Mark Landefeld, OSU Extension Educator, Ag/NR Monroe County (previously published in Farm & Dairy)
At this time of year many cow-calf operators are weaning/selling calves and determining which, if any, cows are going to be culled and sent to market. The sale of cull cows can be a significant source of cash flow for cow-calf operators. Data shows that 15-25% of cow-calf business’ returns are a result of selling cull cows in the fall, after weaning. For this reason, cow-calf operators should carefully consider how and when they market their cull animals.
Glen Selk, Oklahoma State University Extension Cattle Specialist, said, “It is important to understand the values placed on cull cows intended for slaughter”. Fall season price slide for cull cows is often 15% or more. Oct-Nov slaughter cow prices are typically the lowest of the year. Based on long term average information, late March to early April provides some of the highest sale prices of the year for cull cows, but producers should not plan to feed cull animals that long, waiting for prices to peak.
What is the best time to sell? Should a producer hold cull cows in the fall, utilize some stockpiled forage and then sell cull cows at a later date? To answer this, a producer should take two or three items into consideration and understand factors that affect the value of cull cow livestock markets. Cull cow value is determined by, (1)supply/demand, (2)carcass quality, and (3)percentage of lean meat yield per carcass.
Seasonal decline in cow value has some predictability to it. The local price slide(1) usually begins in September, with sharp declines into November as more culling takes place in herds across the nation (supply/demand). Prices of slaughter cows also vary because of carcass quality(2) (determined from age and marbling etc.), and a large portion of the price to be paid is based on lean meat yield(3) as a percentage of live weight. Really thin cows hanging lightweight carcasses (less than 450 lbs.) are often severely discounted because they do not provide enough saleable product while overhead slaughter cost are about the same as heavier cows.
Cull cows that are slaughtered, and if quality graded, generally fall into one of four United States Department of Agriculture (USDA) grades: Commercial, Utility, Cutter or Canner. However, many cow carcasses are not quality graded, but sold for manufacturing beef rather than retail cuts. These carcasses are reported through USDA’s Market News Service in the categories Breakers, Boners, Leans and Lights. These categories take the carcass’s Tissue Lean Percentage (TLP) and quality factors into consideration. TLP indicates the red meat yield of the untrimmed, boneless muscle from a carcass.
For a beef producer selling cull cows, knowing the difference between a cow that would be considered a “boner” from a lean or light are terms that should be understood because there is a substantial price difference buyers are willing to pay. Leans and lights are usually from cattle with live body condition score (BCS) of 1-4 while “boner” carcasses generally come from cattle that are a BCS 5-6.
Body condition scores can be used to help producers evaluate carcass information in live cattle. BCS describes the fat and muscle on a live cow and ranges from 1-9, with 1 being emaciated and thin, to 9 being very fat. Pictures, descriptions and other BCS information may be found at: https://ohioline.osu.edu/factsheet/anr-54
If a producer is going to retain cull cows and put weight on them before selling, the greatest value generally comes from feeding the Leans and Lights, BCS 1-4’s, until they would qualify for the Boner category, BCS 5-6’s. Keeping cows that are already in BCS 5-6 condition and feeding them to the Breaker category (BCS 7’s and up) can add valuable, but is seldom as profitable for the producer. As cows return to their “normal” body condition and weight, gaining weight becomes less and less efficient. As a rule of thumb with the frame size of today’s beef cows, it requires the addition of about 80 lbs. of muscle and fat for a cow to increase one BCS point. So a cow that is a BCS 3 or 4 would need to gain approximately 80 lbs. of fat/muscle to become a BCS 4 or 5, respectively. This should be very doable and adding another 80 lbs. to achieve the next higher BCS score could still be very cost effective for some cows.
So, let’s look at potential profitability of keeping cull cows after weaning for a period of time. First, are the cows healthy? Thin, yet healthy cows provide the best opportunity to add muscling and fat and take advantage of compensatory gain after weaning a calf. Grain based diets can put weight on cull cows more rapidly (2.5 – 3.0 lbs./day) than a total roughage diet, but cost per pound of gain may be higher. A cash outlay to purchase grain would also be necessary for many producers. Slower gains over a longer period of time may be a better fit, and more profitable for farm managers, if he/she can provide low cost, high quality fall pasture or stockpiled forage that meets nutritional needs for these animals. Studies have shown these type cows can gain 1.5 lbs./ day on forage only diets. Grazing stockpiled grass generally cost between $0.40-$0.50/head/day so it would only cost about $40 for a 3-month feeding period to put more meat on those thin cow’s bones.
Let’s make some dollar estimations: for example, if a cow sells for $0.10 – 0.15/lb. less because of excess supply and another $0.10 – 0.15/lb. less because of less meat on her carcass (a very thin cow), a cow that weighs 1175 lbs. may sell for $0.50/lb. or less, totaling about $585. If that cow was kept until after the first of the year (say 80-90 days) and gained 1.5 lb./ day on good fall grass and stockpiled forage, she would weight ±1310 pounds. If prices rebound a little after the first of the year, and they generally do, plus the cow should gain weight making the carcass yield more desirable for buyers, the cow may then sell for $917. Even subtracting about $40 for the stockpiled forage the cow would eat, a producer would still net nearly $300 per head.
So the bottom line is, each producer must determine if keeping cull cows might be a benefit to them. Prices are always subject to change and we can’t predict the future, but using BCS scoring methods and understanding how cull cows are valued can help define options that could make “cents” for producers. Look at your resources. Look at what options you have with your cull cows. Do you have extra forage this fall? What BCS condition are your cows in? Plan the length of time you want to keep the cows and do some calculations? Maybe cull cows, that need a little more meat on their bones, and your young cows that need better nutrition, could be grouped together and separated from the rest of the cow herd. Making use of high quality fall forage growth and stockpiled forage, for the young cows and cull cows, may be very cost-effective for producers. Evaluate carefully what options you have with your cull cows. Following tradition and selling cull cows in the fall, immediately after weaning, may not be your most profitable option!
Source: Ohio Beef Cattle Letter