Breeding "High end" Simmental blood lines and determining calf prices

[rsa1988]

I'm new here, 1st post, we are expanding our cattle business. We have 18 registered Simmental's nothing "prestigious" or "expensive" but we have talked about buying some high end blood lines. My Father asked me a question and I really couldn't give an honest answer to it. I know auction prices vary, who's there, how much they have to spend and how bad they want a certain cow. But an example would be: Cow purchased for $5,000 bred with a Bull that cost $20,000. Where would a price point fall for a weened calf (6 months of age, estimated.)

Depending on if we move forward with this and to what extent, we may have to finance some of them. But a lender is going to want to know an estimated gross sales, aka is this financeable, or we going to get our $ back, the bottom line so to speak. I didn't know if you can "gauge" an estimated value based off of the total cost invested in the calf's mother/father or not. Or if their is a way to determine a "ball park" price so to speak. Any help or information to find such answers is greatly appreciated.

 

[angus9259]

I'm new here, 1st post, we are expanding our cattle business. We have 18 registered Simmental's nothing "prestigious" or "expensive" but we have talked about buying some high end blood lines. My Father asked me a question and I really couldn't give an honest answer to it. I know auction prices vary, who's there, how much they have to spend and how bad they want a certain cow. But an example would be: Cow purchased for $5,000 bred with a Bull that cost $20,000. Where would a price point fall for a weened calf (6 months of age, estimated.) .

About $450 right now.

You can use semen from a bull that originally sold for $200,000 and that will kick the value up $455.

Unless you've built yourself a market for those higher prices, a calf is pretty much a calf.

 

[RanchMan90]

I wouldn't do that to sell commercial calves though an auction. $20000 would be better spent on 15-20 good commercial cows and $5000 on a bull, to sell calves through an auction IMO

 

[Jogeephus]

I know of two people who went this high end route and one lost their home and the other lost their farm. Several I know, who appear successful at this all seem to own insurance companies. I've even bought a few of their cattle. At one sale the average price was $16,000 but I bought some of the sisters for $500/head out the back door. While there is nothing wrong with them they don't look that special to me. They just look like cows.

Personally, I don't think you can buy into this business by shovelling money into the pit. I think the truly successful breeders of high end stock have worked hard and paid their dues by building reputations of being honest and standing behind their cattle and not being afraid to steer them when they don't meet the grade and I think it is their reputation, their devotion, their integrity as much as it is their cattle that earns these premiums.

 

[Supa Dexta]

Yeah maybe 25-50 cents/lb cents above feeder prices if you can find the right customer. And then they are just paying for a purebred papered heifer calf. A bull calf would be even harder to sell.

 

[angus9259]

At one sale the average price was $16,000 but I bought some of the sisters for $500/head out the back door.

I think the truly successful breeders of high end stock have worked hard and paid their dues by building reputations of being honest and standing behind their cattle and not being afraid to steer them when they don't meet the grade and I think it is their reputation, their devotion, their integrity as much as it is their cattle that earns these premiums.

These are great tips.

I would look to pick up some registered animals from someplace that has built their name - but not necessarily the top end at their sale. 99% of us will never make an expensive cow pencil and I would never ever take a loan planning to get that kind of money yourself till you had a name. Buy what you can afford from those places and use that as a base to start building your own name. BTW - nothing worse than paying for a $5000 cow and have it die before she calves - and you need to be prepared for that happening.

 

[Jessica06]

"I didn't know if you can "gauge" an estimated value based off of the total cost invested in the calf's mother/father or not. Or if their is a way to determine a "ball park" price so to speak. Any help or information to find such answers is greatly appreciated."

Short answer is no. Like others have already said, for the average breeder that sells most of their stock private treaty it doesn't matter how expensive the bull is, or how much money they paid for the cow if the calf isn't anything special. An expensive, and even quality, (the two are NOT always synonymous) bull will throw a dud every now and then. Some more frequently than others, and especially if they are bred to the wrong kind of cow. I absolutely agree with what Jogeephus said. It takes a lot of blood, sweat, and tears, and time to build your reputation.

Not taking the cost of the parents into consideration, in general I think you really have to look at what bulls of similar quality are selling for in your area, or state...Cattlerange is a good starting place. Breeders that have been in business a long time are probably going to be able to price them higher than what you would be able to and still sell them in a timely matter, even if they are better quality. Also figure that bulls of similar quality and genetics at a big sale might bring up to twice as much; maybe more. It's VERY important to swallow your pride and not get caught in the trap of thinking "well, if (big name breeder) can get that much, I can, too." You might be feeding yours a lot longer than you were planning on!

If you have some cows that do a good job raising a calf but the quality isn't quite there, buying embryos might be the best way to go.

 

[Anonymous]

:welcome: 1. you now have high priced cows in a down market you said you have 18 registered semis why make things more expensive on you operation
2 adding better blood lines will help but do it gradually
3takeing on more debt in down cycle is foolish
if you have a good reputation for what you have keep doing things the right way it does not have to be the top end as long as people know your cows an bulls are good quality !
like some one said you need to look in to embryo possably
you make it sound like you are trying to compete with top cows an bull with the slaughter price
dont do that !
i have an inside ,my neighbor has worked over 30 yrs with there registerd herd and they have developed an outstanding reputation they have brrn doing transplants for a very long time ,thyey have been taking cattle to some beef congress ,as well as some others ,they worked there buts off and middle age of 50s they still do .
make wise choices for your own sake. :welcome:

 

[Ky hills]

My advice would be to not go too "high end" and especially not to borrow money to do it. I have seen many venture into the registered business, only to have it not work out well. I would work with the herd that you have, incorporate AI, and possibly add some good but not the best from the big name breeders, as you are able to. Like others have said, it takes some time and effort to establish a reputation breeding program. Sometimes people fall for the hype and glamour of some of the registered crowd. only to find out that they can't get any where near those prices.

