What will cows cost in the future?

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With the challenges of the 2011 drought, the beef cow inventory declined 3.1 percent for an annual inven­tory of 2011 and prospects for further decline are evident unless changes occur in cow slaughter and heifer retention. With this decline, the 2012 U.S. calf crop stands at 35 million head, the lowest in 60 years.

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With low cow numbers, historical high prices for weaned calves and the cost of cows at all-time highs for the foreseeable future, what does this mean for the cow/calf producer wanting to rebuild the herd? It means good producing cows are going to be hard to find and will be higher priced than in previous years – possibly exceeding $2,000 per cow. In addition, it will be more critical to cull unproductive cows because input costs are increasing as well.

How much could cows cost? Based on a $550 annual cow cost, 88 percent calf crop, $180 per hundredweight average price for a 525-pound calf over five production years and $2,000 cost per pair, a cow/calf pair purchased in spring of 2012 would yield a 10 percent return on investment.

There are a number of questions that should be asked when determin­ing what to pay for a cow. Are more cows needed? Is there enough grass for more cows? Is there a better alter­native use for the grass than grazing cows (e.g., retained ownership of calves or purchased stockers)? Are the existing or proposed annual cow production costs low enough to make a profit? Can financing be secured for cows at the higher price?

If cows are the best option, you have to decide when to buy them. Because of the cow cost and the value of the calves, the timing of the purchase can make a significant difference in the value of the cow. For example, a cow is typically more valuable the closer it is to the sale of a calf.

All of these factors should be considered when making the decision to buy cows because it can be the difference between making and losing money. Doing so is especially important when cow and calf prices are at all-time highs.

Source: Steve Swigert



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Tex    
Marlow, OK  |  April, 07, 2012 at 03:04 PM

Hate to sound too harsh, but the title of this article combined with the minimal information in it would be a graded very well if a High School student had written it. I would never have guessed that this came from the Noble Foundation. The charts don't adequately relate to the writing, and the theme was not really addressed. What will cows cost in the future? Never answered, never saw the charts that show the trends -- ten year and forty year trends -- and cow costs relationship to the current trends in herd shrinkage.

cowsrcuddly    
April, 11, 2012 at 01:31 PM

I felt cheated as well. I could have come up with this answer. Show me the money!!

Grazier    
Australia  |  April, 07, 2012 at 11:02 PM

Geez I hope my cow calf units become worth $2,000, but if I was buying them I would need every bit of that $180 per hundredweight for the calfs to pay for them.

tony newbill    
powell butte ore  |  December, 27, 2012 at 10:11 AM

the question will be can the consumer afford the meat , they can barely now ?

MDG    
Mb. Canada  |  December, 27, 2012 at 11:06 AM

The consumer has been spoiled with the cheap food policy that I guess started in Europe after the war, and I dont have a problem with reasonable food costs if we could keep cost of production relative. The environment regulations an energy costs are driving food costs not the true inputs of food production.


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