After a pair months of coping with drought and warmth associated matters it’s time to look forward at a few of the monetary alternatives on the horizon. Cattle producers have to act as enterprise managers and assess inventories of all assets and commodities available to find out one of the best plan of action to maximise their revenue potential over the subsequent a number of years. No matter what you could have executed up to now, now’s the time to organize for the monetary alternatives that lie forward within the cattle enterprise. This week we deal with the upside of heifer retention.
Contemplate the next:
- Drought has resulted in cyclically low cattle inventories. The legal guidelines of provide and demand dictate that when cattle inventories are low the long run worth of cows, calves, yearlings and feds will enhance. Feedlot placement knowledge exhibits extra heifers occurring fed versus being retained as replacements. What alternatives does this create? The chance to market bred substitute heifers at premium values sooner or later.
- This week, the USDA Oklahoma Weekly Cattle Public sale Abstract tells us that 477 pound, Medium and Giant body, Muscle Rating 1 heifer calves traded at a median of $162.79/cwt. This interprets to a complete worth per head of $777.
- If we gather weights on our 4 to seven 12 months previous cows at weaning we will decide the typical mature weight of our cow herd.
- If we assume: 1) these heifers might be 14-15 months previous by Might 1, 2023 after we are prepared to start our breeding season, 2) they must be at 65% of their mature weight at the moment to be biking and able to breed and, 3) our common mature cow weighs 1,300 kilos.
- It permits us to calculate the next:
- 1,300 x .65 = 845 kilos goal weight by Might 1, 2023
- 845 – 477 = 368 kilos of acquire wanted over the subsequent 200 days
- 368/200 = 1.84 pound common each day acquire wanted from now till breeding season
- As we take stock of our hay, silage, feed grains and potential for winter grazing we have to arrive at a ball park determine for the price of acquire (COG) on the 368 kilos wanted to succeed in the goal weight. This could possibly be achieved in a number of methods relying on accessible feed assets. For this instance I’ll assume a price of acquire at $.80, $1.05 and $1.30 to make the next calculations:
- At $.80 COG: 368 x .80 = $295. This added to the present worth of the heifer at $777 equals $1,072. To account for alternative price, financing, further grazing previous breeding season, potential dying loss and the price of breeding naturally or AI, I’m elevating this worth by 10% leading to a breakeven worth of $1,180. Do you consider bred heifers might be price a minimum of $1,180/head a 12 months from now?
- At $1.05 COG: 368 x 1.05 = $387. This added to the present worth of the heifer at $777 equals $1,164. Once more, elevating that worth by 10% to account for beforehand acknowledged bills leads to a breakeven of $1,281.
- At $1.30 COG: 368 x 1.30 = $479. This added to the present worth of the heifer at $777 equals $1,256. Once more, elevating that worth by 10% leads to a breakeven of $1,382.
Handle your enterprise, do the mathematics, take stock of your assets and seek the advice of with a nutritionist. Every of the breakevens calculated above are beneath the autumn values of fine high quality, spring calving, bred heifers over the previous couple of years.
Useful resource: USDA Oklahoma Weekly Cattle Public sale Abstract. AMS Livestock, Poultry & Grain Market Information. Oklahoma Dept. of Ag Mrkt Information. October 7, 2022
Dr. Mark Johnson talks about administration of substitute heifers on SunUP TV’s Cow-Calf Nook from April 2, 2022. https://www.youtube.com/watch?v=cbAdfmVTyYQ&checklist=PLglOSpV-Tcac6-pVMv0BEAk78_7tJCuap&index=34&t=4s
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