I have written several times about Canadian studies documenting the importance of copper, selenium and other trace minerals, and their impact on health and reproduction. Although clinical disease can occur with severe deficiencies of these microminerals, many of the effects of deficiencies are not clinically obvious and may just result in lower productivity.

Two areas often affected are cow fertility and the ability to mount an adequate immune response.

A recent study published in The Bovine Practitioner adds some more information on this important topic. The study was conducted at the California Animal Health and Food Safety Laboratory and used its database from 2012 to 2021. Researchers downloaded 857 beef cattle and 638 dairy cattle cases that included both a liver trace minerals test and a post-mortem diagnosis.

This study differs from others I have written about because the animals examined had died. This is a very different population than sampling healthy cows within a herd.

The populations also included a wide range of ages, from calves to cows. The study focused on three important trace minerals: copper, selenium and manganese.

One of the most striking results is the drastic difference between beef and dairy cattle. Copper deficiency in the liver was found in 33 per cent of the beef cattle and five per cent in dairy cattle. Selenium deficiency was evident in 45 per cent of beef cattle and five per cent in dairy cattle. Manganese deficiency was the only one more common in dairy cattle, at 32 per cent compared to 17 per cent in beef cattle. Overall, 73 per cent of the beef cattle in the sample had at least one trace mineral deficiency, compared to 45 per cent of dairy cattle.

Manganese deficiency was more common in dairy cattle, but less is understood about this mineral, including the difficulty in establishing normal levels in cattle.

This observation was somewhat expected because beef cattle often rely on free-choice minerals throughout much of the year, while dairy cattle are typically fed a total mixed ration that includes a trace mineral package. The authors noted many dairy cattle may have been over-supplemented with trace minerals, as many cows were above normal levels in copper and selenium.

Trace mineral deficiencies linked to illness

The second objective of this study was to evaluate associations between the cause of death determined by the pathologist and trace mineral status.

Results showed beef cattle that died of bovine respiratory disease were more likely to be copper deficient. This could mean copper deficiency is affecting the immune system of these animals, but the study cannot claim it “causes” bovine respiratory disease. Respiratory disease is infectious, but the authors established a relationship between the two factors in this population.

The study reinforces previous work showing beef cattle herds are more prone to trace mineral deficiencies. This may be due to a reliance on free-choice mineral intake or to complex interactions with elements such as sulphates or molybdenum, which can cause secondary deficiencies that beef cattle are more exposed to.

Trace mineral deficiencies are complex, and their impact is not always obvious.

As cattle come off pasture this fall and winter feeding begins, it may be a good opportunity to work with your veterinarian and nutritionist to evaluate your herd’s trace mineral status. This may involve taking liver biopsies or serum samples from a sample of cows and submitting them to a diagnostic laboratory for trace mineral levels. Feed and water testing may also be necessary when planning your winter feeding program.

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Feed costs are easy to spot in a beef cattle operation, but what about the other expenses quietly chipping away at your bottom line? This is where yardage comes in; it’s a crucial part of managing winter feeding costs in cow-calf operations.

What is yardage?

Yardage refers to the overhead and non-feed costs incurred while maintaining cattle during the winter feeding period. These costs include day-to-day expenses such as labour, equipment and building maintenance, fuel, utilities, manure handling and other general expenses such as farm taxes and accounting fees. They also include non-cash costs, such as machinery and facility depreciation, which represent the graduate loss of value in assets over time.

Yardage is typically expressed on a per-head per-day basis.

Why does yardage matter?

Yardage may not grab attention like feed costs, but it significantly impacts profitability. These costs, especially non-cash costs like depreciation, often remain unnoticed but can erode profitability over time. For example, underestimating yardage may lead a beef producer to assume their operation is more efficient than it truly is. Ignoring yardage also makes it difficult to identify areas where costs can be optimized. For example, the exclusion of machinery maintenance and repair costs may make the cow-calf enterprise look more profitable than it is.

Yardage insights can mean better decisions

Yardage is more than just a line on a spreadsheet — it’s a key component to understanding and controlling costs, and can be a powerful tool for improving financial outcomes. Here are some examples:

Pinpoint cost driver: Identify the most significant contributors to yardage and pinpoint opportunities for savings.

