Sale barn cattle or pricier replacements?

[CowpokeJ]

There is a E6 sale coming up Apr. 15. My friend is always giving me a hard time about my rainbow cattle. He has cattle that cost $1200, I've got cattle that cost $600. Because of good bulls, my calves are within $10-20 a hundred of his. Now, I'm looking at maybe getting some replacements at this sale, but with the calf market weak right now, their calves are probably going to bring $500 on a good day. Is there something I'm not looking at? One calf and I've already paid for most of my cow.

 

[bigbull338]

There is a E6 sale coming up Apr. 15. My friend is always giving me a hard time about my rainbow cattle. He has cattle that cost $1200, I've got cattle that cost $600. Because of good bulls, my calves are within $10-20 a hundred of his. Now, I'm looking at maybe getting some replacements at this sale, but with the calf market weak right now, their calves are probably going to bring $500 on a good day. Is there something I'm not looking at? One calf and I've already paid for most of my cow.

well heres the thing at the E6 sale you can get top replacements.an yes it does take 2 or 3 calves to pay for the cow.but you have cows that you can raise replacements from.

 

[elwapo]

Cowpoke
I have a very good customer that picked up about 150 cows at very reasonable prices from various sources. He puts good bulls over these cows and topped the sale with his calves last year. He basically paid for his herd with 1 calf crop. We are in the cattle business to make money...... period. If you are making money off your herd there is nobody that can fault what you are doing!

 

[Brandonm2]

We can get 20 ag economists on here and they will all say something different. The cash costs of maintaining a $50,000 cow and a $500 cow are the same (at least in theory). Obviously the more that you pay for a cow the more money her progeny have to be worth too justify the cash spent on her. You are taking a bigger risk of bringing in diseases by buying 50 different animals from 50 unknown sources that may have mingled with 3000 head on the truck and in the barn. He has less risk of that. He won't have too spend as many years improving his herd because they (at least in theory) are higher quality and better performers than your cows. His calves SHOULD bring more money per pound SHOULD weigh more pounds, and because of a cleaner disease status SHOULD wean a higher percentage of calves and when he culls those high quality cows SHOULD bring a little more money. Since he has a uniform set of calves with some proven performance behind them he COULD qualify for marketing avenues than your cattle.....source/genetics verified, board sales, replacement heifers sales, etc. IF all the SHOULD and COULDs turn out in his favor, he clearly makes more money in the long run; though often life does not work out the way it SHOULD on paper. I don't know WHO is right. I have done a little bit of both over the years and too me (if I got the cash too spend) I would rather have the cows that I like over cows that I don't like. I am willing too spend MORE for pride of ownership. I think there is more profit potential in a good uniform set of cows than there is in a not so good set of cows; but how much of a premium do you pay for quality and predictability? We can really debate that one too death.

 

[Brandonm2]

$15 a cwt on a 600 lb calf times 10 -12 years is a substantial difference. $900-1080 which more than paid for the more expensive cow and IF the heifers out of the two momas maintain that degree of difference....it sounds like your friend comes out ahead in the long run.

 

[turning grass into beef]

Just thought I would put my two cents worth in.
How much more does your friend get for his calves? I you take into account that you may have a higher rate of open cows, higher calving losses, not as uniform a calf crop, lower value of cull cow, interest on your money, etc., etc., etc.
What is the difference in $ of calf sold per cow exposed between the two herds?
If you take into account all of these factors is the difference $150.00 (just an example)? If so it will take your friend 4 years longer to show a profit (using your example of a $600 cow vs. a $1200 cow).
Then I guess the question is at what age are you buying these replacements and will they be around for more than 4 years?
Personally I don't worry about what color my cows are or what I paid for them. All I worry about is whether or not I can pencil out a profit.

 

[auctionboy]

You should be able to get some cows that will close that $15 gap for less then $1200. Maybe just get a few and keep there offspring.

 

[Brandonm2]

You should be able to get some cows that will close that $15 gap for less then $1200. Maybe just get a few and keep there offspring.

I don't disagree; but after you keep heifers, develop them, and prematurely cull their mediocre mamas how much will you have spent on upgrading cows versus just buying the quality cows you wanted in the first place? And all that ASSUMES that the heifers are substantially better than their mamas AND that the rest of the market is standing still. I could tilt this debate either way I wanted to tilt this; but I honestly do not know for sure which pathway IS the best path too take.

