Weather conditions this fall have been very favorable for producing wheat forage for grazing compared to the last three or four planting seasons.

Even with the increase in forage production, producers have been reluctant to receive cattle in the prevailing sloppy conditions of the past month. Profit in a stocker cattle enterprise is dependent upon numerous factors, but the two with the greatest impact are the buy-sell price margin and cattle weight gain.

Stocker calf prices have declined through September and early October but have shown signs of stabilizing. Both demand and supply of stocker cattle are expected to increase for the next month, so the price impact is uncertain but likely will be stable to a slight increase. The feeder cattle futures market price for next March is in the $96/cwt range. Analyzing the budget with the current buy-sell margin tends to show more potential for profit compared to recent years.

The second factor impacting stocker cattle profit is weight gain. Good performance is generally expected on wheat pasture. Weight gain of two pounds per day is commonly achieved, and with some select circumstances that can yield even higher.

In a typical 125-day grazing budget, we can expect to advance the cattle 250 to 300 pounds. With this increase in sale weight, the pounds produced reduce the high degree of fixed cost in the budget, to lower the cost of production per pound. Higher sale weight is the key to maximizing gross value under the current market price structure. Wet, sloppy weather is the main factor that can reduce weight gain. Profit is still dependent on your total cost of production.



Cull cow grazing



Wheat pasture is a nutritious feed resource and can be utilized in a variety of ways. Some producers are considering grazing cull cows on wheat forage instead of stocker calves.

The same basic budgeting guidelines apply here. One interesting aspect of grazing cull cows is the buy-sell margin. As cull cows gain weight and body condition, their carcasses will yield more pounds, also known as a higher dressing percentage. Since the market price for high-yielding cows is higher than the thin cow market price, the additional weight gain achieved has a twofold advantage — increased sale weight and higher market value per pound.

One of the keys to profit in a cull cow feeding operation is to maximize weight gain. Cull cows that are open and on a high-energy diet will gain weight rapidly for a short period of time. Keeping the grazing days short to take advantage of true weight gain and compensatory gain in combination is important. Cull cows should be grazed or fed for 50 to 80 days. It is possible for thin, open cows to gain 200 to 300 pounds in a 75-day feeding program.

The other profit consideration when comparing cull cows to stocker calves is stocking rate. Obviously, you can graze two or three calves on the same forage base as one cull cow. Therefore, you would need a two to three times higher profit on cull cows than stockers on a per-head basis to yield the same income per grazed acre of wheat.



Cull cow markets



Cull cows have the most pronounced seasonal price pattern of any class of cattle and one of the most reliable patterns as well. Cull cow prices typically bottom in late-October through November and rise from December through the first half of the year.

A 10-year average shows cull cow prices in the Southern Plains tend to increase from the November low by 8 percent into January, 15 percent into February and about 18 percent into March and April.

There are some unique considerations this fall as cull cow prices weakened in July and have remained soft into the fall. Much of the weakness is due to softness in the processing meat sector, driven by ample competing meat supplies and the availability of competitively priced imported processing beef.

Additionally, the dairy sector has funded dairy cow liquidation programs that have added price pressure in specific weeks and in specific locations.

After two rounds of dairy cow buyouts that resulted in spikes in cow slaughter in May and in September, the dairy industry organization Cooperatives Working Together has announced a third buyout for 2009.

The timing of the slaughter of these cows likely will be in November, precisely on top of the seasonal peak in beef cow culling. This may add another reason for beef cow-calf producers to consider retaining and feeding their cull cows this year.

For information, see Oklahoma State University Fact Sheet AGEC-613 Cull Cow Grazing and Marketing Opportunities.



Highfill is Oklahoma Cooperative Extension Service area livestock specialist.