This is certainly a year that all of us in the cow-calf business would like to soak up and see it never end: A great time to be in the business for sure. Whether you may be opting to pay down a little debt, maybe make one of those once in a life-time purchases, expand your herd a little, or add to the savings pot for an unforeseen occurrence down the road, it is nice to know there is a bit more discretionary income to deal with this year when compared to many in the past. But that was 2014 and it is basically all but in the history books at this point. Now onto 2015!
Raising replacement heifers has been studied a lot. As times and cattle have changed, so have some of the systems used to develop replacement heifers. A better focus on low cost development and selection for fertility and longevity makes economic sense. Traditional development programs recommend breeding heifers at 60-65% of their mature body weight as most heifers should have reached puberty by the time they reach this weight. More recently it’s been well documented that conception rates of 85% or greater can be achieved with heifers being bred at 50-60% of their mature weight. Perhaps heifers are reaching puberty earlier or at a lower percent of their mature weight today due to improved genetics, and larger mature cow size vs 20 years ago.
Having just returned from the Cattle Fax Outlook seminar last week, I would say the message for cow-calf producers was that 2014 and 2015 could be looked back upon as our most profitable years in the cow-calf business. That is not to say that 2016 forward will not be profitable, quite the contrary, but, as the cow herd (and calves marketed) begins to truly increase in 2016, there is certainly the opportunity for the old economic law of supply and demand to kick in. Of course, demand can always increase and change some of those projections. I believe we all know that developing countries have a greatly increasing desire for, and ability to purchase, animal protein. We usually think this market is most all pork and poultry, but there were certainly indications that beef will benefit from this increased need for protein. Suffice it to say, we have a number of very profitable years ahead in the cow-calf business.
It continues to be good times cattle business. A colleague heard from a neighbor in eastern Wyoming that they received $1.25/lb more for their calves this year compared to last year. If you assume a 600 lb calf, that’s an additional $750 per calf! With higher than average profits and prices for replacement heifers, it only makes sense to reinvest in your cows.