Why wean calves?

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We do it both ways; just depends on the circumstances. In general the calves are always vaccinated with Triangle 10 and a 7/8 - way, not always weaned for 45 days. It sure didn't feel too bad when we pulled November calves in the early summer and sold the 600 hundred weight bull calves for $151 cwt a week later! Not really my preferred way to things but sometimes you do what you have to do. I sold the heifers a month later to a neighbor for $900/head after running them back on grass.
 
Here is an example where it pays big to wean. This is from a local market report. market report.JPG

If you did not wean your 567 lb steers, you got $838. If you took 45 days to wean and gain 65 lbs, you sell a 632 lb steer at $1051. A pen, some hay, and some grain makes you $213 more and should only cost $50-$100. Value of gain is $3.27/lb in this situation. I would happily take $1.20 VOG in most markets.
 
I sold unweaned March/April steers this week. Average weight 663 lbs for $1250 CAD ($1012 USD). The only feed/ additional expenses put into them after dropping them in the pasture is the hay I used to lure the herd into the pens. I assume that would have to be done either way so that evens out. Hay is trading here at .12/lb or more so if I weaned 45 days ago I'd estimate over $80 for hay plus grain,(oats trading at$10/bushel) vaccines and whatever I value my time working them an extra time and checking them plus lost gain for the weaning process. I think I'm ahead and I didn't have to do anything to get there.
 
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Before I started weaning or backgrounding it seemed like even though my calves were all born within 90 days the weights were just uneven and all over the place. Couple this with selling at the local barn, were they run them through one at a time I was probably avg. around $650 a head. This wasn't working so I started doing the 60-90 day deal and this helped but only a little and wasn't really enough $$ to make a difference. Maybe $50-75 a head more.

Making the decision to keep them until they're 18 months old or so made all the difference for me. Now the calves are all nice and even and bring top dollar. Being able to ship to a bigger auction and selling in 1-2 groups really helps too. Another thing that helps is being able to guarantee the Heifers open. The calves are bringing double or more what they did before.

As far as cost and time, I've got an extra $125-150 per head in feed and might lose 1 a year. I've taken the extra money I make and used it to upgrade facilities so it takes about 15 minutes extra a day to feed through the winter, most of that time would have been spent sitting in the truck waiting on the cows to come up anyways.

I know this won't work for everyone but it's made the cattle more enjoyable and profitable for me. Cowgirl8 is right about the feedlots feeding cheaper. Our target weight is 825-875#, the feedlots take care of finishing them. The biggest deal I hear about backgrounding is the upfront cost. This is true and it did hurt the first year. If cost is the only thing stopping you I'd borrow the money against the yearlings for the first year. After that it's a yearly check just like before. The only difference is the time of year you get the check……and it's twice as much.
 
Lucky, do I understand you are in Central Tx, not too far from Hamilton?
How many calves do you usually market every 18 months?
Bear with me a minute here please...
If you had to buy your calves each year, (instead of your own cow/calf operation producing them) can you make a profit backgrounding the same # of calves you now market each year?
 
greybeard said:
Lucky, do I understand you are in Central Tx, not too far from Hamilton?
How many calves do you usually market every 18 months?
Bear with me a minute here please...
If you had to buy your calves each year, (instead of your own cow/calf operation producing them) can you make a profit backgrounding the same # of calves you now market each year?
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I'm in North East Tx. Close to the Red River. Right now I sell a truck load and a few stranglers every years. I've had more but let a lease go a few yrs back. I'm raising all my own now. For the last several yrs I've been too short on ground to buy any and try that route out. We just added 60 acres and I'm on the fence about running another 15-20 cows or buying 45-50 500-600 pound calves to run for 6-9 months. I really don't think you can make as much buying vs raising due to death losses.

I have several friends that buy anywhere from 60-1,000 500-600#'s every year and their death loss always scares me. They just say it's part of the deal. I'd guess they are hoping to avg $100-150 a head depending on the year.

