Beef Buzz News
Schulz Evaluates the Cost of Buying Superior Cattle Genetics
Tue, 02 Dec 2014 14:52:46 CST
How much is it worth to step up your beef genetics for your mamma cow herd? This may include buying a higher quality bull, perhaps artificial insemination or using embryo transfer. There are a lot of ways producers can improve their herd, but it does cost money to improve genetics significantly. Iowa State University Livestock Market Economist Lee Schulz said he has rustled this question on behalf of cattle producers. As an agricultural economist, he considers this to be a capital budgeting investment analysis.
"Very much these analysis and decisions made by producers you know depend on expectations for calf prices as we are going out through the productive life of those replacements that will be entering the herd," Schulz said. "The annual cow costs for a specific operation but I think it is important to put these levels we have seen for these replacement prices into context. I have done random analysis quite a bit and looking at max bid prices of $3,200 to $3,400 for bred heifers here is really not that much more being paid by some producer, so just realizing there is quite a bit of risk but also quite a bit a return for this investment."
Radio Oklahoma Network Farm Director Ron Hays featured Schulz on the Beef Buzz feature. Click or tap on the LISTEN BAR below to listen to today's Beef Buzz.
Heifers and cows that have yet to reach their prime remain in short supply right now and they do command a premium. When you start adding superior genetics the additional premium is not all that much. Schulz said it might be a good time to think about adding a few extra dollars to get those top notch genetics.
"If you are looking for the superior genetics there may be potential to justify higher and higher prices, especially if we are putting superior genetics into a herd, also adding use to our herd and culling some of the older cows at record high cull cow prices, there may be some advantages to paying higher prices and getting those genetically superior heifers into your herd," Schulz said.
If producers are looking to cull some of those older females then its worth the adding feeding expense to put on a few pounds before marketing those culls at the auction barn. Culls are bringing top dollar right now, so that will offset the cost of investing in superior genetics to put back into your mamma cow herd.
The Beef Buzz is a regular feature heard on radio stations around the region on the Radio Oklahoma Network- but is also a regular audio feature found on this website as well. Click on the LISTEN BAR below for today's show- and check out our archives for older Beef Buzz shows covering the gamut of the beef cattle industry today.
Ron Hays Beef Buzzes with Lee Schulz of Iowa State University
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