is that their costs will in- crease if they synchronize estrus and AI their cows. Does estrus synchronization and AI actually increase the cost of getting a cow preg- nant? Few ranchers under- stand these costs which make the decision to AI a difficult one. Let’s first try to under-
stand the costs of pregnancy when using natural service. The factors that most dra- matically impact cost per pregnancy for natural serv- ice include the initial pur- chase price, the number of cows that the bull will breed, the number of years a bull will be used, and the pregnancy rate. The costs per pregnancy for bulls that range in price from $1,500 to $3,000 and bull-to-cow ratios from 1:15 to 1:50 are shown in the table below. Assumptions of the calcula- tions included use of the bull for 3 seasons; 10 per- cent death loss of bulls; 7 percent interest rate; and an 85 percent pregnancy rate. Annual bull maintenance
costs are probably a bit higher than most producers would predict. Feed costs for a bull are quite high ($560.60) and increasing the feed costs by $100 increased cost per pregnancy from
But My Bull Doesn’t Cost Me Much....? O
DR. LES ANDERSON LEXINGTON, KY.
ne of the biggest con- cerns of ranchers when they are considering AI
$2.44 to $8.12 for high and low bull-to-cow ratios, re- spectively. The annual cost of about $100 per bull for labor, vet, repairs (gates, etc), and miscellaneous is likely a bit conservative but the total variable cost con- sidering today’s feed costs is about $700. The fixed costs of using
natural service basically are a reflection of the opportu- nity cost of the bull. A rancher invests money in his commodity (i.e. the bull) and using that money for this purpose has a cost as- sociated with it in addition to the actual expenditure. For example, the deprecia- tion of the bull and the equipment needed to handle the bull needs to be in- cluded. Also, the interest on the money used for pur- chase is an expense. Since these costs are a reflection of the purchase price, they will increase as the pur- chase price of the bull in- creases. Fixed costs range from $255 to $823 for bulls that cost between $1,500 and $3,000. Using this model, costs per
pregnancy ranged from $22.77 to $120.41 depend- ing predominantly upon the purchase price and bull-to- cow ratio. Most ranchers in Kentucky run one bull per 25-30 cows so the cost per pregnancy for Kentucky beef cattle producers typically runs from $38-$72. This seems high, but, frankly,
TRACTORS
most famers don’t realize just how much it costs to
Salvage Valuea Pastureb
Hayc Protein, mineral
1088.82 209.40
326.20
Labor 50.00 Vet 40.00 Repairs
Total Variable
Depreciation on Equipment Depreciation on bull Interest on bulle Death loss
Total Fixed Purchase Price
Misc. 7.00 Interestd
31.00 24.10
labor ($5-$15 per cow), and the cost of semen (highly variable). The main factor that influences the cost per pregnancy of AI is conception rate. As conception rate to AI increases, the cost of pregnancy of the system decreases. A common estrus synchronization system that is used in cows is the 7-day CIDR + TAI. The standard out-of-pocket cost for this system is about $45 per cow (semen/service ($20), synchronization drugs ($20), and labor ($5) per cow). If 60% of the cows conceive to the AI, then the cost per pregnancy is $75 which is similar to the cost of using a $3,000 bull.
So, the cost of using estrus synchronization and AI is similar to using a quality bull. Certainly, the cost of registered bulls has gone up recently which makes considering estrus synchronization and AI practical. The key is can estrus synchronization and AI increase productivity and profitability? Can it increase the value of your calves? We will address these issues in the next couple of months.
produce a pregnancy. The cost per pregnancy
Cost per Pregnancy Using Natural Service Purchase Price
when using for estrus CONTINUED ON PAGE 26
1,500 1,700 2,000 209.40
25.00 25.00 25.00 50.00 50.00 40.00 40.00 31.00 31.00 7.00
24.10 24.10
326.20 326.20 326.20 326.20 326.20 25.00 50.00 40.00 31.00 7.00
7.00 24.10 12.39
25.00 50.00 40.00 31.00 7.00
24.10 12.39
25.00 50.00 40.00 31.00 7.00
24.10
712.70 712.70 712.70 712.70 712.70 712.70 12.39 12.39 12.39
12.39
137.06 203.73 303.73 403.73 470.39 637.06 90.61
15.00 17.00 20.00
Total cost/year 967.76 Purchase Price
Cows
15 20 25 30 35 40 50
Cows
Exposed Per Year
Exposed Per Year
15 20 25 30 35 40 50
75.90 56.93 45.54 37.95 32.53 28.46 22.77
75.90 56.93 45.54 37.95 32.53 28.46 22.77
81.84 61.38 49.10 40.92 35.07 30.69 24.55
81.84 61.38 49.10 40.92 35.07 30.69 24.55
90.74 68.05 54.44 45.37 38.89 34.03 27.22
90.74 99.64 68.05
54.44 45.37 38.89 34.03 27.22
74.73 59.78 49.82 42.70 37.37 29.89
99.64
74.73 79.18 59.78 63.35 49.82 52.79 42.70 45.25 37.37 39.59 29.89 31.67
105.58 120.41 79.18
63.35 52.79 45.25 39.59 31.67
90.31 72.25 60.21 51.61 45.15 36.12
105.58 120.41 90.31 72.25 60.21 51.61 45.15 36.12
a1,800 pound bull sold at $.6049 per pound b1.5AU x 8 months grazing x $17.45/AU c1,800 lbs bull x .025 = 45 lbs hay per day x 1.15 (waste) / .90% (conv to as-fed) = 58 pounds of hay per
day. 58 lbs per day x 120 days / 2000 x $65 per ton cost for grass hay. dInterest on money needed to purchase feed. eInterest on money used to purchase the bull
day. 58 lbs per day x 120 days / 2000 x $65 per ton cost for grass hay. dInterest on money needed to purchase feed. eInterest on money used to purchase the bull
This table was altered and used with the permission of Dr. Sandy Johnson, Kansas State University.
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NELSON TRACTOR AND EQ. CO. Poplar Bluff, MO (P) 573-785-9628
Kentucky Beef Cattle Market Update Kenny Burdine, Livestock Marketing Specialist, University of Kentucky
Kentucky Beef Cattle Market Update Kenny Burdine, Livestock Marketing Specialist, University of Kentucky
Visit our Website for pictures and more information
www.nelsontractor.com COMBINES CONT.
This continues to be the feeder cattle market that just dares you to blink. The November contract, which was trading just under $143 at the time of this writing, had traded below $126 in late May. The end of September provided several very strong upward days about the time that we usually start to see our seasonal price declines. Both the October and November feeder cattle futures contacts remain a little off their contract highs, but January and March have both pushed through theirs.
This continues to be the feeder cattle market that just dares you to blink. The November contract, which was trading just under $143 at the time of this writing, had traded below $126 in late May. The end of September provided several very strong upward days about the time that we usually start to see our seasonal price declines. Both the October and November feeder cattle futures contacts remain a little off their contract highs, but January and March have both pushed through theirs.
I’ve included Kentucky price charts for both 5wt and 7wt steers this week. Both showed signs of softening slightly from summer, but the price movements of September will likely affect these markets this month. For example, 7wt prices actually increased a bit from the beginning of the September to the end, on a state average basis.
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The drought in Texas and Oklahoma continues to affect the cattle markets Feedlot placements, which had been running ahead of 2010 levels, fell back in the September report. This was especially true of the heavier placement weights, which is consistent with expected drought effects. Wheat pasture may also become an issue this winter as it is clearly going to be behind, at best, in those areas.
The drought in Texas and Oklahoma continues to affect the cattle markets Feedlot placements, which had been running ahead of 2010 levels, fell back in the September report. This was especially true of the
heavier placement weights, which is consistent with expected drought effects. Wheat pasture may also ‘90 Case 580K cab/heat, 2wd, 3500 hrs. ..........................................................$18,500
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become an issue this winter as it is clearly going to be behind, at best, in those areas. MISC
If you are looking at placing calves into winter backgrounding programs, I would encourage you to run the numbers carefully. Certainly, calves are expensive and feed prices are high, but spring feeder cattle futures contracts are also looking very strong. Decisions should be made based on expected profit levels, and that requires working through a breakeven analysis using current calf prices, feed prices, and the expectation of feeder cattle prices in the spring.
If you are looking at placing calves into winter backgrounding programs, I would encourage you to run the numbers carefully. Certainly, calves are expensive and feed prices are high, but spring feeder cattle futures contracts are also looking very strong. Decisions should be made based on expected profit levels, and that requires working through a breakeven analysis using current calf prices, feed prices, and the expectation of feeder cattle prices in the spring.
Finally, a few questions have come up about selling spring and summer futures before placing stocker cattle and my general advice has been not to do this. While I understand the attractiveness of the futures market right now, it think it makes more sense to wait on taking futures positions until the cost of the
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www.caseih.com
October 21, 2011 / MidAmerica Farmer Grower • 13
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7 7
Finally, a few questions have come up about selling spring and summer futures before placing stocker cattle and my general advice has been not to do this. While I understand the attractiveness of the futures market right now, it think it makes more sense to wait on taking futures positions until the cost of the
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I’ve included Kentucky price charts for both 5wt and 7wt steers this week. Both showed signs of softening slightly from summer, but the price movements of September will likely affect these markets this month. For example, 7wt prices actually increased a bit from the beginning of the September to the end, on a state average basis.
This table was altered and used with the permission of Dr. Sandy Johnson, Kansas State University.
a1,800 pound bull sold at $.6049 per pound b1.5AU x 8 months grazing x $17.45/AU c1,800 lbs bull x .025 = 45 lbs hay per day x 1.15 (waste) / .90% (conv to as-fed) = 58 pounds of hay per
97.61 108.11 118.61 125.61 143.11 23.00
25.00 30.00
255.06 330.73 444.23 557.73 633.39 822.56 1043.43 1,156.9 1,270.43 1,346.09 1,535.26
1,500 1,700 2,000
1,500 1,700 2,000 6
2,300 2,3002,500 Cost Per Pregnancy ($) Cost Per Pregnancy ($) 2,5003,000 3,000 2,300 2,500 3,000
1088.82 1088.82 1088.82 1088.82 1088.82 209.40
209.40 209.40 209.40
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