RESTOCKING OPPORTUNITIES ARE RIGHT AROUND THE CORNER

by: Clifford Mitchell

A little moisture, a rapidly approaching spring and strong market predictions have some producers talking about restocking pastures. For some, there is still a long way to go to reach this point. Other outfits know opportunity is right around the corner.

Building back some of the herds that have been liquidated due to severe drought will have to start somewhere, because even with moisture it could be a slow process. Many factors present opportunity to commercial operators.

“No one has a good handle on the number of cows that have gone to the packers. There are a number of reasons to rebuild,” says Dr. Jason Cleere, Beef Specialist, Texas AgriLife Extension.

“As bad as everything has been, the silver lining is prices are good and should continue into the spring,” says Milton Charanza, Broken Triangle Cattle Co., Caldwell, Texas.

Producers have a good opportunity to build herds back with quality females. Selecting the right genetics and biological type should improve long term profit potential. Sound science and past experience will help find the right genetics.

“Buy cattle that will work and be more efficient. We have lost some productivity due to the lack of crossbreeding,” Charanza says. “When you restock, you have the opportunity to buy exactly what you want if that female works from a cost standpoint.”

“With input costs the way they are, even in a normal year, we still have to focus on buying the most efficient, hardiest, longest living cows that produce acceptable weaning weights,” Cleere says. “There is going to be a premium paid for replacements this spring because they are in high demand and short supply. The producers who are able to get in early may be a little better off from a cost standpoint.”

Challenges to purchase and production costs may make some operations change the way daily business decisions are made. Old habits are hard to break for most and changing type and kind could be a hard task for some outfits. Finding females that are better suited for the environment and management program is the best policy.

“I don't think we'll build back to original levels because some operations will decide it's more profitable not to stock as heavy as they did in the past. Put back cows that are good momma cows. Don't get hung up on things like hide-color because different market cycles come with a different type-and-kind of female,” Cleere says. “Some operations who have traditionally bought replacements, will restock with a core group of females to raise replacements. The terminal cross outfits will have to change breed type of bull to produce females to retain or sell.”

“Take advantage of crossbreeding and build that efficiency into your herd when you restock. Costs aren't going down and you have to position yourself to reap the benefits of a good calf market,” Charanza says. “If you start over with the F1 females, there is a lot of value in her quarter blood calf, if she's bred to a British bull. These females make excellent replacements or could be marketed to other producers at a premium.”

Limitations caused by the severe drought will slow the rebuilding process. Stocking rates may actually help commercial operators spread out risks as restocking occurs.

“Take it a little slower. Let those pastures recuperate. If you build back in phases, you can replace those females in stages,” Charanza says. “Take a couple years to reinvest in those females and try to buy better genetics.”

“In the really drought stricken areas, the pastures will recover gradually. This is a good thing. It could ease the financial burden on some ranches trying to restock with what these replacements are going to cost,” Cleere says. “Some operations were able to spare some of their better cows and got rid of the less desirable females. Producers need to treat the drought as an opportunity to have a better cow herd and become better managers.”

Identifying reputable sources for replacement females could be a challenging obstacle for some cattlemen due to location and environment. Limited numbers could also play a role in demand.

“I do have a concern from a quality standpoint as we look to restock. Are these cattle the right kind? Do they have enough reproductive efficiency? These are questions producers should ask themselves before they purchase replacements,” Cleere says. “There are many reputable sources, but there is some risk involved. If you buy weaned heifers know a percentage isn't going to breed and with short bred females a certain percentage won't calve. Make sure heifers are bred to low birth weight bulls. Pairs seem to be a safe choice, but will probably cost the most.”

“There are reputable female sales where producers stand behind their product. Starting over, I would try to use my crystal ball to see what's going to happen in the future,” Charanza says. “Find the females that meet your guidelines for mature cow size and breed type that have been managed properly.”

Selection criteria differ with each outfit. Sound science gives producers the ability to make that list as long or as short as they want. Bio-security guidelines and disease prevention strategies should be in place to protect the investment.

“I think producers are more educated now than they have ever been and they have more tools to get information. Pay attention to things like disease and DNA testing or some of the other tools out there to protect the herd from genetic defects,” Charanza says. “There is so much capital involved, we have to do everything we can to make sure cattle are problem free.”

“As producers restock, there should be health concerns with things like BVD PI and Trich. These diseases can be devastating to a cow herd,” Cleere says. “You are going to pay a premium for cattle that you buy from the most reputable operation that has a good testing program. This might be the safest bet to get problem free cattle. Certain operations are comfortable managing higher risk cattle. They know how to manage “put together” cattle and can make it work for their operation. If you have no experience buying this type of cattle, you are better off investing on the front end.”

When producers study sources, genetic base and other factors, it's sometimes hard to pinpoint what defines value. Each set of females comes with a description and value can be found in management technique, genetics or breed type. Each operator will define guidelines for purchase hoping to put value indicators into perspective.

“Mature Brahman influence cows have the ability to create value just from a longevity standpoint. Heifers that are tested BVD PI free have extra value,” Cleere says. “It is hard to define the value difference between a set of heifers bred to low birth weight yearling bulls vs. a set that is artificially inseminated to proven calving ease sires, but there is a value difference.”

“Producers need to do their homework and figure out what some of these little differences in value mean to their operation,” Charanza says. “With all of the advantages producers have now in the selection process, hopefully, it will give them more options to market their cattle.”

For most operations, the process gone through to purchase females will not change. Experiences with the drought, market demand and affordability will all figure into replacement purchases as operations restock. Finding the right mix of genetics and value indicators will help producers stay profitable for the long haul.

Making the proper investment in females that better fit the environment and management scheme could help producers take advantage of today's market conditions. A decreased supply of females worthy of being replacements will challenge the industry. Defining long term goals could also help producers plan for today.

“There is a lot of optimism in the market place and it projects well into the future. The calf market will drive the replacement market,” Cleere says. “Some outfits will benefit paying the premium buying the lower risk cattle. It all depends on how each operation is set to handle the challenges restocking bring. It is a good time to be in the cattle business because there are a lot of opportunities, but commercial operators still have to be cost conscious.”

“Producers that know their market and have a long term goal will be able to sell their production a little higher,” Charanza says. “As producers restock they need to figure out what they can pay for females and still make a profit.”







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