 

[CowpokeJ]

There is a E6 sale coming up Apr. 15. My friend is always giving me a hard time about my rainbow cattle. He has cattle that cost $1200, I've got cattle that cost $600. Because of good bulls, my calves are within $10-20 a hundred of his. Now, I'm looking at maybe getting some replacements at this sale, but with the calf market weak right now, their calves are probably going to bring $500 on a good day. Is there something I'm not looking at? One calf and I've already paid for most of my cow.

well heres the thing at the E6 sale you can get top replacements.an yes it does take 2 or 3 calves to pay for the cow.but you have cows that you can raise replacements from.

See, that's an argument in itself. Raising retains vs. buying replacements next year at the same sale. If you buy pairs with 1-2 mo. old babies, your still looking at 20-23 more mo. before she has a calf.

 

[CowpokeJ]

Just thought I would put my two cents worth in.
How much more does your friend get for his calves? I you take into account that you may have a higher rate of open cows, higher calving losses, not as uniform a calf crop, lower value of cull cow, interest on your money, etc., etc., etc.
What is the difference in $ of calf sold per cow exposed between the two herds?
If you take into account all of these factors is the difference $150.00 (just an example)? If so it will take your friend 4 years longer to show a profit (using your example of a $600 cow vs. a $1200 cow).
Then I guess the question is at what age are you buying these replacements and will they be around for more than 4 years?
Personally I don't worry about what color my cows are or what I paid for them. All I worry about is whether or not I can pencil out a profit.

I cull my cows pretty hard. Have a calf every year, the calf has to be nice looking, the calf has to gain as much as his contemporaries, ss=gone etc...Run Charolais, so pretty much a yellow stamp on calves. Now, I'm not good at math, but if it takes 4 years of each calf bringing 150 more, to make up the difference of his cow vs mine then aren't I still 3 calves up on him?

 

[Brandonm2]

Just thought I would put my two cents worth in.
How much more does your friend get for his calves? I you take into account that you may have a higher rate of open cows, higher calving losses, not as uniform a calf crop, lower value of cull cow, interest on your money, etc., etc., etc.
What is the difference in $ of calf sold per cow exposed between the two herds?
If you take into account all of these factors is the difference $150.00 (just an example)? If so it will take your friend 4 years longer to show a profit (using your example of a $600 cow vs. a $1200 cow).
Then I guess the question is at what age are you buying these replacements and will they be around for more than 4 years?
Personally I don't worry about what color my cows are or what I paid for them. All I worry about is whether or not I can pencil out a profit.

I cull my cows pretty hard. Have a calf every year, the calf has to be nice looking, the calf has to gain as much as his contemporaries, ss=gone etc...Run Charolais, so pretty much a yellow stamp on calves. Now, I'm not good at math, but if it takes 4 years of each calf bringing 150 more, to make up the difference of his cow vs mine then aren't I still 3 calves up on him?

NO, according to your numbers, he pays $600 more than you initially...so you start out up $600; but since his calves bring $150 more than yours he cuts that too $450 with one calf, $300 with the second, $150 with the third, and it's even with the fourth calf. The fifth puts HIM $150 ahead, the sixth $300 ahead, the seventh $450 ahead, the 8th $600 ahead,....

 

[rocket2222]

You got to look at it long term. Say you both want to retire in 10 years. You buy 100 head $600 each = $60,000.00 sells their calves every year $500 each. 500x100x10 years = $500,000.00 minus initial investment = $440,000.00
He buys 100 head $1200 each = $120,000.00 sells their calves every year $650 each. 650x100x10 years = $650,000.00 minus initial investment = $530,000.00 Thats a $90,000.00 differance. Looks like he'll be driving a new Caddie, you'll have to keep that beat up old Ford

 

[DOC HARRIS]

You should be able to get some cows that will close that $15 gap for less then $1200. Maybe just get a few and keep there offspring.

I don't disagree; but after you keep heifers, develop them, and prematurely cull their mediocre mamas how much will you have spent on upgrading cows versus just buying the quality cows you wanted in the first place? And all that ASSUMES that the heifers are substantially better than their mamas AND that the rest of the market is standing still. I could tilt this debate either way I wanted to tilt this; but I honestly do not know for sure which pathway IS the best path too take.

