Economics: December 1998 Other Economics Articles

The summer of 1998 will long be remembered by agricultural producers in southern Oklahoma and northern Texas. The lack of rain, high temperatures, grasshoppers and armyworms had an enormous detrimental effect on any kind of forage and crop production. Many drought management strategies were discussed throughout the summer in an effort for cattlemen to maintain livestock numbers.

One of the strategies implemented on the Noble Foundation Red River Demonstration and Research Farm was to early wean the spring born calves on one of the cowherds. On June 18, 1998, 43 calves were weaned that were an average of 67 days old.

The 16 steers weighed an average of 235 pounds, and the 27 heifers weighed an average of 220 pounds. The average weight of all the calves was 226 pounds. At the time of weaning in June it was estimated the calves would bring $1.00 and $0.85 per pound for steers and heifers, respectively. This would make the average price per pound for all calves to be $0.91, and the average value per head to be $205.00. The projected budget to the right was prepared to see what the economics looked like for retaining ownership of the calves until the normal weaning time in October

The average annual variable cow costs for this particular cowherd during the previous two years was $320. If the calves were sold for $205 each at the time of removal from the cows in June, the price would be more than $115 below the variable cow costs. If the calves were retained on the farm the potential existed to recover $35-$40 of the $115 deficit.

Therefore, the decision was made to retain ownership of the calves to recover more of the annual cow costs. Since grass was short the calves were placed in a small trap after weaning and fed a complete ration so none of the grass or hay supplies on the farm would be utilized.

Actual numbers calculated on October 14, 1998, are also shown in bold in the budget. This date was when the rest of the calves on the farm were weaned. The actual break-even was considerably higher than what was projected. This was mainly due to a much higher amount of feed used than was estimated.

Also, no death loss was projected and two heifers died during the feeding period. With just a few input changes, such as cheaper feed costs, no death loss or maybe less labor cost, retaining ownership of the calves could have been a profitable endeavor.

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