Evaluate resource utilization: Determine if equipment and facilities are underutilized or can be used for other farm tasks.

Explore alternatives: Yardage insights can highlight opportunities to lower non-feed costs through alternative feeding methods.

Assess economies of scale: Knowing yardage costs can help assess whether expanding the herd could lower costs per head. Overhead costs are often considered fixed, because they don’t change significantly with the size of the herd — up to a point. This means increasing the herd size can spread these costs over more animals, reducing the per-unit expense and improving cost efficiency. However, as the herd grows beyond the capacity of existing resources, additional expenses for equipment or labour may arise.

Keeping track of yardage

Accurate yardage calculations start with diligent record-keeping. Keep detailed records of cash expenses, such as utility bills, equipment maintenance costs and labour hours.

Many overhead costs are incurred at the whole-farm level, making it necessary to allocate these costs across different enterprises and production stages to calculate yardage accurately.

—> READ MORE: Rethinking yardage costs by Sean McGrath

Overhead costs include machinery maintenance and repairs, building repairs, utilities, insurance, property taxes and salaries.

For farms with multiple enterprises (say, cash crops and cattle), allocating whole-farm costs to the cow-calf winter feeding period can be complex but essential. Various methods can be used for this allocation:

Time-based allocation: For assets like machinery or facilities, costs can be divided based on the proportion of time these resources are used for winter feeding.

Revenue-based allocation: It can be difficult to track or estimate the use-time of each fixed asset used on a diversified farm. In this case, costs can be divided based on the cow-calf enterprise’s share of total farm revenue. For instance, if the cow-calf enterprise generates $40,000 in revenue and the crop enterprise generates $60,000, the total farm revenue is $100,000. The cow-calf enterprise’s share is 40 per cent, so 40 per cent of overhead costs would be allocated to it.

Alternative methods: Costs can also be allocated using the percentage of gross margin or total expenses contributed by each enterprise. For example, if the cow-calf enterprise incurs 45 per cent of the total farm expenses, 45 per cent of the overhead costs would be allocated to it.

The BCRC cow-calf yardage calculator

The Cow-Calf Yardage Calculator is designed to help producers estimate their yardage by providing a clear template and streamlining the calculation process. It requires data input on herd size, winter feeding days, whole-farm cash overhead costs and the values of machinery and buildings allocated to the cow-calf winter feeding period. This tool calculates the total yardage cost, including a breakdown of cash expenses and depreciation on machinery and buildings.

In this calculator, non-feed variable costs — such as veterinarian services, medicine and bedding — are treated separately from yardage. However, they can be entered in a supplementary section to calculate the combined total of yardage, bedding and veterinary and medicine costs.

Making other yardage-related calculations

While yardage is commonly expressed on a per-head per-day basis, the calculator also provides results in cost per animal unit day (AUD) when animal weights are entered. Production cost and feeding capacity can vary significantly with animal size. Yardage on a per-AUD basis helps allocate overhead cost or shared resources based on cattle size or type.

This approach is useful when calculating profits, as both costs and revenue can vary with cattle size and type. For example, a larger 1,500-lb. cow may have a higher yardage cost but could also wean a heavier calf compared to a smaller 1,300-lb. cow. Calculating yardage per AUD also provides a standardized measure for comparing costs across farms with different herd compositions or within the same farm as herd composition or cattle sizes shift over time.

Bottom line

Understanding yardage is vital for identifying inefficiencies, managing resources and improving profitability. By tracking yardage, producers can better navigate challenges and create opportunities for growth.

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Just like any team through junior high, high school, college or the pros, there are some fundamentals required to make a good team. First, the new recruits need a bit of coaching on where to go, what to do, what to graze, et cetera. This is true not only for new entrants from within the herd, but also purchased cows. Often cows that come into a herd aren’t aware of the systems in place, or even what plants are good grazing.

There are a few problems a cow herd team can have that really cause damage, and surprisingly they are quite similar to those in a human team.

