Iowa State University's Lee Schulz Weighs in on the Economics of Buying vs. Raising HeifersTue, 06 Jun 2017 11:19:15 CDT
Whether to buy or keep your own heifers depends on long-term profit and matching genetics to the market-including consumer demand for beef-but that’s hard to keep in mind in the short-term market.
“You are very much looking at the current situation, and really open market availability and price for if you are buying replacements on the open market,” said Lee Schulz, Extension Livestock Economist for Iowa State University. “But also, I think, even more importantly, it's looking at your own individual operation. What your cost structure is, what your goals are as an operation.”
To watch a video clip featuring Lee Schulz, Extension Livestock Economist for Iowa State University weigh in on the decision of whether to buy or retain heifers, click or tap the PLAYBOX below.
A herd’s genetic resources, or some holes pointed out by owning cattle on feed, weigh on whether to keep building from within on add an influx of new female genetics.
“So even if we are doing some retained ownership, or I'm getting some of that data back through the carcasses, that helps me make some of those genetic decisions,” Schulz said. “And where I see that entering really decision is to see if the genetics within your own herd are sufficient and are allowing you to really see that progression. Or maybe you want to go outside and buy some replacement heifers to really increase some of that genetic potential.”
In a volatile, short-term market, high-quality cattle prove their place at the top.
“I think another attribute that we do see buyers willing to pay is for black, Angus cattle,” he insisted. “Really that's translating to that performance that we've seen research on and that they've come to expect, as well as when we look at the carcass traits and the premiums when we get to the finished animal.”
A profitable cow herd does not simply maintain some position such as the same weaning weight, the same marbling or even the same marketing strategy.
“But I think it's always important to understand that we're always looking for progress be it in management, be it in genetics, be it in marketing,” concluded Schulz. “So, I think there's always some improvements that we can make and we know that markets are changing all the time.”
Source - Certified Angus Beef
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