Aaron":6ys6f2ta said:
...The magic figure for yearlings is $800. Basically, no matter what happens, a backgrounder can count on $800 for yearlings sold in the spring, whether they are 680 or 1100 lbs. So ideally, as a backgrounder, I want calves that will hit the 700 to 750 lb mark at a year of age. Anymore weight and I am giving away free weight to my buyers. So if you have 700 lb calves and I pay a $1/lb. and it costs me $100 to winter them, where is my cut? They will sell around the 900-950 lb. mark for $800 cleared and I am sunk. I don't buy calves that are 600 lbs. or over. Light calves are hot for backgrounders and a little bit of a premium is paid by competition alone. Nothing I crave more than a package of whiteface calves in the 400-475 lb range. I want to make at least $200 on the calves I buy and sell as yearlings. I also want green, framey calves. No butter balls. Leave the creep feed at the store, because I'm not paying a premium. Also vaccinate. Nothing fancy. Killed vaccines are fine. I am going to re-vaccinate anyways. Age verifying is worth an extra couple cents in my book.
The local cattle association is starting to do vaccination protocol sales. Calves and yearlings in the program follow Pfizer's live vaccine Gold protocol. My calculations put the cost of drugs from conception to sale at over $10.00 per head. I bought 2 of the calves from this protocol and while they are good calves, they got heavily discounted for being over 550 lbs. (573) and I picked them up at .84/lb. It all comes down to weight. Meanwhile 350 lb calves under the same protocol were bringing $1.35 /lb.
One of my normal yearling grasser buyers bought a package of 7 steers at the local sale this spring. Weight was 715 and he paid $1.1150. I knew he was going to have a real hard time breaking even on those steers. He sold them Oct 3 and lost $1 on each one, having put 315 pounds on them.
Aaron, as a beginner and cow-calf guy I think you are saying something very important and useful but not sure I understand you correctly.
You say above that you get $800 for yearlings in the spring "no matter what they weigh"and therefore you want to buy calves that will "hit the
700 or 750 lb mark at a year of age"
I can see the logic of that given the "$800 no matter what" market you are selling into, but my goodness! Something does not compute here! Checking my weight records, so far my steers typically have a 205 day weaning wt around 650 lb and a yearling weight of 850-875 lb.
Then that means you should not sell a single calf, feed them light through winter and sell with the expectation to maximize profit on the smaller ones and lose on the bigger ones.
You mention BWF and I think you are also a Hereford guy. Isn't a BWF or Hereford steer that only weighs 700 or 750 as a true 365 day yearling either underfed or a runt?
Don't think I said BWF. Whiteface steers. Should have said RWF steers specifically. Don't want black cattle. A yearling Hereford steer at 700-715 lbs. is called a 'green steer'. No significant amount of flesh on the animal but a lot of frame. That is what grasser buyers want. They aim for a 250 to 300 lb. gain on grass from May to October, so the frame has to be on the animal when they buy it.
Why are we working to breed good growth and milk for 600-650 lb 205 day WW if we are going to get penalized for calves that are sold over 475 lb ? And I am talking about grass only here, no creep.
This is where the purebred world doesn't jive with the commercial world. If you want to be in the purebred game and raise big calves to sell, don't sell stocker calves. Background them through the winter and minimize your losses. Commercial producers don't care if they have big calves. A big bunch of lightweights in the ring will outsell a good bunch of 5 weights. Most of my own calves are in the 550 lb. range for a 205 day weight around 600. I know the loss I would take if I sold them as calves, so I have to work out a ration that will only get them to the 750 lb mark and no more. You can't feed backgrounders like you would feed a bull or heifer calf show prospect, you would lose your shirt.
I'm not doubting what you say, just amazed in that it doesn't make much sense to me. And I bet to HD.
No, it doesn't seem like it. But go buy a 1/2 dozen feeders this fall at different weights, 4, 5, & 6...all for a similar price per pound, and then see which one makes the most money.
So in order to sell you a 475 lb calf I have to rip them off of the cow at about 130-140 days and sell then to you in August at $1.26 ( x 475lb = your $600 which leaves you your $200 per $800 calf)? But even if I do that and assuming you feed them properly aren't they still going to end up near 900 at 365 days/yearling? The only way I can see you can hold them to 700-750 at a year is if you don't feed them very much, which on second thought, is maybe the backgrounder's goal... $1.26 is a bit high. More like $1.10. Remember I want about $200 profit, not $100 after expenses. Basically you can say I want to spend $500 for a calf, no matter the weight up to 600 lbs. So 300 lbs @ 1.43 or 400 lbs @ 1.25 or 500 lbs @ 1.00 or 575 at .87 .
Plan A: So if I sell you a 475 lb/135 day old calf in August for $1.26 that gives me $600 per calf. Which now that I think of it is the same as selling a 600 lb 205 day calf at $1 which is way above the US market this week. Hmmmm. Again, don't plan for $600 from a small backgrounder. Some big backgrounders 100+ calves, might go there. But most are even more greedy than the small guys.
I just don't like the idea of weaning calves regularly at 135 days and selling them but maybe it makes economic sense. Either that or I have to take them all the way up to 1150 lb (Plan B) and sell them at .80 for $920 at 15 months/450 days? So I get $320 ($920 - your $600) for feeding them an additional 315 days (450-135 days) or about $1 per day gross income...or about breakeven? So really I make nothing (at this "current" price structure) for keeping him around for another 315 days so I might as well sell him to you at 135 days?.... (thinking out loud)
If you can get over $900 US for a 1150 lber, your doing good. Like I said in an earlier post. One of my yearling buyers sold their 1029 lb yearlings for .76/lb. CDN.
I don't really like either of these alternatives but maybe I am starting to see what you are talking about? Please correct me if I am missing something.... Maybe I need a plan C?
Thank you for the above post - please check my math and logic.
Jim
edit: So maybe my plan C should be to sell 750 lb yearlings in March for $800? This gives me $200 more than selling them to you for carrying them another 230 days? That is less than $1/day but at least I don't need finishing rations and can do it on grass... but still maybe breakeven or close to it. Not an obvious profit? And I'd probably need to restrict feed in a feedlot to hold them down to 750 lb...which is not my thing.
800 lbs max. If you have 600 lb calves right now, feed free choice hay and a pound of rolled oats per head per day. You should hit the 800 lb mark with lots of frame and little fat. Sell whenever your hottest yearling market is in the spring. March for us is too early. Late April is best.
Or maybe Plan D: none of the above???
It's good to shake things up a bit and shake a few more coins out of the market. You may waste time, but you shouldn't lose any money, your first year doing it. :cowboy:
