe...

If you put together a group of stocker cows be realistic about the weaning percentage.

If I was going to go (back) into stocker cows I would not source them locally. Too many hobby guys bidding too high for stocker cows here. I would put a black bull on the ones I trucked in, and resell the better cut in the fall, as replacements.

I can snag some young first trimester cows by the pound or keep them under $1000 per head, the hobby guys just want heavy breds here. The goal is the take them to a special sale as 3 n 1s or at least pairs in November-December. Worst case scenario I take them back as breds the next August and the calves as feeders.

 

[midTN_Brangusman]

Stick with the cows. By the time you bury a few and spend a thousand on medicine you will be money ahead.

Some people like risk, and are really really fast with the pistol syringe...

If you put together a group of stocker cows be realistic about the weaning percentage.

If I was going to go (back) into stocker cows I would not source them locally. Too many hobby guys bidding too high for stocker cows here. I would put a black bull on the ones I trucked in, and resell the better cut in the fall, as replacements.

I can snag some young first trimester cows by the pound or keep them under $1000 per head, the hobby guys just want heavy breds here. The goal is the take them to a special sale as 3 n 1s or at least pairs in November-December. Worst case scenario I take them back as breds the next August and the calves as feeders.

:nod:

 

[Stocker Steve]

Ahhh...risk-adjusted expected values based on the phase of the cattle cycle. Not asking for too much there, eh?

My Indian name is Black Swan.

 

[WalnutCrest]

Nice.

Sometimes I feel like mine is "Whoops".

 

[RanchMan90]

Ahhh...risk-adjusted expected values based on the phase of the cattle cycle. Not asking for too much there, eh?

My Indian name is Black Swan.

That's better than Yellow Snow