Is it time to rebuild the beef herd?

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LITTLE ROCK – Drought-erasing rains and greener pastures are welcome sights to Arkansas’ battered cattle industry, but ranchers shouldn’t think the danger is past, said Tom Troxel, associate head-Animal Science, for the University of Arkansas System Division of Agriculture.

A study by economists with the Division of Agriculture pegged the drought’s preliminary costs to the cattle industry at $128 million between August 2011 and July 2012. The study also found that 3 percent of ranchers said they planned to sell all their cattle.

“Even though much of Arkansas received much needed rains in August and September, armyworms consumed much of the fresh regrowth,” Troxel said. “Many of the ponds and streams are still very low.  

“Drought is a slow long process and so is the recovery,” he said. “Is the drought over and is it time to rebuild the cow herd? I don’t think so.”

However, with the number of years it will take to rebuild a herd decimated by drought, it’s not too early to have a plan in place. Troxel said that when the time comes to rebuild, there are several potential approaches to consider:  

  • Purchasing bred cows or cows with calves at their side. There may be some opportunities to purchase quality cows due to ranch dispersal sales or from other sales of this type. The cattle can be either purebred or crossbred but it is very important to purchase cows that fit your environment. Often times “put together” cattle are purchased. These cattle are often not the quality and as productive as desired. “It’s been my experience that after three years, only 50 percent of ‘put together’ cattle remain on the farm,” he said. “The other 50 percent gets culled due to poor performance, lack of pregnancy, and other factors.”
  • Raise heifers. Troxel said there has always been the debate about purchasing or raising heifers. “Whether you purchase or raise replacement heifers one must be concern with genetics, dystocia, or difficulty calving, and cost, and ask whether the heifer fit into your operation.”
  • Managing bred cows. When it comes to rebuilding the cow herd economics must be considered. If a bred cow, in last third of pregnancy, is purchased for $1,250, and the operation expects to pay for the bred cow with the net returns of her calves, it will take eight years to pay for the cow – assuming she has a calf every year. If the purchase price is $1,600 it will take 10 years.

If a bred heifer is purchased for $1,000 it will take eight years of net calf sales to pay for   her. If a heifer is retained from the herd, it will be year 10 before the internal rate of return is positive.

Another approach is to buy the bred cow for $1,250 and keep her for five years.

“At the end of five years, sell her with her fifth calf,” Troxel said. “This strategy will return 10.4 percent on your money. The same approach used for a $1,000 bred heifer will return 7.6 percent.”  

Troxel also has a checklist of considerations for rebuilding the cow herd when the time comes:

  • Purchased cattle from a well-managed cow herd – try not to purchase problems.
  • Quarantine newly purchased cattle for 30 to 45 days.
  • Test bulls for Trichomoniasis.
  • If possible, manage new cattle as a separate herd.
  • Properly vaccinate newly arriving cattle.
  • Do not rebuild to pre-drought levels – rebuild slowly.
  • Pasture recovery must precede cattle rebuilding.
  • Before rebuilding, consider all costs.

The bottom line is “there are two questions to ask yourself before embarking on a rebuilding program,” he said. “’Have you lost grazeable acres due to the drought?’ and ‘Is the drought really over?’”

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Todd Weyl    
NWA  |  November, 03, 2012 at 08:56 AM

You can not feed your way out of a drought. You have to think your way out. It makes no economic sense to be bailing hay the last week of October to be feeding it 2 weeks latter. Only those that manage their forage and resources more wisely than their neighbors will be in the beef business in the future.

November, 03, 2012 at 06:58 PM

Cattlemen as a group and indiviually need to think about the economics of more or less cattle. For example it makes no sense to keep 22 cows and produce 20 calves at $0.80/lb when they can keep eleven cows and sell ten calves at $1.60. Just more work for no more money. There is no expectation that $1.80/bu corn will return anytime soon and at some point the retail price will hit a demand wall. If anything it makes more sense for cattlemen to use any extra grass and hay to increase the weight of the calves and capture a bigger share of the retail dollar. The only group that gains with more calves is the packers because they can cut the prices they pay faster and deeper than the prices they receive.

Ca.  |  November, 05, 2012 at 10:56 AM

Good comment keeping fewer cows as a drought management tool and holding on to calves to increase sale weight when you have the extra pasture is a good option for a rancher and the cow calf sector in general.