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Cowboys, sale barns, and bull buying reviewed

TAGS: Beef
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Watch each Friday for Doug Ferguson's Market Intel blog on Beef Producer and BEEF magazine.
Being effective in the cattle business means covering a lot of factors, and this week it's time to look at your bull buying plan.

Super Bowl Sunday evening, I got a text from my best friend that read “If the Packers played the Cowboys in the Super Bowl, the Packers would win 9 out of 10 times.” It doesn’t take long to get past the humor in that statement and get to the seriousness of it.

The Packers have studied the game at great length and have come up with a solid game plan. Their execution of that plan is fundamentally sound. The Cowboys on the other hand don’t care to think about marketing, or come up with a business plan. They believe they are at the mercy of the market and the weather, so they will win some and lose some.

Here’s the big difference between the two, the Packers are looking, and preparing for the future of their team. Some have invested in fake meat, conception to consumption programs, finishing facilities, and even the land to grow feed.

That same friend who sent me the text also told me this week that state FFA has been cancelled for the second year in a row. Some sale barns are still not allowing kids at their auctions. We all agree that kids are the future of this industry. So why are some on the Cowboys organization not allowing them to participate in the present? If they are not exposed to everything in this industry how will they ever know if they are interested in being a part of it?

Not everyone in the Cowboys organization is treating the draft picks poorly. While one sale barn will not allow my daughter to be there, other ones welcome her and load her down with swag. Before we know it these youngsters will be calling the shots and I’m sure they will remember who showed an interest in them and who shut them out

(Here’s a side note about swag. We are still very much in a Covid world, so drinking fountains are turned off and kids are required to bring water bottles to school and sports practice. Get some water bottles with your stockyard logo on them and give those out to the future cowboys and cowgirls. Get bottles that are a neutral color and they are unisex.)

Normally at this point I write about what the markets have been doing the last few days. This week the weather caused many to cancel their auctions and the places that did sell cattle had light runs. I did calculate value of gain on the markets that did have sales to see if there was a trend and to spot under/over-valued relationships. It was impossible to do. One sale showed a VOG that got higher as the cattle got heavier and another auction showed a VOG that got smaller as the cattle got heavier.

Talking about bulls

I am going to use a little space to offer some thoughts on buying bulls. There has been much written on the subject and I am going to share some of my thoughts that are different and will be uncomfortable for most. I realize breeding programs are different with different goals in mind and my thoughts will not fit in some places. It’s just something to think about.

First I am going to share my definition of what a seedstock and a registered cattle breeder is.

Seedstock breeders are the guys breeding cattle the industry needs. They ruthlessly cull animals for important problems, and produce cattle for the natural environment

Registered operations select for performance. They produce cattle in an artificial environment. They are easily spotted by bragging about how much bulls gain and the championship banners they display.

The first thing to keep in mind when buying a bull is you are buying into a program, which is based on the breeder’s philosophy. Notice I put a program over genetics. The breeder will decide what his program will be first, then he will select and breed for the genetics to achieve that.

This is why bulls raised in an artificial environment fall apart during the breeding season. Kit Pharo has been writing lately that only one out of three yearling bulls developed in these artificial environments will see a second breeding season. If you spent big money on one of these bulls planning on keeping him around a few years you may have made a risky investment. My advice is go to the weigh up auctions and pay attention to the brands on the spent yearling and mature culls. People that sell bulls tend to brand them for advertising purposes.

The easy way to determine the value of a bull is to first figure his cull value, which is roughly $1600. Then establish a breeding fee to charge against the cows, let’s say that is $50 and we run him on 25 cows. Then we subtract his cost to keep, and I’m going to use $50 a month. This makes a bull worth $2250 if we use him for only one year.

But things aren’t that easy in the real world. We must ask ourselves what our goals are, how are we going to market the calves. Are we going to retain ownership, keep replacement heifers, put them in a grass-fed program, or strip and ship (take them off the cow and straight to the sale barn)? Now it got much more complicated.

If we retain heifers, we need a bull that will sire problem-free females that thrive in our environment. If we go grass-fed, we need genetics that compliment he approach. If we retain ownership through the feedyard maybe then carcass and growth traits have some merit. Growth may be important if we wean and background them. But if we just strip and ship we need something to get the cows bred and a calf on the ground. We need that no matter what, but spending more money on a bull for other traits in a strip and ship program is a waste.

Know your market

We must understand the market we will be selling into. I’ve seen this Cowman Formula in several bull catalogs I have looked at recently. They claim a bull with high growth will sire cattle that are 30-pounds heavier than an average bull. Their math looks like this 30 pounds at $1.50 is $45 per head. Run that bull with 25 cows adds up to $1,125. Use that bull for 4 years and it makes him worth $4,500 more.

As a cow calf producer, it’s your profession to spot the error here. As a cattle buyer I’ll point it out. The bull seller is assuming all cattle sell at $1.50, they do not. We use a slide, which means as the cattle get heaver the price per pound goes lower. Looking at my bidder cards from last week and market reports from last week and this one it was very steady that cattle roughly 40 pounds (heavier than the Cowman Formula) only brought $22 per head more. All the sudden the real world makes it impossible to reclaim the extra $4,500 value.

The last paragraph leads to another point. If they are going to mislead people on something as simple as cattle markets and math what else will they mislead a customer on. Birth dates? Weights and performance data? Their development program? Phrases like “high roughage” and “low starch” simply mean the bulls ate a lot of distillers. This is why so many bulls fall apart during breeding season.

Most people only recommend running 25 cows per bull. I have seen first-hand where a one nutted steer bred over 70 heifers in grazing programs and feedlot pens. If a one nutted feeder steer can do that a mature bull should easily be able to as well. Granted the steers were in close proximity to feed and the heifers. In the west where grazing areas aare several sections this would be unreasonable. In my area and to the east where pastures are smaller it should be easy to achievable.

My last thought this week. People think more pounds equals more dollars, so they tend to place more value on high growth bulls. To get that growth potential requires nutrition. There is only so much nutrition in a pasture. Most pastures are not managed well, therefore nutrition is limited and not all that great. This limited nutrition means the cow will only milk so much, and the calf will only get so much from grazing. This limited nutrition means the calf can only unlock a limited amount of his growth potential. To me its wasted money paying extra for growth if we are not managing our pastures better to unlock more of that potential.

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