Bull price reasoning

[Aaron]

I am interested to hear how people determine the price they pay for a new yearling / 2 year old bull. The one I have heard, and remember is, "3 times the current price of a fat for a good bull, 5 times the current price of a fat for a great bull". :roll:

I know my Dad was raised with the slogan, "no matter what it looks like, as long as it breeds, as cheap as you can get it". :?

So, whats your reasoning? :cowboy:

 

[novatech]

That depends on a few things.
How well do you know cattle? You can often times buy very good bulls from the little guy that has no clue how to market what he has.
Do you want to buy name dropper bulls? Buy from the big popular ranches relying on their reputation and the genetics they use?
Do you want a cheap bull that only puts a calf on the ground regardless of the outcome?
What am I going to gain by what I buy and how much am I willing to pay for that gain?
It depends a lot on what they will be used for and how you market your cattle.

In my openion their may be a difference between what I would pay for a yearling vs.a 2 year old. But then my breed is slower sexually maturing. A yearling cannot be put on as many cows as a two year old.

 

[Alberta farmer]

Everything sells at a sale barn, but for how much depends a lot on the bulls you use. Every cow calves or dies trying, but again that too depends a lot on the bull you are using?
Being real cheap, or overly extravagant, usually doesn't make economic sense in the long run.
If the breeder is supplying you with a bull that is adding to your bottom line then price(with in reason) should be one of the least decisions? A bull that will add pounds or desirable replacements is worth more than a "cow freshener"!
Buy from a reputable breeder who raises his cattle like you do. As I've said(in my opinion) $2000-$3000 is not an unreasonable price for a yearling bull with the right genetics who has been developed properly and has a good guarantee. Remember the breeder has to stay in business too.

 

[Brandonm22]

I am interested to hear how people determine the price they pay for a new yearling / 2 year old bull. The one I have heard, and remember is, "3 times the current price of a fat for a good bull, 5 times the current price of a fat for a great bull". :roll:

I know my Dad was raised with the slogan, "no matter what it looks like, as long as it breeds, as cheap as you can get it". :?

So, whats your reasoning? :cowboy:

I thought it was 5 times the price of a good feeder calf (some people waffled on that when feeders were bringing $1.30)? A 1250 lb finished ("fat") steer at $.90 would be $1125. Three times that would buy a bull just about anywhere and five times that would probably buy almost any bull you wanted. But then again most of us don't sell "fats".

 

[Angus Cowman]

the formula I have always used is
evry calf that bull throws is worth $50 so if I breed 25 cows per yr and use that bull for 4 breeding season
so it goes like this $50x25= $1250 pr yr x 4yrs =$5000
I count the salvage price say $1500 as the up keep and maintence on that bull for 4yrs
I also lease some of my bulls out and I get $1200 for 90 days use so for a 4 yr period that is $4800 that bull didn't cost me anything I actually made money on him

$50 x25 hd =$1250x4yrs = $5000 +$4800 lease = $9800 +$1500 salvage =$11300 -$5000 purchase price=$6300 return on investment
this is based on purchasing a bull for $5000 the $per calf doesn't change if you give $3000 for the bull so if giving less you actually make more if you buy a quality bull

I have seen and my bull lease customers have seen a minimum increase in weaning weights of 50lbs and I have seen carcass premiums on the rail of over $$100 per hd

I run commercial black cows and I have no problem giving $5000 for a bull if I can see the returns on him a good bull will more than pay for himself even if your cows are not top end cows that bull should increase your profitability in their calves

I have one customer that buys my cull cows ( culled because of not fiiting my breeding window not because of inferiority) and he leases my bulls
with my bulls and his cows he seen a increase of 50lbs at weaning

with my cows and my bull he seen a increase of 50lbs of increase over his cows and my bulls
so it is easy to see that my bulls will work out at the prices I give

 

[KMacGinley]

We sell 4 or 5 bulls each year, We keep only the calves that I would use myself intact, the rest go for freezer beef. We sell ours for $1500.00 . I have 5 or 6 out there right now, growing on shucklage. I have one calf, that we are going to use, so it would take a little more to talk me out of him.

 

[Brandonm22]

I can see the $5000 bull in theory and for a seedstock producer you probably would need to be out on that razor's edge of perfection (or why not just keep your best calf?); but for a commercial cattleman I would be kind of scared to buy from a guy who had 80 bulls for sale and he only had 5 who would improve my cows. I know that it gets increasingly hard for a progressive producer who has spent 20 years improving a herd of cows; but if the guy has 80 bulls in an offering it ought to be hard for me to find 40 I don't like. IF most of the bulls have "REAL" flaws in them and paying $5000 for the #3 bull in the sale is the only way I can get a good one, I don't know that I need to be buying from that guy. I am kind of the view that their average needs to be pretty darn good, because in most populations the best will breed back towards his herd's average and if their avg SUCKS in all likelihood you aren't going to be to happy with their best.

