Proven Strategies to Maximize Profits to Cow-Calf Producers In agriculture, there are many things that you can’t control. But there are many that you can! As cattle prices have dropped off record highs in 2014, cow-calf producers’ profits are being hard hit, leading to a need to cut costs and increase revenues. Careful management through cost control and adoption of recommended practices becomes more critical. I’m Damona Doye In this video- I want to highlight a toolkit of methods proven to improve profitability regardless of herd size. The various practices that will be highlighted have been subjects of research by our beef team at OSU. Our goal is to equip extension educators, producers, ag lenders with the information needed for cow-calf producers to minimize costs and identify readily available profit-making opportunities. These management tools do not require investment in capital-intensive handling facilities although some minimal infrastructure, e.g., head chute, may be necessary for some practices. .

Cow/Calf Returns from Kansas Farm Management Association Data Data from the Kansas Farm Management Association (KFMA) show that Kansas cow-calf producers on average earned positive returns over variable costs in all but 11 of the last 39 years (Pendell, Kim, & Herbel, 2015). Or another way to look at it is that in roughly ¼ of the years, producers did not earn positive cash returns. In 5 years, cash returns were less than $50 per cow and in 9 years they were more than $150 per cow. About half the time the cow generated between $50 and $150 to pay loans, contribute to replacement of machinery, equipment, bulls, and pay unpaid labor and management. When you factor in those fixed costs, these same producers earned positive returns above all costs in only six of those 39 years. Averages mask a lot of variability across producers however….  Source: Pendell, Kim and Herbel (2015).

Economic Opportunities Cost management, especially feed Calf management using value-added practices Castrating Lot size Vaccination Pre-conditioning Implants Breeding and cull cow practices Cow size Cull cow marketing Bull selection While numerous practices can improve potential returns, research from Oklahoma shows many producers fail to implement even some basic practices known to increase returns. We will first focus on cost management as a strategy, then discuss a variety of calf cull and bull management and marketing strategies. Ranges of price increases or cost reductions are presented, and when applicable, an estimate of increased returns is presented for each practice. For some value-added marketing practices, the probabilities of positive economic returns are reported. Research associated with each practice is referenced. Only 12% of Oklahoma producers participate in some type of formal value-added production and marketing practices. Producers with small herds in particular typically have lower adoption rates for common practices and yet benefit the most economically.

Cow/Calf Cost of Production ($), 2015  Costs of production vary widely among producers with a nearly $250 difference in operating costs between low and high profit producers (KFMA, 2015), with the largest determinant in the difference being feed expense. The least profitable group of producers spent more on purchased feed (and less on grazing) than producers with the highest profits. Effective forage management requires matching herd size, cow mature weights, and milk production potential to available resources. Overgrazed pastures result in lower weaning weights and more purchased feed inputs. A forage management plan that includes fall-winter grazing and only 60-90 days of fed hay will likely result in higher profits. A comparison of other costs to benchmarks like KFMA by individual producers may point out other opportunities for improvement through cost control. Profitability Group Excludes depreciation, operator labor, interest on investment. Source: Kansas Farm Management Association, 2015

Hay Feeding Item MCONE OBSR Poly Ring Total waste, lb. 71a 283b 294b Waste, % bale wt 5.3a 20.5b 13.0c Cost of ring $525 $200 $209 $300 Value of hay wasted per ton @ $60/ton $3.18 $12.3 $7.8 Value of hay wasted per cow at ½ ton $1.59 $6.15 $3.90  During fall and winter months when cows are fed hay, the type of bale feeder used has been shown to greatly affect feed waste and thus cost. At OSU, four types of bale feeders were studied to measure hay wasted by beef cows. Polyethylene pipe ring and open-bottom steel ring feeders had the highest percentage of hay lost at more than 20%. Sheet bottomed steel ring feeders showed considerable improvement at 12.7% but modified cone feeders were superior with approximately 5% of hay wasted. While each of these bale ring feeders will reduce hay waste compared to no feeder, considerable savings are available by investing in the better option. The producer realizes savings even after accounting for the added investment in bale rings with additional features. In fact, the payback period may be less than one feeding season for modest sized herds. 100 cows, ½ ton per cow: payback period for MCONE is 3.3 years; for ring, is .3 years Source: Sparks, Sexton, McMurphy, Mourer, Richards and Lalman (2015) plus author’s calculations.

