Here's food for thought

[Jeanne - Simme Valley]

Randi DeBruyne

posted this on FB Commercial Beef Cattle:
Who knows what their cost to keep a cow for a year is? For the summer or the winter? What about cost to raise a replacement heifer? Any ideas on when or if she is actually making a profit?
How many years does it take in your herd for a cow to start turning a profit? What is the max you can afford to pay to buy a replacement heifer? A bred heifer? A cow?
There is a lot that goes into cost of production and the value of an animal. Some of it is pretty easy to figure out, some of it is a lot more difficult. Some things on the farm, shouldn't really be attributed to a cow, even if they are paying for it. For example, my horses and the feed they eat. Sure I do use the horses to work the cows, but a good part of what the horses do isn't exactly related to the cow herd. But the cows do pay that bill in the end.
Feed and pasture costs are probably the easiest to figure out. There are bills for feed and mortgages, rent or lease fees for the pasture. Vet, mineral, and salt are pretty easy too. Harder to figure out are things like machinery, buildings, fences, and corrals, YARDAGE! Some of it wouldn't be too hard to figure out if you just keep track of it, but that is easier said than done…. who wants to sit in the house and figure all that paperwork out after all.
Today I sat down and did some figuring. Came out with a pretty decent calculator too, if I do say so myself. This one will calculate your animal expenses from weaning through to production. Your yearly maintenance and feed costs. The bull costs. It'll show you how long it will take for your cows to start making a profit, and how much they made all together. And it will calculate your profit or loss depending on what time of the year and age of cow. Now, I am sure I am missing some numbers, but I am also pretty sure that I covered all the big expenses.
Some numbers I came up with in my herd
Cost to take a heifer from weaned to Bred, between $2000 and $2100
Cost to take her to weaning her first calf, between $2800 and $3000
Yearly maintenance cost, including Vet work, breeding, feed, pasture and more, about $850
# of calves before she returns any profit is 5
You should be able to download or save a copy from this
https://docs.google.com/.../1BI52q4Vh6plP7hPHj51R.../edit...

 

[greybeard]

good info there Jeanne and tho it isn't one size fits all, it is probably at least a good rule of thumb.
As he notes, machinery costs is omitted and a major breakdown or replacement can change the total quite a bit, especially for a small producer, but that cost can be spread out over the life of the new $40,000 new tractor or $50,000 new truck to haul cows and hay.

 

[Warren Allison]

Cost to take a heifer from weaned to Bred, between $2000 and $2100
Cost to take her to weaning her first calf, between $2800 and $3000
Yearly maintenance cost, including Vet work, breeding, feed, pasture and more, about $850
# of calves before she returns any profit is 5
You should be able to download or save a copy from this
https://docs.google.com/.../1BI52q4Vh6plP7hPHj51R.../edit...

I have always said that you can sell your heifer calves and buy as good or better a cow or heifer for way less money than you can raise one. A heifer born today will take 2 and 1/2 years, 30 months, till fall of 2025, before you have a weaned calf to sell. It just doesn't pan out for a commercial cow/calf operation. Pure bred, registered stock producers, of course, are the exception. I think this chart is a little off, because it should have added the cost of what you could have sold the heifer for. Let's say you could have sold her for $1000. so the first line would be $3000-$3100, and the 2nd line would be $3800 - $4k. You can buy the damnedest, best commercial cow you have ever seen, 7+ months bred, for $4k and have a whole lot of money left in your pocket. As far as that goes, you can buy a registered heavy bred cow for that.

 

[greybeard]

Warren;
in 2021, I had extensive talks with a Chief appraiser in my old county that was pushing hard for existing small producers to switch over to backgrounding/feeders instead of cow/calf. About the 3rd session of this I got fed up with it and asked her "Just where the heck do you propose all these light weights are going to come from? They don't grow on trees. Without cow/calf operations there wont BE any calves to enter the feeder programs! Are you saying you think it's a good idea for the small and large producer in San Jac county to go spend their money on calves OUTSIDE this county?"
She had a look on her face that told me she was completely ignorant about the subject we were discussing.