 

[Angus Cowman]

I can see the $5000 bull in theory and for a seedstock producer you probably would need to be out on that razor's edge of perfection (or why not just keep your best calf?); but for a commercial cattleman I would be kind of scared to buy from a guy who had 80 bulls for sale and he only had 5 who would improve my cows. I know that it gets increasingly hard for a progressive producer who has spent 20 years improving a herd of cows; but if the guy has 80 bulls in an offering it ought to be hard for me to find 40 I don't like. IF most of the bulls have "REAL" flaws in them and paying $5000 for the #3 bull in the sale is the only way I can get a good one, I don't know that I need to be buying from that guy. I am kind of the view that their average needs to be pretty darn good, because in most populations the best will breed back towards his herd's average and if their avg SUCKS in all likelihood you aren't going to be to happy with their best.

I wasn't meaning that only his top bulls will improve my cows but the improvement I have seen is over the breeds avg bulls that are fine and productive bulls but, If I can spend $5000 over $2500 and get the better returns on my carcass I am money ahead in buying the $5000 bull, there is no theory I have the data to back it up
I have had to prove it to several cowmen I actually even let a guy use 1 bull just to prove my point we done a test on 25 of his cows ranging in age from 4-8 yrs of age and they were fed the same as the rest of his cows and he had a Bull that was a good bull and a little above the breed avg
when we weaned his calves the calves out of my bulls ran and avg of 27 lbs more on heifers and 41lbs heavier on steers
at a $1.20per lb on heifer they brought him $32.40 more per hd and on the steers at$1.29 pr lb they brought him $52.89 more per hd
I was always told that the bull is 50% of your calves well if the right selection is made you can make that 50% pay more
he was selling at weaning if a person sells on the rail they have to breed for the carcass not jut weaning weights

I have had several people tell me that I can buy a bull for what you lease one out for yes they can but they can't buy the same quality it is like going to look at tractors a used 100hp tractor for 25,000 or they can buy a new 50hp tractor for that same $25000 yes they cost the same but you sure don't have the same product
I am probably gonna piss some off with this statement but it holds true
Most small Reg. seedstock producers are multipliers and not breeders yes they might sell a few register bulls or hfrs but they don't have the resources to be on the edge because if you are buying semen you are buying what someone else has already proven to be a good product and you try and use different matings and it don't work you have spent alot of money that was for nothing and it is hard for a small producer to absorb much of that

 

[mnmtranching]

I used to buy my bulls at the bull actions. Now I like the idea of going to the smaller breeders and look over the herd, the cows and the sire when available. I walk among the bulls with the information on all bulls in my hand. The bloodlines on these small herds is exactly the same type stuff as the big guys that advertise heavily to get the big crowds. You know? you can save a $1000 bucks and get the same breeding.

 

[Aero]

$50 x25 hd =$1250x4yrs = $5000 +$4800 lease = $9800 +$1500 salvage =$11300 -$5000 purchase price=$6300 return on investment

it must be nice to live in your dream world.

you forget to factor in: probability of the bull being above average, probability of being dead one morning for no reason, contracting disease during lease, and the higher risk w/ higher prices paid.

 

[bigbull338]

when i look for a bull to buy.i look at my bloodlines that i have in the herd.then i look for a bulls bloodlines that will work with my herd.an set the price im willing to pay for a bull that does that.the price im looking at paying is $2500 more or less.an when i sale a bull i set the price based on his bloodlines an the way he looks.

 

[Angus Cowman]

$50 x25 hd =$1250x4yrs = $5000 +$4800 lease = $9800 +$1500 salvage =$11300 -$5000 purchase price=$6300 return on investment

it must be nice to live in your dream world.

you forget to factor in: probability of the bull being above average, probability of being dead one morning for no reason, contracting disease during lease, and the higher risk w/ higher prices paid.

It isn't a dream world
As for that bull being dead that is whay they sell insurance,

yes there is risk in the cattle business, and I can afford the risk if I couldn't I wouldn't be in this business
I have worked long and hard to get to where I am and If something happened to one of these bulls then so be it that is a conscious business decision I made on taking that risk
If you cannot afford the risk then by all means don't take them

As for the bulls being average if you do your homework that is a very slight possibility with the information available

So I am sorry if I offended you Aero, I didn't say a thing about you and your operation so don't go telling me I am in a dream world I am not one of these people that run a few cows and have a day job
I run cows as a living not as a Hobby and they are our only means of an income and I do well at it
and have been in the business for over 20 yrs
Also a person running 25-50 cows cannot do this and it work the reason it works for me is that I run a larger number of cows and I market my cattle in a totally different way than a small producer , even if a small producer forms a co-op with other producers they still have a disadvantage because it takes a consistant cowherd to produce like and consistant groups of calves and it is hard and usually financially impossible to get 3 or 4 guys to sell all there cows and start fresh and all buy a consistant set of cows

 

[SRBeef]

We sell 4 or 5 bulls each year, We keep only the calves that I would use myself intact, the rest go for freezer beef. We sell ours for $1500.00 . I have 5 or 6 out there right now, growing on shucklage. I have one calf, that we are going to use, so it would take a little more to talk me out of him.

