Cattle Economics

CHAPS Data Shows Benefits Of Smart Culling

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As the crippling drought in cattle country pushes more cows to town, data from NDSU's Cow Herd Appraisal Performance Software (CHAPS) software shows smart cow culling pays.

This year’s widespread drought on top of last year’s moisture sucker in the Southern Plains has left everything short – from corn to hay to the supply of cattle. Yet, true to their nature, folks in the cattle business can always figure out a different way to skin the proverbial cat.

Case in point is an example recently served up by Kris Ringwall, a beef specialist at North Dakota State University’s Dickinson Research Extension Center.

According to Ringwall, for herds enrolled in the Cow Herd Appraisal Performance Software (CHAPS) program since 1990, “the culling rate exceeded the replacement rate only once. In other words, through good times and bad times, producers are optimistic and have replaced at a greater percentage than they have culled.”

Incidentally, though producers in his neck of the woods need to cull more cows and retain fewer heifers due to drought, many were already minimizing the replacement rate rather than expanding. Consequently, the average cow age has grown older.

Drought Resource: Cow Management Advice Following 2012 Drought

“Because dry weather is harder on older and younger cows, producers who have been keeping minimal replacement heifers will end up having to pay to let some old cows go and increase the replacement rate to maintain the same size cow herd,” Ringwall says.

The typical culling rate in this data set is 14.1%, while the typical replacement rate is 17.8%. For perspective, the most recent benchmark data were obtained from 91,414 cows exposed to bulls from 2007 through 2011. The calving rate per cow exposed runs at 92%.

So, for a herd with 100 cows, there are 92 calves. If you figure the calf crop to be half bulls and half heifers, that leaves 46 heifers. Culling according to the typical rate would send 14 cows to town. Replacing at the typical rate would mean retaining 15 heifers and marketing the other 31 head (Table 1).

For the sake of example, Ringwall values cows at $1,000 and heifers at $750. Slide the beads and that results in $37,250 from cull cows and market heifers in a typical year.

Of course, this year is anything but typical if you’re slugging through drought conditions.

Continuing Ringwall’s example, he says one response to the drought would be to increase the culling rate to 20% while also reducing the replacement rate by 5%. The net effect would be reducing the herd size and feed costs by about 10%.

Likewise, revenue increases, too. From that herd of 100 cows, 20 would go to town. Rather than keep 15 replacements, only 10 would be retained; five more would be sold. That tallies up to $47,000.

“Next year, the goal would be to decrease the culling rate to 10% and increase the replacement rate to 20% to bring back the number of cows back to the desired 100 head,” Ringwall says.

Back to the example, that would mean culling 10 cows next year and keeping 20 heifers; only 26 would be sold. That rings the register at $29,500.

Across the three years, though, the average revenue from cull cows and heifers – assuming a stable price – would be $37,916, compared to a typical year’s revenue of  $37,250.

“All in all, that’s not bad for having saved 10% in cow costs, maintained the long-term cow herd size and slightly increased income,” Ringwall says. 

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Wes Ishmael provides tightly focused analysis and commentary on specific beef quality and marketing issues of practical importance to beef producers.

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Wes Ishmael

Among the industry’s most insightful thinkers, Wes Ishmael concentrates on industry price and market perspectives for BEEF magazine. Along with his monthly “Cattle Economics” column...

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