Hay Storage Calculator, beefextension.com Another source of hay loss is poor storage. Improperly stored round bales can lose up to 50% of dry matter. In just nine months, uncovered round bales stored in the open at ground level lose 5-20% of dry matter where elevated bales lose 3-15% of dry matter. Covering bales reduces these losses to 5-10% and 2-4% for bales on the ground and elevated, respectively. Polyethylene tarps are an inexpensive means of covering bale stacks and add about $2.10 per bale or $4.20 per ton to hay cost. Reducing hay loss by 10% with a polyethylene tarp would save $6 per ton in hay loss at $60/ton hay prices, justifying the cost of tarps on dry matter loss alone. Other hay storage practices are even lower cost. Site selection and preparation can save up to 8 inches dry matter on the bottom of bales due to moisture absorption. Bales should be stored in a more elevated location and off the ground if possible. Used tires, pallets, fence posts, crushed rock etc. can be used to reduce contact with the ground Orientation of bale rows from north to south, with bales in rows, tightly packed end-to-end, and at least three feet between rows also reduce losses by allowing adequate sunlight and airflow to quickly dry the area and bales following precipitation. While storing bales under a roof or in a barn reduce losses further, these options are not cost effective unless facilities are already in place as show by the hay storage calculator. A 3300 square ft pole barn that could handle 165 round bales stacked two high (and 20 sq ft per bale) is approx. $17,000 in today’s dollars.  This assumed no concrete poured for a floor.  You could get a microloan at 2.625% for up to 7 years or commercial at 6% for up to 20. For hay covered, assumed a tarp at $0.75 per sq ft for a 3 high pyramid of round bales (from the beef manual).  Assumed 15 sq ft cover requirements for 150 bales would cost approx. $1700 up front.  Includes clearing costs, leveling , and raising the ground bed an additional $500. Hay Storage Calculator, beefextension.com

Management Choices for Specific Practices Value-add management practices have been shown to increase both the price received for calves and producers’ net returns. This figure shows non-adoption rates of several practices. Some practices require very little investment in infrastructure. For example, 28% of Oklahoma producers are not castrating bull calves. Intact bull calves are discounted $5-$10 per cwt ($26-$52 per head at 525 lb.) at auction. In 2012, price discounts for horned calves were $3.15 per cwt.  More recently, dehorning or using polled bulls adds $5.25 per cwt to auction price and $24 in cow-calf producers’ profits. Vaccination for Bovine Respiratory Disease, BRV, BVDV, Parainfluenza Type 3 Virus, BRSV, clostridial diseases, leptospirosis, and other diseases has been shown to increase sale price of calves. (Animal pharmaceutical companies often combine several of these into one vaccine so that fewer injections are necessary.)  Research shows a $1.44 per cwt increase in sale price for calves that had been vaccinated, with a premium of $6.79 per cwt for vaccinated calves and an average profit of $20 per head from vaccinating calves. The probably of a positive net return from vaccinating calves was reported to be over 61%. Yet only 36% of Oklahoma producers surveyed were using respiratory vaccines for calves. Source: Williams, Raper, DeVuyst, Doye, Peel, Lalman and Richards (2009-10).

Castration Prior to Weaning It is not only Oklahoma in which producers have failed to capture this price premium for steers. Notice the difference in adoption for the more western states, part of which is associated with herd size. Source: USDA (2008).

Castrate Bull Calves USDA NAHMS (2008): 95% of operations with > 200 head castrate 50% of operations with < 50 head do Lower stress, less sickness, lower death losses Beef quality issues Looming animal welfare issue Economics Don’t castrate: Price discount $5-10/cwt ($25-$60+ per head) Castrate after 3 months of age, 20# of gain less (at $150 = $30) 12 additional days in the feedlot Why does it matter? From a health perspective, calves that are castrated at less than three months old experience lower stress levels, less sickness, and lower rates of death loss. From an animal welfare perspective, older calves experience more stress at castration and show more aggressive behavior while uncastrated, implying greater risks of injury for other animals and for humans. From a beef quality perspective, calves that weigh more than 500 pounds at castration will have less marbling and lower tenderness ratings. From an economic perspective, bull calves castrated past 3 months of age will weigh 20 pounds less, on average, at slaughter and will be in the feedlot for 12 additional days relative to a calf castrated at less than 3 months of age. That results in a higher cost of gain at the feedlot. And finally, from a cow-calf operator’s perspective, bull calves are discounted at the sale barn, impacting the bottom line. Williams, et al. (2012) found that bull calves were discounted at $5.77/cwt at feeder cattle auctions in Oklahoma in 2010. That is a revenue difference of $25 between a 500 pound bull calf and a 500 pound steer calf, conservatively speaking. Many other studies find similar discounts, typically in the $5/cwt to $10/cwt range.

