I would like to go into a little more depth on some aspects of my October column titled “Buy all the bull you can.” By necessity, that column was statistically dense and a lot of detail had to be left out because of space limitations.
As you may recall, I suggested that if you were using sires that were EPD+15 for weaning weight, you could money-out over a breeding life of seven years by investing major money in sires that were EPD+30, EPD+40 or EPD+50. The idea was that the alternate bulls would increase weaning weights by the differences between the EPDs — 15 pounds, 25 pounds and 35 pounds, respectively.
As you consider this idea again, I suggest that you substitute AVG (average) for EPD (expected progeny difference). EPDs are averages above or below breed averages, and thinking in terms of AVGs will help you apply my hypothesis to your breed of cattle.
It is also important to remember that my economic projections compared the effects of high-AVG bulls with low-AVG bulls. For example, the accompanying table shows that the progeny of a +50 bull would return $7,536 more than those of a +15 bull. Granted, this compares a pretty sorry bull with a very good bull. There is still a pretty significant advantage when a +50 bull is compared with a +30 bull. This comparison is not as favorable when comparing a +50 bull with a +40 bull but there are other considerations, like the quality of replacement heifers.
Beyond these considerations, there are variables that are probably as numerous as there are producers, environments, breeds and genetic choices. And they affect the way your analysis might work out. Here are some examples: 1) I assumed a bull-to-cow ratio of 1:30. If you were using a 1:50 ratio, as has been shown feasible in some university research, you could market an extra $10,000 worth of calves per sire. 2) I assumed a weaned calf percentage (per cow exposed) of 90 percent in my analysis. An increase of just one point in this percentage could add $6.44 per cow. 3) I assumed an average age of 205 days per weaned calf in my analysis. A positive swing of five days in average weaning age could net another 10 pounds and $10.
I also want to spend a little space here on the grid effect that I included in my analysis. I expect this element was accepted differently by different producers — you who retain ownership and feed out your calves and those of you who do not. It was shown that this effect would add $10 per calf if you retained ownership through harvest. This outcome was conservative because it assumed an April harvesting date when the Choice/Select spread is usually wide. Yet, it is a significant, genetically related gain that goes along with selecting breeding bulls of higher merit.
You may argue that grid effect is meaningless because you sell your calves into the stocker market at weaning. Maybe not. A $10 premium per head on a 450-pound calf is only 2.2 cents per pound. I’ll bet that even the foxiest cattle buyer would pay this on top of an agreed-to price if you provided proper documentation. Speaking of documentation, have you looked into the dollar value indexes that breed associations have begun adding to their performance pedigrees? These indexes, like EPDs, are intended as an aid in bull buying but will probably become important aids in calf merchandising, too.
I have presented these additional thoughts on bull values in the hope of giving you the courage to invest substantially as you seek to improve your herd’s profitability. My analysis isn’t intended to and, indeed, cannot fit all producer situations, but there is enough truth in it to stimulate you to always buy all the bull you can.
To contact Fred Knop, write Drovers or send e-mail to firstname.lastname@example.org.