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Now Isn’t the Time for Business as Usual

By John F. Grimes
 
The fall harvest season has been evident across Ohio over the past several weeks. This certainly applies to both grain farmers and beef cow-calf producers. Grain crops are being harvested and sold or placed in storage for future sales. Cattle producers have even more options as most of the spring 2018 calf crop has been weaned and decisions are being made as to whether calves should be sold as feeders, placed in backgrounding enterprises, sent to a feedlot, or heifers retained as future herd replacement females.
 
Many important beef management decisions are made late in the calendar year. Any owner or manager of an operation should have a basic awareness of the overall economic situation and long-term outlook for their segment of the beef industry. So where does the beef industry stand today?
 
The current cattle cycle that began earlier this decade is showing signs of coming to a conclusion. The beef industry has experienced an eventful decade that has seen a rapid decline in cowherd numbers followed by rapid expansion driven by record high prices in 2014 and 2015. Market prices have moderated more recently in response to increases in the supplies of all classes of beef animals. However, market prices have stabilized to the point of giving producers a reasonable chance of profitability. The U.S. consumer who is expected to purchase more than 218 pounds of beef, pork and poultry in 2018, has made this possible. Foreign trade is also a key factor in current prices as the livestock and poultry industry sends more than 40 pounds per person to the global marketplace.
 
Cow-calf producers should realize that feeder calf marketing is undergoing significant changes across the country. The market is currently sending a clear message that buyers are demanding more for their purchasing dollars. Significant discounts are occurring in the market place for feeder calves that are not weaned 45-60 days, castrated & healed, dehorned, and given two rounds of a modified live vaccine for the shipping fever complex. Exports to China and other countries are going to require age and source verification. These are growing realities for cow-calf producers if they want access to as many markets as possible.
 
Many producers will question the merits of implementing value added practices, as they simply believe that they do not receive sufficient financial rewards to justify these extra practices. The reality is that you probably will not be properly compensated if you are selling a small number of calves at any type of traditional sale. Consider working with other producers to put together larger groups of calves of similar breed composition, weight, and sex.
 
Traditionally, replacement heifers are selected from the current calf crop to be developed, bred, and added to the herd. By anyone’s standards, raising replacement heifers is a long-term proposition. To properly develop replacement heifers, there must be a strong commitment to providing sound management and adequate facilities to get the job done correctly. The average cowherd in Ohio numbers less than 20 cows. Given a normal replacement rate of 15-20%, this would result in keeping back 3-4 heifers annually as replacements. This often results in poorly developed heifers unless they are managed as separate production group.
 
Regardless if you raise your own replacements or purchase them, establish your selection criteria based on the particular needs of your herd. Traits of importance will include fertility, calving ease, growth rate, structural correctness, milk production, disposition, fleshing ability, muscling, and frame size. I would contend that fertility and calving ease should be at the top of every producer’s selection criteria list. A cow must become bred and calve every twelve months in order to cover her expenses and hopefully make a profit. A calf cannot be sold at market unless a live, healthy calf is delivered at birth.
 
If selecting replacements from your own herd, a few basic criteria should be followed. Select heifers that were born in the first 30 – 45 days of the calving season. Retain daughters of your most productive cows. Avoid extremes in terms of birth weights and frame size. Use individual performance data, EPDs and selection indexes, and DNA tests to identify superior individuals. Disposition must also be a consideration. Also, retain more heifer calves than your replacement goal to allow for less than perfect conception rates as yearling heifers.
 
There are several advantages to raising your own replacement females. The producer has more control of genetics prioritized in the herd and their ability to adapt to given environment. The breeder has a better perspective of a replacement heifer’s background for more accurate evaluation. Home-raised heifers can provide increased biosecurity for disease control. It also may cost less to raise than purchase replacements.
 
There are also advantages to purchasing replacement heifers. Purchasing replacements can give more flexibility to use farm resources for other purposes. It facilitates more rapid herd expansion and change in the breeding program. The producer can source replacements with improved genetics and it may cost less to purchase than raise replacements.
 
Today’s cattlemen will surely face many challenges in the next cattle cycle to remain economically viable in the beef industry. Conducting “business as usual” may not be the best path to success.