I'm a big proponent of keeping our money close to home.

(She really knew very little about cattle but had gotten this dang blurb from some fella with TAMU Agrilife Extension that said cow/calf operations weren't really viable in Texas for small operations and she based her decision on that. Gave me a copy of it and I called the guy. Turns out he was down in Uvalde and when I told him where I was, he backtracked and explained when they write these things, it's for the whole state and then said "Yeah, you folks over in East Texas that get a lot of rain, this doesn't apply to you.")

 

[Silver]

From my observations the people that claim they can buy as good or better replacements than they can raise are almost always right.

 

[Jeanne - Simme Valley]

Depending on your home program. If you raise a quality commercial herd, you would be hard pressed to buy heifers of your quality that will FIT your program. How many will be culled before you find an equal fit to your program?
Obviously, my program would not be beneficial to do that. Generally, the only females I buy are COWS that have proven valuable as a producer and can add a new cow family.

 

[Silver]

Depending on your home program. If you raise a quality commercial herd, you would be hard pressed to buy heifers of your quality that will FIT your program. How many will be culled before you find an equal fit to your program?
Obviously, my program would not be beneficial to do that. Generally, the only females I buy are COWS that have proven valuable as a producer and can add a new cow family.

This is pretty much the point I was trying to make.

 

[J+ Cattle]

Yearly maintenance cost, including Vet work, breeding, feed, pasture and more, about $850

I know that costs are different for different producers, different parts of the country, etc. but in general, I would say this is a good example of why it is so important to raise the best possible quality cattle that you can. To consistently get $850 for a 500 lb calf means $1.70/lb, in today's market that's easy enough to do on steers but to do that on heifers you need to be on the upper end of the market. (I'm using my current, local market prices)
Bottom line is that quality pays, to stay in business you need to make investments in genetics and improve your cow herd. Using a craigslist bull isn't doing yourself any favors.

 

[Warren Allison]

Depending on your home program. If you raise a quality commercial herd, you would be hard pressed to buy heifers of your quality that will FIT your program. How many will be culled before you find an equal fit to your program?
Obviously, my program would not be beneficial to do that. Generally, the only females I buy are COWS that have proven valuable as a producer and can add a new cow family.

I agree, and even mentioned that registered stock breeders would be the exception. But take a commercial cow/calf producer, probably running angus and/or black baldy cows. They will also have to be astute at culling the ones they raise. and you can take that discernment you use when choosing keepers vs culls, and apply it to purchasing stock. I am not saying that I could go to a sale the day after you sold, and buy as good a replacement as that heifer you retain might could be.. You might..and just as good a chance of finding one the first time as it is the 20th..but you don't have to do that. It takes 30 months for that heifer you raised at $4k, to wean a calf you can sell. I guarantee you before that 30 months have passed, you could take the money and buy a heavy bred, 7+ months bred cow that does fit and that will give you a calf to wean in a year or less.

And @Silver, you obviously raise quality cattle...we have all seen your pics. Say you retain the nest of the best of your heifers each year. and say for whatever reason, you had to sell them off this year. If I bought them, would that make them not as good a quality as one I could raise myself?

 

[1982vett]

I've bought open heifers, I've bought bred heifers, I've bought pairs, I've bought bred cows, I've raised my own. They all have a cull factor.

One can get bogged down in cost exercises like these...as in the Bull Cost... Doesn't appear the bull is in a can, so if I understand the chart correctly you haven't fed the bull. Oh well, I seem to forget them when doing cost analysis too, Longevity of the cow and it's salvage value isn't taken into consideration. Each "next calf" brings the "first calf" cost down. While it doesn't happen every time, by the time I willingly cull a cow I recover the initial cost. It's the train wreck cull (and inflation) that eats into that recovery.

Over all, my 2 year carrying cost for a cow is about $849.98. 3 year is about $1154. Doesn't include the cost of an animal or depreciated expenses.

 

[J+ Cattle]

I raise my own replacement heifers; I started out with bred heifers 20+ years ago and the cull rate was extremely high. I decided that I could do better. This is a commercial first calf heifer pair that I raised, she's in pretty good condition for a drought year. How much would it cost to buy a pair like this?

