Cull Cow Management and Marketing Alternatives Kellie Curry

Cull Cow Management and Marketing Alternatives Kellie Curry Raper Livestock Marketing Economist Agricultural Economics kellie. raper@okstate. edu June 27, 2017

A Revenue Source for Cow-Calf Operations ■Cull cows are an asset with salvage value q 15 -30% of a cow-calf herd’s annual revenue ■How do you maximize salvage value? ■What factors should influence a producer’s cull cow management and marketing strategy?

Opportunity lies in the Seasonality… Index 1. 30 SEASONAL PRICE INDEX – UTILITY COWS Southern Plains, 2005 -2014 1. 20 1. 10 1. 00 0. 90 0. 80 0. 70 0. 60 Jan Feb Mar Apr Max. Index Data Source: USDA-AMS, Compiled & Analysis by LMIC Livestock Marketing Information Center May Jun Avg. Index Jul Aug Sep Min. Index Oct Nov Dec

A Multi-Dimensional Decision Sell or retain for later sale? Cull from herd? • Identify open cows • Negative impact on profit • • • Market conditions Cow health Body Condition Score Facilities/Labor Feed source & cost Attempt breeding to later sell as bred? • • Cow age Bull availability

The Culling Decision “An open cow to a producer is like an empty well to a thirsty man" ■ Pregnancy status: Open q Consumes resources with no contribution to revenue q Openness may signal persistent infection § May spread VD in a natural service herd ■ Age ■ Disposition ■ Calving ease/difficulty ■ Structural soundness q Teeth? Udder? Lameness? ■ Other Health issues q Cancer eye, prolapse, Johne’s, PI

The Marketing Decision ■Sell now? Retain and sell later? q. Consider facilities, cow health, age, feed/input costs, expected marketing conditions ■Sell Now q. Lameness, teeth q. Higher body condition scores ■Retain and sell later q. Healthy sound cows q. Lower body condition scores

The Management Decision Strategy 1 Feed to increase quality grade & value per pound Strategy 2 Feed for moderate weight gain to increase pounds sold Strategy 3 Feed for minimum maintenance and hit seasonal spring price upswing Strategy 4 Retain with bull for possibility of selling as bred cows

Strategy 1: Feed to increase quality grade & value per pound ■Most intensive – and expensive – management scenario ■Most previous research focus is on revenue or final value rather than profitability ■Feuz offers a good discussion of possible rations with cost and profit scenarios q. Prices/costs are dated, but concepts are well illustrated qhttp: //digitalcommons. usu. edu/cgi/viewcontent. cgi? article=1073&context=extension_curall

Strategy 2 versus Strategy 3 ■Moderate gain versus minimum maintenance ■Collaborative study with Noble Foundation q 3 years of NF cull cows q 2 systems § Low Input Drylot System • Start feeding rye hay with 10% crude protein in mid-October • Start feeding 25% crude protein cubes at ~ 5 lbs/day/head in December § Stockpiled native pasture • Hay and cubes only during icy periods

3 ADG for Cull Cows on Drylot Thin(BCS<4. 5) 2. 5 Medium(4. 5<=BCS<=6) ADG 2 Heavy(BCS>6) 1. 5 1 0. 5 0 ADG -0. 5 3 2. 5 2 1. 5 1 0. 5 0 -0. 5 35(Oct-Nov) 63(Nov-Dec) 91(Dec-Jan) Days 126(Jan-Feb) ADG for Cull Cows on Pasture 155(Feb-Mar) Thin(BCS<4. 5) Medium(4. 5<=BCS<=6) Heavy(BCS>6) 35(Oct-Nov) 63(Nov-Dec) 91(Dec-Jan) Days 126(Jan-Feb) 155(Feb-Mar)

Feed Cost for Pasture versus Drylot Management Systems Average Feed Cost Per Head Feed Cost Comparison By Management System 300 250 Pasture Drylot 200 150 100 50 0 35 63 91 126 Days Beyond Culling 155

Native Grass System: Change in Net Revenue from Culling to Marketing Period

Drylot System: Change in Net Revenue from Culling to Marketing Period

Feeding System and Body Condition Matter ■ Native Pasture System q Stockpiled native grass pasture (350 acres) q Hay and cubes only during icy periods ■ Drylot System q Rye hay with 10% crude protein in mid-October q 25% crude protein cubes at ~ 5 lbs/day/head in December

Strategy 4: Bred vs. Slaughter, Native Grass System Net Returns Comparison between Cows Marketed as Bred Versus Slaughter in Native Grass Pasture System 180 Net Returns($/head) 140 100 Bred 60 Slaughter 20 -60 35(Nov) 63(Dec) 91(Jan) Days Beyond Culling 126(Feb) 155(Mar)

Strategy 4: Bred vs. Slaughter, Drylot System Net Returns Comparison between Cows Marketed as Bred Versus Slaughter in Drylot System 180 Net Returns($/head) 140 100 Bred 60 Slaughter 20 -60 35(Nov) 63(Dec) 91(Jan) Days Beyond Culling 126(Feb) 155(Mar)

Preferred System and Feeding Length ■ Year to year decision – not automatic q. Re-evaluate your resources and market conditions ■ Get rid of your big ones… q. Heavy, higher BCS cows not profitable for retention ■ Find an inexpensive way to feed the rest q. Little difference in returns between thin & medium q. Native Grass more profitable than low-cost drylot q 90 -150 days on native grass = highest returns ■ Potential to breed back at least some of them q. Market as bred -Potential replacements for fall calving herds or year-round herds q. Bull has to eat regardless of where you keep him…

Resources: Cull Cows q Kellie Curry Raper and Jon T. Biermacher. “Cull Cow Management and Marketing Alternatives. ” Oklahoma Cooperative Extension Service Fact Sheet AGEC-629, December 2016. http: //pods. dasnr. okstate. edu/docushare/dsweb/Get/Document-10583/AGEC 629 web. pdf q Kellie Curry Raper, Jon T. Biermacher, and Zakou Amadou. “Marketing Cull Beef Cows: Does Body Condition Score Matter? ” Oklahoma Cooperative Extension Service Fact Sheet AGEC 627, March 2014. http: //pods. dasnr. okstate. edu/docushare/dsweb/Get/Document-9258/AGEC 627 web. pdf q Derrell S. Peel and Damona Doye. “Cull Cow Grazing and Marketing Opportunities. ” Oklahoma Cooperative Extension Service Fact Sheet AGEC 613, May 2008. http: //pods. dasnr. okstate. edu/docushare/dsweb/Get/Document-8252/AGEC 613 web. pdf

Thank you! ■Webinar survey: https: //okstatecasnr. az 1. qualtrics. com/jfe/form/ SV_8 Jogh. Q 5 G 3 b. XKD 1 r.