Failing to fit

Some cows may come into a system or a team and just be unable to fit in with what is going on. That doesn’t mean they are not good players, but it may mean their talents are better suited for a different playing style. This could be cows that are in a low-input, grazing system trying to keep up with the power of cows in a more high-octane system — or it could be the reverse. Sometimes players just don’t fit the overall scheme of things. We don’t want to sign a goalie when we are really looking for a power forward.

Not a team player

This could be something as simple as being aggressive toward coaches and ownership, or more complex, such as choosing to leave the playing field at inopportune times (fence-crawling). It sometimes takes a bit of time for a cow to adapt to her new teammates and understand the pecking order — but some things are relatively inexcusable. It partly relates to non-performance, but cows that require extra attention or care relative to their teammates are a drag on the entire roster. It’s often a fine line between a cow learning the game versus a cow being a literal on- and off-field distraction.

Non-performance

This may also seem basic and, as previously mentioned, it may take a while for new recruits to really learn the game. For example, we don’t necessarily expect the calves from first-calf heifers to weigh the same at weaning as calves from mature cows. That said, various teams have different expectations and teammates need to meet these expectations at the risk of shortened careers and being traded.

Sometimes we can end up with a recruit that creates a lot of team drama or is not a good fit. It is often better to trade your way out of this team member and search for a better fit. That also goes for injury-prone players. Every time we add new herd members we need to empower their success, but we also need to hold them accountable and not adjust the rest of the team just to make a few new players happy.

Salary cap

Most operations work on a salary cap. There is only so much money that can go into players and at the end of the day it is nice to have a bit left for the coach and ownership. While we may have our favourite players (remember old No. 27?) it’s important that everyone pulls their weight toward the end goal.

I think it’s also fair to state every team needs a coach whose playing style matches the environment and the players. That is the role of the farm or ranch manager. The players need to clearly understand the expectations of the system and ownership needs to work to ensure the right players are in place. It’s possible to adapt the system to the cows — but be aware of the salary cap and if you want to pay for a team of superstars or grinders.

There are a lot of teams of cows with different playing styles that can be extremely successful. The trick is making sure that the style matches management resources and coaching. Additionally, it’s important to know the system you are working in and ensure players are accountable to whatever standard that requires.

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There are certainly times when you are racing from one urgent task to another. While it feels like the rest of the working world has three to five business days to respond to a request, that tactic doesn’t apply when cattle escape onto a busy road, the stock water dries up or a sick animal needs attention.

The fall run is a good reminder of the contrast between the long wait and the mad dash intrinsic to cow-calf production. It’s a time of gathering, sorting, shipping, evaluating and selecting. There is a familiar rhythm of activities like weaning and preg-checking that yield easy-to-count metrics producers use to inform decisions or (more honestly) take pride in. Are the weaning weights up or down? Did the cows breed early? Are we happy with how the calves looked out of that new herd bull?

For insightful observers, the season can also underline subtleties that pull at the heartstrings of the gruffest, toughest cattle producer. Maybe it’s a set of twins that thrived despite the odds, or a favourite, reliable cow that raised one last calf before it’s time for her to go down the road.

There are things about raising a live animal commodity that are inherently different from other agricultural sectors. Planting, harvesting and marketing a cash crop within six months requires a different approach than the mindset necessary for operating within the messy, complex continuum of breeding, grazing, weaning and calving.

The fall is often an incredibly important time for beef businesses. For many commercial cattle producers, this period is where a big portion of annual income is generated. Managing cash flow and budgeting on a single big paycheck for the year is challenging, even when prices are good. Producers who have retained calves to feed or breed have a minimum of 12 to 24 months of expenses tied up in a live critter that has yet to leave the farm. There are a lot of moving parts between conception to market that impact profit.

While most producers are strategic about paying their bills, there isn’t a Magic 8 Ball with answers on how to parse out those funds so they last until the following year or beyond. Will the winter be tough or the summer dry? Should we invest in water? Land? Buy more cattle? Pay down debt? Should more calves be sold when prices are good? Or should females be kept to increase the breeding herd? It’s impossible to anticipate all the chances, choices, and outcomes.

Yes, raising cattle can be fast-paced and full of life-or-death moments, and that’s likely part of what makes this business appealing for some. But an equally important aspect of raising cattle is about pacing oneself to make it to the finish line, or more practically, the next payday.

For cattle producers, the fall is the end of a chapter, a new beginning, and a continuing saga, all at once. Be patient yet quick, sprint but also walk, and acknowledge the risks you take on for a business that somehow costs and pays you more than you can define.

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He joked that he is ready to lock them up inside the creep enclosure and force-feed them. Like most people, myself included, he wants to add about 60 lbs. of creep-fed weight to each calf, in order to take advantage of 2024’s record-breaking feeder prices.

Dried-out pastures make any nutritious creep feeding program work, but we seemed to forget that a lot of rain makes us dependent upon profitable economics, if we are going to creep-feed calves until late autumn. Consequently, I have calculated the profitability of creep feeding calves for 2024, which targets 60 lbs. of extra weaning weight in a 100-day creep feeding program and I compare it to that of non-creep-fed animals. The main profit drivers of this year’s creep-feeding are:

• predicted feeder prices during this autumn andinto winter,
• current feed prices, and
• feed efficiency in which creep-feed is turned into heavier weaning weights.

For 2024, the accompanying spreadsheet shows that to put 60 lbs. of creep-fed body weight on large-framed calves (segregate out the replacement heifers) in a 100-day creep feeding program looks unbelievably profitable.

I estimated a base $4.50/lb. for fall-weaned 600-lb. calves and the recent decreased creep-feed prices of 15 cents/lb., together with an estimated 6.5 feed efficiency and a 10-cent/cwt. market discount. The yield from those calculations is an unheard-of $150 premium, or a 250 per cent return on investment, for creep-fed calves.

It has been my experience that when producers wait until late summer to put out creep-feeders, feed intake by spring calves is dictated significantly by pasture quality, even though mum has already dried up.

This means calves usually start to come up to the creep feeders and eat a couple of pounds of creep each day, for a few days. Then they might not come up again for about a week. It’s only in early fall that calves tend to tackle creep consumption to an optimum seven to eight lbs. per day, which continues until they put on an extra 60 lbs. until weaning.

To drive such great creep feed intake, I believe that only a highly nutritious grain-based creep feed should be provided. As a beef nutritionist, I have formulated many creep rations that fill this nutritional gap for spring calves. One of my favourites is a 14 per cent protein and medium-energy feed pellet, made up mainly of wheat middlings, and some barley and supplemented with high-protein concentrates such as corn distillers’ grains. Its mineral/vitamin profile also contains a complement of calcium, phosphorus and salt with essential trace minerals and vitamins A, D and E.

It should also be noted I have formulated rolled creep feeds with a similar nutrient profile, largely using steam-rolled oats in combination with a special protein pellet. Plus, all of my creep feeds contain five per cent molasses to improve and steady feed consumption by young calves. Brewer’s yeast is often added to improve forage digestibility and monensin sodium (a coccidiostat) is added to prevent the devastating effects of coccidiosis.

As an alternative to my creep feeding program, a feed mill operator for whom I worked part-time 15 years, and who owns a 100-cow-calf herd, takes a more aggressive approach. His sons put their creep feeders out much earlier in the spring. Initial consumption by spring calves starts at one to two lbs. per head per day, but steadily increases throughout a normal grazing season (with timely rains, no drought) in a step-up fashion toward autumn.

As a result, weaning weights of their spring calves are consistently higher by 20 lbs. (80 lbs., total) with better feed efficiencies of six lbs. of feed per pound of gain compared to the above conventional creep feeding program.

The funny thing is, whether my other friend is truly serious about locking his calves in to creep feed them, or my former employer puts out their creep-feeders much earlier in the season, both producers should make more creep profit than ever. And it’s not just a couple of loonies, but a $150 profit per creep-fed calf. So, it’s never too late to creep feed, even when feeders are pulled as the first snowflakes fall.

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To avoid having any more calves drown, my husband and I fenced off the creek in those pastures. The cattle drink from water troughs instead.

In the pasture where we always have cows with young calves, they generally have access to two troughs, filled twice daily with a hose while I am doing morning and evening chores.

