What's a cow worth? Determining the value of a cow important to success

2012-01-23T14:31:00Z What's a cow worth? Determining the value of a cow important to successBy DALE HILDEBRANT, Farm & Ranch Guide Farm and Ranch Guide
January 23, 2012 2:31 pm  • 

DEVILS LAKE, N.D. - Knowing the value of your stock cows is important, whether you are working out a budget for your herd, or getting ready to purchase additional cows for your herd, according to Karl Hoppe, area Extension livestock specialist at the NDSU Carrington Research Extension Center.

During a session at the recent Lake Region Extension Roundup in Devils Lake, Hoppe guided producers through the steps that are needed to determine the value of a cow in their individual operations.

The first thing a producer needs to determine is the feed costs per cow per year. That would include total feed costs during the winter months and pasture charges during the grazing season.

Using Farm Business Management records from Region 2, Hoppe estimated using 1.2 acres per month for each cow/calf pair for a total of 6 months. Using a seasonal pasture rental fee of $30 per acre, the total pasture cost would come to $216 per year.

In calculating the winter feed costs, Hoppe figured a 1400-pound cow will either eat or waste 40 pounds of feed daily. Using a hay price of $65 per ton and figuring 180 days on feed with the winter ration that translates into a feed charge of $1.40 per day or $252 for six months. And to be accurate, Hoppe said the cost of a mineral program should be added in as well, which would range from a dime to a quarter a day.

Hoppe then grouped the other direct expenses associated with owning a cow into what he termed "yardage."

Some of the feedlots are now charging 50 cents a day to house a calf in the feedlot, Hoppe said. Going to the Farm Business Management records shows such things as water, pen cleaning costs, or basically overhead expenses amounted to $69.79 per year, while non-feed direct expenses like vet charges, breeding expenses and insurance totaled $125.43. This totals $195.22 a year and that divided by 365 days gives a figure of 53 cents a day or close to what some of the feedlots are now charging for yardage.

Looking at the income side, the FBM records from 2010 indicate the average weight of calves sold at weaning time was 594 pounds. Using a current price of $158 per hundredweight (cwt) for 600 pound cattle and rounding the weight off at 600 pounds means a weaned calf value of $948.

But to accurately determine the cost of the cow, he said, you must also consider the eventual price the cow will bring once she is culled from the herd and the longevity of the cow in the herd. Using information from the CHAPS (Cow Herd Appraisal Performance Software) program of the N.D. Beef Cattle Improvement Association, the average cow age in the state is 5.7 years, which means the average number of calf crops per cow is 4.7, since she doesn't calf that first year. Current cull prices would pay $70 per cwt., which would come to $910 for a 1300 pound cow.

The various figures are now ready to be gathered together and the value of the cow determined:

Income

4.7 calf crops @ $948/ year = $4455.60

Cull cow sale = $910.00

Total income with 3 percent death loss adjustment = $5204.63

Expenses

Pasture for 4.7 years @ $216/year = $1015.20

Winter feed for 4.7 years @ $252/year = $1184.40

Yardage for 4.7 years @ $90/year = $423.00

Total expenses = $2622.60

Net income over life of cow = $2582.03

If a producer would like to realize a profit of $200 per head each year that would be an additional cost of $940 over the life of the cow, meaning that the value to pay for a bred heifer would be $1642.03.

And that figure, Hoppe noted, is pretty close to what bred heifers are selling for at the current time.

In closing he stressed that the various figures used in determining the value of a cow or how much can be paid for a bred heifer will vary from each farm, and enrolling in the Farm Business Management program will help each producer arrive at those costs and help sharpen their management skills.

Copyright 2015 Farm and Ranch Guide. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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