Edit: I should have added time as another reason for not buying calves. I still work rotating 12's and have a very busy business that my wife runs. When raising calves they know were home is. When buying calves they go looking for home for the first month. I used to be able to go nonstop…..getting older now. 😆
 
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sstterry said:
Compare those prices to the prices here.

500- 600 wt being 1.30-1.41
600 wt weaned and vaccinated 1.38

https://a9c71bdf-2e1c-420a-80d4-c0f...d/f0b6ad_550e73d64f494100ab900831d71da853.pdf
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Makes me want to try my hand at some Tennessee calves, although they call them all 1-2, so maybe they are not as nice. Or the market reporter didn't want to distinguish.

If the 540 lb unweaned steer is $1.30, you get $2.10 VOG. If the 540 lb unweaned steer is $1.41, you only make $1.11 for every pound.
 
Lucky said:
We just added 60 acres and I'm on the fence about running another 15-20 cows or buying 45-50 500-600 pound calves to run for 6-9 months. I really don't think you can make as much buying vs raising due to death losses.

I have several friends that buy anywhere from 60-1,000 500-600#'s every year and their death loss always scares me. They just say it's part of the deal. I'd guess they are hoping to avg $100-150 a head depending on the year.
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Thanks. The death loss is sure something to consider. I'm thinking, depending how many you have total, it wouldn't take but a few to completely wipe out any profit you make considering the buy-in cost and in the case of borrowing that cost against the sale of the yearlings, (+interest) you could get upside down too easy for my risk appetite.

The reason I asked, is there was a big push last year by the appraisal district's chief appraiser for the small cow/calf producers to forego that venture and just raise what she termed 'feeders'. She asked me to come in, gave me a bunch of TAMU brochures and articles to read and asked me to submit an opinion of cow/calf versus feeder/background operations. I tried to explain to her, that those calves don't grow on trees, you have to buy them from somewhere and if it's at the salebarn, you are bidding against deep pocket order buyers than can put you in your place pretty quick and for small farms, the death loss meant no profit and you're again upsidedown on the venture. (we were talking about little places with less than 100 acres and the minimum ac requirement here is now 15 acres for cattle. ) If she were successful in converting all or even a big majority of the little cow/calf producers here in the county, where the heck would the calves come from?

I don't know what she has against cow/calf but she has certainly harbored a grudge against them for awhile now. I suspect it's because it's such a less initial cost way to get into cattle, meaning fewer people applying for ag exemption.

Most of the literature she gave me was written by TAMU extension agents in counties where there is a lot less annual rainfall than we get here in East Texas and they don't have the forage we have. One was out in West Texas in Uvalde, had been raised on a sheep/goat ranch and the other down around Karnes county in South Texas .

I called and talked to the one in West Texas and asked why he thought small cow/calf was not good and he flipped when he realized I was in East Texas, explaining when they write those publications, they do it with an eye on the whole state and most of the state gets lots less rain than East Texas does, further saying that "Heck yeah, you guys should be able to do cow/calf easy there in East Texas"

Interesting thread, and yall please continue as before my interruption.

(I may play with that market report KAstocker posted and try to determine what effect death losses would have on the operation, using the unweaned calves' $147.79 as a buy-in point, but math is sure not one of my strong points)
 
greybeard said:
Thanks. The death loss is sure something to consider. I'm thinking, depending how many you have total, it wouldn't take but a few to completely wipe out any profit you make considering the buy-in cost and in the case of borrowing that cost against the sale of the yearlings, (+interest) you could get upside down too easy for my risk appetite.

The reason I asked, is there was a big push last year by the appraisal district's chief appraiser for the small cow/calf producers to forego that venture and just raise what she termed 'feeders'. She asked me to come in, gave me a bunch of TAMU brochures and articles to read and asked me to submit an opinion of cow/calf versus feeder/background operations. I tried to explain to her, that those calves don't grow on trees, you have to buy them from somewhere and if it's at the salebarn, you are bidding against deep pocket order buyers than can put you in your place pretty quick and for small farms, the death loss meant no profit and you're again upsidedown on the venture. (we were talking about little places with less than 100 acres and the minimum ac requirement here is now 15 acres for cattle. ) If she were successful in converting all or even a big majority of the little cow/calf producers here in the county, where the heck would the calves come from?

