An extra $8-$10/cwt. That's a hefty extra bump of profit on fed cattle, but from cull cows? Could be.
The sale of cull cows can make up 20% or more of a ranch cattle enterprise. By holding cull cows off the market this fall, giving them a little winter ration, and marketing them next spring, producers could add a nice bonus to their overall cattle program.
“The slaughter cow market fluctuates within the year and generally follows a seasonal pattern, with the price usually low in the fall and high in the spring,” says David Sanson, Louisiana State University (LSU) beef cattle specialist at Rosepine.
The average rise can be more than $7-$8/cwt. Price is also affected by cow grade, with Canner and Cutter cows selling for an average of $4-$5/cwt. less than Utility and Commercial grades, he adds.
In other words, he says, “don't throw them away — market them.”
Joe Bell, owner operator of Amarillo Livestock Auction Co., Amarillo, TX, says slaughter cows brought $50-$60 in mid-April 2005. Compare that to about $45-$55 last fall.
Sanson is coordinating a project to monitor the value of cull cows fed a roughage-based diet from November through March.
“This project was designed to evaluate the potential of using a roughage-based diet to provide the level of gain required to improve the quality grade of Canner cows to Utility,” he says. “This can enable producers to capture both the seasonal increase in price, as well as the increase in price as the quality grade of the cow increased.”
In the LSU program, cows are purchased in late October to early November and placed on dietary treatments estimated to provide 1.5-2 lbs. of gain/day. Gain and condition score are observed during the feeding period.
“In late February to early March, cows are slaughtered and carcass data are collected,” Sanson says. “The data are used to evaluate the economic potential of feeding cows for a moderate level of gain.”
Sanson isn't using poor-performing cows from LSU's test herd. Bought at local sale barns, the cattle weigh 950-1,000 lbs. with body condition scores (BCS) of 4 to 4.5. The cows go on a rice bran ration with a mineral supplement and hay for 100-120 days. Their average gain is 100-160 lbs.
“When we sell the cows at 1,100 to 1,150 lbs., their average BCS has improved to 5 or 6,” Sanson says. And the price difference is about $100 higher than if they had been sold in the fall, he reports.
The number of cull cows ready for the fall market often depends on whether a region has faced a dry summer and the availability of minimal grazing going into the winter. P.J. Rathwell, a retired Clemson University Extension livestock economist, says if drought is still evident in the fall, producers may see an even better return on cull cows by holding them over winter.
In his South Carolina observations, Rathwell says the normal increase in cow slaughter totals from the third quarter to the fourth quarter is about 14%. In drought situations, that can increase. About a 10% decrease in prices results. So more cows can create even greater price pressure in the fall; giving producers more reason to consider feeding cows over the winter.
Over a five-year average, there's about an $8-$9/cwt. range between the highest and lowest prices for slaughter cow prices. There is usually a major increase between December and March, Rathwell says. Even if the increase is $6-$7/cwt., that's an additional $60-$70/animal, and even more if the grade jumps to Utility from Cutter.
Since the cows in the LSU study were sale barn-type animals, Sanson believes producers could easily see better profit potential by holding over their own cows, which are likely more fit and under less stress.
LSU researchers often ultrasound their mature cows to provide additional data to that received from packer carcass data.
“The key is knowing your cattle,” Sanson says. “The packer likes an animal that can score above the 4.5 to 5 condition. You need to find someone interested in your product.”
The value of holding cull cows over winter also depends on the availability of cheap or even free feed.
“If I have three cows open and thin and I have the extra hay and feed, they will nearly always make us money, as long as they are healthy,” Sanson says.
Bell says, in many cases, cows marketed in the spring will come off good wheat pasture grazing, which can help their condition. But cows sold in the fall, coming off good summer grazing, could also be in pretty good shape.
“I don't think there are any certain price patterns for any type of cattle right now,” Bell says. He points out breeding cycles are different, there's a shortage of cattle, and the industry has slaughtered a lot of cows.
“It could be more difficult to know if there will be a better market for cows in the fall or spring,” he says.
Sanson believes the strong cow market will continue.
“I think we have another three years in the market,” he explains. “This is the first year we have kept significant numbers of heifers back.
“Also, the need for lean beef (by packers and consumers) is pushing the cow market. What's needed is more cows that have some flesh go for more than just hamburger. So if you can take a cow from Canner and Cutter to Utility, and they can gain 2 lbs./day on decent feedstuffs, you can do good on marketing them in the spring,” Sanson says.
Larry Stalcup is a freelance writer based in Amarillo, TX.