-Brandonm2- Your several comments on this subject on this thread are well thought out. I agree with what you say, and would like to add these thoughts: the "Rainbow Color" debate can be and has been argued to a stand-still, but the basic premise that augur's a profitable operation AGAINST variegated cows is: - - Inconsistency, both at first glance and with the progeny at sale time! It is as unappealing as looking to buy a house, and every room in the house is of a different color! Agree or not, and like it or not - the First Impression is something that you get only ONE chance at! It is called "Curb Appeal! That "Consistently Striking First Impression" WILL make the breeder more money over time. Guaranteed. When it is all said and done, it is the 'little' things that make a difference. When the 40 - 50 steers pour out of a Trailer at the market or feedlot and they all look the same - do you think that the buyer or feedlot operator isn't impressed??. . . . .Take another load of 40 - 50 steers that look like a mixture of Heinz 57 Varieties - and it is just another bunch of colorful spots and patches.

Another factor to consider in 'standardizing' the appearance of your brood cow herd is the fact that SIZE consistency of the progeny you are selling makes for a uniform, attractive look, along with a uniform color pattern. For THAT reason, all company trucks are painted the same - UPS, Budweiser, United Airlines, Coca-Cola, U.S. Post Office, the 'talking animals on the tails of Frontier Airlines- -you can think of any number of examples who strive for consistency and easy remembering. If you are in the business for the long haul - you want your customers to REMEMBER what your good looking cattle look like! If they look crappy - your business is crappy!

Think of your own Business Cards! Are they ALL different colors, with different logo's? Does Prudential Life Insurance Co. have a bunch of DIFFERENT Rocks as their trade mark logo?

I could go on!

DOC HARRIS

 

[stocky]

Cowpoke, I am with you on this one. If you are selling feeder cattle, those rainbow cattle for half the money will do a real good job for you. I am having trouble with the 10-20 dollar per hundred less on your calves. I have black, red, yellow, dairy mix, a variety of mixed breeds and run charolais bulls and the yellow calves sell right with the blacks but weigh alot more. I also buy good milking longhorns for 500 and less that raise big yellow calves that sell with the blacks per pound. They more than pay for themselves the first calf. I dont know where the 150 dollar per calf difference comes in. No one is figuring the interest on the extra 600 dollars per cow and no one is figuring the cost of death loss on those 1200 dollar cows in the figures that have been shown. If you have plenty of money to invest and want the matched set group, get the 1200 dollar cows. If you need to make money and you need to pay for those cows as soon as possible, keep using those rainbow cattle. Sounds like you do a good job with them and you can keep heifers out of them that will raise great calves.

 

[auctionboy]

You should bee able to close that .20 gap a little buy culling your herd. Also whatever solid bull you use you should keep some of the heifers if color is the main reason. I don't agree with some people on here talking about impressing everyone I am concerned with profit, but if you are going to still be working on this herd in 10 years then you should pnvest in some more profitable genetics early on. Also don't let breeders tell you it is impossible for you to breed replacements, they are just like all other salesmen.

 

[memanpa]

You should bee able to close that .20 gap a little buy culling your herd. Also whatever solid bull you use you should keep some of the heifers if color is the main reason. I don't agree with some people on here talking about impressing everyone I am concerned with profit, but if you are going to still be working on this herd in 10 years then you should pnvest in some more profitable genetics early on. Also don't let breeders tell you it is impossible for you to breed replacements, they are just like all other salesmen.

just who is talking to impress any one? the only one i see doing that is you!
what you say about improved genitics is basically the same thing everyone else is saying, except they are providing logical and straight forward examples.
do not see one person that has responded offering to sell anyone stock. no is anyone saying you cannot raise replacements. merely stating that sometimes it is better to buy than raise, depending on your overall goal,
i cull several times during a year, weaning, yearlings, older cows, mid aged cows that are not producing, for these i usuallly look at purchasing replacements, so there is not a one size fits all in the cattle game,

 

[turning grass into beef]

Stocky: the $150 is just a number I pulled out of the air.

you take into account that you may have a higher rate of open cows, higher calving losses, not as uniform a calf crop, lower value of cull cow, interest on your money, etc., etc., etc.
What is the difference in $ of calf sold per cow exposed between the two herds?
If you take into account all of these factors is the difference $150.00 (just an example)?

