As we prepare to close the chapter on the summer grazing season, most cattlemen are seeing cows nursing the biggest calves in recent memory. Unless you reside on the West Coast, you’ve probably enjoyed an abundance of moisture and plenty of grass for grazing. In addition to plentiful water and grass, there is a swell of replacement females set to hit the market this fall, providing ample opportunity for discriminating buyers.
Heifer retention has been on the rise for some time. That fact is confirmed by cattle sale
reports and cattle on feed data. The past 18 months have seen an even higher amount of heifer retention with no sign of slowing down. Areas of Texas have experienced record rainfall and are as green as most cattlemen can remember. That could make Texas, western Oklahoma and western Kansas more active in
female retention than they have been over the breadth of this extended cattle cycle.
The long-awaited herd expansion phase is gaining momentum. It is the precise market environment on which custom-bred heifer entrepreneurs have leveraged their businesses. These steadily-expanding replacement female development programs have carved out a wonderful niche in the beef industry. Some of these new businesses are very professional and produce exceptional quality replacements—presorted for intangible, economic qualities advantageous to the cattle buyer. These niche markets have steadily inflated the price of premium, open heifers to the point they are demanding more value than steers. Savvy commercial cattlemen are capitalizing on this by capturing value through marketing and relationships with their bull suppliers.
While the market for bred heifers is likely to remain solid, it looks to be slightly less robust than in 2014. Demand is still there; however, custom heifer programs have successfully risen to the occasion with the largest supply we have seen of this cycle. The supply/demand correction will slowly pick up steam over the next few years. This is good news for those of you in the market for quality replacements. The first real observable changes will come in the form of price differentiation between quality and marginal females.
When the price gap between the top quality and grade heifers widens, cattlemen will be faced with a proverbial fork in the road. Do you buy as many grade heifers as you can to spread more dollars over your operating expenses with the increased potential for larger number of weaned calves? Or, do you buy the really nice set of quality replacement females you’ve wanted for a while without fear of overspending on marginal quality females? It’s hard to find fault with either scenario.
When examining your options, the life span of your investment may be the ultimate determining factor of how you choose to purchase replacements. Will this year’s cow herd decisions be short- or long-term acquisitions? If you need to stabilize cow numbers with select females that will stay productive for six to eight years, sort for quality. Likewise, stretch your dollars as far as you can by cleaning up the marginal heifers. Calve them out and flip them as pairs for a nice short-term investment. Regardless, the market shift is moving in favor of the buyer with each passing season.