Patterson: Cow age influences profitability, efficiency in the cattle herd
Loveland, Colo. – When it comes to cattle, Padlock Ranch CEO Trey Patterson said that profitable cattle are usually productive, but productive cattle are not always profitable.
“It is the economic component that we are after,” Patterson commented during his presentation at the Range Beef Cow Symposium in Loveland, Colo. in mid-November. “When we are talking about cow efficiency, we need a certain level of production, but we also need the economic efficiency.”
When looking at efficiency, Patterson noted that it is challenging to parse out the many components that are included.
“It is terribly complex, with the genetics, management, environment, changing costs and changing markets all involved,” he said. “There are so many factors involved.”
Biological efficiency
Citing a 1984 paper by Ferrell and Jenkins, Patterson said that efficiency is dependent on the biological type of the cow.
“We have different biological efficiencies bred into our cows,” he said. “Some are more moderate, others are heavier milking and larger. These researchers looked at two different biological types of cattle at two levels of feed intake.”
Their research showed that, when feed was restricted, the more moderate cattle had a higher biological efficiency.
Additionally, studies related to milk production and efficiency showed that those cows with lower milk production were more economically efficient, with more dollars out per dollars in.
At the same time, Patterson noted that individual ranches must also consider their environment and grazing system in evaluating the efficiency of cattle.
Grazing impacts
“If I am looking at cow efficiency and I look at rotational grazing versus season-long grazing, we’ve been able to document that we can increase animal unit month (AUM) harvesting by having a planned, time-controlled grazing system,” Patterson explained. “If we are going to be fully stocked and have some grazing pressure, we typically find that the heavier biological types tend to weed themselves if we cull on reproduction.”
Reducing grazing pressure, he continued, can create a more liberal feed situation, but the stocking rate may depend partially on the overhead costs.
“In most ranches, it seems like we have to be fully stocked to dilute the overhead costs,” Patterson commented.
“Carrying capacity of our ranches and what they return on a per-acre basis is also important,” he added.
Longevity
Patterson also includes longevity of cattle when he looks at efficiency.
“J. Zietsman, in a 2014 study, measures efficiency as if a cow can produce a second calf on or before her birthday,” Patterson said, citing another study. “Longevity in production is important relative to efficiency, and young cow reproduction is something that is seriously important.”
Heifer pregnancy rates, whether they were bred early or late in the season and the time and costs associated with calving heifers should also be included.
Using NPV
One way to look inside efficiency in a cowherd is by using net present value (NPV).
NPV estimates net cash flow by taking gross revenue minus costs.
“The middle-aged cow has a higher NPV than younger cows,” he said, which isn’t intuitive, but Patterson noted that lower reproduction drives that figure. “We also have to include the marketing of calves off heifers and the young cows.”
In one example, Patterson utilized a set of 100 bred, coming-two-year-old cows in two scenarios. First, he assumed that the two- and three-year-old pregnancy rates were at 88 percent, and running age cows had a rate of 93 percent that tapers off at age 11. Cows were culled at age 13.
He also used a five-year average for 550-pound calf and cull cow prices.
In the second scenario, he utilized a pregnancy rate of 75 percent on the two- and three-year-olds, leaving the other factors constant.
The result, however, was a change in the average age of the set of cows over their lifetime. In scenario one, where an 88 percent pregnancy rate was seen on young cows, the average age of the set was 5.6 years. Scenario two, with a 75 percent young cow pregnancy rate, had an average age of 5.3 years.
Impact of age
“The absolute values are not what are important, as that varies with the assumptions on markets, for pregnancy and cull rates on the base cowherd,” Patterson explained. “What is important is the relationship. The cows in scenario one had a NPV of $1,821 per head and $1,611 per head in scenario two.”
“The modest change of 0.3 years average cow age affected young cow reproduction and changed the lifetime value of the cows by $210 per head,” Patterson said. “Young cow reproduction is important.”
“At the end of the day, we have a product to sell, and we have to have animals that will perform for our customers,” Patterson said. “Maternal traits are important, but the end product also has to be marketable.”
Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at saige@wylr.net.
