UT Beef and Forage Center

Agriculture Economics- Article

Andrew Griffith

Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics

(865) 974-7480

agriff14@utk.edu

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Cow-calf producers are constantly bombarded with decisions and challenges as it relates to herd health, nutrition, retaining versus purchasing heifers, sire selection, timing of cattle marketing and the list could continue. Decision making should come as no surprise because all business owners have to make short and long-term decisions to promote the success and longevity of the business. Many times, the decisions made today (this often comes in the form of not making a decision) can limit the alternatives in the future and lead to negative outcomes.

Starting with the current time period, many cow-calf operations are in the middle of calving season and the focus is live calves that get on their feet and start growing. The next focus is cow body condition prior to the breeding season which then leads to a focus on rebreeding so the operation will have a calving season next year. The next big decision is weaning and what to do with calves at weaning which may include marketing the calves immediately, backgrounding and then marketing feeder cattle, or sending the cattle to the feedlot and marketing them to a packer. All of these decisions can have a long term influence on the operation.
Breeding is the first major decision in a cow-calf operation. Given a group of cows, most of the focus is on sire selection, and sire selection is evaluated using expected progeny differences (EPDs), and/or physical examination of the potential herd sire. EPDs provide information on how the progeny of the sire will perform throughout their productive life. A producer has to know the intended market to know which EPDs will return the greatest value for the effort. For instance, a producer marketing all calves at weaning is likely to place more emphasis on the weaning weight EPD than a producer retaining ownership through the feedlot.
Similarly, the decision to breed a cow on a certain day influences the value of that animal when it is ready to be marketed. Thus, producers have to choose a breeding season based on the desired calving season. The calving season will influence when the calves are weaned, backgrounded, and enter the feedlot which will influence the price of the animal at the time of marketing. At the same time, the breeding and subsequent calving season influences feed costs which will influence profitability.

Once the breeding season and sire are selected and the calves are on the ground, there are several production decisions such as a health program or supplemental calf feeding program that will influence production cost and calf value. The health program may include vaccinations, deworming, and growth implants which may or may not pair well with creep feeding calves. The value of creep feeding calves is largely dependent on the quality and quantity of available forage and market signals.

Every calf is weaned! Weaning takes many forms but in most instances it involves the cattle producer weaning and backgrounding the calves or the cattle producer weaning and immediately marketing the calves which will influence production cost and value of the animal. In most instances, producers backgrounding calves provide a complete health program while attempting to add weight and capture additional value from the calves. In some instances, producers who background calves retain ownership and finish animals at home or in a custom feedlot. The decision of what stage of production to market the calf crop will influence total costs, total revenue, and can greatly influence cash flow. The inability to cash flow is one reason many producers market calves at weaning, because they do not have the financial ability to continue owning the animals.

This discussion could have included more specific examples of decisions on a cow-calf operation, but the intent was not to discuss every potential decision making point. The purpose of this discussion was to remind producers that decisions made today can and will influence their cattle operation down the road. It is similar to salvation. Choosing to follow the Lord today impacts today, tomorrow, and eternity. Ephesians 2:8-10 “For it is by grace you have been saved, through faith – and this is not from yourselves, it is the gift of God – not by works, so that one can boast. For we are God’s handiwork, created in Christ Jesus to do good works, which God prepared in advance for us to do.” In simple terms, this says a person is offered the gift of salvation, and created to do good works. Thus, if a person accepts salvation then God has good works prepared for that person to do.