Bull Sales

[Phil A.]

Going Bull shopping Monday. Been watching quite a few sales on net last month or so. Seems Prices are not all that high after the first 10-15 get through the ring most of the time. Today seems lots of bulls under $2500. Seems a budget of 4K will get you something on your list fairly easily. For all these additional cows in the U.S. herd just seems bulls are not all that strong. Any opinions out there? Maybe I am seeing it all wrong as well.

500x1.60x5=4000 is Math I usually like to use.

Phil A.

 

[js1234]

I'll summarize how we figure it:
We run mother cows on some of our ranches in California and Nevada.
We plan on using a bull for 5 seasons. An annual 35/head breeding charge is billed to each cow in the CA operation and a charge of $36/head (less cows exposed to each bull in NV) is assigned to each cow in the NV operation. While we would like to see that charge closer to $30/head, we aren't operating in a vacuum and failed semen tests, broken penises and other things arise that prevent a small percentage of bulls from seeing 5 productive seasons. Keeping that per head allocation in the mid 30's accounts for that.
So we are in the midst of buying bulls for our Spring calving NV operation right now. The high desert operation sees one bull turned out for every 18 cows. 18x36x5=$3,240 in lifetime breeding charges that bull will recoup. Secondly we factor in salvage value. as we are replacing bulls leaving the program, we use the salvage on the bulls that are leaving to assist in forming a budget for their replacements. The truckloads of cull bulls off the NV ranches were recently contracted to Laura's Lean for an average of $90/cwt. weighing 1,900 or $1,710/head. that along with the $3,240 gives us a figure of $4,950 that we will use as our target average to be at or below on the bulls we need to buy for the NV operation. When fall bullsale season rolls around for our fall calving CA program, we will use the same equation but plug in the different variables. assuming a similar cull bull market we would see 35x20x5=$3,500 (our CA bulls are turned out at a rate of 1:20) plus a salvage of 1,900x90=$1,710 (while bulls mature to a slightly bigger size on CA foothills than on NV sagebrush I'll leave it constant) for a budget of not to exceed $5,210 for the bulls purchased to enter our CA operation.
We have found this to be the best method of coming up with what a bulls honest top end value is to us in relation to where he will break-even and salvage in a fashion to replace himself after a useful life while keeping our annual breeding expense per mother cow at a level where we are comfortable with the charge she is being asked to carry while remaining profitable.

 

[Son of Butch]

I'll summarize how we figure it:
....gives us a figure of $4,950 that we will use as our target average to be at or below....
We have found this to be the best method of coming up with what a bulls honest top end value is to us

Very interesting thought process js1234 Thank You for outlining it.
Now If $4950 - 5200 is a honest top end average value....
What is the least you can afford to pay for bulls?
OR to put it another way...
How much quality difference is there between $5000 bulls and the $2500 bulls Phil A was talking about?
or
How low can you go this year before hitting the point of unacceptable diminished margin on return of investment?
Not to put words in his mouth, but Phil A seemed to suggest it should/could be under $4,000 this year.

 

[WalnutCrest]

I would think you would get quite different values if all the calves are terminal ... vs ... keeping back some/all heifers ... vs ... developing some of your own bulls.

The more animals you are going to keep for breeding purposes, the less you should skimp on the bulls you do use.

 

[bird dog]

Thanks for that breakout js1234. Does that $35 a head breeding charge include all costs such as worming, minerals vac's and so forth? If not would you need to figure that in also?
Thanks

 

[js1234]

Thanks for that breakout js1234. Does that $35 a head breeding charge include all costs such as worming, minerals vac's and so forth? If not would you need to figure that in also?
Thanks

That is just the purchase price of the bull. To make sure I'm not being dense, you are referring to the maintenance costs on the bull not the cow correct?
While the annual maintenance costs of the bull battery most certainly needs to be budgeted in to production costs for the cow/calf operation, we allocate it as a separate charge. Our view is that what we assign to the cow as a "breeding charge" is just used to arrive at the purchase price average where the bulls will break-even (including salvage) once they've run their course with us as they are a tool more so than a profit center. What we may choose to pay for a lease or charge the bulls for our deeded ground, the frequency which we worm bulls or the fact that we choose to trich test annually or any number of other management decisions, is a separate line item, support stock maintenance. The logic for us is that while those financial decisions absolutely have to be justified and paid for with calf and cull cow revenue, how extravagantly or spartan we choose to run the bull battery is a separate concern than what we can justify to pay for him to breed his way to a break-even on himself.

 

[bird dog]

Your not being dense, I was. It was a dumb question. I need to read a little more carefully.
Thanks again for the good info.