Tips For Staying Profitable In A Depressed Livestock Market

There has been quite a price change in the livestock world in the last two years. There has never been a time in recent history that cattle prices crashed as quickly as they did in the fall of 2015. Historically high prices were being paid for anything that looked like a cow. The new normal for 2014 and part of 2015 was rocket fuel prices never seen before in history. Tons of folks threw caution to the wind and wanted to get in on the action of the super high cattle prices. I read an editorial during this feverish price action from a respected cattleman that predicted, “Prices would never go back down!” I kept the article for that quote, because this was the mentality during this phase of the cattle cycle. People just lost their common sense, completely bonkers. This guy had been in the cattle business his entire life, he got sucked in with the vacuum and hype that was running rampant. I’m sure most of you have heard it before but it is true, “There has never been a rock thrown high enough, that eventually it comes crashing back to earth.” When you are dealing with commodities they always move up and down, period. It comes back to the mob mentality with humans, we certainly don’t want to miss out on what the rest of the mob is doing. We had local sale barns where black 2 day old bottle calves were selling for $700. Four hundred p

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9 thoughts on “Tips For Staying Profitable In A Depressed Livestock Market

  1. Hi Greg,

    I’ve really benefited from your books and teaching in the past and just wanted to say thank you. I’ve gone from a 50 acre small holding and increased my acreage by about 180 acres every year for the last 3 years. When you know it’s difficult to make a loss it gives you confidence for expanding the business.

    One Question – How many acres per cow do you need for stockpiling them? I’m at pretty low stocking levels and would like a bit of a comparison about where I might get to.

    Many thanks.

    Rob.

    1. Hi Rob,

      That is a pretty hard question to answer accurately without knowing the quality and quantity of your stockpile. On our stocking rate for our farm we are stocked at 1 animal unit (1000 lbs) per 2 acres of pasture.

      Before we switched to planned high density grazing we were stocked at 4 acres per 1000lbs.

      For winter forage calculations, take 3% of the body weight of your entire herd (daily forage required for the herd) and multiply this figure by your anticipated winter non growing season days. This gives you total pounds of forage for the winter for your herd.

      To calculate how much forage you have on your farm, google “grazing stick to assess pasture forage” This method teaches you how to calculate how much available forage you have available on your farm.

      Now you know how much forage is available to you on your farm for the winter. You know how much you need for your herd from your first calculation. You can now calculate how many grazing days of winter stockpile that you have in front of you. Add a 30 day drought reserve cushion for late spring green-up growing conditions. If you have a dry winter, slow growth spring, this drought reserve is critical.

  2. Wow, if you consider a 950 lb cow “Medium”, I’d hate to see what a small cow looks like.

    I like my cows around 1300 lb or so and thick,.. I do agree that no beef cow should ever need grain…

    The old iron? well.. if you’re starved for cash, sure, send it along, but not before you *have* to… There’s nothing more expensive to own than NEW iron, even if you never turn the key… For the amount of money you get for an old working tractor, you can save a lot of money on the more expensive stuff.. Having several tractors, each with it’s own set of tasks, and each perfectly sized for the task saves money in the long run.

    1. If those 1300 lb cows are working for you, by all means keep em. As long as they’re paying the bills and you’re having fun, then don’t change a thing.

    1. Meg, my hat is off to you folks in New York that are pushing the grazing paradigm in the winter months. Keep up the great work. We need more young ones like you out on the land teaching the older generation that maybe there is a more profitable way of managing our livestock herds. When you get to the end of the calendar year, producers can keep some of the money on their farm instead of it all ending up in other peoples pockets.

  3. One of the reasons for feed bucket cows are our Land Grant Universities when they decreed that producers had to increase weaning weights to become profitable. Their premise was “since you sell calves by the pound, more is better.” No one was thinking about the cost up front, which was ignored (apparently thinking raising a bigger calf was free), then when cows began getting larger, not understanding the result. On top of this producers were told they had to take better care of the cow (read more feed) it was a race to the bottom. This began in 1969. In 1979 I sat in a sale barn watching the calf sale. I realized 500 pound calves were only brining $10 a head more then 400 pounders. How is this making money? I thought there was some big secret I did not understand. Then it got worse. The universities and breed associations were on a roll with bigger performance numbers every year. Production and profit must be by the “acre”, not by the animal. That will lead back to the smaller, do it on their own, cows that Greg Judy and Ian are talking about.

    1. Chip you are spot on with your remarks. I always wondered myself while watching auctions how folks could raise bigger calves on their farms and not get paid for it when they sell them. Another disturbing trend that is starting to be pushed by bigger is better is keeping beef cows in very large hoop barns their whole life. All the so called professionals claim it is a much more efficient system than letting the cows graze. Wonder how that is working out for them today with present day calf prices?

  4. Ranchers and farmers in our area tend to increase their herds according to something other than sale price: forage price. They stock for a maximum-production year (of forages) which means either they can produce more or buy more cheaply. Stocking for optimum–not maximum–land usage and average production (though this changes as fast as the weather patterns recently) may help with the bad spells.

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