Wally Olson is an On Pasture sponsor who wants to help readers make more money marketing their livestock. Here he provides an example of how that works for him.
A couple of years ago, I sold 95 bred, fall calving cows in Joplin, Missouri on August 1. That same morning I delivered the weaned calves off of those cows.
The pity party: When I got to the stockyards and went back and looked at the cows, they had just melted in the heat. And three of them that were supposed to be bred were open. I had decided to sell these just the Monday before the sale. So I was down in the pecking order as far as when they would sell. As the sale started off, I became very aware that my cows were not near black enough, near big enough, and near fat enough to bring top price. There were many black heifers at 1100 pounds bringing $2800. My heifers weighed about 885 pounds and brought $2250. They were also selling a set of 1400 pound cows that just that morning they’d weaned 700 pound calves off of them. That morning when I delivered, my calves only weighed 530 pounds. At this point I was feeling very sorry for myself.
One of my stated ranch goals is to “run a profitable ranch.”
Everything that I talked about in the prior paragraph does not tell me anything about whether I’m a profitable ranch. What is interesting, if you divide both sets of heifers by their price and weight, you’ll find out that they both brought $2.54 a pound. So I guess I got paid for what my heifers were worth. I do not know the costs of the 1100 pound heifers, but I do know what it cost me. It costs me a little under $400. The value of the weaned heifer calf is $1300 plus $400, and I have a heifer ready to calve for $1700. Subtract $1700 from $2250 leaves me with the bred heifer and $550 in cash.
Now for the big weaning weights. The 700 pound steer calves were worth about $2.16, so that equals $1572. My 530 pound steers sold for $2.60 pound and were worth $1378. That is $134 difference for 170 pounds for the value gain is $0.78. If you compare cow efficiency, I should be able to run 1.32 cows on the same area that their 1400 pound cows were run on. When you multiply my 530 pound steers times 1.32, that equals 699.6 pounds.
As many folks tell us, an acre will only produce so many pounds of beef, and that’s what I just showed.
The big calves produced $1570 and the little calves produced $1817. Enough said.
Wally,
I’ve struggled with how to present this math without sounding condescending. You’re pity party angle is perfect!
Great example, and as always, thank you for your leadership.
Derek