More farms seem to be moving their calving season from late winter to early/mid-spring. There are many reasons for this change, but foremost may be the desire to avoid the worst of the winter weather. Some also argue that later calving more closely mimics Mother Nature, increasing reproductive performance and reducing costs. A May calving cow will be bred in July. Her nutrient requirements are greatest in early lactation when milk production is high and she is preparing for re-breeding. The early part of the grazing season is when pasture quantity and quality is at its peak, more closely matching the cow demands. Pasture is generally cheaper than stored feeds, thereby reducing feed costs.
Advantages to grazing yearlings
The challenge with later born calves is that they will weigh less if selling during the traditional fall marketing season. While lighter calves do fetch a higher price per pound, in the end, total pounds is the driver to total receipts. Is there a way to capitalize on the advantages of later calving while at the same time not give up income? The answer may be yes, if you are willing to hold the calves over the winter and graze them next summer. Grazing your yearlings offers several advantages.
- You can make use of the spring flush with yearlings as compared to clipping or allowing forage to mature.
- By not selling all of your calves in the fall, you open up other market windows that can diversify your risk.
- Yearlings are somewhat easier to “Pool” for sale, which, when combined with cattle from other farms, can increase value. (For more information on feeder calf pools, go to “Events and Programs” at http://beefcattle.ansci.cornell.edu/ ).
Given that selling in October may not be the best option to optimize receipts, I’ve looked at several scenarios that include holding the calves over part or all of the winter (backgrounding) and grazing the following summer. As with any discussion of this nature, your situation is likely to be different; however, this is intended as a framework to think through what may or may not work on your farm.
Marketing scenario breakdown
We will be looking at four marketing scenarios. The first two involve backgrounding over the winter at two ADGs and then going to pasture May 1: (1) Feeding from January 1 through May 1 at a projected ADG of 1.0 lb. Market off pasture in October. This approach assumes a lower feed cost during backgrounding and compensatory gain in the spring. However, these assumptions may not hold. (2) Feeding from January 1 through May 1 at a more moderate ADG of 1.5 lb. These steers will be heavier at turnout so they will be marketed in September. The second set of scenarios involve backgrounding only and marketing in March or May.
I’m assuming that we are starting out with a May/June born steer weighing 550 lb. on January 1. My best guess, based on recent sales as of this writing, is that he is valued at $1.75/lb. The first question the reader needs to answer is this: “What is the return for this steer if we just sold him in December/January for $1.75? If you have been working with your local Extension educator or lender, you should know the answer. If not, go to http://beefcattle.ansci.cornell.edu/, click on “Field Staff” and find out how they can help you complete a Beef Farm Business Analysis. Using an average cost of production from Minnesota, Wisconsin, Michigan and Ohio, the average direct and overhead cost to keep a cow for a year is $836. The 550 lb. steer at $1.75 is worth $963, resulting in a profit of $127 (if your cost is $836). You may want to stop right here and “take the money and run!” Or, you may want to evaluate the potential to increase your return by keeping this steer longer.
The first scenario uses a lower ADG during winter. The challenge is that overhead costs must be covered by fewer pounds, increasing the cost of gain. This steer was grazed longer as he was lighter (671 lb.) going to pasture as compared to the market date of September in scenario #2 where the steer was heavier (732 lb.) at spring turnout. I also reduced this heavier steer’s ADG on grass from 1.5 lb to 1.2 lb to account for pasture not being able to meet an increased energy requirement of a steer further along in his stage of growth.
No one knows what cattle prices will be next year. Our best “guess” is to use the Feeder Cattle Futures price. I adjusted the futures price with a $0.05/lb slide. So for every pound different than the 750 lb. Feeder Cattle Futures contract, the price was moved up or down $0.05. Lots of factors make this an imperfect approach to arriving at a locally accurate prediction, but it’s a place to start.
Both grazing options were profitable. Yet of the two, the calves that gained 1.5 lb/d through the winter, 1.2 lb/d while on pasture and marketed in September were the most profitable. At the lower ADG, there just is not enough gain to cover the yardage cost of $0.25/hd/d for utilities, insurance, building repair and maintenance, and paid labor.
The two scenarios where calves were sold after a period of backgrounding and not held for grazing were either projected to lose money or just barely break even. Under the current conditions and assumptions, unless you have cheap feed, this model indicates it may be best to sell than to retain ownership beyond weaning.
Again, each farm needs to evaluate their own circumstances and use their own numbers. New York is blessed with abundant pasture resources and under the right conditions you can take advantage of grazing your calves through a second summer, adding weight and potentially adding value.
Cover photo: GordonImages/istock