One of those troughs is short enough that the calves can reach the water to get a drink, but over the years that trough developed some rusted-through holes in the bottom. We fixed it once by putting mesh over the worst holes and spraying a sealant over the entire bottom. That lasted about 10 years, but then the trough started developing holes again — which at first I was able to patch with a little mud.

This spring the holes were getting big again and we planned to clean up the bottom of the trough and re-spray sealant over the bottom — which would be a lot cheaper than buying a new trough.

The problem was cold weather; we needed some warm days for the sealant to set up.

While waiting for warm enough weather to patch the trough, we made a temporary calf watering creep next to the fence, near the big water trough for the cows.

READ MORE: Water systems for cattle operations

There was already an electric wire along the top of the fence, since one of our horse pens is next to that field; we have electric fence along the top rail of all our horse pens to keep them from chewing the fences.

So it was a simple solution, to set some short tubs along the fence. They can be easily filled with water when I am watering the cows. I used an electric wire and step-in posts to keep the cows away from the tubs. Otherwise, the cows like to drink from the tubs, rub on them, and tip them over.

This has been working nicely. The calves are curious and come check out the tubs and sample the water — and soon learn to drink from the tubs — and the cows respect the hot wire and can’t get close enough to the tubs to mess them up. The wire is high enough that the calves can easily walk under, while the cows stay out of that area. Now the calves have plenty of water until we get a chance to fix the old leaky trough.

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Sometimes I hear comments such as “just because there is more supply, why should the price go down?” Secondly, these producers often complain that there is not enough information about the feeder market to make a timely decision — therefore, producers make random decisions. I often ask a producer if they have a five-year plan. Many producers plan day-by-day rather than having a five or 10-year strategy.

In University, there is a fair amount of time devoted to learning about the feeder cattle market. It’s a purely competitive market with limited or no government intervention. This tells us in the long run, there is no margin. One has to be smarter than the group or have economies of scale to compete long term. In this column, I will provide a basic theory of the feeder market. I will use this theory to forecast price behaviour over the next six to 12 months. Hopefully, this will help you be more profitable and provide information for a longer-term strategy for your operation.

Look ahead one year

When looking at any market, one has to start by asking what the market needs to accomplish over the next year. At extremely low prices, the market discourages production and encourages consumption. At extreme highs, the market encourages production and rations demand. High prices discourage consumption.

The feeder market is somewhat unique for three reasons. First, there is no real equilibrium price range where we can say supply and demand are in balance. The market is either encouraging production or discouraging production. The market moves from extreme highs to lows.

Secondly, at extreme highs, the feeder market has an inverted supply curve. In a normal market, higher prices result in more supply coming on the market. For feeder cattle, there is a period where higher prices result in lower supplies coming on the market because of heifer retention.

Thirdly, in a normal market, low prices result in less supply coming on the market. Low feeder prices cause a temporary surge or increase in beef production. The higher cow slaughter and larger beef production tend to result in feeder cattle prices dropping to abnormal lows. This is a basic theory of the feeder cattle market and explains why it is unique. This also tells us there are significant opportunities if you know what to look for.

A look at the numbers

The U.S. beef cow slaughter from January through August was 2.353 million head, up 175,700 head from last year and up 273,800 head from the same timeframe of 2019. The cow slaughter has been higher each year since making a low in 2015. The U.S. calf crop peaked in 2018. The 2019 U.S. calf crop was down 721,000 head from 2018. The 2020 calf crop was down 455,000 head from 2019. We’re looking for another year-over-year calf crop decrease of 500,000 to 600,000 head for 2021. For 2022, I’m forecasting the U.S. calf crop to drop to 34.1 million head. This is similar to 2012 or 2013. The calf crop is dipping down to 10-year lows and the cow slaughter is reaching up to 10-year highs.

The Canadian calf crop has been relatively flat over the past four years, coming in at 4.3 million head. The marginal changes from year to year have not been sufficient to alter the market structure.

Expect a major rally

What does the feeder market need to accomplish over the next two years? The market needs to encourage production that will result in higher prices. I’m looking for a major rally in the calf market next spring. The expansion phase starts by tapering the cow slaughter pace. Secondly, heifer retention increases and thirdly, we see an increase in the calf crop. History tells us this takes about two years to accomplish all three steps in the expansion process.

