Marketing: Don't Forget Your Cull Cows
Fall is that time of year when cow calf producers are gathering in the calf crops, weaning, vaccinating, and pregnancy checking cows. It should also be a time when marketing strategies and plans are determined. This means taking some thoughtful time and looking at the options that are available and making a decisions based on the best market and time frame for the operation, not necessarily the most convenient.
When starting to look at a marketing plan for your cattle, it all starts with knowing your cost of production. By knowing cost of production, this moves us from worrying about trying to capture top dollar and allows you to make decisions based on expected returns. Knowing your cost of production also allows you to be able to compare various marketing options with a higher degree of confidence. The Wisconsin Beef Information Center has various decision tools and software that can help to determine your cost of production and to explore other marketing options.
When we look at marketing for a cow-calf enterprise, selling feeder calves is the obvious as it makes up the largest share of our income. Options to explore are pre-conditioning, backgrounding, private treaty sales, and retained ownership. There is another revenue source from our cow calf enterprise that can also add a extra value when we know our cost and markets, and that is the sale of cull cows. Cull cow sales typically represent 15-20% of the revenue for cow calf producers. One option that may be considered is feeding out cull cows. Feeding cull cows is not always the best option but, under the right set of circumstances, could provide some added value to the right cows. In general we are looking at taking cows that are healthy and body condition score 4 or less up to a body condition score of 5.5 or 6 at the most. Too fat of cull cows are discounted just like thin ones are.
What are the right cows? The right cows are healthy cows. The cows that do the best in this scenario are those that tend to be on the thin side due to periods of negative nutritional balance, but are still in good health. These thin cows will experience compensatory gains and will aid in the second factor to successful cull cow feeding program. Being able to add pounds of gain efficiently with low feed cost is key to making this system work. According to an Ohio State publication “Feeding Cull Cows”, the most efficient gains are made in the first 30 days of feeding and, by feeding cull cow out for at least two months, we can improve the carcass quality therefore making the carcass more valuable. The third situation that will make this decision is the cull cow market versus feed prices.
The real question then becomes does it pay? The answer, it depends. In 2009 Iowa State University published a “Seven Year Summary of Feeding Cull Market Cows”. In this summary, data was collected from nine groups. Five groups were placed on feed in November and December, and four groups were placed in May. Cull cows were feed for 70-90 days. As expected there was quite a variety in profit per head. The overall summary average for the seven years was $16.54 profit per head. The range was a loss of -$91.45 to a profit of $174.36. The summer feed groups had the highest average profit per head at $35.84 while the winter fed group averaged $7.75 profit per head. Fully reflecting that knowing your cost of production and what the market has to offer can help make your marketing plans and decisions just a little easier.
