Gross Return from purchasing Bred Heifers ?

[Stocker Steve]

Bred heifers here were about $1500 last winter. My numbers, based on 2016 average feeder prices, were that there was a zero gross return at a $1400 price. Most locals also did not want to play, so many bred heifers were trucked west to SD in time for the drought. :frowns: Someone took an equity hit on those girls even if they bred back...
Locals were willing to buy running age cows last winter. Kill price did go down, but hindsight says that this was still a better buy than bred heifers. I think this winter could be a repeat.
I asked a local BTO on what drives bred heifer prices - - and he went into a monologue about real cattlemen buying the big high quality heifers regardless of the price because they are "in the beef business."

When are bred heifers a more profitable buy than bred cows? A guess is that only at the bottom of the cattle price cycle?

 

[1982vett]

Good question....I’m finding it hard to pay ~$1000 for a young bred cow and upwards of $1200 to $1400 for heifers when I can buy an older short bred cow in need of better forage than she was getting for~$650. Seems their has been a steady supply like this even in times of flush forage.

 

[Stocker Steve]

I can buy an older short bred cow in need of better forage than she was getting for~$650.

Is "older" running age or broken mouth?

 

[Brute 23]

There can be a lot of factors but I would think it mostly comes down to making a short term or long term investment.

I will add there are pros and cons to both. I don't see one way being better than the other. It just depends what kind of hole your trying to fill in your operation.

 

[Anonymous]

I put together a group of 60 commercial heifers last spring as an experiment. Brangus type, black baldies, a few red angus and red motley face in the group.The idea was to breed and pick a dozen or so to keep and sell the rest. Some were mine, some I bought local. I put some weight on and got them all bred and they look nice. (blood tested). Looks like I will need get around $1250 per head to come out. I'm not sure that's possible for an average. Middle age cows are selling cheap here.

 

[Stocker Steve]

Heifer calves were cheap a year ago, so I would expect the bred heifers work out. I have a bunch too.

The conservative guys here work up bred prices from cow kill price plus expected profits. What are breds worth in AL?

 

[Anonymous]

Heifer calves were cheap a year ago, so I would expect the bred heifers work out. I have a bunch too.

The conservative guys here work up bred prices from cow kill price plus expected profits. What are breds worth in AL?

I see some advertised for $1400 and higher but I know of no one willing to pay that. I haven't been to stockyard sale in a few months. According to stock card, good cow/calf pairs going from $1100 to $1350. Bred cows for $800 to $1100. Culls for 45 to 57 cents. No heifers were listed. I may try to go Wednesday. If so, I'll report back.

 

[TCRanch]

I just sold a 3.5 year old bred cow for $1300 private treaty.

 

[Farm Fence Solutions]

I'd be a whole lot more likely to pay $1,500 for a 4-5 year old that knows what she's doing before I'd pay half that for bred heifers. That's just my humble opinion, but ain't nobody got time for that kind of problem around here!

 

[ddd75]

breds are cheap here and cow / calves are cheap. not sure what bred heifers are going for.

seems like everyone is happy with what they got right now. possibly because they bought high.

 

[Stocker Steve]

seems like everyone is happy with what they got right now. possibly because they bought high.

Yes, some are still hurting from $2400 cows.
Others loaded up this summer with BM cows from Dakotas.
I am trying to get my head around optimum stocking rates based on recent calf prices. I know some are still stocked like calves are worth $2.50. :o And I don't think current cows are necessarily "cheap" when you dig deep into profitability.
I think some would be best served by selling off some older cows and reducing feed purchased.

 

[1982vett]

I can buy an older short bred cow in need of better forage than she was getting for~$650.

Is "older" running age or broken mouth?

6 to 8 + is my guestimate mostly.

 

[Stocker Steve]

Some corn silage and a $650 breds could be a winning combo. :cboy:

 

[ddd75]

Some corn silage and a $650 breds could be a winning combo. :cboy:

i don't see how you could lose.

 

[RanchMan90]

They may rationalize it by selling second calf cows for same price or more than first calf heifers and getting a "free" calf in the meantime. Seems to be the same sellers and buyers at these "special" sales every year. :2cents:

 

[talltimber]

For some, it is to see and to be seen, for sure. They don't keep the cattle they buy long enough to do nothing but lose money, this is at a special hfr sale in my area.

Run of the mill breds and kill cows are not bringing much here either. I've got a couple older cows that need to go. Their bags are not what they once were, and are starting to require some assistance to get the calf started. Once the calf gets going, he can keep her beat down, and they raise some dandies. But with an outside job, I really dont' have the time for all that.

SS, how does your stocking rate vary with calf price? Are you stocking for forage, or stocking for input capability/value as in bought feed?

 

[BrangusUSA]

Zirlot that was an interesting post about buying 60 mixed and then breeding and reselling them. I had considered doing the same. I also had looked at doing it with Brangus and Angus (red and black). Have a bunch of excess pasture so I need to increase stocking rate or lease less. I cant see getting $1250 each at sale barn here. Cheapest course of action would be to hold everything except culls and bull calves.

 

[Dave]

Zirlot that was an interesting post about buying 60 mixed and then breeding and reselling them. I had considered doing the same. I also had looked at doing it with Brangus and Angus (red and black). Have a bunch of excess pasture so I need to increase stocking rate or lease less. I cant see getting $1250 each at sale barn here. Cheapest course of action would be to hold everything except culls and bull calves.

I did that purchase of 60 heifers, breeding, and selling as breds for 4 years. Made good money first three years. Gave back the profit from one of those years on year four. It works in years of a growing cow herd. Not so much on years the market turns. I wish I had kept them on that fourth year and calved them out.

 

[Stocker Steve]

SS, how does your stocking rate vary with calf price? Are you stocking for forage, or stocking for input capability/value as in bought feed?

Trying to stocking for increased soil fertility and increased profits. More cattle usually means improving soil fertility, but improving profit is a lot more complicated. This is what I am trying to work:

1) Livestock Classes
I used to focus mostly on gross margin per acre. This leads you to grazing young stock, not cows. This helps with drought planning but this also greatly increases your price risk... I think you need to find a personal balance here.
2) Livestock Performance
I also do a few gross margin what ifs like 100# lower weaning weight (from poor or old cows), and grazing hayfields (and buying in hay), and adding N. With current calf prices some cows are not generating a positive gross margin so they are gone. With $3.00 calves they would have stayed for "one more" and herd size would have gone up. I think you need to be a bit careful here so you are going to some stocking extreme and not putting away some profit for the next down turn.
3) Forage Chain
With a mix of short term cattle and cow/calf pairs you can do a better job of matching the annual forage production curve. So you end up with a variable stocking rate - - where you might try to match cow numbers to fall production, and have enough short term cattle to mostly utilize the spring peak, and perhaps some high energy annuals. This may seem like a huge amount of management, but you can pasture one herd at a higher stocking density on perennial pasture and get most of the benefit.
4) Delayed Weaning
Once you cull a few poor milkers and match up better with forage production - - it may become profitable to delay weaning IF you have the moisture to produce feeder quality feed. I dabble with cover crops, but it is usually easier to purchase local discounted feed. So far this year I have fed (too wet to combine) green chop corn and (too weedy) to sell oats. I think your location will dictate the practicality of this.

 

[Brute 23]

That sounds exhausting. :shock:

What do you do Stocker Steve? I can never follow your actual end game? You buy and flip cattle short term?