Lot Size Herd size Calf crop uniformity Defined breeding season The benefits of a defined breeding season are well documented. Earlier OSU research showed that as length of breeding season increased, cost per cow increased, pounds weaned per exposed female decreased as did the rate of return on assets. A relatively narrow calving window results in larger lots of homogeneous cattle for offer in auction barns or direct sale. Even small producers can readily implement a strategic calving window. By only allowing bulls access to breeding cows and heifers for a relatively short interval (45-60 days, for example), a relatively narrow calving season is achieved. Cows should be pregnancy tested at weaning. Cows that do not test positive for pregnancy at weaning should be culled at that time. An alternative strategy allows bulls to remain with the cow herd after the initial pregnancy test. Cows that did not test positive for pregnancy initially are palpated again before selling. Those that are bred can be sold as bred cows and the remainder sold as open cows. Regardless of approach, the objective is to have a cow herd that calves within a short time interval.

Effect of Lot Size on Sale Price (2010-2013) OQBN Sale Data This figure reports the effect of lot size on sale price in selected Oklahoma auctions. The difference between a one-head lot and five-head lot was reported at $3.57 per cwt or $17.85 per head. The difference between a one-head lot and ten-head lot was $5.11 per cwt or $25.55 per head Source: Mallory, DeVuyst, Raper, Peel and Mourer (2016).

Preconditioning Calves Impacts of preconditioning Feedlot and carcass performance increase Medication costs decrease OQBN Preconditioning Protocol 45 days minimum weaning; respiratory vaccinations; other standards Third party certified Vac-45 program Increase producers’ access to value added marketing opportunities Encourage adoption of best management practices Calves that have been weaned at least 45 days have also been shown to earn sale price premiums. Premiums for weaning: most recently: $5.23 per cwt premium, an expected net return from 45-days weaned of over $35 per head, and a 61% probability of positive net return. With only 41% of Oklahoma producers weaning calves prior to sale (Williams et al., 2013), weaning is an underutilized practice. Moving calves off the ranch means increased stress and illness Requirements to enroll calves in OQBN PRECON: Calves can be gathered from various sources. Male caves must be castrated and healed. Calves must be dehorned and healed. Calves must be retained a minimum of 60 days by enrolling owner.**The 60 day time frame begins at first vaccination. If multiple groups of cattle are put together, the 60 days begin from first vaccination of the last group of cattle purchased.** BQA guidelines must be followed and program compliant ear tag in place. Must follow vaccination protocol to qualify. Third party verification is required by OSU extension personnel. Vaccination Management Schedule Receiving: Vaccinate with a IBR-BVD-BRSV-PI3 product, a clostridial bacterin-toxoid product. Low volume dose (2 ml) products are preferred.Vaccinate with either a Mannheimia haemolytica or with a combination Mannheimia haemolytica – Pasteurella multocida product. 14-28 days later: Booster IBR-BVD-BRSV-PI3. Booster clostridial bacterin-toxoid. Low volume dose (2 ml) products are preferred. Enrollment and certification process must take place at least 21 days before the sale date or shipping event. Earlier enrollment and certification is highly encouraged. oqbn.okstate.edu

Source: Raper, personal correspondence (2016). OQBN Sale Data Combining weaning with other value-added management and marketing practices in a third-party verified program, called Vac-45, adds even more value. In addition to the price increases reported for vaccinating, weaning, dehorning, and castrating, Vac-45 premiums add another $12.46 (Williams et al., 2013) to $15.54 (Williams et al., 2012) to calf auction prices. According to Mourer (2013), less than 6% of Oklahoma calves were marketed as third-party Vac-45 in 2012. Since 2010: 5 or more markets, with multiple sales at some More than 300 lots Growing number of direct sales Lower numbers of calves sold during drought Double digit premiums since 2011 Source: Raper, personal correspondence (2016).

Source: Raper, personal correspondence (2016). Graphical depiction of the number of head sold through different venues in recent years. Source: Raper, personal correspondence (2016).

