Following a drought, it’s best to stretch out your restocking decisions. Here are some tips on making informed choices.
If your ranch has suffered through a drought and you were forced to liquidate cows, don’t “get crazy” with a little green-up and immediately restock your pastures, stress Southwestern beef cattle specialists and economists.
While some portions of Texas and Oklahoma received substantial rainfall this winter, large portions of West Texas and New Mexico were merely teased with a tenth of an inch here or a half-inch there, in most cases. It was enough to liven up wheat pasture and some native grass, but there was scant help toward bringing the semi-arid region back to normal pasture-wise. Stock tanks still remain mostly dry. And there are forecasts that project the drought to continue in some regions yet to recover from the 2011 misery.
However, cow-calf producers don’t like to see empty pastures and grow eager to restock if there’s a little green sprouting through dead forage, says Stan Bevers, Texas AgriLife Extension economist. He says ranchers should make sound business decisions and not be blinded by false hope in rebuilding herds.
“The cow-calf business is an asset-management business, not a margin business, that must focus on the next seven years,” Bevers says. “About 45-50% of total costs are fixed costs, not variable costs. In order to be sustainable, we must focus on net worth, not cash flow.”
Bevers recommends that producers examine three things before buying replacement females: what is her productivity level potential, what will it cost to keep her over her life, and what will her calves sell for on average?
“Producers should look for at least an average total weaning rate of 82% annually,” he says. “If you buy pairs, and the first calf has already hit the ground then the productivity rate is high.
“Sometimes producers want to buy young females, 2-3 years old, for longevity. But those females don’t have the highest probability for reproduction in the near term. A middle-aged female probably has a higher calving probability than either a younger female or an aged female.”
He says that at today’s prices, it will probably cost a rancher $580-$590/year to keep a female in condition to produce a calf. That includes costs to provide sufficient forage, feed supplements and animal health.
The most difficult price to determine is what calves will bring. Bevers looks at price forecast from the University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI) price projections of about $145/cwt. for 2012, a figure he says seems fairly conservative in light of cattle price surges seen early this year.
At that $145/cwt. price, a 525-lb calf would bring about $760. If that was the price for calves from a 100-cow herd with an 82% weaning rate, then the overall average calf price per cow is about $624 (82% of $760).
Those factors, plus the fact that the cow likely has a cull value of $750 to $850, must be considered. Bevers adds that in buying replacements, producers should consider the cost of getting their first calf on the ground.
“If you raise your own replacement heifers, Standardized Performance Analysis (SPA) data on some 4,500 cows indicate it will cost about $997 on average to get that animal up to the breeding stage and bred,” he says. “You need to measure if it’s worth raising your own replacements, or if it’s better to buy that three-year-old cow that has a better chance to have and wean a calf.”
Get the most out of feed
Whether it’s forage or supplements, pulling the most benefit out of feed following drought can help boost cow performance and promote better calves, adds Ted McCollum, AgriLife Extension beef cattle specialist. He says that will likely improve a female’s Body Condition Score (BCS), which normally increases her pregnancy rate.
“Research has shown that a BCS 3 female will only have a 32% pregnancy rate,” McCollum says. “That compares to 68% for a BCS 4, 88% for BCS 5 and 93% for BCS 6.”
He reminds producers that a cow “grazes 10 hours a day – so you need to get the most out of those 10 hours. The challenge is how to adjust the supplemental needs of a cow when there is a limited forage supply. If I see cows grazing steadily midday, they may be stressed to find a lot to eat.”
Producers may need to test the nutrient value of the forage. “You should collect samples of what forage is being utilized by the cattle,” McCollum says. “If it is tested and contains less than 7-8% crude protein (CP), there is a deficiency. Also, if the TDN (total digestible nutrients) to CP ratio is greater than 6 to 1, there is probably rumen deficiency.”
He says cold weather is likely still in the forecast for the drought-stricken areas, meaning producers should attempt to improve the flesh condition of females if they will be breeding in the winter.
New tool available
Bruce Carpenter, Texas AgriLife Extension beef cattle specialist, says there is a new Excel spreadsheet available to allow producers to compare the cost of different drought management strategies for their cows.
These cost options are: keep them and feed them, destock or re-stock, ship to grass, ship to a feedyard and embryo storage and transfer. Carpenter notes that it is key that input costs are known and entered for individual ranches.
He also says that while the variable “length-of-drought” is always the big unknown, it’s still one of the biggest things that can affect the cost and comparison of some of these strategies. The spread sheet is available here. (Note: Some users may need to first save the spread sheet to their hard drive to open it.)