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Advice for Expansion-Minded Cattle Producers

Finally, last month it happened: The beef cow herd expanded. The January 1 USDA cattle inventory report says cow numbers were up by 2% from the year before, to 29.7 million head. It breaks a streak that saw ranchers liquidate 4 million cows since 2006, mostly due to withering drought in the Plains and expensive feed.

A break in the drought and phenomenal calf prices turned the tide. The chase for limited feeder calves has grown so competitive that 550-pound steers straight off the ranch approached $3 a pound. Average profits are $550 per calf sold, according to CattleFax.

Texas, the leading cow-calf state with 4.2 million pairs, added 7% last year. Beef industry leaders, anxious to regain market share from pork and poultry, had plenty of advice for expansion-minded ranchers at the recent National Cattle Convention.

Squeeze tighter. Grazing land is in short supply, but you can make existing pastures work harder, says Texas A&M cattle specialist Ted McCollum. In research, they put GPS trackers on cows. They grazed only 39% of the pasture, mostly close to water. You can expand their range and stocking density by moving water and mineral sources, clearing brush, and cross-fencing into smaller paddocks, McCollum says. 

Confine in feedlots. Rabobank market analyst Don Close suggests adding cows in a confined or semi-confined system. Many feedlots are at only 60% of capacity, so pens and feed equipment are available. Confined cows could also work on landlocked Corn Belt crop farms, using underutilized farmstead facilities. It could add a revenue stream and value to homegrown feed, opening a door to a new generation on the farm.

Invest smart. Don’t think wild cattle prices will last forever. Over the past 25 years, a bred heifer has been worth 1.5 times the sales value of her calf, says CattleFax CEO Randy Blach. That’s $2,300 to $2,600, not the $3,500 of some sales. “Expand, but be smart and do your homework,” he says.

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