pounds up price down

[denoginnizer]

On calves , why does the price per pound go down as the pounds go up?

 

[Bama]

think about it.
it not it would be
Calves for 50$
Cows for $2500

Its supply and demand.
calves have the biggest potential for weight gain as an investment

 

[denoginnizer]

So your not really paying for the pounds but potential return on your investment?

 

[Bama]

In a round about way.

 

[Craig-TX]

Small calves will bring more per pound than big ones because they offer more potential gain against their basis. As they grow their potential diminishes and if they change hands their basis for the new buyer is higher. Therefore as they grow they command less premium. Through the calf's growth cycle the price per pound shrinks but the number of pounds per calf grows. The longer you keep the calf the bigger your check, but it increases at a decreasing rate. As time goes forward the increase in pounds and decrease in price come closer and closer to offsetting each other. As a producer trying to maximize income your challenge is figuring out the best time to sell on the size/price curve. Experience will show you that in normal times you will typically do best to sell between 500 and 600 pounds. Up until that point it pays to keep them. After that point the inputs would be better spent on new baby calves. Plus it's a good size to wean them anyway.

Many factors go into the timing decision on when to sell. One is risk. Every day you retain the calf you continue to take the risk that it could get sick, the markets could move against you, etc. Another factor is grass. Another would be cash flow. If your calves are doing fine, the markets are somewhat stable, you aren't in trouble on grass and you can wait on the cash, etc. you will probably be doing yourself the best service to stick fairly close to the 500-600 pound rule of thumb.

Craig-TX

 

[sidney411]

Thank You Craig - that's some good advice.

 

[denoginnizer]

When I sell a 600 pound steer calf what is the likely scenario of who is buying it and what happens to it before it becomes beef?

 

[TLCfromARK]

Many factors go into the timing decision on when to sell. One is risk. Every day you retain the calf you continue to take the risk that it could get sick, the markets could move against you, etc. Another factor is grass. Another would be cash flow. If your calves are doing fine, the markets are somewhat stable, you aren't in trouble on grass and you can wait on the cash, etc. you will probably be doing yourself the best service to stick fairly close to the 500-600 pound rule of thumb.

Craig-TX

Right on the money Craig, I like to sell between 400 -500# myself but its the same principals. Anytime you can sell one, that's one less chance of having one die in the pasture!

;-)

 

[sidney411]

From what I understand most likely a buyer for (from) a feedlot will purchase your 600lb steer, denoginnizer.

 

[G&L Cattle]

Thanks for the good advise! Well said.

G&L

 

[buckaroo_bif]

When I sell a 600 pound steer calf what is the likely scenario of who is buying it and what happens to it before it becomes beef?

welp in our area cattle don't enter the feedlots till they's about 800 lbs. don't know why anyone would feed one out at 600. we like to have them as close to 800 when they come off wheat pasture in march around these here parts.! :cboy: