Deciding how much to pay for a bull is no easy task, but Iowa State University Extension cow-calf specialist Patrick Gunn says knowing which factors to consider can help cattle producers feel more confident in the decision they ultimately make.
“While no calculator exists to determine the exact price a producer should spend on a bull, there are multiple factors that can be considered to establish a base price,” he says. “Typical thumb rules I’ve heard for estimating the value of an average registered bull, include two times the value of a fed steer, five times the value of a feeder calf at weaning, or 25 times the hundredweight price of feeder calves. Using these thumb rules in the current market gives us a range of $4,000 to $5,200, which is very representative of early sale reports from 2016.”
You can’t afford to give up genetic progress in your herd
With the recent recession in cattle prices, it is natural to start looking for ways to reduce input costs for the enterprise. However, poorly justified or haphazard budget cuts often begin with the bull battery, Gunn notes.
“I can’t stress enough the value in optimizing your marketing goals through improved male genetics, regardless of cost. With bulls representing 50% of the genetics of the program, you cannot afford to give up genetic progress in your herd at the expense of “cheap” bulls that don’t match or advance your production goals,” he says.
Regardless of money spent on a service sire, the bull battery typically represents less than 10% of annual cow costs for the herd. But the difference in returns between good and below average sires for your traits of interest could be 15% or more. This re-emphasizes the value in “paying up” for a bull that truly meets your marketing goals.
“Don’t forget the two primary factors that determine profit in the cow-calf sector are feed cost and pounds of calf weaned per cow exposed,” Gunn says. “That’s why there is no substitute for stepping up to the table to invest a few extra dollars in high-quality, registered bulls with proven pedigrees as well as performance and genetic testing.”
A good bull can be one of best returns for cattle enterprise
In today’s marketplace, enhancing your factory with a bull that excels in economically relevant traits such as calving ease, maternal calving ease, stability, growth and/or carcass traits will definitely maximize profitability in a volatile market, he says. As such it can be one of the best returns on investment for any cattle enterprise.
It should be noted that purchasing a less costly bull does not necessarily imply you bought an inferior breeding piece. However, be sure the strengths of your new herd sire still improve and complement your existing cow herd without sacrificing your marketing goals. “As always, for more information on bull selection, consult with the team of experts you have assembled including your beef Extension specialist and genetics provider,” Gunn says. “Good luck, and happy bidding.”
About the Iowa Beef Center: The Iowa Beef Center at Iowa State University was established in 1996 with the goal of supporting the growth and vitality of the state’s beef cattle industry. It comprises faculty and staff from ISU Extension and Outreach, College of Agriculture & Life Sciences and College of Veterinary Medicine, and works to develop and deliver the latest research-based information regarding the beef cattle industry. For more information about IBC, visit www.iowabeefcenter.org.