Conventional wisdom tells us that the proper strategy to investing in a business or commodity is to "Buy low and sell high!" I have heard that phrase for years and would agree that it is sound advice. However, the current outlook for the beef industry might put a different spin on the traditional investment advice.
There is little doubt that there is plenty to be excited about in the beef cattle industry. Nearly every class of beef animals is receiving historically high prices. The portion of the country experiencing drought has reduced significantly over the past 2-3 years. Feed costs are trending downward on the expectations of a second consecutive large corn crop and improved forage production across much of the country.
Nearly all the market signals are in place for cattle producers to expand their herds. Yet, the U.S. beef cow producer fully realizes that expanding the herd is a long-term investment and commitment. This fact has translated to a fairly conservative approach to expanding the nation's cow herd. There are many factors that have contributed to a slow rate of rebuilding which include strong feeder calf prices, volatile feed costs, drought, competition for land for crop production, and the advancing age of the average cow-calf producer to name a few.
If herd expansion is on your mind, there are some important factors to be considered. As always, there is debate as to whether one should raise or buy replacement females. Some may want to use their own genetics to build replacement female numbers while others may need to buy females from outside sources to increase numbers in their herd.
One must also consider the long-term nature of cow-calf production when making the decision of how to add females to the herd. Will you be able to capitalize on the strong prices received for feeder calves today and forecast for the near term? The purchase of bred replacement females may create a larger window of opportunity to sell calves in a favorable supply-demand situation. Financial considerations usually dictate the approach taken as ultimately, one must decide if it is more cost-effective to produce their own replacements or to purchase them.
I want to remind you that the Ohio Cattlemen's Association (OCA) is sponsoring an event of potential interest for both the buyers and sellers of beef breeding cattle. On Friday evening, November 28, the OCA will be hosting their second Replacement Female Sale. The sale will be held at the Muskingum Livestock facility in Zanesville and will begin at 7:00 p.m.
The 2014 Ohio Cattlemen's Association Replacement Female Sale will provide an opportunity for both buyers and sellers to meet the need for quality replacements in the state. Consignments may include cow-calf pairs, bred cows and bred heifers. Females must be under the age of five as of January 1, 2015 and may be of registered or commercial background. Bred females must be bred to a bull with known EPD's and calves at side of cows must be sired by a bull with known EPD's. Pregnancy status must be verified by an accredited veterinarian through traditional palpation or ultrasound or by blood testing through a professional laboratory. Analysis must be performed within 60 days of sale. Consignments will also be fulfilling specific health requirements.
Consignments for the sale are due to the Ohio Cattlemen's Association by October 1, 2014. Sale information can be obtained by contacting OCA at (614) 873-6736 or at their web site located at www.ohiocattle.org. If you have any questions about the sale you can call me at my office at (740) 289-2071, Extension #242 or contact me by e-mail at firstname.lastname@example.org.
I consider this sale a unique opportunity for Ohio's cow-calf producers. This sale is an opportunity for buyers to add quality females to their herds from a local source. Also, this sale is a marketing option for those producers looking to sell quality females in a strong market. You must decide which route is best for your operation.