The Cow-Calf Manager
Livestock Update, November 2003
John B. Hall, Extension Animal Scientist, Beef, VA Tech
Investing in the Future
What an amazing late summer and fall for selling feeder cattle! High prices and good grass resulted in profits for beef producers this year. Some of the profits will offset the high feed prices of the last several years. However, many operations will have some profits left for other purchases or investments.
Certainly there will be many possible uses for this money, but producers should consider investments that will enhance future profitability. For beef operations, investments in farming equipment may not contribute to profitability. On the other hand, investments in key areas of the cattle operation will lower costs or increase quality of cattle produced.
Key Areas for Investment
Cattle Genetics - Investments in quality cattle genetics will pay off in heavier calves and calves that may garner a premium. Producers should carefully assess the type and quality of calves they are producing. Managers need to ask questions like: Do the calves fit the market? Do I need more muscling or less frame? Do my bulls have EPD's that meet the standards for the VQA certified feeder calf program?
The other consideration is maintaining a crossbred cowherd. Either develop a planned crossbreeding system or purchase crossbred replacement females. Replacement animals should be purchased from reputable breeders of heifers, and information should be known about service sires. Service sires should be calving ease bulls. Most commercial heifers should be bred to Angus sires with Birth Weight EPD of 2.1 or less.
Information on sires of replacement females is also important to maintaining consistency of the cowherd. Heifers developed through the VA Premium Assured Heifer (VAPAH) program and meeting quality standards to be sold as VAPAH will be bred to calving ease bulls and information on sires and service sires is provided.
Producers should go to sales with a realistic purchase price in mind. There will a tendency for replacement breeding bulls and heifers to sell high this year. Producers should know what price for replacements will be able to cash flow in their operation. In my seven years in Virginia, my observation has been that producers could pay more for the good bulls, but replacement heifer prices have been about where they should be. Over the past 5 years, VAPAH bred females have averaged about $ 950 with a range of $ 750 to $ 1200.
Working Facilities - Improvements to working facilities will enable producers to more easily perform routine health management procedures such as vaccination, castration, deworming and implanting. All these procedures should result in healthier calves that gain weight more rapidly. In addition, being able to vaccinate calves according to the VQA health program is the first step to being able to market calves in this value-added program. Premiums for calves sold VQA (1996-2002) have been $15 to $30 per head over the special graded feeder calf sales.
Investments in facilities should focus on repairs and upgrades that will make cattle handling faster, safer and easier. A good quality headgate is a good place to start if you don't have one. Squeeze chutes are nice if you work a lot of cattle or do freeze branding, but a squeeze chute may be more than the 30 cow herd needs. There are many good commercially available headgates, squeeze chute and sweep tubs. Holding and gathering pens should also be upgraded if needed. Sturdy pens made from locally available materials will be the most economical.
Before making upgrades to your facilities take a critical look at them. Get some advice on the changes you need to make from your County Extension Agent or an experienced producer. Some good ideas and plans are available through The Midwest Plan Service, North Dakota State University or Dr. Temple Grandin's web site.
Feed storage - A long-term investment that brings immediate payback is feed storage systems. Most beef operations in Virginia could benefit from building a hay shed or buying heavy duty hay tarps. Research clearly indicates that 20 to 30% of all round bales stored outside are damaged or refused by cattle. Materials for a good hay shed will cost only a few thousand dollars where as hay tarps will cost a few hundred.
Larger operations may want to consider building a commodity shed. These sheds are designed to hold tractor trailer load volumes of alternative feeds such as corn gluten, brewers grains, soy hulls etc. Plans are available through you county extension office.
Fencing and water - Upgrading water systems and fence so more land can be grazed is a good investment. Grazing cows costs only 1/3 to 2/3 as much as feeding hay. Properly managed grazing can increase calf weight gains and cow reproductive performance.
Fencing and water systems need not be expensive. Three to four strands of high tensile electric fence will be sufficient for most cattle operations. Field staff from NRCS can advise you on water system options. Some cost share monies may be available for water systems.
Making investments in the cattle operation is always a trade off. Most of us want or could use a new pickup or tractor, but investing wisely in areas of the beef operation that can improve profitability may be the better option.