Lots of Options for Cull Cows and Stockers this Year, Derrell Peel SaysThu, 14 Nov 2013 12:39:48 CST
With winter pasture coming on and a need to rebuild the nation's cow herd, many producers are thinking about holding back cows that otherwise would have been culled and sent to market this year. Oklahoma State University Extension Livestock Market Economist Dr. Derrell Peel says cull-cow prices are strong this season.
"For cull cows, cow-calf producers, if you sell now the prices are strong and are holding up well. Normally they're at the seasonal low right now. On the other hand, if we take them through next spring, we normally see a strong price increase. We might not see as much price increase because they're holding up so well this fall. But, on the other hand, they're likely to actually go up even with this just because of the overall situation for cows."
Current calf prices are also holding well, Peel says, and that gives producers a number of marketing options.
"We're nearly at record levels for these lightweight calf prices. So, selling now, not a thing wrong with that if that's what you need to do. If cow-calf producers are thinking about retaining ownership of these calves and putting some more weight on them before they sell them as heavier feeder cattle, the thing to keep in mind right now is there's a pretty sharp price break in this market in that 500-pound range. And, so, if the calves are lighter than that and you're going to put just a little bit of weight on them-100 to 125 pounds-you might not get paid very well for that right now because of the size of that price break. On the other hand, if you're going to put quite a bit of weight on them and hold them long enough to put 250 to 300 pounds on these calves, it'll probably turn out OK."
Peel said stockers could be a good bet this year, but some conscious choices need to be made when it comes to what size calves to buy.
"The winter stockers, at this point, at least in the Southern Plains, the wheat's running a little bit behind schedule. We are going to have some wheat pasture, but it's going to be a little bit shorter grazing season. We'll be lucky, at this point, to get 90 or 95 days of winter grazing for the dual-purpose wheat. Because of that and because of the price break that I mentioned, I think a producer would want to think about whether you want to buy on one side of that or the other. The heavier stockers right now have a much better value-of-gain potential, a much better margin potential. If you buy that lightweight calf, that four-weight calf, the first hundred pounds doesn't really pay back very well right now. You might as well just buy a little bit bigger calf for a short grazing season."
For producers who will hold calves through graze-out, Peel recommends buying the lighter weight calves and bringing them up to the heavier weights.
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