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What''s an open cow cost?

August 10, 2008
 
 
 

Bruce Carpenter

How much an open cows costs depends on the cow, as well as what and when something is done with her. The illustrations used here are not intended to be profit-loss analyses or even simple cow-calf budgets. The intent is to illustrate cash flow relationships, over time, between costs and revenue; and to illustrate how a good management practice like pregnancy testing minimizes risk.

Southwest SPA data indicated that the average cost to maintain a cow in Texas was $440 in 1991. That annual cost climbed steadily, until reaching $528 in 2006 (SPA analysis includes all costs i.e.depreciation, feed, pasture, vet, labor, taxes, etc).  Two years later, economists think average annual cow costs have probably climbed another $20 or so, mostly due to fuel and supplement. That means about $550 per cow in 2008. The illustration below uses a cow cost of $523 because livestock depreciation was removed and used as a direct replacement cost.

Weaned calves are worth $500 to $700 and a bred replacement cow (private treaty) will cost about $1,200 to $1,500 these days. In view of this, the first objective should be to attend to management that minimizes the need for replacements (i.e. open cows). Many of those management practices have been covered in previous news letters. Secondly, with replacement costs as high as they are, it will likely take several calf-crops to recoup the cost of an open cow: that is, the cost of her replacement, plus the replacement's annual maintenance costs once she enters the herd. 

For illustrative purposes, let's compare an open cow in four different scenarios. Costs and revenue will be held constant and, for simplicity, we will also assume that stocking rate will not need to be adjusted over the 2 year window used here. We will purchase a bred cow for a replacement, though obviously other options do exist. Scenario 2 uses pregnancy testing at weaning. Scenario 1 does not: dry cows are simply culled at weaning. This means that management decisions are delayed by 12 months. Scenarios 3 and 4 also use pregnancy testing, but instead of selling the open cow, she is held over the winter for an attempted second breeding in the spring.

 

Table 1 shows what an open cow costs at the end of two years.  Note that the cost of an open cow was lowest in Scenario 3: where an open cow was held over and given a second chance to breed. Note that at the end of two years, it only cost $396......IF she got pregnant. If she failed to get pregnant a second time, then this quickly became expensive - costing $1,096 at the end of two years (Scenario 4). 

In order to balance risk vs. cost, the most attractive scenario (of the four used here) is number 2. In Scenario 2, an open cow is identified early and replaced with a bred cow - costing  $446. This is a little more than $396, but without the added risk of possibly costing $1,096.  In the end, Scenarios 1 and 4 work out the same, because either way, there is no revenue from the replacement female until the second year (October 2010).

While it is important to cut costs, spending money on the right management practices will be more important than ever. This will mean getting brood cows pregnant and keeping them in production. Cull open cows as early as possible.

If the decision is made to risk keeping an open cow for a second chance at breeding, it is critical to choose cows that may have a higher probability of breeding. Typically those are middle-aged cows that have never missed a calf before, and that are in reasonably good condition.

Choosing those kinds of cows may lower risk, but it certainly won't eliminate it. Individual ranch circumstances and calf prices, as well as replacement female options and costs, will influence the decision to risk keeping an open cow.

Table 1. Cost of an open cow at the end of 2 years, under 4 different scenarios

SCENARIO

COST

Scenario 1

Cull by finding dry cows           

- $1,096

Scenario 2

Cull by preg test

- $ 446

Scenario 3

Preg test. Keep open cow.

Breeding successful

- $ 396

Scenario 4

Preg test. Keep open cow.

Breeding unsuccessful

- $1,096

            (see time lines below for cost and revenue cash flows)

           

Scenario 1: No Pregnancy Checking.
Open wet cow, weans a calf, not preg checked and goes back to pasture.   Turns up dry, sell her. Salvage $600, less $1,300 bred replacement, less pervious cow costs =

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