April 2018 and 2019 blizzards caused stress to the region’s cowherds, and for some herds changed the calving distribution. 2020 brings a chance to re-establish a preferred calving distribution.
Calving distribution can have an economic effect on the income received for calves in the fall, as well as a long term effect for the herd.
Cattle producers have options to bunch the herd back into their preferred calving timeline this breeding season. Synchronizing the herd can be done with either bull breeding programs or artificial insemination (AI) systems. Another way would be to sell the cows that calved in the 4th and 5th 21-day interval and replace them with owned or purchased bred heifers, or with purchased bred cows, or help subsidize a synchronization program.
On a cash-flow basis, synchronization can be accomplished by several methods. Each of the methods have their pros and cons, as well as associated costs.
Options to Consider
Move all cows up to the 1st, 2nd, or 3rd interval.
By moving the cows back up into their regular calving interval or shortening the calving season, the producer can take advantage of heavier, more uniform sets of calves going to market. When making this decision, the synchronization costs need to be well-thought-out.
Labor is another significant component to evaluate. Synchronization protocols require a wide variety of labor, depending on the protocol chosen. If AI is going to be utilized, either with time-breeding or heat detection, labor to watch and sort cows needs to be considered. The actual AI’ing also needs to be included in the analysis. Additionally, if large numbers of cows are moved toward the front end of the calving season, labor requirements during calving may also need to be part of the analysis.
Also included in the evaluation should be the feed availability and feeding system situation. Cows in the last trimester of gestation have higher nutrient requirements than those in the 2nd trimester. If these cows are receiving the same diet, there may be feed advantages to front-loading the calving season, as the herd is better utilizing the feed costs. It is also important to consider available bunk space for late gestation and early lactation cows. As more cows are added to these groups, adequate feeding space is required to ensure all cows have access and maintain milk quantity and quality.
Sell the last 4th and 5th interval calvers.
It may be that the cowherd is currently too large for the resources of the operation. By selling late calving cows, the resources of the operation may be better utilized by the remaining herd. Selling these cows provides cash flow this summer. This influx of income may allow for synchronization, additional/better mineral program, or the timely payment of bills/loans that are due. This method would need to factor in the change in income from the cows sold compared to the expected value of their calves traditionally sold in the fall. Additionally, a long-term analysis should consider the change in inputs needed (feed, labor, bull power, and other expenses) and income generated from fewer calf sales in 2021.
This option could also be tweaked. The 4th and 5th interval calvers could be calved out, and then early weaned. From this point, the producer would have additional options. The cows could be sold as soon as they have had time to dry up, fed and marketed as higher grading weigh-ups, or synchronized for a fall calving herd. These options require evaluation and cash flow analysis as well.
Sell the last 4th and 5th interval calver’s and buy/grow replacements.
Again, with this option, the cash-flow analysis needs to be considered. Changes to 2020 income should be evaluated. Additionally, replacement costs and funding sources need to be considered. The income generated by the cow sales can do all of the things discussed in the sell-only option discussed above. Or it could be held to purchase replacements bred to calve within the desired timeline. Holding funds is generally easier said than done on most operations. If repopulation is the goal, the funding of this decision needs to be part of the planning efforts.
Additionally, herd health considerations need to be part of the decision-making process. Traditionally closed herds should consider their ability to isolate new herd purchases and health protocols of the source herd to ensure different problems are not introduced into the herd.
Is it Time to Market Cows?
COVID-19 market disruptions have created chaos in regular marketing decision making. Cull cow and pair marketings are no different.
The temporary closure of packing plants backed up fed cattle marketings, which in turn increased carcass weights and the amount of beef available.
The full extent of the effect on the weighup market has not yet been realized. One school of thought is that with increased beef tonnage available from fed steers and heifers, the cow market is negatively affected. The other school of thought relates to the need for lean beef to blend into ground beef. The increase in steer and heifer slaughter weights may have increased the demand for lean cow carcasses. Lean would be needed to meet ground beef ratio requirements. Working through the backlog and increased tonnage is expected to last into the fall. These opposite effects make the marketing decision harder this summer.
Budget and Cash Flow Analysis
Budget development is a critical component of each of the options described above or any individualized variation a producer may make. The budget calculator outlines the costs associated with the changes and assists in the development of a cash flow statement.
Consideration of the options available, including the partial budgeting and cash flow exercises discussed here can help producers make the best decisions for their operations. Even during an uncertain market situation.