Source: Raper, personal correspondence (2016). And a graph showing the double digit premiums for all calves in recent years. Record high prices in 2014 carried over to record premiums for value-added calves. *Premiums calculated as difference in weighted average prices Source: Raper, personal correspondence (2016).

Source: Raper, personal correspondence (2016). This chart shows the premiums by weight class for steers with fairly consistent premiums across weight class in earlier years and greater premiums for lighter weight calves most recently. The one negative bar is likely associated with a small sample size. Source: Raper, personal correspondence (2016).

Source: Raper, personal correspondence (2016). Heifers have a bit of a different chart with the heaviest weight heifers often commanding higher premiums. Source: Raper, personal correspondence (2016).

Sale price premium ($/cwt) Likelihood of positive economic return Estimated Returns from Value-added Practices and Likelihood of Positive Economic Returns Practice(s) Sale price premium ($/cwt) Net return ($/head) Likelihood of positive economic return 45 days weaned $5.23 $35.44 61.2% Vaccination $6.79 $20.32 61.4% Dehorn/polled $5.26 $23.35 56.3% Wean+vaccinate $4.86 $28.86 60.4% Wean+vac+dehorn $8.78 $41.84 67.2% Certified vac-45 $12.46 $69.16 79.3% In a 2014 article derived from a grad students thesis, the returns and likelihood of positive returns were estimated. To estimate the probability of a positive return from value-added management practices, lots of cattle with and without the practice are matched using propensity score matching and then probabilities are estimated using non-parametric methods. Propensity score matching estimates the probability of an observation to be in the treatment group. This probability is the propensity score and observations are matched based on that score. Expected or average net return is calculated using a partial budget for each management practice or bundle of practices and the marginal price impact of each value-added practice or bundle of practices. Hedonic estimations yield the probability that a premium is greater than zero averaged over all lots of cattle; however, we are interested in the probability for an individual producer. For this reason, we use matched pairs to estimate an individual’s probability to receive a positive premium or net return for adopting a value-added management practice or group of practices. The marginal price impact of each value-added practice or bundle of practices is re-estimated using a nearest-neighbor method. Certified Vac-45 has the highest likelihood of positive economic return . Source: Williams, DeVuyst, Peel and Raper (2014) using 2010 data.

Implants: Current Use in Cow-calf Operations Surprising level of non-adoption of implants in steer calves prior to weaning. Perceptions may be driving decisions Only around 30% of LARGE operations implant? Only 5% of beef is marketed as organic/natural No clear negative impact of calfhood treatment on downstream production Source: USDA (2008).

Source: McMurphy, Sharman, Cox, Horn, Lalman (2010). 2014 Implant Study, OSU P<0.01 P<0.01 Source: McMurphy, Sharman, Cox, Horn, Lalman (2010).

Source: McMurphy, Sharman, Cox, Horn, Lalman (2010). Preconditioning Gain after Implant at Weaning (lb.) Source: McMurphy, Sharman, Cox, Horn, Lalman (2010).

Implants Work Better with Better Nutrition Summary of 25 Studies from 1976-1991. Source: Bayliff, Redden, Cole, McGee, Stansberry, Lalman, Corrigan, and Burdett (2016).

Calfhood implants are effective and more valuable than ever Implant Economics Calfhood implants are effective and more valuable than ever 18 lb. of gain $1-2 cost Value of gain: $0.80 => $14.40 to $1.50 =>$27 Implant at branding Implant at weaning Administer herd health program at weaning Vaccinations Deworm 45 to 60-d growing period Certification through value-added preconditioning program Oklahoma Quality Beef Network Angus Source Superior Wean Vac Fear of market discount for implanted calves is unjustified

Maximizing Salvage Value of Cull Cows Cull cows represent 15-30% of a cow-calf herd’s revenue Does body condition score matter? Is retaining and managing cull cows on native pasture or low-cost drylot systems more profitable than selling in October at the time of culling? Is selling culls as bred cows a profitable alternative? Source: Amadou, Raper, Biermacher, Cook, & Ward (2014). Can increase revenue associated with the cull cow by adding weight, getting a better price or changing the quality classification. Strohbehn and Sellers (2002) reported feeding sound and healthy cull cows with thin to moderate BCS led to overall profitability of cull cows Peel and Doye (2004) indicated positive relationship between BCS , marketing classification and estimated dressing percentage Apple (1999) and Cater (2007) showed that ending BCS and the value of cow carcass are related BCS is a useful tool for making culling decision, but most previous research focused on the impact of ending BCS on carcass value