This is an interesting topic.

In marketing anything, you can have all the formulas you want but the selling price is determined by what your buyer is willing to pay for your product. Buyers don't care about what your product costs to produce or whether or not you are making a profit.

And what a buyer is willing to pay is determined by their perception of the quality of what you are selling and the competition's prices.

So the first thing you need to determine, Aaron, is who is your target customer? The big time breeder or the part time guy like me with a small herd. Then you need to look at the competition.

In this case for the bull customer with a smaller herd but looking for a quality animal from a breeder who hopefully is honest in selecting, raising and presenting their animals, as I would guess KMG is, $1500 is about where the competition is.

Especially for a yearling who has the advantage of disease free and hopefully workable but disadvantage of no progeny to look at I think 1500 is about right unless there are other factors. A 2 year old with progeny that I can see might be worth 1800-2000.

A big name super pedigree yearling might warrant more. I can't ever see myself, with my size operation, paying anything near $3,000. for a bull. There is just limited opportunity for a return on that investment.

On the other hand, I may be able to sell my bull for about what I paid for him and roll that money plus a bit more into a new one when needed. Upkeep on a bull year round is high. I can rationalize keeping a bull year round, rather than AI or rent a bull, only if I can roll him to someone else for a decent price when I need to change to breed his daughters.

I think a big factor is to start out modestly price and build your prices the customers are willing to pay by selling top products that bring customers back for another one.

I just bought a yearling bull last year right in this price range. I was not happy with the inconsistency of the rent a bull luck of the draw system used earlier. The saying that a bad cow gives you one bad calf but a bull is half your herd is very true.

The bull I bought has worked out very well so far but the proof is when his first calf crop hits the ground.

Being a newcomer to cattle I don't really know much about bull selection. When I buy any type of product that I don't really know much about, the thing to do is to find a dealer who you trust and ask for his advice then follow it.

I tried to explain my situation and needs. I visited his operation and it looks like he has the same goals: good on grass, calving ease, good disposition... His thoughts on cattle appear to be similar to mine. I decided to trust him to provide a bull to meet my needs - or tell me if he doesn't have one. At this point it looks like he will be the first place I go when it comes time for another one.

My opinion and experience. Good luck.

 

[capt]

So am I to understand that a small producer cannot possibly have a uniform, consistent cowherd and cannot possibly be a breeder because they do not possess a large number of cows and can therefore only be a multiplier because they choose to use a bull proven to do what they happen to need in their cowherd? I agree that the difference between being a breeder and being a multiplier is huge, but being large does not make one a breeder. IT ONLY makes it easier to swallow or eat your mistakes and like it or not MISTAKES happen to both large and small. I have traveled extensively looking at both large and small breeders as well as large and small multipliers and I have yet to see a perfect cowherd or one that needs no improvement in one aspect or another. I have seen large contemporary groups of pure crud as well as large contemporary groups of solid cattle. Same goes for small groups. One must be careful living "on the edge" when trying to create a breed changer, it is just as easy to fall off the edge as it is to build up the slope. I would suggest striving for genetic improvement which happens regardless of herd size. Large contemporary groups only prove it faster. And now for the disclaimer that is starting to appear to be mandatory anytime one expresses an opinion on here. These comments are not meant to pick on any one person, their cowherd, their abilities or insult anyone!!!

By the way, IMO 3 yearling steers for above average yearling bull or 5 yearling steers for 2 yr old.

 

[Angus Cowman]

So am I to understand that a small producer cannot possibly have a uniform, consistent cowherd and cannot possibly be a breeder because they do not possess a large number of cows and can therefore only be a multiplier because they choose to use a bull proven to do what they happen to need in their cowherd? I agree that the difference between being a breeder and being a multiplier is huge, but being large does not make one a breeder. IT ONLY makes it easier to swallow or eat your mistakes and like it or not MISTAKES happen to both large and small. I have traveled extensively looking at both large and small breeders as well as large and small multipliers and I have yet to see a perfect cowherd or one that needs no improvement in one aspect or another. I have seen large contemporary groups of pure crud as well as large contemporary groups of solid cattle. Same goes for small groups. One must be careful living "on the edge" when trying to create a breed changer, it is just as easy to fall off the edge as it is to build up the slope. I would suggest striving for genetic improvement which happens regardless of herd size. Large contemporary groups only prove it faster. And now for the disclaimer that is starting to appear to be mandatory anytime one expresses an opinion on here. These comments are not meant to pick on any one person, their cowherd, their abilities or insult anyone!!!

