By now many beef farms have weaned calves and made cow culling decisions (see last month’s column for recommendations on which cows should be culled). The question is does it make sense to sell now or, if feed is available, to hold them to a later date? Looking at the graph below you can see that, in general, slaughter cow prices peak in early summer and decline through the fall months. The only year in which this didn’t occur was in 2014, where cow prices remained strong through the fall. Last year was an anomaly where all class of cattle saw price increases in the fall. (See Graph 1.)

Removing 2014 I calculated the average index from 2010 through 2013 for all market classes. (Recall from last month’s column that body condition score increases from the lean to breaker market class). From this graph you can see that based on price alone, fall is not the best time to sell cows. Note that regardless of market class the seasonal pattern is similar. (See Graph 2.)

You may have seen data from western states graphed in the same manner. The shape is quite different. The seasonal lows are lower and pick up sooner. For example, the November index in Torrington, Wyoming, is 87 and the January index is 94. In our region, the November index is 97 and the January index is 90. This may be due to the fact that we have more dairy cows and don’t see the increased slaughter in the fall as in primarily beef states. Therefore the recommendations on whether to feed cull cows should be based on local pricing.

Determining change in value of cull cows

Change in the value of cull cows comes from the increase in weight and the increase in fatness or quality grade. If the value of the increased weight is greater than the cost of feeding her, then it is a profitable decision.

Now, if you increase weight you generally also move the cow into a different market class. A cow in the Lean market class has a body condition score (BCS) of 2 to 4; Boner, a BCS of 5; and Breaker, a BCS of 6 to 7. It takes approximately 70 pounds of body weight to increase 1 BCS. So a 1,200-pound cow with a BCS of 4, would weigh 1,410 pounds at a BCS of 7.

The question is how much weight do you need to add to be profitable? We can use historical data to provide an answer. However, each year is different, so one needs to use caution. On average moving a cow from the Lean to Breaker class increases the price 10.9 percent (Table 1). Yet, this year the average increase has only been 5.2 percent. This is due to several conditions. Fed cattle are staying on feed longer increasing the amount of fat trim. Also, with the value of the dollar, more grinding beef is being imported. Finally, Australia continues to suffer drought, sending more cows to market, thus increasing our supply of lean trim.

Looking at Table 1 you might think that moving the cow from Lean to Boner might make the most sense because the 2015 differential is 4.6 percent compared to moving her from Lean to Breaker (5.2 percent). Yet remember that she will be also be heavier as a Breaker compared to a Boner.

Using the average index and the price differential, I calculated the value of cows in each market class from November 2015 through March 2016 (Table 2).

Table 3 shows the change in value by moving between market classes. Moving a cow from Lean to Boner requires the addition of three units of BCS or 210 pounds. This looks like a pretty good return ($299/hd); however, it is not practical to think you can add that much weight from November to December. On average it appears that moving a cow from Lean to Breaker provides the greatest return, especially in the later months.

Next we need to evaluate a ration to achieve our goal. I’ve calculated three base rations: hay, corn silage and corn grain (Table 4). Each ration should increase body condition score by three units in 90 days.

I created a partial budget to evaluate the three feeding programs (Table 5). The numbers speak for themselves. Using hay alone is not profitable and feeding corn silage or corn grain provides a relatively small return. If you have cheaper feed ingredients, then this picture can change. For example, stockpiled pasture, corn stalk grazing, byproduct feeds or dairy refusals could change this picture.

Summary

Evaluate the condition of your cows. Unsound cows may present a greater risk.

Evaluate the body condition score of your cows. Those with greater or equal to BCS 5 are not good candidates for feeding.

  • Do you have inexpensive feeds?
  • Do you have a location to keep cows through at least February?
  • Use local sales data to make decision; variation in price changes by region.

Watch the spread between Lean and Breaker cows. If the spread widens, then this may provide an opportunity to increase value.

Unless you have cheaper feed ingredients or a better market, 2015 is probably not a good year to feed cull cows beyond December.

Cover photo: alex grichenko/istock