No More Culls

By Boyd Kidwell
Progressive Farmer Contributing Editor

Drop that old term "cull cow" from your thinking and vocabulary. These days, those open females represent real pricing opportunities. Maybe it's time to find a new name -- something like "market cows."

In today's cattle industry a typical cow/calf operation gets 20% to 30% of its gross income from selling market cows and retired herd bulls. And their value has only grown as consumers on tight budgets increase demand for ground beef and whole muscle cuts from these types of animals. That increased demand can mean opportunity, if you time things right.

Bill Sexton, of Denton, N.C., weans his fall-born calves in July and has his veterinarian perform pregnancy checks at the same time. The vet also identifies cows with leg issues, poor teeth, bad feet and udder problems. They will all take a trip to market.

Market cow prices are usually relatively high in July, and grass quality is on the decline. So for Sexton, this is a good time to cull and sell.

Sexton and his son Joel run 215 cows and 75 replacement heifers at Big Oak Farms, in the central part of the state. They will quickly tell you they're not "married" to any of the cows in this commercial herd. Every year, 15% to 20% of the cows and heifers get moved out. The focus is on those that remain open after a 60-day breeding season. If a cow loses her calf and doesn't rebreed after calving, she heads to market, too.

"We don't have any loafers around here," Sexton said. "If you keep a cow after she loses a calf, she'll never make it up with calves she produces the rest of her life."

As the herd moves into fall calving season, Sexton splits up the cows that lost calves from the rest, moving them into a separate pasture. He will run these cows on stockpiled fescue and clover until after Jan. 1.

"We've found over the years that prices are higher in winter than they are in the fall, which is when everyone sells their cows. So we can usually get a few more cents per pound selling right after a holiday, when the packing plants get back into full operation," the veteran cattleman said.

GRASS IS THE KEY

In many ways, the basic cull-cow game hasn't changed much, said Auburn University economist Walt Prevatt. If you have grass you can usually make money grazing healthy thin cows through the fall and selling them in early winter like Sexton does. However, the numbers won't add up if you have to buy feed, Prevatt pointed out.

After you pull a calf off a 1,000-pound cow, she can gain 2.5 pounds per day, or 250 pounds over a 100-day grazing period. At the same time, her body condition improves and her quality grade is higher at market. Taken along with the historical improvement normally seen in prices from September or October into January, the value of a cow can improve by $250 per head during that 100-day period.

But if your forage supply is limited, there's another way to look at things. Backgrounding growing calves may be more profitable than putting grass into cows. Here's why: A cow requires 10 pounds of dry matter for a pound of gain. A growing calf needs 6 to 8 pounds of dry matter for a pound of gain.

So as the cow gains 250 pounds (from 1,000 pounds to 1,250 pounds), she consumes 2.5% of her body weight, or about 28.1 pounds of dry matter per day. A stocker calf with an average weight of 625 pounds (growing from 500 pounds to 750 pounds) consumes 15.6 pounds of dry matter per day.

"You can almost graze two stocker calves for each market cow," Prevatt explained.

GAME CHANGER

Before the 2011 drought, there was typically a 20% decline in cow prices from early summer to mid-fall, generally a post-weaning period. But dynamics created by drought and feed shortages changed this market to some degree.

Declining beef production meant the market quickly absorbed what was an increased volume of cows going to slaughter, with a limited negative price impact. As grazing improves and culling numbers drop off, market cow prices may not fall as much as the seasonal norm would suggest, said Iowa State University Extension economist Shane Ellis.

More cows have been available in the summer months and the demand for lean beef for burgers has continued to be strong. By late June, cow slaughter was 3.5% above 2012 levels, and prices were down 6.8% ($5.69 per cwt).

A return to normal grazing conditions in more areas could further reduce beef cow slaughter and support higher prices the second half of the year, explained Lee Schulz, an assistant professor of economics at Iowa State University.

This fall, market cows in reasonably good weight condition may sell for higher prices (per cwt) compared to thin cows. Thus, if the condition of market cows can be improved and pounds added at a reasonable cost, keeping them a little longer may be worthwhile, Ellis said.

"As far as taking cows through the winter and marketing them in spring, the cost of stored feed will probably be prohibitive. This may be a year where cow values will be a matter of additional pounds as opposed to market timing," Ellis said.

THE BASICS STAY THE SAME

In one major way culling hasn't changed. A cow that would have been culled when calves were cheap is still a top candidate when calf prices are higher, said Ron Gill, of Texas A&M AgriLife Extension.

Culling cows with high-strung dispositions, bad udders, poor body condition, worn-out teeth or structural problems should never be compromised regardless of prices.

Gill has noticed one change in the cull game in his part of the country. During Texas' awful drought, many of the cows that had been weaning the heaviest calves had difficulty maintaining body condition. While these cows weaned big calves, they were also heavy milkers, and their high feed requirements made it difficult for them to maintain body condition during forage shortages. Cows that produced less milk and weaned middle-of-the-pack calves were better able to maintain their body conditions.

Based on this experience, Gill now urges producers to cull toward a cow herd that is optimized for its unique environment.

"It's hard for a cattleman to be satisfied with average calves and moderate cows, but Mother Nature is a fickle girl," Gill said.

FEED THE COWS OR HEIFERS?

After high levels of cow slaughter early in 2013 and slightly lower prices compared to 2012, North Dakota State University livestock economist Tim Petry expects normal-seasonal weakness in cow prices this fall.

That being said, he pointed out some areas of the Northern Plains have received favorable moisture and grazing conditions. They are seeing the potential for above-average hay crops, and that could change the dynamics.

"If good hay crops materialize in the Northern Plains, producers may be interested in retaining cull cows past seasonal fall lows," Petry said. "But producers may prefer to use the feed for retaining heifer calves rather than cull cows."

For several years, heifer calf prices in the fall marketing season have been $12 to $15 per cwt lower than their steer counterparts. By spring, heifers may be only $5 per cwt below steers. With a seasonal (spring) increase for feeder calf prices and an increase in prices compared to steers, many producers in the Northern Plains prefer backgrounding heifers for spring markets.

(VM/CZ)

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