“The investment in a higher priced bull that can contribute to improved production of more market-acceptable calves and better weaning weight for the cow-calf producer is not that costly when numbers are put into perspective for calves sired and as a percent of the breeding cow’s total annual cost,” says Jim McGrann, noted agricultural economist and Texas A&M University professor emeritus. He now owns Ranch Management Economist, a ranch business consulting firm.
Patrick Gunn, Extension beef specialist with Iowa State University, explains the bull battery typically represents less than 10% of annual cow costs for the herd, while the difference in returns between good and below-average sires for traits of interest could be 15% or more.
“I can’t stress enough the value in optimizing your marketing goals through improved male genetics, regardless of cost,” Gunn says. In fact, he considers buying bulls for commercial use that excel in economically relevant traits an unparalleled investment opportunity.
Basic bull value
Bulls bring value to the commercial cowherd via three primary avenues.
First is getting a cow bred by any bull.
“Sometimes you get what you pay for,” says Matt Spangler, Extension beef genetics specialist at the University of Nebraska Lincoln (UNL). “Using a bull without any known EPDs is risky, given that you have no idea what his genetic potential is. Using a bull that might be cheaper, but that does not excel in traits that are drivers of profit for you, can end up either slowing progress or eroding progress that you have made.”
Next is building the genetic potential of the cowherd over time.
“The bulls used over the past several years contribute greater than 80% of gene flow in a self-replacing herd,” Spangler explains. “Consequently, bull selection drives the progress that can be made by commercial producers.”
Finally, bulls determine the relative market value of calves sired. Estimating that value may be tricky, but more tools these days are designed to help simplify the determination.
Consider EPD-based economic selection indexes.
“Economic selection indices can provide a tool to compare bulls in terms of their potential differences for net profit,” Spangler says. “These are the most valuable tools to help producers understand the economic value of choosing a given bull. However, this assumes that producers use an index that truly fits their breeding objectives. Producers that retain replacement heifers should use an index that has this assumption rather than an index that assumes all offspring will be fed through the feedlot.”
For that matter, it pays to understand the relative weight of various traits in chosen indexes. As an example, if marbling is paramount to you, be sure the carcass-based index you consider places commensurate weight on marbling versus other carcass traits.
Sifting the differences
Figuring the net return of one bull versus another revolves around both ultimate breeding cost and the value of their calves.
“In making the decision between bulls, you need to really think about what you’re getting for your buck,” says Matt Stockton, a UNL agricultural economist. “What’s this bull going to give me versus this other one in terms of calf value?”
Stockton developed the Bull Value Cow-Q-Lator (CVC) several years ago, which helps users consider differences between bulls based on their total cost and the estimated value difference in the calves they sire. As an example, it helps users see whether a bull costing $30 more per calf is returning at least that much more in value.
On the cost side of the equation, the CVC considers such things as purchase price, feed cost, salvage value and ultimate replacement cost.
In terms of calf value, users estimate the added average dollar difference they expect from calves sired by the bull. Yes, that’s subjective, but necessarily so. What’s valuable in one herd and to what degree is unlike another.
Plus, Stockton notes, “Every producer manages differently. As a result, they’ll get a different response from the same genetics.”
Likewise, McGrann developed the Herd Bull Investment and Cost Analysis several years ago. It’s a decision aid that addresses comprehensive cost on one side of the ledger. On the other, expected calf revenue is based on weaning weight and price.
Both of these aids serve up results such as the annual service cost per cow and per calf weaned, as well as other metrics to gauge the economic differences between bulls.
“Calculated cost per calf and per hundredweight of calf weaned per cow exposed are good indicators to compare bull investments,” McGrann says. “The number of calves required to pay for the bull is a good indicator to monitor the investment.”
“I think producers need to pay attention to what it costs to get a cow bred; not just bred, but the cost of getting a calf sired by that bull.” Stockton says.
“With bulls representing 50% of the genetics of the program (single year, no replacements), you cannot afford to give up genetic progress in your herd at the expense of cheap bulls that don’t match or advance your production goals,” Gunn says.
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