Unfortunately, all beef producers have open (nonpregnant) cows at the end of the breeding season. The reasons why cows are open can be numerous: disease, age, nutrition, calving difficulties, etc.
Regardless of why they are open, developing a management plan for these open cows is important. For the average beef operation, the marketing of cull animals provides 10-20 percent of the gross income, so making the best judgment on if or when to send her to market can impact the farms bottom-line.
But before we discuss marketing options, it would be important to revisit a previous article I wrote for this publication: “It Pays to Know!”
Remember, you can only make marketing decisions on what to do with open cows if you know who is open and determining this by waiting to see who calves next spring is not the best way to approach this decision. Spending a few dollars to diagnose pregnancy via rectal palpation, ultrasonography, or by blood tests allows you to identify who failed to conceive and thus allows the flexibility for you to choose how to market these animals.
Cyclical market trends and projections, feed prices, cull cow prices, and replacement costs and needs are some of the factors that impact the decision on if and when to sell a cow determined not to be pregnant.
Maintaining an open cow over the winter is an expensive proposition. Depending upon feedstuffs used and costs of hay production, the price of maintaining a cow over the winter can exceed $250. Hence, for most situations, I am a proponent of culling open cows rather than “recycling” them into next years’ breeding season.
However, in certain instances when cull cow prices are low and replacement female costs are high, if feed is not limited and feed prices are manageable, retaining open cows can be an option.
Fortunately for beef cow/calf producers, cull cow markets have been at record highs since 2011 and they are projected to remain strong, if not better than last year, through 2012. Of course, replacement female costs are also expected to be high, further adding to the management decision.
Recently, Bohling et al. (2012) conducted an economic analysis to determine the feasibility of keeping a nonpregnant cow compared to retaining additional replacement heifers, purchasing replacement beef heifers, or purchasing replacement beef cows. This report can be found here: http://beef.unl.edu/c/document_library/get_file?uuid=f352e631-0fd4-4db9-9059-1c8f58b7e23a&groupId=4178167&.pdf.
With their model, when the percent of open cows was in typical range for most farms (~10 percent), the most economical strategy was to retain more heifers, followed by purchasing replacement beef cows instead of keeping open cows.
Interestingly, their budgeting model suggested that keeping nonpregnant cows yielded greater economic returns than purchasing replacement heifers. Only when cull cow prices were low (< $36/cwt) and percentage of open cows was very high (>30 percent) on the farm did retaining open cows yield greater returns than purchasing replacement cows and retaining additional replacement heifers was always the best option in all scenarios.
So if the decision has been made to cull the open cows, when is the best time to sell them?
In most years, cull cow prices are also cyclical during the year, peaking in spring and dipping in the fall and winter. This makes sense as most open cows hit the market in the fall after weaning, driving prices down. So if you decide to sell the open cow discovered in the fall following pregnancy diagnosis, the question becomes; do you sell her immediately or hold her until the market improves?
Again, this is not an easy question to answer. However, the following equation can assist with this decision. This equation is used to determine breakeven cost needed in the spring to cover the extra costs of maintaining the cow over the winter: ((Lost Revenue + Total Additional Costs) ÷ Final Weight) * 100 = $/cwt. For example, if you can sell an open cow in November for $900 (Lost Revenue; 1250 lb * $72/cwt) and it costs you $200 (Total Additional Costs) to feed her from November to March and she gains 200 lb (1450 lb Final Weight) the minimum price per hundred weight (cwt) you must receive in March to breakeven would be $76/cwt.
With this information in hand, if you can predict where cull prices will be in the spring, you can attempt to determine which approach will yield the best returns.
Every year there are going to be cows that fail to get pregnant and deciding what to do with them is an important financial aspect of the beef cow/calf operation. While it is sometimes tempting to hold these cows over to the next spring, this can be a costly decision.
It is important to weigh your options, assess your cow number needs, investigate the market and future trends, and make an informed decision on the best strategy for dealing with these open cows.
Visit the University of Minnesota Beef Team website at www.extension.umn.edu/beef for more information on this and other beef-related topics.