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How critical production decisions affect the fate of our cow herd numbers

March 20, 2024
How critical production decisions affect the fate of our cow herd numbers

As we enter 2024, the talk among economists and producers seems to center around the decreasing beef cow herd. The 28.2 million head of beef cows posted in the USDA biannual cattle inventory report is the smallest in decades. When considering factors like feed and equipment cost, supplemental nutrition and mineral decisions, continued dry and drought conditions in many areas, regional lack of feed inventory, age of the average producer, complex considerations in herd management decisions, and elevated interest rates, we need to consider: Is that cow number only going to get smaller?

2023 saw higher prices — at record or near-record levels — for feeder cattle and calves, along with cull cows and bulls selling for over $1 per pound. Some producers are sharing that they are getting more for their cull cows than those cows originally cost. And, with the smaller cow herd leading to tighter feeder cattle numbers, some are predicting even higher prices this year and for years to come.

The key to success during this uncertain time is getting the information you need to make savvy decisions about the health and productivity of your herd.

Could there be an opportunity for the herd to expand?

Could the prediction of higher prices change the tides? With the current costs of production, the outlook for higher prices has some producers thinking that there is opportunity and it may be time to expand their herds.

The conversation with these producers tends to lead to important questions:

  • Should I keep my heifer calves back this year and develop my own?
  • Should I wait that long?
  • Should I buy bred cows or bred heifers now?
  • Should I wait and buy higher-priced pairs right before grass turnout?
  • Should I do some or all of the above?

As they start to find answers for what will work best for their financial, labor and feed situations, and what makes sense for their facilities and land base usage, I offer a few things to consider.

Is it a cost or an investment?

What is your mindset when it comes to deciding to purchase cows or heifers versus developing your own? Are you looking at that animal as a cost or as an investment? There’s a big difference. Cost is simply the amount paid to buy something, but investment is the action of paying money today in order to reap greater rewards later. Producers often look at these herd decisions as simply a cost instead of an investment, but if you invest in that cow or heifer today, she may give you back more in the long run.

A few questions to ask yourself:

  • Is the cow or heifer the better investment to maintain your cow herd and keep production high?
  • Is your supplementation program, including minerals, a cost or an investment?
  • Do you know the return on a given bag of mineral?
  • If you don’t currently supplement with minerals, would adding that to your nutritional program pay off well?
  • If you are already supplementing, would a better-quality mineral and/or a year-round program return you more?
  • What about protein supplementation when appropriate?
  • Is your vaccine program up to date? Could an updated program pay dividends later?

Good supplementation is an investment — and a worthy one

Fetal programming research shows that cow nutrition and mineral status can directly impact the longevity and productiveness of offspring. A good mineral program for the cow herd contributes to more productive and profitable heifers that stay in the cow herd longer. The data shows that a heifer whose dam received a good mineral program year-round tends to reach puberty earlier, breed earlier in the cycle, and stay in the cow herd longer.

As you look to invest up to $3,000 for a commercially bred heifer, consider this:

  • Do you know how the dam of that heifer was supplemented and what she was supplemented with?
  • Was the heifer given the best opportunity from the start to work for you?
  • Will she be ideally equipped to breed back, and to do so in a timely manner?
  • Will she raise a calf every year and stay in the cow herd long enough to pay for herself?

And what about the home-raised heifer calf you want to retain and develop? You will have invested a lot of time, effort and energy by the time she calves. How can you give her the best chance to give you a high return on that investment?

In short, when it comes to the decision of breeding versus buying, are you consistently investing so as to maximize your return?

Data and insights vs. “what we’ve always done”

Consider what criteria you are using to make your decisions. Do you have the records to justify your decisions, or is it, Well, this is what we’ve always done?

Recently, I was talking with a banker who works with a father/son operation. The father and son were considering expanding their herd and were debating on buying young bred cows or bred heifers. The father was leaning toward buying heifers because he felt that they were the better value.

The banker reviewed their purchase and sale records and then advised them, “Don’t spend more than $2,600 for a bred heifer, because that heifer will never pay for herself.” He explained that in their operation, heifers tended to “fall out” in 3–4 years due to management constraints; namely, the operation didn’t have the facilities or labor to keep the heifers separate from the cows. In this particular operation, cows returned more money because they stayed in the cow herd longer.

What data do you have, and what data do you need, to make the best decisions?

Tough decisions will determine the direction of the cow herd

With current prices and the price outlook, producers have some tough decisions to make about whether to get out now or try to expand. If they decide to expand, they need to know how to make the most informed decisions along the way. Those who see the opportunity to expand, if they use their data wisely and invest where they are most likely to get the biggest returns, stand the highest chance of success.

About the author: 

Bryan Sanderson grew up in Lake Preston, South Dakota, and spent most of his childhood working on pig, crop and cattle farms. After receiving a degree in animal science from South Dakota State University, with minors in ag marketing and ag business, Bryan began his impressive career in animal agriculture. With experience in livestock production, feedlot supervision, sales and finance, Bryan is currently the U.S. beef business manager for Alltech.

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