Wednesday, February 27, 2013

The Bigger is More Profitable Myth

There is a commonly held opinion within the cattle industry that ranchers need to raise bigger calves to be profitable. Is this opinion fact, or is it a myth?

When I checked the market prices at Amarillo, Texas tonight, 700 pound steers were bringing $145 cwt while 500 pound steers were bringing $187 cwt. This meant (that at least on this day) a 500 pound steer was actually worth $65 more than a 700 pound steer. In reality, that 700 pound steer is costing you more than the $65 difference in market price per head.
The average amount of feed to maintain a cow (depending on whether or not she is lactating, and what trimester of pregnancy she is in) will ranch from 2.5% to 3.5% of her body weight. For the purpose of keeping the numbers round, I am going to use an even 3%.

A 1,250 pound cow will have a daily feed requirement (1250 X 0.03) of 37.5 pounds of feed. This comes out to 13350 pounds of feed per year to raise that 700 pound calf.

A 700 pound cow will have a daily feed requirement (700 X 0.03) of 21 pounds a day, which comes out to 7665 pounds of feed per year.

By dividing the difference in the amount of feed needed to maintain the 1,250 cow by the amount needed to maintain the 700 pound cow, we find that you can actually run 1.78 of the 700 pound cows on the same amount of forage as it takes to run one 1,250 pound cow. This equates to running 178 cows raising 500 pound calves on the same amount of forage as it takes to run 100 of those soggy 700 pound calves. So just how much more money can your ranch bring in with the more moderately framed cows?

Based on the above market prices, you will make $6,500 more per 100 calves on those 500 pound calves. However when you add the additional 78 calves you would raise, this adds another $72,930 which brings the total to $79,430. When you take into account the extra vaccines and wormers you will need, the total will drop a little, but you would still be putting more than $70,000 a year into your bank account on the same amount of feed and forage.

For information on my services, visit NaturalCattle If you would enjoy a laugh or two, take a look at my cowboy humor and cookbooks at the 2lazy4U Livestock & Literary Co.

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