 

[gizmom]

I know of two people who went this high end route and one lost their home and the other lost their farm. Several I know, who appear successful at this all seem to own insurance companies. I've even bought a few of their cattle. At one sale the average price was $16,000 but I bought some of the sisters for $500/head out the back door. While there is nothing wrong with them they don't look that special to me. They just look like cows.

Personally, I don't think you can buy into this business by shovelling money into the pit. I think the truly successful breeders of high end stock have worked hard and paid their dues by building reputations of being honest and standing behind their cattle and not being afraid to steer them when they don't meet the grade and I think it is their reputation, their devotion, their integrity as much as it is their cattle that earns these premiums.

I think Jogeephus has hit the nail on the head. Success in the cattle business is a marathon not a sprint. It doesn't matter what you pay for a cow, if the cow doesn't perform then you have purchased very expensive hamburger. We have made some purchases that worked out and we have made some that just didn't. You have a good start with 18 head of registered cows. Find yourself a good AI tech and pick some of the best genetics you can find through an AI stud and breed those cows. Find yourself as good a clean up bull as you can afford you can find bulls in this market for 4000 - 7500 and maybe less that will improve your genetics. Take a look at http://www.whelanfarms.com there are some high end genetics full blood Simmentals and Simangus bulls in this sale take a look at them. The consignors that have bulls in this sale have been breeding cattle for some time. They bring the top end of their calf crop to this development program. Between the various breeders you have several thousand calves so your seeing the top end of a very large group of calves. These bulls are evaluated from day one out of around 80 bulls delivered your only going to see around 60 sell. The reason for this is they strive to have only the very highest quality bulls offered. And each is sold with 100% guarantee for the first breeding season. Measure your cow herd, by that I mean take birth, weaning and yearling weights on all your calves. Measure your cows weight and hip height, disposition, foot score weight going into the breeding season and at weaning. When you measure you identify the cows within your herd that are doing the best job, sometimes you will be shocked to find it is a little ole cow that never catches your eye, but she is weaning a top calf every year and breeding back on time. That is how you figure out who your best cow is and which genetics are working in your program and your environment. Get involved in your state breed association, meet other breeders get involved in the industry. Good luck to you I can still say after 27 years I still love this business, it is hard, sometimes wonderful, sometimes heart breaking, but I wouldn't want to do anything else. These type of questions are when I really miss Doc Harris he sure could word things better than me and was a treassure trove of experience and common sense answers. I didn't always agree with him 100% but he would always offer up great advice and I would have to admit was right on target most of the time.

gizmom

 

[Ebenezer]

I would look to pick up some registered animals from someplace that has built their name - but not necessarily the top end at their sale. 99% of us will never make an expensive cow pencil and I would never ever take a loan planning to get that kind of money yourself till you had a name. Buy what you can afford from those places and use that as a base to start building your own name.

Good advice.

Much of the big name and high dollar sales are swaps or behind the scene agreements. They are set up as a legitimate type scam to take in "new money" from new breeders (like you) or those who get the bug to be big or important. Most purebred breeders, or maybe we should use the average Angus breeder, lasts 7 years. Either the money or the blind enthusiasm is used up by then.

You need to spend a few years and look behind the cattle operations that you think are wonderful. Most have a business behind them that funds the cattle operation or else they have ties so that they have leverage in the sales and marketing that you will never have. Also research the "great cow", "great bull", "strong family line", and any other jargon used to sell as much of it is hype. I would bet that the small unknown breeders have most of the best cattle because they do not have the extra money to waste.

To buy down in the sale order and find good cattle takes knowledge of the bloodlines, the operation and the specific cattle. Otherwise you are buying so-so lots to fill the sale bill. If you can find a good honest person with great cattle my advice after many years of sifting through cattle would be to work a deal or buy a proven cow and flush her to bulls that the seller knows will confirm, fix, parallel or nick with the cow and build a base of those cattle.

Just do not fall for the name game, avoid operations where businesses float the cattle, avoid the operations that think they have achieved greatness on every new generation, never use an unproven sire unless it is a linebred animal from solid parents and know that your main sales market is always going to be within 50 miles of your farm.

 

[Stocker Steve]

Local guy with some family rep who is about 10 years into it:
- Buys bulls for $4000 to $8000, and sells about 15% of his yearling bulls for $2500 to $3500, and rest go to sales barn.
- Buys some open heifers for $2000 to $3000 - -and sells about 25% of his for $1000 to $2500, keeps about 25%, and rest go to sales barn.
You can do the math. AFTER some investment years that ignore opportunity cost - - there seems to be an annual wash on the breeding stock. Longer term you could (dig out of "the pit") make some $$$ with a dispersal, but I don't think that is the business plan.
With all the selling and buying and culling and cost of money - - I think some embryos is a good suggestion. It would be faster and could be cheaper. What is a typical cost adder for an embryo calf vs. a commercial calf on the ground?