It doesn’t matter if you have big or small cows or sell calves, fed cattle or steaks; you get paid by the pound!
Do I make more money selling an 80 pound baby calf for $7.50 per pound or a 1500 pound fed steer for $2.50 per pound carcass weight?
Let’s say it costs you $800 to carry a cow for a year – including feed, vet., interest, labor, fixed costs etc. If it costs $800 to carry a cow and I sell her baby calf for $600 per head, I just lost $200. If I sell her calf at weaning weighing 600 pounds for $1500 with $150 more dollars cost in the calf, I make $550 per head. If I sell her calf as an 800 pound yearling costing me $200 more but selling for $1900 I make an additional $200 per head. And if I retain ownership through the feedlot and sell my calf as a 1500 pound steer on the grid at $2.50 per pound carcass weight my gross is $2437 for an additional profit of $47 per head. The point is, size matters because pounds pay!
There are two ways to add profits to your calves:
1) Sell More Pounds which come two ways—selling more calves and selling more weight per calf.
- A 96% conception rate vs. 94% gives you two more calves at birth and 98% live calves at birth vs. 95% gives you another 3 calves and weaning 99% instead of 97% will add another 2 calves for a total of 7 more calves to sell out of every 100 cows. Conception rates, calving ease, good health and management all pay because you have more calves and pounds to sell.
- More pounds also come from more weight per calf. That means genetics and/or feed.
- Genetics is where the quality of your herd bulls matter. Buying a bull that sires calves with the genetics to add 20 pounds to their weaning weight and utilizing crossbred vigor to add another 30 pounds with minimal cost could return an additional $100 per calf in today’s market. If your bull sires 30 calves for four years that weigh 50 pounds more, that bull just made you an additional $12,000 dollars. Herd bulls should be considered an investment not an expense.
- Feed adds pounds. Feed costs money. So, you need to produce those pounds for less than you sell them for just like you do if you keep the baby calf and sell him at weaning.
2) REDUCE COST PER POUND
Reducing costs isn’t as glamorous as bigger weaning weights but costs affect your profits directly. Ben Franklin knew what he was saying when he said, “A penny saved is a penny earned”. If I can reduce my feed or vet or labor or fixed costs by 5-10% that amount goes directly to profits. For example: If I spend $100 for a ton of hay and it costs me $10 to feed it and I have 10% feed loss my total cost for that feed is $120. I can save $50 if I let the cow graze a ton of stockpiled grass costing me $70 per acre or I can save $70 if she grazes an acre of cornstalks that cost me $20 rent and $30 supplement. Save a dollar—make a dollar, as long as you don’t decrease production.
SIZE MATTERS because POUNDS PAY. Managing to have more pounds to sell from more live calves and heavier sale weights makes money. Controlling costs to produce those added pounds makes money. Why not do both?
