Management options: Cattle producers explore alternatives during cow/calf college
Clay Center, Neb. – With the cattle market expected to maintain lower prices, at least through 2017, producers are putting a sharp pencil to the way they manage their cattle.
Cattle management specialists from the University of Nebraska and the private sector were on hand to offer some management alternatives during the recent Farmers and Ranchers Cow/Calf College in Clay Center, Neb.
Kate Brooks, ag economist for the University of Nebraska, told producers they can expect lower calf prices to continue through 2017, as supplies for all proteins continues to grow. Although cattle herd expansion has slowed considerably since market prices have declined, pork and chicken supplies are still growing.
Despite some strength in steer prices toward the end of 2016, Beef Basis projects 550-pound steer calves to bring around $1.45 a pound this fall and 600-pound steers at $1.41. Coupled with rising pasture rent costs, which have went from $20 in 1991 to $60 in some areas of Nebraska in 2016, ranchers may have to make some tough decisions this year.
Brooks says the estimated average cow/calf costs in the U.S. have climbed from $367 a cow in 1991, to more than $851 a cow in 2016.
“There is a lot of range in cow costs, depending upon labor, feed and depreciation costs,” she notes. “The ranchers with lower costs will be better able to withstand these lower prices.”
With it becoming harder to stay in the black in cattle production, Extension specialists with the University of Nebraska are starting to explore ways for cattle producers to get around paying high rent for hard grass.
Nebraska Extension Educator Aaron Berger explains the importance of evaluating the ranching operation, especially during an economic downturn.
“Understand the financial position of the operation using a balance sheet. It helps us see where some changes could be made,” he tells producers.
“I would recommend producers know and build a business model and determine who their customer is. It will help them see what they can do to get an advantage over their competitor,” he says.
Berger recommends producers break down their operation into units, like land owned and land rented, cow/calf, hay, oil and hunting, as examples.
“We should ask ourselves where value is being created,” he says. “Can the cows pay fair market value for the grass we have? If we have hay, determine the costs of putting it up and the value of it. It will help us determine whether or not we should be putting up hay.”
Most ranches have three major costs, Berger continues, including feed, cow depreciation and overhead, which is labor and equipment.
“Typically, for most ranches, 50 to 65 percent of their costs are usually feed,” he says. “That’s why it is important to determine what fair market value is for pasture, if it was leased to someone else.”
In many areas of Nebraska, grass rental rates average $55 to $65 a month per pair. That is equivalent to $92 a ton, assuming 1,200 pounds of air-dried forage.
“I never thought I would be saying this, but is it possible to drylot a cow cheaper than grazing, based on $100 a ton for distillers and $80 a ton for alfalfa hay? That is why it is important to determine what our costs are,” he states.
With improvements in electric fencing materials, Berger says producers should not forfeit crop residue and annual forage grazing just because they have to put up electric fence.
“There are some really good products out there. I would recommend finding someone who is really good at putting up electric fence and see what they are doing,” he explains. “With the right materials, electric fence can be put up and moved fairly quickly.”
Kip Lukasiewicz with Sandhills Cattle Consultants discussed acclimating and moving cattle safely and easily. He encourages producers to focus on the animals that are natural leaders in the herd.
“The leaders are not the cattle walking away, but the ones facing us with their eyes locked onto us,” he says.
Ranchers should work with the cattle in front when moving them, rather than pushing them from behind.
“If the cows are skittish, don’t be afraid to get off the horse and walk slowly through them. We have to be willing to prove to them that we understand them. They already see us as a predator,” he says.
When tagging a calf, Lukasiewicz emphasized the importance of acknowledging the cow.
“Keep working with the calf, but let it and the mother make eye contact. It is also important to pinch and rub the ear before tagging the calf to desensitize it. It may keep the calf from bellowing and flopping around, distressing the mother,” he explains.
Gayle Smith is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to firstname.lastname@example.org.