Understanding Value of Gain Can Keep You in the Black

As I was talking to Blake about this piece, he told me about something Gordon Hazzard had once written. He said it went something like: "We are grass farmers, and we need to remember we are selling grass and water wrapped up in a cow hide." Blake's take on this is "Grass makes us our money, but we have to have livestock to harvest the grass to make it worth anything. All ruminants will eat grass, but we might as well find a class or type of livestock that maximizes our return for our time and effort." Here, Blake takes us through how we can do that. Enjoy! Prices for different weights, sexes, and types of cattle can vary greatly throughout the year. When a person is trying to decide what kind of stocker animals to buy, it is important to study the relationships between these prices. Market prices paid for cattle are constantly changing, and certain classes or sizes are often in far greater demand than others. Performing a value of gain analysis shows a prospective buyer which classes of cattle are overvalued compared to others, and which are undervalued. We want to sell the overvalued animals from our inventory and buy the undervalued. What is Value of Gain? The concept of value of gain is an important one to understand for anyone involved in commercial cattle production.  A value of gain analysis is a useful tool whether you run a cow/calf, stocker, or finishing operation. Value of gain is basically what the market is willing to pay you to add weight to a

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