Opportunities exist to increase revenue from cull cows through changes in marketing strategies. This figure shows that cull cow prices tend to bottom out in the fall when the majority of calves are weaned and culling decisions are made, then increase into early spring. By shifting the cull cow sale date from November to March-April, producers may realize about a 10% increase in sale price. Data Source: USDA-AMS, Compiled & Analysis by LMIC Livestock Marketing Information Center

Cull Cow Retention Management Systems Drylot System Start feeding rye hay with 10% crude protein in mid-October Start feeding 25% crude protein cubes at ~ 5 lbs/day/head in December Native Pasture System Stockpiled native grass pasture (350 acres) Hay and cubes only during icy periods Source: Amadou, Raper, Biermacher, Cook, & Ward (2014).

Source: Amadou, Raper, Biermacher, Cook, & Ward (2014). Data and Methods Culled cows randomly assigned to either native pasture or drylot systems: Three categories for beginning BCS: thin: <4.5, medium: 4.5 -6.0, heavy: > 6.0 48 cows in 2007/08, 43 cows in 2008/09, and 71 cows in 2009/10 NF Cows; Black hided Angus; four years of age in 2007 Data collected monthly October - March Weight USDA grade and dressing percentage Each grading period: Calculate/simulate net return (revenue – costs) over revenue if sold at culling Revenue (AMS price by grade and DP times cow weight) Accumulated costs (feed, hay, labor, pasture, interest) Source: Amadou, Raper, Biermacher, Cook, & Ward (2014).

Marketing Strategies for Cull Cows Solid lines show the gain under the different systems: green for dry-lot, purple for pasture gain. Gain on pasture only the first 42 days. Clearly the gain is better under the dry-lot system. ADG decreased for all cows on average. However ADG for thin cull cows was better than other cows. As cows get heaver, more goes to maintenance as opposed to weight gain and efficiency. Dressing percentage did not change. But, the dashed lines show the costs of the two systems. Here, clearly the pasture cost is lower. So, how do these differences translate into net returns? Source: Amadou, Raper, Biermacher, Cook, & Ward (2014).

Marketing Strategies for Cull Cows Net returns are important. Does added value from holding cows offset costs? Price increases may offset losses in value from weight loss for cows on grass. And that was the case here. Pasture system has positive returns regardless of the length of the holding period in contrast to dry lot. Greater returns for longer holding periods for the pasture system. Better dry lot gains were offset by much higher costs. Source: Amadou, Raper, Biermacher, Cook, & Ward (2014).

Marketing Strategies for Cull Cows These charts show the difference in returns for cows with differing initial BCS. Top left is for the pasture system, bottom right for dry lot system.The right bar indicates the return for the cows labeled heavy at the start of the study. Clearly, not much opportunity for increases in net returns for cows in good body condition when calves are weaned regardless of system or length of holding period. Cull cows placed on winter pasture and marketed in late winter or early spring months can return up to $60 per head more than an October sale (Amadou, Raper, Biermacher, Cook, & Ward, 2014). Highest returns were reported for cows that were thin to medium body condition score (BCS) in early fall (thin = BCS <5; medium = BCS 5-6) placed on native grass for 90-150 days. Retaining culls cows with BCS > 6 was typically not profitable Source: Amadou, Raper, Biermacher, Cook, & Ward (2014).

Preferred System and Feeding Length Get rid of the big ones… Heavy, higher BCS cows were not profitable in either system Find an inexpensive way to feed the rest Little difference in returns between thin and medium Native grass system more profitable than low-cost drylot system in every case Retaining on native grass from 90 to 150 days resulted in highest returns

Yet Another Option…. Marketing culls as bred cows Retain cows beyond culling Potential to breed back at least some of them Market as bred Potential replacements for fall calving herds or year-round herds Bull has to eat regardless of where you keep him… . Additional value can be added by selling culls as bred cows (Amadou et al., 2014). Cows that test positive for pregnancy outside the desired calving window can be sold as bred cows adding $140 to sale revenue.

Bred vs. Slaughter, Native Grass System $80 to $120 premium for bred compared to slaughter cows. Premium narrows the longer the cow is held/fed. Source: Amadou, Raper, Biermacher, Cook, & Ward (2014).

