Establish the "time windows" when your animals will create the most value in the supply chain when harvested. This would include the best base price plus the best Choice to Select spread and other program premiums.
Review your operation to explore the possibility of calving 14-15 months prior to the most lucrative time window.
|Harvest Date||Calving Date|
|May 10||February 10|
|April 20||January 20|
|April 1||January 1|
|March 10||December 10|
|October 10||July 10|
|October 30||August 1|
|November 20||August 20|
|December 10||September 10|
IF ranch resources/dynamics allow for retained ownership and the time window fits, create a strategy to wean, grow, finish, harvest and price. Or, market calves to a grower/finisher who can hit the most lucrative time window. You will get paid more for supplying the proper time window plus carcass and efficiency genetics, NHTC, age and source verification and animal health management.
IF ranch resources/dynamics DO NOT allow for the most lucrative calving period, then it might be advisable to market directly off the cow to the next most lucrative market, which is the wheat pasture grazer or the summer grass grazer. Genetics and other programs will continue to be of added value as the cattle move through the supply chain. You will be rewarded for best management practices, but just not as much as retained ownership in a lucrative time window.
In performing spreadsheet sensitivity analysis, with the strategy of marketing directly off the cow when calving periods occur outside the most lucrative time window, we have determined the following:
Calf weaning efficiency is very important to profitability when selling directly off the cow. If you have purchased bulls that produce heavier calves, they are also
producing heavier replacement females. A mature cow will eat 3% of her body weight per day. In our grass country, we can stock about 50 lbs. of cow per acre on native range. Therefore, we
must allow for the following stocking rates:
|Cow Weight||Stocking Rate|
|1,500 lbs.||30 acres|
|1,250 lbs.||25 acres|
|1,000 lbs.||20 acres|
If we are weaning 50% of the cow's weight, then the pounds of calf weaned per acre is the same for all weights of cows. (Cow weights are taken at weaning time, right after calf weights are recorded based on 205 days.) Now, ask the question, "Do I want to price my pounds produced per acre on a 700 lbs. calf or a 500 lbs. calf"? Well, the price of a 500 lbs. calf is normally more than $20/cwt better than a 700 lbs. calf, given apples to apples. Now, before we all run to the auction barn to buy smaller cows, there are more marketing factors to consider. The University of Nebraska research has suggested that a 1,200 lbs. cow is optimum when calculating all things considered, such as harvest and carcass weight, feedlot efficiency, weaning efficiency and premiums. Also, to be competitive running a smaller cow, much consideration must be given to calving season, shipping time, supplemental feed, bull procurement, marketing preparation, pricing time and replacement strategy. Each and every operation has a unique set of resources. There is NO "one scenario fits all" proposition.
PRICING, PRICING, PRICING
Pricing strategy is a key factor that deserves much analysis and continual study. Best pricing for calves being shipping directly off the cow has seasonality, just like carcass quality premiums. Marketing begins the day you buy your bull. Developing a comprehensive marketing plan is the first step to realizing your most profitable strategy.