Shorter days, longer nights, lower temperatures-the time of the year baseball team owners call the Hot Stove League.
Owners of baseball teams spend the "hot stove" months planning ways to improve their teams-team batting average, fielding percentage or pitching earned run average. Some teams just make coaching changes but most use a culling and acquisition process-cutting weak performers and adding strong performers.
The cattle business has its own Hot Stove League, which extends from weaning to breeding. This is a time for deciding whether improving herd performance will require a coaching change, as in new bulls, or just some culling and acquisition of cows.
So what's to be gained? How much change can culling and acquisition accomplish? How much money can be invested?
Think along with me. For easy-figuring purposes, assume you own 49 cows with a productive life of seven years each. You cull seven of these cows each year and acquire seven bred heifers that you think will produce at the level of your top seven cows. The desired herd effect is a significant increase in average weaning weights. That's like a team owner in baseball hoping that the batting average of his acquired players will increase next year's team batting average.
This hypothesis plays out as shown in the accompanying chart. The value of the extra average weaning weight is $11 per head in the first year in the culled group-$85 per head over the seven-year period. Applied to the 49-head group, the increase is $539 in the first year and $4,165 over the seven-year period.
So much for herd effect. Let's now examine how much you can afford to pay for the seven bred heifers.
Of the various methods that are used to determine how much can be paid for bred heifers, I prefer the Discounted Present Value (DPV) method. The DPV method was described in detail in a January 1999 Drovers article by Jason Gerke (I'll send you a copy if you don't still have that issue). This method uses estimated annual calf prices, weaned calf costs, adjusted future income and desired return on investment to establish a workable price. The DPV method says that bred heifers capable of weaning 540 pound calves (see chart) will produce enough adjusted income (at 10 percent ROI) over their seven-year productive lives to justify a $1,046 purchase price.
This is an attractive result but the base numbers don't necessarily apply to your herds. Every herd is different. Each of you has a different average weaning weight. You have different distributions of average weaning weights between your top cows, bottom cows and main-body cows. Your potentials for increasing weaning weights vary depending on your starting points.
The biggest problem in this process is probably identifying the potential of available commercial bred heifers to fulfill your goals. Unfortunately, the commercial bred heifer trade is still back in the pre-EPD days of seedstock production. You base selection on owner reputation and cattle appearance when you need to know specific sires, individual weights, specific frame sizes, etc. In the end, the weaning weights you plug into your analysis will have to be a wild, wild guess.
But I think this process is something worth trying in your herds. You have the most to gain if your average weaning weights are low because your acquisition goal can be higher than the average weaning weights of your top seven cows. Plug your own numbers into the format used in the accompanying chart. I would be glad to share with you a little spreadsheet I developed for my computer. Just contact me at my e-mail address shown below.
It is important to remember that managing cattle production is not an exact science. We combine the known with unknown and hope for the best. That's the way it is in the Hot Stove League.
To contact Fred Knop, write Drovers or send e-mail to: email@example.com