Cow Size Maintenance requirements Genetic potential for milk on maintenance requirements and/or biological efficiency Interaction of cow size and milk yield on nutrient requirements and/or biological efficiency Reproductive efficiency Weaning weight Biological versus economic efficiency Cow size is gaining more attention in the beef industry and press…Mature cow size/weight is also known to influence profitability (Doye & Lalman, 2011). Watch milk EPDs In most environments, milk EPD is NOT the limiting factor High milk EPD = higher maintenance feed costs YEAR ROUND 12-20# milk EPD is sufficient for most producers

Differences between Big and Moderate Cows Big cows Bigger calves Lower price per cwt Bit more cull cow income More acres Higher maintenance costs Moderate cows Lower operating costs per cow (land, forage, other nutrition) Lower fixed cost per cow In comparison to moderate weight cows, bigger cows generate more revenue due to slightly heavier weaning weights and higher cull value. However, bigger cows also require more pasture acres per head, have higher maintenance cost, and their calves sell for less per pound than lighter weight calves.

Budget Summary ($/cow) Native Pasture Introduced Pasture Moderate Cows Big Cows Gross income 496 542 Total operating cost 337 429 431 553 Returns above operating cost 159 113 65 -11 Fixed costs 144 148 Total costs 481 577 575 701 Returns above all costs 15 -35 -79 -159 Ranch returns above all costs $1,500 $(2,700) $(7,900) $(12,200) Gross income includes both calf sales and cull cow revenue. Calf revenue was based on calf weaning weight as a percent of cow body weight: 1100 x .45 = 495 1400 x .45 = 630 $50 difference in gross income Operating costs are about 100 per cow more for the native pasture system and a bit more ($125) for the introduced pasture system. Fixed costs are slightly higher for big cows as you are dividing by fewer cows per acre. Positive returns only to moderate cows on native pasture. My expectation that re-crunching those numbers would lead to similar relative results with higher costs for all systems but also higher returns with higher prices relative to 2010. Source: Doye and Lalman, 2011

Big Cows versus Moderate Cows Bottom line: Moderate cows were more cost effective and even more so when Additional WW is more likely 12.5#/100 lb. rather than 45% of body weight Calving rate on big cows is likely lower Calf weaning weight: 495+ (3 x 12.5) = 532.5

Maximizing Net Present Value (NPV) and Optimal Mature Cow Weight Fall calving Angus cows on Bermuda Fall calving Angus cows on native Spring calving Angus cows on Bermuda Spring calving Angus cows on native Max NPV per head $647 $1,291 $2,921 $3,937 Cow weight 950 1600 1550 1100 Max NPV per acre $42 $16 $189 $46 Fall and spring calving cows on two pasture systems. Get very different outcomes depending on what you are maximizing: per head or per acre values. Look first at the top two rows in the table to look at Max net present value per head. Per Head suggests bigger could be better but when maximizing net present value to the the land base, smaller is better. Source: Mallory, DeVuyst, Raper, Peel and Mourer (2015).

Bull Selection Polled/dehorned calves earn $3+ per cwt No. 1 & 2 muscling earn $10+ per cwt over No. 3 Black hide earns premium over other colors If retaining heifers, impacts herd genetics As bulls represent 50% of a breeding herd’s genetics, the quickest improvements to phenotype in calves can be made through bull purchases. Sale lots of dehorned/polled calves earn $3.15-$5.25 per cwt more than lots with horned calves (William, Raper, DeVuyst, Peel, & McKinney, 2012; Mallory et al., 2016). The polled trait is dominant so using polled bulls adds to calf sale prices. At 30 calves per bull per year and 525 pound weaned calves, the value added by using a polled bull is $496 to $827 per year per bull. Muscling has also been found to increase auction value of calves. Calves graded as No. 1 and 2 muscling earn from $10 per cwt (Williams et al., 2012) to $14 per cwt (Mallory et al., 2016). Assuming a 525-pound calf and 30 calves per bull per year, $1,575-$2,205 per bull per year is earned for adequately muscled calves.