The drop in the cow slaughter pace is expected to occur in the first half of 2022. Heifer retention will begin in the fall of 2022. We’ll likely see an increase in the calf crop in the latter half of 2023.

Bred heifers, cow-calf pairs and one- and two-year-old cows have been reasonably priced over the past few months. This is the opportunity for the cow-calf producer to expand the herd. Feed grain and forage prices are expensive, but it’s prudent to increase the herd so that you can take advantage of higher prices over the next couple of years. Interest rates have been at historical lows. Just like a factory is encouraged to expand in this economic environment, the cow-calf producer has to do the same. Inflation is running at four to five per cent year-over-year. If you don’t’ expand every year, your operation shrinks.

Good information an investment

When it comes to market information it is available from different sources but it’s not free. Cow-calf producers and backgrounding operations often tell me that “I’m just a small operation; I can’t afford market information.” My response is that if you don’t spend $1,000 to $3,000 on education, self-development or market intelligence per year, then you have other issues. Spend money on intelligence and on yourself to make yourself wiser. In a purely competitive market, you need to be smarter than your neighbour. Your long-term profitability and viability depend on it.

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Driving down cost

There are a couple of answers to that and it depends a bit on how we view our operation. We could look at a unit on a per-acre cost or a per-calf cost. In the cow-calf sector, our forage harvest is usually marketed as weaned calves, so cost per pound of weaned calf is a good choice for most operations. For a stocker operation, an equivalent would be cost per pound of gain. Generally, we market our forage through a cow, so pounds of weaned calf is roughly equivalent to cost per bushel in a grain analogy.

If the price per pound of calf is low, then we need to make sure we drive down our cost per pound of weaned calf below the price level to be profitable.

Assessing unit cost can be a big job, especially on a mixed farm with more than one enterprise. For a ranch that is strictly a cow-calf operation with no haying or feed-making enterprise, it’s as simple as adding all the costs together and dividing by the pounds of weaned calf. For mixed enterprises, there are more nuances. How much tractor depreciation is used on the grain side vs. the cow side? How much labour is spent on stockers vs. cows vs. haying?

That said, the fastest way to make big gains is to focus on big costs. A five per cent improvement in your largest cost will have a much more significant impact than a 10 per cent improvement on a cost that is among your lowest.

Depreciation

I like to use the adage that “stuff” kills cow-calf outfits. It’s not necessarily the purchase of stuff like tractors, haybines and trucks — it’s the maintenance and replacement cost. That replacement cost — the inevitable need to update/upgrade — is depreciation. A good way to consider depreciation is “what is the price difference to replace this item, and how soon do I need to replace it?”

There are a couple of ways to drive down the cost of “stuff.” The first and most obvious is to have less. The other way is to use more of the stuff you have. Note I did not say “more effectively” although that is also important, but the more units or the more enterprises you can spread that stuff over, the lower the cost per unit.

Here is an example. Let’s assume we have a $50,000 tractor that depreciates at $5,000 per year. If we wean 100 calves that average 500 pounds, then the depreciation cost is $0.10/pound. If we could use that same tractor to run 200 cows, that depreciation cost immediately drops to $0.05/pound. On a mixed farm, we may use that tractor 50 per cent of the time for grain operations. In that case, we have also dropped the depreciation cost to $0.05/pound, as we can spread the cost over another enterprise.

Another way to improve depreciation is to make assets last longer. If we get 10 years instead of five out of a truck, we can spread that loss in value over twice as many years of production, reducing the overall cost per pound of weaned calf.

Feed

Feed is a huge cost in a cattle operation, and maybe more importantly, feeding can be a huge cost. Cows have to eat, that is pretty much a given. However, I am continually amazed by the number of cows that are not fed using a feed test and a formulated ration. This does not necessarily mean that you must have a mixer wagon and feed every day. But a feed test does help prevent over-feeding cattle and also identifies any potential nutrition gaps with the lowest-cost options we can come up with. This balanced ration can also increase performance, thus reducing feed use and potentially increasing saleable product.

