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Rebuilding Your Herd, At What Cost?

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Rebuilding the U.S. beef cowherd, which is at its lowest level since the 1950s, will take time and money.

My husband Tyler and I were at a fellow Limousin breeder’s place a few weeks ago, helping them clip and prep their cattle for the upcoming state fair. As typical when cattlemen get together, the topics of genetics, sires and this year’s breeding decisions dominated the conversation.

Sadly, parts of cattle country in the U.S. are still suffering from drought, and liquidation of beef herds is continuing in 2013. However, many folks are more fortunate regarding the weather and feed situation this year, and are keen to grow their beef herds, myself included. However, a complicating factor is that this is a time when high-quality replacement and bred heifers are tough commodities to come by, and afford.

Our friend, the Limousin producer, asked us if we had any bred females for sale. Of course, we wanted to say yes. After all, the goal of any purebred breeder should be to have bulls and females available at all times. However, we were hesitant to make any sales, despite the high price we could have gotten for females. If last winter’s cattle sales are any indication, bred heifers will be worth a pretty penny again this year.

With record-high prices for females at many production sales across the country, there weren’t many bred heifers that I wanted to take home for the price they were going for.

However, as the nation’s cattle producers start to rebuild, this could be our reality. I believe bred heifers will be much like gold for cow-calf producers in the next couple of years.

The current situation prompts a couple of questions. Does the incentive exist this year to begin rebuilding our national cowherd? I think it does, but at what price?

Are you buying any females this year? Are you retaining all of your replacement heifers? What are you paying for females? Share your reports in the comments section below.

 

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Discuss this Blog Entry 6

dlh (not verified)
on Sep 16, 2013

Sure bred or replacement females will cost more than the last time we rebuilt the nations cowherd. But the value of their offspring has almost doubled too. A replacement heifer valued at $1000 and worth $2000 as a bred heifer returns up to $400 profit depending on your costs to develop her. That is probably more profit than you made "selling" the $1000 heifer calf. Our costs of production have gone up but if the current prices for calves and fed cattle remain at these levels or higher, I think the economics will start to rebuild the herd. And if corn and feed gets less expensive, we might be able to do it in a dry lot situation and still make money. The speed at which rebuilding will occur will depends on the drought and the dollars.

on Sep 16, 2013

At our farm here in central Alabama we are retaining the majority of our heifers. We will probably purchase a few as well. Bred heifers have been on the rise here as in the rest of the country.The majority of our cattle are black baldies and simangus and all our purchasing is done at Debter Hereford and Gibbs Farms, last falls pricing for breds was in the $2000 to $2500 a head range, have watched folks with more money than sense go $2800 to $3000 for bred commercial heifers. We'll raise our own at that price.

Anonymous (not verified)
on Sep 16, 2013

Plan to breed the heifers that I normally sell as replacements and sell them as bred heifers instead.

gene schriefer (not verified)
on Sep 16, 2013

started retaining more heifers 2,years ago. got a little tough with last years drought, but managed to expand the herd still

Pat Bearup (not verified)
on Sep 16, 2013

One thing that most people seem to miss is that the main reason calf prices are high is due to the smaller supply. If everybody rebuilds their cow herd to pre drought levels, it will just drive price back down. Maybe we need to look at the present situation as a way to have more say in the market price. Be more of a price maker and not a price taker.

on Sep 17, 2013

Pat, I don't think anyone in the cattle business has missed your first point regarding the size of the U.S. cattle herds correlation to current prices. The problem with your theory is that in the end the consumer will decide what producers will be paid, because if beef is priced out of their budgets they will buy more chicken and pork. Have we found that price ceiling at retail? I'm not sure but I personally know people who already say yes. Furthermore, everyone in the chain has to be able to make a profit, from the cow calf man all the way to the packer. If the cost of calves, plus the subsequent costs of gain throughout their life cycle, exceed their end profit potential, then links in the chain will bow out. They are businesses after all, and they will and can only lose money for so long. Not to mention if the U.S. beef industry can't meet domestic and export demands then other countries and protein sources will step in to take away that market share. I could go on but the point is there are a vast amount of factors that must be considered, and the answer is not as simple as the cow-calf sector just deciding "hey we're not going to expand!". As a producer myself, we will continue to expand as long as it is viable, but in marketing our cattle whether it be at feeder calf sales or bred heifers off the farm in the end you'll always be a price taker and not a price maker. Otherwise your going to have a lot of cattle that no one will buy. They will only be worth as much as the market is willing to pay.

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BEEF Daily Blog is produced by rancher Amanda Radke, one of the U.S. beef industry’s top social media “agvocates.”

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Amanda Radke

A fifth-generation rancher from Mitchell, SD, Amanda grew up on a purebred Limousin cattle operation in which she and husband Tyler are active. She graduated with a degree in agriculture journalism...

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