Bred Cow vs. green Calf Prices ?

[Stocker Steve]

I updated some gross margin numbers last night. If you are paying market price for hay and for grazing (which have both doubled here in the last 4 years), you then realize why we often run out of buyers at bred cow sales. You hear about crazy prices for registered cows in some distant place - - but the local auctioneers are nervous for good reason. Calf prices are hitting new highs but the margin is not very compelling in the snow belt when it is -20 F. and things do not work.
Some folks think they have free hay or free pasture but most of us don't. I can rationalize some free or discounted crop residues. If I combine these residues with some of my own ditch hay and the rolls my neighbor likes to sell each year - - I have a pile of feed that will not support all the cows. But, it looks like hard cull'in into smaller herd could net almost as much. So I sold some more late calvers who weaned small calves that did not make me any real money. In total I culled 39% of the cows this year. No herd expansion here.
When you run gross margins for back grounding or stockering you get a different picture. The high value of gain makes the current forage cost (decent hay or corn silage plus 2 to 5# of supplement per day) look reasonable. On a per acre basis it looks better than current cash crop margins. :shock: The only potential issue I see is a market wreck for someone w/o insurance.
How many folks do you expect to trade off some of that green iron for green calves?

 

[Aaron]

39%, wow.

Like people have said on this side, in the west, the next push will see a mass exodus from farming altogether over the next 10 years. Cattle are being dispersed at an alarming rate. Margins in cereals are terrible, but many of those same guys did run cows at some point and say the next step is to quit altogether and rent out the land to someone with too much money and fewer brains. The inputs kill you in crops and the infrastructure kills you in cattle.

The Feds on this side bought 100,000 acres of range and crop land in SK, as an investment for the benefit of the national pension plan - the CPP. This is a bad sign for crop guys as the Feds have a uncanny ability through history to invest heavily in farmland just before it tanks.

 

[bigbull338]

old cattlemen are going out faster than new cattlemen try to come into the business.an thats sad.no 1 wants to take over for grandpa or dad anymore.

 

[Stocker Steve]

Laster said that we should cull 25% of our cows per year. I may have got a little wild :cowboy: with the hard cow cull'in, but I also have a bunch of bred heifers out winter grazing at -18 F.. :shock: I think/hope that they are good enough I can make more money with fewer cows.

I agree that there are more guys going out - - rather then into - - cow/calf. Not sure where that will take us longer term. I talked to a cattle jockey last week and he said guys can not find hay locally for less than $60 per roll so they don't want cows... I plan to seed down some renovated acres this spring.

I sold a lot of corn in March for $7.04, and I sold some corn in November for $3.80... The rest of the corn is going to the cattle. Grain guys who signed high cost multi year land leases are not happy.

I think you can make a little money on low input grain as part of a long term rotation. I don't think you need a lot of infrastructure for cattle. Right now my cows still have calves on them and they are all bale grazing behind a 2 high corn stalk bale windbreak in -40 F wind chill. Big red barns are a thing of the past.

 

[Aaron]

Laster said that we should cull 25% of our cows per year. I may have got a little wild :cowboy: with the hard cow cull'in, but I also have a bunch of bred heifers out winter grazing at -18 F.. :shock: I think/hope that they are good enough I can make more money with fewer cows.

I agree that there are more guys going out - - rather then into - - cow/calf. Not sure where that will take us longer term. I talked to a cattle jockey last week and he said guys can not find hay locally for less than $60 per roll so they don't want cows... I plan to seed down some renovated acres this spring.

I sold a lot of corn in March for $7.04, and I sold some corn in November for $3.80... The rest of the corn is going to the cattle. Grain guys who signed high cost multi year land leases are not happy.

I think you can make a little money on low input grain as part of a long term rotation. I don't think you need a lot of infrastructure for cattle. Right now my cows still have calves on them and they are all bale grazing behind a 2 high corn stalk bale windbreak in -40 F wind chill. Big red barns are a thing of the past.

I agree entirely. But I wouldn't say that is the norm in the industry yet. It's slowly heading that way. But there are still a lot of producers out there that would say people like you, Bez and myself are not right in the head, or even go as far to say that we are abusing the cattle. :shock: :roll: :lol2:

Merry Christmas, Steve, and all the best to you, Sue, and your family in the new year.

 

[houstoncutter]

Have a feeling very few would cull according to Lasater. He also believed their should be no shots, worming or dehorning. Also a cow didn't wean a calf, she went to market no matter what the reason for it. Also minimal hay or minerals or salt. The animal was supposed to live off the land, not off of you.

 

[tsmaxx47]

old cattlemen are going out faster than new cattlemen try to come into the business.an thats sad.no 1 wants to take over for grandpa or dad anymore.

got to go where the money is, big bull. that's the American way.......

 

[bverellen]

The only potential issue I see is a market wreck for someone w/o insurance.

What type of insurance are you referring to?

 

[Stocker Steve]

The only potential issue I see is a market wreck for someone w/o insurance.

What type of insurance are you referring to?

Livestock Risk Protection

 

[bverellen]

Thanks Steve.

Would you recommend fully insuring your stockers or just a percentage of the herd?

And at what replacement cost, purchase price of replacements or your expected price at time of sale?

Thanks!!!