 

[simme]

Buying good quality replacements that will fit your management, conditions and expectations is possible. But it is similar to buying good quality hay. From an economics standpoint, buying hay might pencil out better than growing your own. Problem is finding that source of good quality hay year in and year out. Possible, but elusive.
I have purchased seedstock over the years. Most times the home raised cattle did better for me than the purchased. Maybe I am just not good at selection of cattle or locating good hay.

 

[Warren Allison]

I raise my own replacement heifers; I started out with bred heifers 20+ years ago and the cull rate was extremely high. I decided that I could do better. This is a commercial first calf heifer pair that I raised, she's in pretty good condition for a drought year. How much would it cost to buy a pair like this?View attachment 25726

How much could you sell them for at the sale barn near you today? With a bull calf, one like this would top the market for pairs down here, probably around $2500. maybe a little more on a good day. Just depends on who is at the sale that day. whatever they were bringing today. no doubt she would bring top dollar. But, it won't bring the $4k that the chart said you would average having in her at this stage. Bull or heifer calf?

 

[mwj]

Who has many good type replacements to buy. How much ''free'' time and travel will go into that purchase?

It is not like shopping for new boots at the farm store.

 

[J+ Cattle]

@Warren Allison it's a bull calf. The local auction sales aren't the place where people are willing to pay for quality. I've had better lucky selling direct where I can set my price and they can take it or leave it.

 

[Warren Allison]

Never mind, I give up. I agree...there is no way to buy a quality commercial cow for less than that $4100 in the chart.

 

[Silver]

Say you retain the nest of the best of your heifers each year. and say for whatever reason, you had to sell them off this year. If I bought them, would that make them not as good a quality as one I could raise myself?

Okay. But can you guarantee you could do that year after year? That's a tall order and makes raising them the best hedge against declining quality.
Now, if a person is happy raising decent quality cattle and have no passion for improvement then I say buying replacements is a viable option.

 

[Ky hills]

I've raised several, and bought several, both registered and commercial.
Like somebody already said in a comment, there is a cull factor with both.
Seems to me that it's higher culling with purchased animals both heifers and cows than when you retain heifers.
To me there's too much variation across the board, anybody would just have to plug in their own figures. There's expense to both.
When you buy, it's luck of the draw, even if buying from a reliable source.
When you retain it's still somewhat of risk because they don't all turn out, but hopefully a higher percentage will stay in the herd longer. Those animals that you know you can track progress and build on it.

 

[Warren Allison]

Okay. But can you guarantee you could do that year after year? That's a tall order and makes raising them the best hedge against declining quality.
Now, if a person is happy raising decent quality cattle and have no passion for improvement then I say buying replacements is a viable option.

How many cows you wanna replace each year? Let's say you have 50 cows or less, like the majority of cattle producers do, and 50 is all you have room for. Say that your numbers run with that chart...$3100 to raise a replacement heifer 30 months to weaning her first calf. Say you averaged needing 1 or 2 replacements a year. You sell that heifer at 700-800 lbs for say $1000. And sell the cull cow you wanna place for $750 ( she is really old). I will guarantee you that in way less than 30 months (well, 28 months, we want to buy a heavy bred cow), I can take that money and a fraction of that $3100 cost to raise a replacement, and buy you as good or better a cow that will calve in 2-3 months, that the calf will be ready to wean in less than a year after you bought that cow. Even an open cow, you are looking at 15 months to get a calf to sell instead of 30 months. You can even buy a pair or a 3 n 1 deal for less money. than $3100.

There are people who do raise replacement heifers to sell at what..... 14 to 15months old?..either open or bred. And if they have any business sense, they raise the best they can to sell. You may have to pay $2k or $2500 for a Brahma or f1 Braford replacement, but that is still less than the $3100 to raise til she weans her 1st calf. And even if open, in half the time.
But yeah, if a huge operation that retains 500 heifers a year for replacements for themselves. you'd have to keep a man on the road full time to find that many of the quality you want, year after year.

 

[Brute 23]

Here we go.