On the Blog

Insurance or fertilizer?

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.

If we look at the Cattle Fax average price/CWT for a 550 pound steer for 2013, we see it is $167.94.  That would be a value per head of $923.  For the first 11 months of 2014, that steer is averaging $245.08/CWT, for a value of $1,348.  While that is the average for the year, prices over the last 5 months have averaged closer to $268, putting us close to $1,500 per calf.  Many calves are weaned at well over 600 pounds and individual calf prices approaching $1,700 are common.  So, it is not surprising that cow herds around the country are increasing in an attempt to take advantage of the soaring returns on calves over the next few years.

We saw similar changes take place with corn acreage a few years ago, when corn exceeded $7 per bushel.  Many acres of CRP and pasture land were planted to corn, just to get a few more bushels to market, at that historic price.  Now, as farmers were paying $280 a bag for seed corn, $3.50 a gallon for diesel, and investing the price of a very nice home in a tractor or combine, how many of them, do you suppose, just put the seed in the ground, and turned their back on those fields until they started up the combine in the Fall?  I would say few, if any.  Pesticides and fertilizers were also part of their program for the crop year.  Those that could, certainly applied irrigation water with a premeditated plan.  Few, if any, would ever dream of investing those dollars with those potential returns, and not take steps to increase the chances of a better crop, most often with judicious application of fertilizer.

Growing corn and growing beef have many similarities.  What steps have you taken since your seeds were planted last summer for your spring calving herd?  Did you implement a plan to control pests?  Did you purchase hay or move cattle between pastures to ensure an adequate forage supply each week?  Did you precondition or fenceline wean calves, in order to send a more valuable product to your customers?  What steps did you take before those seeds were planted last spring and summer?  Did you conduct a breeding soundness exam on your bulls?  Has your herd been on a supplement program pre-calving through breeding?  Are you sure your cows had proper nutrition the first six months of gestation (not just the last three)?

We have many times heard that a good nutrition program is like insurance.  For example, feeding a product with MOS (mannan-oligosaccharide) prior to calving, would seem like “insurance”.  However, car insurance does not make you a better driver, nor does it prevent accidents, just as homeowner’s insurance does not prevent Christmas Tree fires.  Insurance helps fix the problem AFTER it has occurred.  A good nutrition program is more like fertilizer.  It does not wait for a problem to begin, it fills in nature’s nutrient gaps, and steers your herd on a more profitable course BEFORE any accidents or fires can start.  A good year round nutrition program like CRYSTALYX® will give your cows better colostrum.  It will help get your cows cycling sooner, so more calves are born in that first 21 day cycle.  And, from what we have learned about fetal programming, we can see that we do not want to nutritionally neglect our cows at any time during gestation.  So, what would a year round nutrition program cost?  Eight months of a CRYSTALYX® protein supplement will cost about $93/ cow.  Four months of a CRYSTALYX® mineral supplement would cost about another $21/cow.  That ends up being about 7.5% of what will likely be the sale price of calves over the next several years.  And remember, this is not insurance that costs you 7.5%, but “fertilizer”, that helps you send more pounds to market each year.

You buy insurance, and hope you never need it.  Do not make that same mental play when you buy CRYSTALYX®.  CRYSTALYX® will help replace nutrients that are lacking in nature, and give you a bigger, healthier crop.