I don't know what she has against cow/calf but she has certainly harbored a grudge against them for awhile now. I suspect it's because it's such a less initial cost way to get into cattle, meaning fewer people applying for ag exemption.

Most of the literature she gave me was written by TAMU extension agents in counties where there is a lot less annual rainfall than we get here in East Texas and they don't have the forage we have. One was out in West Texas in Uvalde, had been raised on a sheep/goat ranch and the other down around Karnes county in South Texas .

I called and talked to the one in West Texas and asked why he thought small cow/calf was not good and he flipped when he realized I was in East Texas, explaining when they write those publications, they do it with an eye on the whole state and most of the state gets lots less rain than East Texas does, further saying that "Heck yeah, you guys should be able to do cow/calf easy there in East Texas"

Interesting thread, and yall please continue as before my interruption.

(I may play with that market report KAstocker posted and try to determine what effect death losses would have on the operation, using the unweaned calves' $147.79 as a buy-in point, but math is sure not one of my strong points)
Click to expand...
 
GB, your post was an interesting one. I'm really not sure why the person you spoke of would be against cow/calf and for yearlings. Yearlings are far more risky for several reasons. It is interesting that she gave you so much information though.

What I see with people getting into cow/calf is the following….(not doing exact math here).
Cow/Calf….
Person buys 100 cows for $100,000 with an annual payment of $23,000 for 5 yrs. They end up with a $450 per hd operating cost, mostly due to being new and not having the proper equipment for their area. They trailer wean 90 calves and sell at the local barn for a $700 avg or $63,000. So with an operating cost of $450 x 100 we're at $45,000 with a payment of $23,000 due at the bank. $45,000 + $23,000= $68,000. Well dang they lost $5,000.
You can see by the math they get easily disgruntled and eventually quit or just make it a hobby. What seemingly successful people see in the example above is that they made $18,000 and left another $15-20k or more on the table. So they start planning for the future and get operating cost to a manageable # and start the weaning/backgrounding process which, isn't easy and takes time. If you can make this work you end up with allot of equity and no cow payment in 5yrs but, you didn't make much for 5 yrs.

Yearlings….
Person buys the above persons calves at the sale for $63,000 with a loan from the bank, this way he has no real risk other than a mad banker. Person puts $150 a head in meds in feed in them through the winter then turns out on grass to finish. At this point they have $850 or $76,500 invested and it's free gain now. They sell when market is right for an $1,150 avg. 81 x $1,150= $93,150 -$76,500=16,500 in their pocket. I figured a 10% death loss in that.

First guy deals with cows and calves all yr and seemingly makes nothing second guy deals with some yearlings for 6-7 months and pockets an easy $16,500. But never builds any equity.

This is just a quick example of what I see in the guys I talk with. Most yearling guys I know run 6-8 truck loads once a yr as a sideline. They'll borrow $6-700,000 and hope to clear $70-80k. They are all pretty big operators.
 
Lucky said:
GB, your post was an interesting one. I'm really not sure why the person you spoke of would be against cow/calf and for yearlings. Yearlings are far more risky for several reasons. It is interesting that she gave you so much information though.

