Summer is shaping up to be a key time for selling cull cows or bulls before the market declines seasonally.
Your grass is green, your calves are growing, and there are a lot of grazing days to look forward to this summer. Weaning time, pregnancy checking, and marketing of calves and cull cows are a long way off in your mind. Why would you even consider making plans to send a cull cow or bull to market this time of year?
Well, if you’ve been watching cull cow and bull prices over the past few weeks and months, you might have an answer for this question. Since utility cow price hit its seasonal low last November (around $44-45/cwt), cow prices have steadily increased at a rate of about $2/cwt per month. As of late-May, cows were selling for over $55/cwt in many parts of the country, which is approximately 15-20% higher than the average year-round utility cow price over the past 5 years.
Cow Prices – Seasonal Highs and Lows
To help get an idea of how predictable the seasonality of cull cow prices can be, let’s look at which months have had the seasonal low and high prices for cull cows over the past 10 years.
Interestingly, since 1997 the lowest price for utility cows for the year has always occurred in November, December, January, or February. At its low, cull cow price has been 10-12% below the average price for the year.
Conversely, the high price for the year occurred during either the late spring (March, April, or May) or mid-summer (July or August) in all years except one. Those high prices were approximately 10% above the average for the year.
Using these historical trends and the high price of cows in today’s market, it is important to consider two points when determining when to market cull cows based on price:
1) Cull cow price in 2007 is probably at or near its peak for the year, currently;
2) Cow price tends to decline steadily $1-2/cwt per month from late summer through the fall and winter, and can drop more than $5/cwt in total.
Cows to Consider Culling
If a producer can cull some key cows earlier this summer rather than the fall, it is possible to access a 10-25% premium over the average year-round price. However, the specific cows or bulls that a producer may cull should depend on several factors, including: time of breeding/calving season, availability of pasture or feed, drought situation and outlook, and intended weaning date.
It appears that spring-calving cowherds could take advantage of this opportunity most easily, particularly if their breeding season is well underway. With some advanced planning, non-pregnant cows can be identified by mid-summer (via palpation or ultrasound by a skilled veterinarian). In addition, cows that may have been candidates for early culling before the breeding season started should be considered, including those with non-treatable conditions like cancer eye, udder and teat problems, recurring feet and leg problems, or poor dispositions.
Finally, bulls can be sold earlier for non-treatable conditions or if previously identified for replacement next year anyway.
Cows or bulls that can be culled and sold earlier can generate several advantages, including:
- Lower transportation cost – cattle trucks are more available in summer and therefore lower per-mile rates may be available.
- Increased income – remember, the high price for the year and the year-round average price typically differ $4-5/cwt, which equates to $50-60/head more for a 1,200 lb cow.
- Drought management – if forage availability is a problem due to drought conditions, summer is a great time to reduce herd size by selling cows at a premium price (1,200 lb cows at $55/cwt are worth $660/hd), and replacing them next year.
- Harvest or sell your grass via other outlets – by reducing the number of grazing cows, it is possible to still get value out of the grass that they don’t consume. This might include leasing your pasture, harvesting more hay or silage, or possibly purchasing and grazing calves or yearling cattle.
The Bottom Line
Since 1997, low price for utility cows for the year has always occurred in winter, while the high price for the year occurred either during late spring or mid-summer. As today’s cull cow market continues its consistent and strong upward trend above the mid-$50s, cow/calf producers should consider culling some key cows and bulls this summer at this premium price.
If cows can be sold at or close to the seasonal high price for the year, producers can acquire a premium in excess of $50/head vs. year-round average price, and possibly $100/head compared to the seasonal low for the year.
Not all cows should be culled early, but those that can be diagnosed as open soon after the breeding season ends or those with non-treatable conditions should be considered. Cows sold early may help reduce costs (for transportation, etc.) and increase revenue (via a higher selling price), and may enable a producer to effectively manage around drought or other factors that may affect profitability.
Editor’s note: There are several information sources available on-line for producers to access current market prices for cull cows for free through the Livestock Marketing Information Center (www.lmic.info) or the Livestock and Grain Market News section of USDA’s Agricultural Marketing Service (www.ams.usda.gov/lsmnpubs/), or with a paid membership through Cattle-Fax (www.cattle-fax.com) or DTN (www.dtn.com).