Another week of hot weather and hot markets! The yearling market continues to be very strong, with steers weighing 800 to 1000 lbs bringing over $100.00, while fats are selling in the $90.00’s. The very front end of the calves are selling well, but overall, there is a downtrend in the calf market. Many people seem to be too busy to mess with calves, and of course, there’s usually a large run of them coming up in a month or two.
What is opportunity cost? It used to be taught in college economics courses, but it’s one of those things that don’t seem to stick. How much has it cost the wheat farmer in the last several not to run wheat cattle? In a normal year, just grazing cattle from November to March will put on around 200 lbs of gain. At today’s prices, that’s well over $200.00 a head a person is pulling off the wheat. If you run one head to two acres, that’s $100.00 an acre a person is getting from the wheat without harvesting it!
Supposedly, grazing cattle will reduce the harvest by somewhere between two and ten acres, depending on where you are. If grazing really does cut down the yield by 10 acres, then a person would have to produce an extra 20 acres to make up for that $100.00 they didn’t get from grazing cattle, and that’s just at $5.00 a bushel! If you graze the wheat out until May, there might be even more money to be made, and it sure doesn’t cost $25.00 an acre to graze it out!
The opportunities are as plentiful as someone’s imagination. Bred cows and pairs are probably still the best thing going in the cattle industry. A fancy bred heifer might cost $1400.00, but she might produce 10 calves in her life worth over $5000.00! Another nice thing about cows and calves is they will eat wheat too!
What about turning out a yearling? There isn’t any rule that says a calf has to weigh 475 lbs in order to turn them out. A yearling will eat more, but there is also less sickness, and probably more gain. The only difference is whether you sell them in January or March! Two hundred pounds of gain is two hundred pounds of gain, whether it’s from a 300 lb calf or a 700 lb yearling, and with the market now and on the futures board somewhere around $115.00, that’s $230.00 a head in your pocket! And that doesn’t even include the harvest!
The U.S. cow herd numbers have NOT been building up in the last several years. Heifer numbers in the feed yards is higher than it was a month ago, and drought has forced up to 20% more cows into the packing plants. The opportunity is here! Running cows and calves, producing yearlings, using wheat to put on weight are all very real opportunities to make money. Demand for beef is excellent, there are more people in the world every day to eat beef, and it’s great to eat besides! What more can we ask for?
Every day it’s easier and easier to get cattle. The internet lets you buy cattle from just about anywhere in the nation, at almost any weight or age you want, and you can either buy them live through the auctions, or even contract them for future delivery! Go to WWW.CATTLEUSA.COM to see all the opportunities available to you!
Thank You for your time,
Weston Winter
