![]() If feeder calf prices are expected to range between $180 and $190/cwt for 500-lb calves, even when considering a price slide for the lighter calves in the example, profitability for herds with poorer performance in 2022 may not be achievable. In that simulation, herds with annual cow costs of $900/cow require $225/cwt to breakeven while those with annual cow costs of $1,000/cow require $250/cow to breakeven. Using the line representing herds that wean 500 lb calves at 80% weaning rate in Figure 1 demonstrates the importance of maintaining performance considering high annual cow costs. Note: Line for 500 lb at 80% weaning rate and that for 450 lb at 90% weaning rate (middle lines) overlap completely. Feeder calf price required to breakeven with annual costs ranging from $750 to $,1750/cow at 500 or 562.5 lb weaning weight and 80% or 90% weaning rate. Based on observations made above, the former herd example might represent a profitable herd in 2022 but not the latter. Herds with 562.5 lb weaning weight at 90% weaning rate at annual cow costs of $900/cow require $177.78/cwt to breakeven while herds with the same performance but with annual cow costs of $1,000/cow require $197.53/cwt to breakeven a difference of $19.75/cwt. At 500 lb weaning weight with 80% weaning rate, a $10/cow increase in annual cow cost demands an increase in feeder calf price of $2.50/cwt to breakeven. At 562.5 lb weaning weight with 90% weaning rate, an increase in annual cow costs of $10/cow demands an increase in feeder calf price of $2.00/cwt to breakeven. When reviewing Figure 1, it is evident that the rate of response by breakeven feeder calf price is lower when performance (weaning weight or weaning rate) is better. Breakeven feeder calf prices were determined as illustrated above (annual cow cost divided by weaning weight * weaning rate).Īs expected, breakeven feeder calf price responds linearly to increases in annual cow cost. Weaning weight and rate values chosen represent a difference of 12.5% within each set (562.5 is 12.5% greater than 500 lb and 90% is 12.5% greater than 80%). Operations weaning 500- or 562.5-lb calves at 80% or 90% weaning rate were simulated over a range of annual cow costs from $750 to $1,750. Figure 1 represents the results of these simulations. Strategies to cope with effects of drought or high input costs in 2022 were developed using performance scenarios simulated at various annual cow costs. At an annual cost of $750 to keep a cow, the feeder calf price required to breakeven would be $151.51/cwt ($750/495 lb). Thus, a herd of 100 cows exposed in the summer of 2021 weaning 90 550-lb calves in the fall of 2022 will yield a total of 49,500 lb at weaning or 495 lb weaned per cow exposed. Weaning weight and weaning rate (number of calves weaned from the total number of cows exposed) determine effective weaning weight (total pounds of calf weaned divided by total cows exposed). Interactions Between Performance and Cost ![]() Reducing the cow herd on the eve of higher feeder cattle prices will limit the opportunity to capitalize on greater profit potential in the near term. Because of declining beef cow inventory, resulting lower supplies of feeder cattle will be reflected in greater feeder cattle prices in 2022 and well into 2025. If drought persists, the decision to cull some of the cows in the herd or to bear additional cow costs is an important one. Therefore, how much can a producer pay to maintain a cow in 2022 while expecting to remain profitable or at least break even? Producers are encouraged to consider the implications of greater costs on decision-making carefully. Greater cow maintenance costs expected for 2022 will need to be offset by greater feeder calf prices. This is good news for cow-calf producers. Fall price projections for steers of this weight class are par with or greater than current cash prices. ![]() Despite pressure from corn grain price and persistent possibility of drought, feeder cattle sale prices for Medium and Large 1 steers weighing from 500 to 600 lb remain at or above $180/cwt. On the other hand, feeder cattle prices will be moderated by two factors in 2022: sustained demand for beef under the current inflationary conditions and continued weekly slaughter totals supportive of current beef harvest. Weather conditions and continued high grain and forage prices will result in greater annual cow costs in 2022. Prediction models of precipitation for May to July place most of Nebraska counties at leaning below normal probability with probability of temperatures likely above normal. Presently, despite timely rains in certain areas of Nebraska, the threat of drought for the summer of 2022 is not dissipated. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |