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Extension office can help farmers create a cost efficient ration for cattle

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All cattle farmers are aware of how far cattle prices have fallen from peak levels in 2014-15. Weaned calves in those years traded in the mid to upper two dollar range with some calves even trading above $3 per pound. Much of the reason for the extreme prices was a rapid reduction in the size of the national beef cow herd due to severe drought in major production areas in the plains and southwest. In contrast, last week 500 to 550 pound calves averaged about $1.13 per pound at stockyards across Kentucky. A calf that may have sold for up to $1,200 not too long ago will bring less than half of that now.
There is no certainty of which way prices will go from here. There are many factors that will continue to put pressure on cattle prices. The number of cows in the United States is up by three million since prices peaked, the strong dollar makes export expensive and imports cheap and competition from pork and poultry is intense. Pork prices on futures markets for December and February for example have fallen to less than $0.50 per pound. Futures markets for fed cattle and feeder cattle rallied last week but there is no solid basis for expecting a major increase in prices.
The only positive market indicator recently is that the number of heifers in feedlots has increased significantly. This is an indication that cattlemen and women have stopped their major breeding herd expansion plans. Unfortunately, however, the nationwide cow herd is very young and it will be several years until normal culling will cause a reduction in numbers that will put upward pressure on prices.
Economic theory states that in the long term commodity prices will equal the cost of production as efficient producers will increase production as long as they can sell at a price above their cost of production. Statistics in numerous university studies confirm this as they show that over the last 30 years or so cattle production has basically been a zero profit scenario for the “average” producer. In reality, the high prices of the last few years were an anomaly and while the prices may have swung too far the opposite direction, we are in a much more normal situation now. Efficient farmers will make money and inefficient ones will lose money.
In the face of this price onslaught what should farmers do? As we have discussed in the past in this column the most important factor in determining whether a cow-calf farmer falls in the efficient or low cost category that determines profitability is the number of calves sold per cow. This means the herd must have a high pregnancy rate, calving percentage, weaning percentage and calves must be kept alive from the time they are weaned until they are sold. These parameters are more important than things we often focus on like how much the calves weigh. As an example, the average calving rate in Kentucky is somewhere in the 70 to 80 percent range. If we assume an average size herd of 25 cows, with an 80 percent calving rate the herd would have twenty calves born. If we assume a five percent death loss we will lose one calf and have 19 to sell. Assuming half are heifers the price received today would be about $1.10 for a 525 pound average weight. Nineteen calves at 525 pounds would yield 9,975 pounds, which would sell for $10,972.
If we can feed the calves well and increase their weight by 50 pounds we will have more pounds to sell, but will get slightly less per pound. Last week the difference between 525 and 575 pound calves was about three cents. So if we sell 19 calves at 575 pounds we would have 10,925 pounds to sell. At $1.07 per pound we would get $11,690 or $718 more than we got for the smaller calves.
The biggest factor that keeps calving rates low in Kentucky is inadequate cow nutrition, particularly for late winter and early spring calving herds. Most of our hay is not high enough quality to keep cows in peak reproductive condition. Low feed quality may not always be apparent in how the cows look, but it certainly has an effect on their ability to get pregnant and have a strong healthy calf that can survive the rigors of being born in cold wet winter or early spring conditions. Rather than feeding calves to get extra weight, what if we fed cows in the winter? With proper nutrition it is definitely possible to have a 95 percent calving percentage. On our 25 cow herd this would give us 23.75 calves so let’s round down to 23 calves born. This would actually be only a 92 percent calving rate. Assuming we still lose one calf we will have 22 to sell. Twenty-two calves at 525 pounds gives us 11,550 pounds to sell. At $1.10 per pound we would get $12,705 or $1733 more than the baseline and $1,015 more than the example where we fed extra to the calves. Ideally, we would supplement calves and cows but if money is short and we can only do one or the other it is much more effective to feed the cows.
I know it is easy to just put hay out in hay rings for cows once or twice a week during the winter, but we may be cheating ourselves by not paying attention to nutrition. Corn, soybeans and byproducts like soyhulls or distillers grains are cheap now so balancing a ration to increase herd productivity does not cost a lot. If you are interested in supplementing your cows feed this winter call the Marion County Extension Office and we can help you create a cost efficient ration.
The Marion County Extension Council will meet at 6 p.m., Thursday, Nov. 3 at the extension office. The purpose of the meeting is to review and receive guidance from Marion County residents about the programs we offer and to make nominations for positions on the Marion County Extension District Board. Everyone is welcome to attend. Please call the office at 270-692-2421 if you plan to attend.
The Marion County Beekeepers will meet at 6:30 p.m., Wednesday, Nov. 9, at the extension office.
Because of Election Day the Central Kentucky Goat and Sheep Association Meeting scheduled for Nov. 8 has been rescheduled for 7 p.m., Tuesday, Nov. 15 at the extension office. This will be the annual holiday party. Anyone interested in sheep or goats is invited to attend. Please call the office at 270-691-2421 if you plan to attend.
We are rapidly approaching the November 18 deadline for CAIP Cost Share program participants to complete their projects and submit their receipts and paperwork to the Office. If you have not completed the education requirement or need the Beef Quality Assurance Certification, please call the office as soon as possible. The Kentucky Ag Development Fund Rules prohibit us from reimbursing program participants who have not completed these requirements by the due date!
The Marion County Farm Service Agency Office has advised us that USDA has moved the deadline for farmers to report hay and pasture acres to Nov. 15. The same deadline will apply to farmers in Washington County. This is a simple process that is required for farmers to participate in USDA programs. Please call the Marion County FSA Office at 270-692-3351 or the Washington County FSA Office at 859-336-7774 if you have questions.

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