Economics of preg checking: Testing continues to be vialbe in declining cattle marketsWritten by Emilee Gibb
Cull cows account for 15 to 30 percent of a cow/calf producer’s income, making their management a crucial aspect for producers to consider.
“Management of cull cows is not an insignificant aspect of a producer’s income. Each year, producers are faced with the decision to preg-check or not and this can really make an impact on the bottom line,” said Canfax Research Services Manager Brenna Grant.
In a webinar by the Beef Cattle Research Council titled “The Economics of Pregnancy Detection,” Grant discussed the impacts of the current cattle markets on the economic viability of pregnancy testing in cow/calf operations.
There are three main options for producers to choose from when culling cows from their herd.
The first option is pregnancy checking and then culling in the fall, which is beneficial for reducing feed costs over winter.
“This has the benefits for the producer of providing cash flow and minimizing additional overhead costs associated with keeping those animals over the winter,” said Grant.
The second option producers can choose is short-term feeding. Producers pregnancy check their animals but separate the cull animals from the herd to supplement with a high energy ration for a short period of time to add weight.
“This means that they not only get a higher price when the markets are out of fall low prices, but producers also get added pounds sold,” she explained.
The final option is overwintering cattle and selling the cull cows in the spring. This option avoids pregnancy testing.
According to Grant, several factors influence the economics of pregnancy checking.
“The economics of preg-checking are really dependent on the cull cow market price,” she said.
Winter management strategies also influence the economic viability of pregnancy checking.
“This is really going to impact what our yardage is, as well as our feed costs,” said Grant. “That winter management system is also going to have implications on what our average daily gain is and the final weight of those animals.”
While it plays a role, Grant’s study did not find that veterinary costs were a large economic factor.
“This is one cost that’s been brought up in the literature quite a bit, but we found, when we looked at the model, it’s a really minor aspect of the equation,” she commented.
A test model was created to compare the three culling options. The purpose of the model was to determine how to maximize value.
“This whole model is really set up with the premise that, instead of minimizing cost, we want to maximize value for the producer,” explained Grant.
Grant’s research determined that cull cow body condition in the fall is a significant driver in deciding whether or not to pregnancy check.
“If they’re fat from being on grass all summer and there’s very little potential of additional weight gain over the winter, we’re maybe not going to see much benefit because we’re really only gaining that seasonal price variation,” she said.
However, if cows are thinner and have the potential to gain weight, overwintering or short-term feeding may be a more viable option.
“We’re not just going to have the additional pounds sold, we’re going to have the seasonal price increase, as well as potentially increasing quality grades,” noted Grant.
The type of winter management system that a producer uses impacts the economic viability of pregnancy checking.
“The higher a producer’s feed and overwintering costs, the more favorable preg-checking and culling cows in the fall is,” said Grant.
She explained that costs can be offset by cow performance and will vary from operation to operation. It is important to note that even if feed costs are low, if average daily gain is minimal, it will offset some of the advantages.
Ultimately, cow prices are one of the largest factors in choosing a culling option. A threshold point of $1.20 per pound is important for producers to consider when making a decision.
“If prices are lower than this, it actually encourages producers to preg-check and cull in the fall,” explained Grant.
In most scenarios run in the model, short-term feeding showed the greatest economic benefit for producers.
“The only case when separating cull cows was a less favorable option is when the overhead costs of separating them and feeding them separately was very high or the number of days on feed was really low,” she said.
As cow market prices have peaked and come back down, Grant emphasized the importance of the counter-seasonal year that was observed last year.
“Last winter was the first time that were in a bear run and cow prices actually dropped from the fall going into the spring,” said Grant.
In a situation where prices are increasing, pregnancy checking does not prove to be economically viable. However, in markets that are decreasing, it becomes more economically viable to pregnancy check and cull in the fall.
“With increasing prices, preg-checking is obviously a negative option, but that’s not the case in decreasing prices when comparing overwintering or short-term feeding compared to preg-checking. Basically we’ve got declining prices to encourage preg-checking based on our economic gains,” she said.
Grant concluded that pregnancy testing is currently the most viable option for producers to consider.
“As we come back into a price situation with lower cull cow prices, preg-checking does make sense,” comments Grant.