Page 38 - MWC 3-9-2023s

The Midwest Cattleman · March 9, 2023 · P38
Early Herd Rebuilding Could Happen Through the Bred Cow Market

By Elliott Dennis, Department of Agricultural Economics, University of Nebraska – Lincoln
The USDA Cattle Inven- summer whereas the North-
tory report showed a 4% re- ern Plains generally stay dry
duction in beef cows, a 6% in the summer before a cool/
decrease in heifers held back wet fall. For Northern Plains
for retention, and a 5% re- cattle producers, it may get
duction in heifers expected to a bit tougher before things
calve this year (USDA-NASS improve from a feed perspec-
2023). Feeder cattle supplies tive.
will be reduced nationally in There will be producers
2023. Continued liquidation who have feed resources and
in 2023 will depend on the believe profits are to be had
profit margins producers ex- in 2023 and 2024. The quick-
pect to receive. Higher prices est way for these producers
for feeder cattle are expect- to increase the feeder cattle than expected due to poten- these factors could impact
ed but higher feed costs, es- supply is through the ad- tial issues with calving which producers’ decisions to either
pecially hay, and other in- dition of bred cows or bred can occur with first calf heif- buy or sell bred cows this
puts are limiting the profit heifers. Bred heifers receive ers. year, I walk through several
potential. Some producers a premium over bred cows. However, the national bred scenarios assuming we have
have already run out of hay For example, the price ratio cow price masks several fac- a three-year-old bred cow
as heavy snow has limit- of bred heifers to bred cows tors that impact price. Age, that is six months pregnant,
ed winter grazing and per- has averaged 2.5% over the weight, months bred, genet- is a medium/large 1-2, and
sistent drought conditions last 5 years. In other words, ics and market conditions are black hided. February 2023
shortened the grazing season bred heifers are on average the primary drivers of bred prices for this type of cow in
and reduced overall hay pro- 2.5% more expensive than cow prices. One study using Oklahoma City, OK is $1,150
duction. Much has been said bred cows. The premium Oklahoma City bred heif- but has averaged $870 over
about the ENSO weather is the widest in the Spring er and bred cow sales from the past three years.
patterns changing this year. (March-May) and lowest in 2000-2015 estimated the pre- Producers selling cows
If this weather pattern does the Fall (September-Novem- miums and discounts for each older than this should ex-
materialize the change will ber). There is a premium due of these factors in the bred pect to receive a discount
benefit the Southern Plains to the longer useful life of the cow market (see Mitchell et and the discounts tend to de-
with a cool and wet spring/ cow in the herd but smaller al. 2018). To illustrate how crease almost linearly from

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