Yardage

Aside from feed testing and feeding the right amounts of the right feeds, there are also tremendous opportunities to lower unit cost of production by allowing cows to feed themselves. Most of us do not appreciate the costs associated with yardage and feeding of cattle. Depreciation is one of these costs, but we also need to look at labour, fuel, repairs, facilities, corral cleaning, electricity and other costs. There is still a yardage cost no matter how we feed cattle, but it can often be greatly reduced by allowing cattle to feed themselves. This is part of why we see systems such as corn-, swath- or bale-grazing gaining traction for winter feeding of beef cattle.

Yield

If you talk to a grain farmer, it’s not all about yield, but it’s a big part. In a cattle operation, we use weaned calves to sell forage. In other words, we need to be concerned about forage yield. Forage quality also affects performance and is important as well. If we can increase our forage yield, several exciting opportunities can be opened up for us to lower our unit cost of production. We can run more cows producing more calves and thus more weight, lowering our unit cost. Or we may be able to graze our cow herd longer, reducing our feeding and yardage costs, thus reducing our unit cost of production. Or we may be able to graze our calves longer or put more weight on them using the same land base, thus lowering our unit cost of production. Lack of yield in forage systems is probably one of the biggest costs to the industry.

These are obviously not the only cost-reducing opportunities available, but for most of us they are big ones. They also demonstrate how knowing our unit cost allows us to make better risk-management decisions. It also helps us to identify and understand areas in our operation that can be improved.

In the next articles I will touch on a couple of ideas to boost forage yields and to assess costs and opportunities on our income and expense statements.

I like to say that economics is the science of justifying what you were going to do anyway, but the reality is by knowing your costs and managing forward, the economists are actually right!

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If you hadn’t thought of it before, bull-sourcing services are available. Bohrson Marketing based in Olds, Alta. is one service that can offer stress relief, organization skills and the ability to dissect the immense amount of information available to help buyers make an intelligent bull-buying decision.

Their extensive contact network of purebred breeders, test stations, production and private treaty sales, combined with number-crunching expertise can make them the perfect partner.

Owner Scott Bohrson says for cattlemen looking to fill out their bull roster, it’s important to take stock of what is needed and where they want their operation to go. Communication is the most important ingredient. “We want to visit with them to determine what types of bulls may be suitable for their programs,” he says. “When we have success buying cattle for commercial cattlemen, it all starts with proper communication.”

Checklist of requirements

Bohrson says it’s vital to determine the buyer’s production and marketing system along with environmental and management considerations. “Beyond the breed of the bull, we need a breakdown of what kind of cattle they prefer,” he says. “How important are specific traits to them?”

For example, is the production system aimed at marketing the calf crop at weaning, backgrounding, retaining ownership through the finishing process or other more specialized targets? Will this bull be used on heifers, mature cows or both? Does the producer want to retain some heifers as replacements? What are the feed resources and environmental conditions? These are among the questions that often need to be answered.

EPDs are a fixture of bull buying and recently genomic testing has pushed them to the forefront, but Bohrson says while it may be more of a factor in the purebred industry, most commercial cow-calf operators are still more concerned with the basic parameters such as birth, weaning and yearling weights.

“We get very few comments on genomic testing although over the 12 years I have been doing this, there has been an increase in EPD interest,” he says. “Most commercial cattlemen we deal with are concerned with the different weights, the type of animal and the eye test.”

He says potential buyers usually ask about breeding soundness exams (BSEs) and their results. “Buyers want to know if the bulls have passed their semen test and what the exam looked like,” Bohrson says. “Was it the breeder’s and the vet’s professional opinion that the bull could be a satisfactory breeder? The actual scrotum measurement is also important to them as much as anything.”

Nail down the details

Another vital aspect Bohrson likes to nail down is the warranty arrangement in case things go wrong and a bull fails. He says many repeat customers often contract them to buy bulls from the same place and there is a familiarization and comfort level there. “We have the discussion with breeders to determine how they handle different situations. Then we visit with our customers beforehand to let them know that if unforeseen circumstances arise, this breeder is willing to do ‘this’ for you.”