Hide Color Discounts ($/cwt) – 2010 Black Hide color has also been shown to influence sale price. Williams et al. (2012) reported that compared to black-hided calves, other hide colors earned discounts ranging from $1.21 per cwt for lots recorded as “black mixed” to $13.76 “Other.” More common hide colors including red, white/grey, and Hereford were discounted $2.91, $1.81, and $7.47, respectively, compared to black-hided lots of calves. So, using a black-hided bull adds value to calves. When combined, bulls that sire polled, black-hided, and No. 1-2 muscled calves earn at least $2,262 per bull per year over bulls that sire horned, non-black-hided, and No. 2 and 3 muscled calves. At the opposite end of the price scale, calves that are dairy or Longhorn, horned, and No. 2 and 3 muscled earn discounts of almost $42 per cwt. At 525 pounds and 30 calves per bull, producers with bulls having traits less valued by the market leave over $6,435 per year per bull on the table. The investment in quality bulls is clearly worthwhile even for smaller producers.  Hide color is obviously related to breed, although many breeds have either selected for or bred in black hide color genetics. One breed, or rather species, that has significant discounts is Brahman. Lots of calves with visible Brahman influence were found to have price discounts of $3.48 per cwt (Williams et al., 2012). The cost to a producer with 30 head of 525 pound calves is $548 per bull per year. To avoid these lower prices, producers should select bulls with little visible Brahman phenotypical traits. Note that in southern climates in which Brahman-influenced cattle perform well, price discounts must be weighted against productivity losses. Brahman Influence $-3.48/cwt Source: Williams, Raper, DeVuyst, Peel, McKinney (2012).

Bull Purchase Calculator Bull cost Annual bull cost per cow exposed Cost per calf weaned Cost per cwt weaned Value of calf Value of pounds weaned per exposed female $3,000 $32.46 $37.45 $7.15 $735 $647 $4,000* $42.12 $48.60 $8.45 $748 $658 * Same annual operating cost = $450, 50 lb. heavier calves, $10/cwt lower price (heavier, but also higher quality) Bull Investment Cost Calculator, beefextension.com

Economic Opportunities Value-added Practices Price impact ($/cwt) $/head (525 lb. calf) Per 30 cows Polled/dehorned $3.15-$5.25 $16.54-$27.56 $496-$827 Castration $5.00-$10.00 $26.25-$52.50 $788-$1,575 Lot size of 10 head $5.18-$7.00 $27.20-$36.75 $816-$1,103 Vaccination $1.44-$6.69 $7.56-$35.65 $227-$1,070 Weaned 45 days $1.67-$5.23 $8.77-$27.46 $263-$824 Vac-45 $12.46-$15.54 $65.42-$81.59 $1,963-$2,448 Cow-calf producers are facing a tougher economic climate than the past few years. To maintain profitability, producers should consider implementing more recommended management practices as their individual resources allow. These practices have been proven to increase sale prices, reduce costs, and improve profits to cow-calf production without requiring significant capital investment. The practices are scale neutral and can be used by small-scale cow-calf producers. Try a few low-cost management practices Castration Don’t like to cut? Try a bander Weaning Use fence line if possible Vaccination Keep it cool! Forage management Get with extension educator and have a plan before April 1 Get skirts on your bale feeders NOW

Economic Opportunities Practices Price impact ($/cwt) $/head (525 lb. calf) Per 30 cows Implants $27 $810 Market cull cows later $50 Market cull cows bred $140 Bull selection $42 $220.50 $6,435 Moderate cow size Reduced hay loss Hay ring type 10-15% Hay storage $4-$6 per ton Forage management Get with extension educator and have a plan before April 1 Get skirts on your bale feeders NOW

Summary and Conclusions Combining management, marketing and technology represents “low hanging fruit” for cow/calf operations Informed decisions start with records Measure then manage… agecon.okstate.edu/cattleman/order

Record-Keeping Tools Cow-calf record keeping tools Financial records CR-3279 Cow-Calf Production Records Software in www.osufacts.okstate.edu www.beefextension.com Financial records CR-324, Quicken for Farm and Ranch Financial Records AGEC-266 Quicken or QuickBooks: What’s the Best Choice for Agricultural Producers? www.agecon.okstate.edu/quicken More information on budgets, decision tools, record keeping www.agecon.okstate.edu/budgets www.agecon.okstate.edu/extension/

Other OSU Resources OSU Farm Management Facebook https://www.facebook.com/OSUFarmManagement/ Oklahoma Women in Ag and Small Business Facebook https://www.facebook.com/OKWomenInAg OSU Agricultural Economics Extension https://www.agecon.okstate.edu/extension Beefextension.com