Hot cattle market brings tough decisions

Hot cattle market brings tough decisions

Should you sell calves at weaning? What is the most economical alternative for replacement females?

Recently, the cattle markets have been as hot as the mid-July temperatures. While the high prices generate lots of questions, the main ones being asked now are: 1) should I sell my calves at weaning, and 2) what is the most economical alternative for replacement females?

Fortunately, two decision-aids from the Agricultural & Applied Economics Department at UGA have been updated that can help cattlemen with these decisions.

The first question dealing with marketing calves can be addressed using the UGA Marketing Alternatives Calculator. Using this simple Excel spreadsheet, cattle producers can evaluate up to four marketing alternatives. This allows users to enter different sales times, weights, prices, and the associated costs to arrive at the decision that is best for their operation.

An example comparing selling 550 pound calves in August is shown below. In this example using current market price forecasts and anticipated feeding costs, it looks as though retaining ownership through the feedlot is the most profitable alternative followed by stockering until next spring and backgrounding this fall. Of course, cattlemen will want to use their own numbers to customize their analysis.

The second question receiving much consideration is how much to pay for replacement females. Numerous factors go into this decision including anticipated cow longevity, calf weaning weights, differences in cow cost and expected calf prices. The UGA Replacement Female Calculator can be used to answer this question.

Users can compare the economics of raising their own replacement heifers, buying bred heifers, buying bred cows, or buying bred cows with calves at side (3-in-1). By entering their own numbers, cattlemen can compare the economics of these different alternatives to determine how much they can pay for female, here total lifetime profits, and her anticipated rate-of-return.

Find both aids at the Decision-aids and Budgets section of the Southeast Cattle Advisor website.

TAGS: Outlook
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