By the way, IMO 3 yearling steers for above average yearling bull or 5 yearling steers for 2 yr old.

Sorry if my wording was a little off Capt
No I was not meaning to say that small breeders can not be succesful breeders and like you said large outfits can be multipliers also
I know some small breeders that breed good animals and I know of sevral that just multiply and that a large breeder can eat the results of a cross that doesn't work easier than a small producer, because some small producers won't cull like they need to they are trying to sell papers not quality animals

I was trying to point out that alot of small breeders also believe that since their animals have papers that they are high quality and they don't cull like they should , I also know buyers that say well the bull I bought is registered so he is just as good as your bull
So I am sorry if my statement wasn't clear on that point
it was the same way in the horse industry for several yrs people would buy and sell horses on their papers alone no matter if that horse was a dink, Just because his brother was a world champion doesn't mean he is any better than old Nellie standing in the pasture
They all have to prove themselves
I actualy beleive no matter what size a breeder, commercial or breeding stock they need to cull based on uniformity to reach the full potential of their cattle

 

[kenny thomas]

In this day of good EPD's they should always be considered. I look at the epd's and then the bulls. If the epd's do not suit me i don't condsider the bull. I then look at the bulls with comparable epd's and pick considering each bulls makeup and frame score. Many times a $3000 bull may be cheaper than a $1500 bull over his lifetime. Also the smaller the herd the harder it is to give the higher price and make it work out for a profit.
I buy most of my bulls from a small breeder with very good cattle. I buy them at 9 months old after they are weaned and vacinations given. $1500-$2000. I then raise them in the conditions that they will work.
As many of us use some AI we rely on the epds and papers exclusively. Don't be fooled by the pictures because if you go where they are collected you would probably not be able to recognize them. Been there and was suprised

 

[Angus Cowman]

Many times a $3000 bull may be cheaper than a $1500 bull over his lifetime. Also the smaller the herd the harder it is to give the higher price and make it work out for a profit.

Thank You Kenny
this is the point I was trying to make but sometimes I have a hard time getting my point across without it sounding like I am going off on someone

Thank You

 

[KMacGinley]

My five or six that I select is based on a variety of factors, first and foremost is the cow that bull is out of. I do the AHIR records of course and this year for instance, I had two bulls that weaned at around 750 lbs. They were the two biggest I had. They looked great and they have continued to grow well on what is a very high forage/low energy ration. But I banded them, because I don't like either of their mother's udder. My bulls have to be out of totally problem free cows first and foremost. They have to be good doers out of cows that milk adequately, average or below birth weight and good phenotype and good dispostion. As I said before, I don't keep something that I wouldn't use myself, if I needed to.

As far as price; I have seen many herds and I may be a little predjudiced, but I would stack my cows up against much of what I see out there. However, I see no point in charging people an arm and a leg for a bull. At fifteen hundred, I am getting a $200 premium over a freezer beef, and I would rather sell good honest bulls to people at a reasonable price. I can show them the mother with a new calf on her and any other offspring or relatives that they want to see. Our epds are pretty average, but if I sell someone a bull, he is a legit bull, at least in a similar environment to mine. In an environment better than mine, he might be a world beater.

 

[cypressfarms]

I normally like to buy bulls as yearlings, and work with them a while before letting them be bulls. Most I've paid for a yearling is $1200. I guess I would go to $1500 if he really looked good and was exactly what I needed. As for breeding age bulls (2-3 year olds) I would pay probably up to $2500. I'd have to draw the line somewhere around $3000 - for me I can't justify that big of a price. There are so many good bulls available, why would you spend so much? I'm not talking about spectacular bulls, I'm talking about a bull that will go out, work and do his job 4 to 6 months of the year. In our area there is an abundance of a number of breeds of good quality bulls that would sell from $1500 to $2500 (2 year olds). What could a $3000 bull offer me that a $2000 bull couldn't. Down here, there's not much difference.

 

[capt]

So again, Angus cowman, you get close to making the point I would hope you would make and then go off and rip small breeders again. Are small breeders the only ones who try to sell papers and not quality? Are there any large breeders not guilty of forgiving some below average animal because they have to sell 100 bulls instead of 90 or 99? Your last two sentences are right on the money. IF ALL BREEDERS AND MULTIPLIERS were to use their sharp knife like they use their computer, semen tank, skill set, and knowledge, genetic improvement would be a whole lot easier to justify a price for a bull. KMacGinley, you possess exactly the kind of DISCIPLINE all seedstock people need to have. No matter the wean weight or show records or carcass scans, that animal had better be as complete as possible to pass along their genetic contribution.