Our farm runs a rainbow colored herd and we use very good bulls on those cows. We background the all of our calves. The bigger ones are fed heavier and sold in March around 800 pounds and lighter ones are fed lighter and then put back onto grass the next summer. They are sold in the fall as long yearlings. We get within a few cents per pound of the top groups of straight colored calves so our difference per head is less than $50 (often much less than $50).
I feel the key is that the cows are multi colored but are fairly uniform in type.
The interest on your money is something that a lot of people never take into account. At 5% if the cost difference is $600 per cow, the higher priced cows have to bring in $30 more calf just to stay even.
Right now if I were buying cows I would by the good quality cows because in our area the good 3 year old bred cows are only selling for about $200 more than the old crocks. This isn't always the case. I have seen times when the price difference is $600.

 

[auctionboy]

You should bee able to close that .20 gap a little buy culling your herd. Also whatever solid bull you use you should keep some of the heifers if color is the main reason. I don't agree with some people on here talking about impressing everyone I am concerned with profit, but if you are going to still be working on this herd in 10 years then you should pnvest in some more profitable genetics early on. Also don't let breeders tell you it is impossible for you to breed replacements, they are just like all other salesmen.

just who is talking to impress any one? the only one i see doing that is you!
what you say about improved genitics is basically the same thing everyone else is saying, except they are providing logical and straight forward examples.
do not see one person that has responded offering to sell anyone stock. no is anyone saying you cannot raise replacements. merely stating that sometimes it is better to buy than raise, depending on your overall goal,
i cull several times during a year, weaning, yearlings, older cows, mid aged cows that are not producing, for these i usuallly look at purchasing replacements, so there is not a one size fits all in the cattle game,

maybe everyone is staiting what I am saying? I didn't necessarily mean the people responding. Not one size fits all? No crap! Nice attitude, go beat your wife.

 

[bigbull338]

There is a E6 sale coming up Apr. 15. My friend is always giving me a hard time about my rainbow cattle. He has cattle that cost $1200, I've got cattle that cost $600. Because of good bulls, my calves are within $10-20 a hundred of his. Now, I'm looking at maybe getting some replacements at this sale, but with the calf market weak right now, their calves are probably going to bring $500 on a good day. Is there something I'm not looking at? One calf and I've already paid for most of my cow.

well heres the thing at the E6 sale you can get top replacements.an yes it does take 2 or 3 calves to pay for the cow.but you have cows that you can raise replacements from.

See, that's an argument in itself. Raising retains vs. buying replacements next year at the same sale. If you buy pairs with 1-2 mo. old babies, your still looking at 20-23 more mo. before she has a calf.

the real question is how you want to spend your money.spend it by buying top cows thatll last you 10 or 12yrs.or spend it over 2yrs raising your own replacements.the bottomline is bought an raised replacements cost the same.the differance to me is this you dont have to tie up pastures to raise heifers if you buy them already calved.

 

[Brandonm2]

You should bee able to close that .20 gap a little buy culling your herd.

This is one argument I don't quite get. If you bought 50 cows thru the yard at $600 each ($30,000), you put a good bull on them, and the market still docks you 15 cents a lb. (50x.9x600x.15) gives you a total herd dock of $4500. Now in response you are going to keep 20 heifers next year, decreasing your gross income by 44% and grow out 20 heifers for a year. Around here the heifers either get wintered on ryegrass or they get grown out on grain. 2.5 lbs of grain per day x 140 days x 20 heifers / 55lbs per bushel x $3.4 a bushel is $432 plus the cost of hay (20hdx3 rolls/hd x $25 a roll (If you can get it at that this year) or $1500) plus vaccinations (~$10/head x 20 hd or $200) plus tractor expense, pasture expense, fence expense, ear tags, fly treatment, minerals(~$20 a hd). By my cowboy math you have now spent $2552 plus the opportunity cost lost by not selling the heifers (say $500 each). We have spent $12552 on the heifers. Also factor in that normally you lose ~50 lbs on that first calf and wean a lower percentage of calves from first time heifers than cows. 2 extra dead/still born calves plus $50 (50 lbs x $1) a calf sold is an additional cost of $1000 for the lost calves plus (16*$50) or $800. I am coming up with the cost of developing 20 new heifers too replace those 20 worst cows at $14,432 and that assumes that the cull cows bring the same amount as you bought them for.


The cost of replacing all 50 mediocre cows with an acceptable group of heifers too replace them. Would be this times 3 years or $43,296 (assuming 20 heifers per year and a heifer cull rate of ~15%).

And all this assumes that the daughters are better than the mamas. Maybe it is just me, but I can't ever recall getting a heifer that made a top cow out of a mama that was a mediocre cows. I get daughters that are better than their mamas but typically the heifers that made the best mamas in a group came out of the best mamas in the group.