What I see with people getting into cow/calf is the following….(not doing exact math here).
Cow/Calf….
Person buys 100 cows for $100,000 with an annual payment of $23,000 for 5 yrs. They end up with a $450 per hd operating cost, mostly due to being new and not having the proper equipment for their area. They trailer wean 90 calves and sell at the local barn for a $700 avg or $63,000. So with an operating cost of $450 x 100 we're at $45,000 with a payment of $23,000 due at the bank. $45,000 + $23,000= $68,000. Well dang they lost $5,000.
You can see by the math they get easily disgruntled and eventually quit or just make it a hobby. What seemingly successful people see in the example above is that they made $18,000 and left another $15-20k or more on the table. So they start planning for the future and get operating cost to a manageable # and start the weaning/backgrounding process which, isn't easy and takes time. If you can make this work you end up with allot of equity and no cow payment in 5yrs but, you didn't make much for 5 yrs.

Yearlings….
Person buys the above persons calves at the sale for $63,000 with a loan from the bank, this way he has no real risk other than a mad banker. Person puts $150 a head in meds in feed in them through the winter then turns out on grass to finish. At this point they have $850 or $76,500 invested and it's free gain now. They sell when market is right for an $1,150 avg. 81 x $1,150= $93,150 -$76,500=16,500 in their pocket. I figured a 10% death loss in that.

First guy deals with cows and calves all yr and seemingly makes nothing second guy deals with some yearlings for 6-7 months and pockets an easy $16,500. But never builds any equity.

This is just a quick example of what I see in the guys I talk with. Most yearling guys I know run 6-8 truck loads once a yr as a sideline. They'll borrow $6-700,000 and hope to clear $70-80k. They are all pretty big operators.
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I would like to know more about the loans from the bank with "no real risk other than a mad banker".

How do I apply for one of these?
 
Brute 23 said:
I would like to know more about the loans from the bank with "no real risk other than a mad banker".

How do I apply for one of these?
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The banker can't eat you or take anything from you. Go talk to one about the Evergreen Operating Loan
 
There is no one answer fits all. We are all so diverse in our climate and land and cattle. We don't have any "big" sale barns here. Most sale barns have about 90% cull dairy cows out here. I would lose my shirt if I sent my feeders to a sale barn. There is 1 barn that does have feeder calf sales. I base my sale price off their highest priced feeder. I sell direct to a private feedlot.
 
Brute 23 said:
They don't take anything from you if you can't pay it back?
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Most of these guys are borrowing the money with the yearlings being the collateral. If things go south for them they just make a deal to pay what they can and try again next year. I'm sure they're not going to loose the entire herd but if they end up 50-60k in the hole they'll just roll it into next year. I'm sure once they get too deep something will happen but it's not like they loose the house and all the land.

Operating loans are a little crazy to me. If you've never had one it's kind of hard to explain. My banker set me up with one and I can definitely see where a guy that's good with money can make allot with one and how a guy thats not so good with money can get too deep really fast.
 
Lucky said:
Most of these guys are borrowing the money with the yearlings being the collateral. If things go south for them they just make a deal to pay what they can and try again next year. I'm sure they're not going to loose the entire herd but if they end up 50-60k in the hole they'll just roll it into next year. I'm sure once they get too deep something will happen but it's not like they loose the house and all the land.

Operating loans are a little crazy to me. If you've never had one it's kind of hard to explain. My banker set me up with one and I can definitely see where a guy that's good with money can make allot with one and how a guy thats not so good with money can get too deep really fast.
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That's pretty good if they will let the cattle be collateral. My understanding was most those loans required a hard asset, usually meaning land.
 
Brute 23 said:
That's pretty good if they will let the cattle be collateral. My understanding was most those loans required a hard asset, usually meaning land.
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I think it depends on the relationship with your banker and how much you owe him.

My banker offered to set me up with a pretty big chunk last year and told me to use the money however I wanted and all I owed every year was the interest. I hope I would never have to do something like that but if you did have a $23,000 payment due like in my example above and the market was down it could save you. You could just pay the $4,000 interest and keep the calves for a few months until the market went up. At that time you sell them and make a loan reduction payment or just keep the money and use it how you want. They resign the loan every year so it's not a term note. Guys joke about it being an evergreen because they pay the interest every year and use the banks money to roll on and hopefully make more than the interest cost them. Not sure if any of that makes sense.
 

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