Cow-calf producers faced with tough decisions in drought

While difficult, destocking certain portions of the cowherd may be best for economic viability.

Most upper Midwest beef producers have been taken aback by what the NOAA calls the worst drought since the 1950s. Since early May, rainfall has been sparse across the upper Midwest and has stifled what is normally the region’s peak forage growth period. Throughout Michigan, there are more Craigslist ads for “wanted hay” versus “hay for sale”. Because we are on the downward side of the forage production year, there is little doubt that stored forage will be in shortage and that which is available will sell for very high prices. Because of this, cow-calf producers must be willing to take a hard look at their production situation and determine if feeding hay priced 2-3 times higher than normal is good for the ranch. Thus one option to consider is destocking a percentage of the cow herd versus feeding expensive feed for an extend period of time.

Because of the record high prices for beef, the common inclination even in drought is to hold on. Feed costs are always the ranches highest expenditure and can comprise 70 percent of the total cow cost. Doubling or tripling this expense will no doubt erase any profits that high prices once promised. Thus, ranchers should take a hard look at what cattle to market to bridge until soil moisture and forage production improve.

There are different approaches to identify cattle to destock and this can vary from seedstock to commercial cow-calf operations. In either operation, first identify the cows with noticeable production issues, such as age, feet, udders or obviously any open cows. However, with respect to a purebred cattle producer, identify the cattle within the herd that has the most value per unit forage consumed and retain these. This may be the younger generations, including heifers that are the product of more advanced matings. Retaining the young nucleus of the cowherd is imperative for future genetic improvement. Therefore marketing older cows including those that are still productive may be the best options of gaining income from cows that still have value but also aptly retaining the future genetic base of the herd.

On the other hand, a commercial cow-calf producer must consider destocking from a different angle. Inherently the producer may wish to identify the replacements and young cows that are the future of the cowherd. However, these cattle also have the highest herd energy requirements. Obviously in the face of drought and energy shortages, these cattle are most suspect to not breed back. Heifers and young cows can also command a higher premium from an income perspective. The safer and more economical approach is to identify cows whose growth requirements have subsided and will breed back with greater ease, which are generally the center group of the cowherd, ages 4-8.

The cattle business is predicated on slim margins. Even though cattle prices are high, the cost of feed will quickly erase any hope of profitability. Be proactive in culling before it is too late.

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