When the specifics have been ironed out and buyers are comfortable with the breeders and their animals, Bohrson demands three things of the cattle they purchase. “We are a huge stickler for quality of udders, feet and structural soundness,” he says. “It’s the big three we never want to overlook. We work with lineage and genetics that are strong in those aspects.”

He encourages buyers to visit the sellers to view their heifers and mature cows. A visit to the seller’s farm can provide a valuable look at what the buyer’s future cow herd could look like. “Get in touch and visit to see the cattle and meet the people,” Bohrson says. “Everyone can get on the same page and we can be sure we have sourced the proper bull that the customer is looking for.”

Bohrson believes a marketing service can be a great option for those unable to invest their time in the extensive bull-buying procedure. “We promote programs buyers can have confidence in. The process can be successful and like I said before, communication is the most important part. It is all about being upfront with the potential customer, and helping them make a smart decision on the investment in their next herd bulls.”

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The fed and feeder cattle markets softened during May as beef production grew. North American beef demand is considered inelastic so a small change in supplies can mean a huge change in price.

Alberta packers were buying fed cattle in the range of $154 to $156 during the second week of May, down from the highs of $163 in late April. The feeder market has also been trending lower. Old-crop feed grain prices remain strong and the October live cattle futures dropped from the contract highs of $121 to contract lows near $106 within 21 days. At the time of writing, larger-frame Angus mixed steers weighing 835 pounds were quoted at $186 in central Saskatchewan, while their similar-quality heifers averaging 825 pounds were valued at $174. Feedlot margins have dipped into negative territory and there is potential for significant equity erosion during the summer. Weaker fed-cattle prices during the fall timeframe along with ongoing negative feeding margins will weigh on feeder cattle prices.

During the winter and spring of 2018, the U.S. Southern Plains experienced drought-like conditions which caused feeder cattle to move off small-grain pasture sooner. This year, Kansas has experienced greenhouse conditions. Feeder cattle were placed later than last year and feedlot placements during March and April came in above year-ago levels. On the quarterly production estimates, the 2019 first-quarter production was actually 51 million pounds below year-ago levels. Second-quarter production is projected to come in 66 million pounds above last year. This amount will have minimal effect on the domestic market given the increase in beef exports. The most noticeable year-over-year changes occur in the third and fourth quarters. It’s quite easy to make the case that in each of the third and fourth quarters, production will be up 200 million pounds over year-ago levels.

Burdensome supplies in Canada

Canada has also been contending with a burdensome supply. For the week ending May 4, the year-to-date Canadian slaughter was 1,040,356 head, up 74,111 head over the same time last year. Secondly, Canadian exports of slaughter cattle to the U.S. for the week ending April 27 were 165,803 head, up 35 per cent or 42,977 head from last year. The Canadian fed market has traded at a discount to U.S. values for most of 2019 as the market functions to encourage demand.

The U.S. economy remains red hot with historical-high consumer confidence, record-low unemployment and mild inflation. Wages are up approximately three per cent over last year. The economy continues to adjust to the personal and corporate tax cuts from March 2018. To put the inelastic demand concept into perspective, it appears that every American will have to eat another half a pound of beef in the third quarter compared to last year.

In the latter half of April, the managed money had a record-long position on the live cattle futures while the commercials had a record-short position. Commercials are traders like the large packers. Therefore, if they have a record short on the futures, they have a record long in the cash market. In late April, some packing plants in the U.S had 75 per cent of their May requirements on the books while others had just over 50 per cent coverage. The commercial short position is always something to monitor because this is a very negative signal for the market when it nears record levels.

The fed-cattle environment dictates the feeder market. At the same time, the feeder market is the live cattle five months forward. For example, the November feeders are the April live cattle. The April 2020 live cattle has dropped from the contract highs of $127 to the contract lows of $115. Compared to last month, the 800-pound steer for November delivery has lost about C$200 in value. The cow-calf operator needs to watch the deferred live cattle futures for nearby market direction at the local auction. Readers that have followed my articles earlier in the spring, know I was quite bearish on the feeder market for the fall timeframe. If you haven’t taken any price protection on your fall feeder marketings, it’s too late at this time and you’ll have to ride all risk in the cash market.

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