Anyone who has marketed cattle within the last few months is keenly aware that current calf prices are extraordinarily high.
We are now marketing all classes of cattle, including those coming out of the feedyard, at or near record levels. As an example, this week (4-3-23) across Oklahoma, a 600 lb. steer was worth $232.86/cwt. – or almost $1,400.00/hd. – which is only overshadowed by the all-time high prices of 2014-2015. All this is great for coffee shop conversation and bragging rights with your neighbors but doesn’t necessarily equate to profit.
Mostly due to last summer’s drought, Oklahoma ranchers are coming out of a winter-feeding season which will be recorded as one of the highest on record! In most years, there are opportunities to cheapen winter feed costs with flexibility and creativity, but not this past year. All categories of feed (cubes, commodity, liquid, hay, etc.) were higher than normal. Not only that, most of us had to start feeding earlier than usual, which exacerbated the problem. Also, the quality of roughage was lower and cattle condition in the fall was weaker.
Plus, other important input costs such as fuel and capital were more expensive than normal.
What this equates to is, even though cattle prices are extremely high right now, we’re going to need them, just to offset higher input costs. However, this places actual 2023 profit margins in serious danger. At some point in 2022, many cattle producers had to cull or even liquidate, which is partly the reason for higher market prices. It remains to be seen which decision – to keep or to cull – was the correct one. If you culled, congratulations: you don’t have the higher cow costs. But, you’re now sitting on the sidelines during a really good market. If you kept them, congratulations: you now have two to three years of good markets, but you’ll very likely also incur higher costs. One thing is certain: you can’t be in the cattle business if you don’t have cattle.
The Choctaw Nation was very fortunate and blessed to have maintained its cow herd, and – in terms of cow-condition, calving percentage and forage availability – we’re coming out of feeding season in pretty good shape. However, like most everyone else, our cow costs to-date are significantly higher than normal. Many climatologists have predicted or claim weather patterns will shift more favorably for the southern plains. Let’s hope so! But since we cannot dictate weather patterns, we must focus on what we can control.
Here are a few short-term activities for your consideration:
- If you’ve considered skimping on a high-quality deworming program for all classes of cattle, this is not the year to do it. Most cows have been out on short grass since last summer and will most likely be more susceptible to parasites. Deworming calves will increase performance and leverage market conditions. Familiarize yourself with the different anthelmintic classifications, and use them accordingly.
- Unless you are prohibited to do so by your marketing program/approach, consider implanting calves. Anabolic agents are cost effective and will increase calf performance, thus taking greater advantage of better markets. Be careful to use the right product based upon your calves age, sex, plane of nutrition and length of ownership. Replacement heifers should be implanted between 1-3 months of age, depending upon the label guidelines.
- Only put out bulls that have been breeding-soundness tested. As previously discussed, costs are high, and you’ll need every wintered cow to breed back. Ensure your bulls are properly conditioned and are reproductively functional. This will prove beneficial to conception rates, especially if cow condition is limited.
- Depending upon actual spring/summer forage conditions, be mindful of “sook” (or whatever you may call it) feed costs. I am a proponent of checking cattle throughout the year, and sometimes you need to utilize feedstuffs to do it. However, with current feed costs, even little amounts – if done often – will add up.
- Prior to implementing a feeding program for stockers or calves, calculate the supplemental cost of gain and consider any ancillary benefits. For instance, creep-feeding all calves this year may be cost prohibitive, but creep-feeding first-calf heifer calves may not.