Now is the time to sell if you have a cow-calf or stocker operation, according to Curt Lacy, livestock Extension economist for the University of Georgia.
“It’s hard to turn down money that you can make by going ahead and marketing your cattle,” Lacy says. “It’s hard to make any high prices come out for futures right now.”
For those who choose to keep their cattle until fall, there are marketing options that could help producers make it through summer successfully.
Temporary summer grazing is one choice available for cow-calf producers.
“You need something with good gain,” Lacy says. “Cattle don’t gain well on bermuda or bahia grass. It needs to be a type of millet or sorghum.”
Irrigation also helps increase production and quality, he adds.
Summer stockering is another popular marketing alternative.
Lacy warns that in Georgia this does not work as well as in other parts of the country because of the severely negative buy-sell margin of cattle placed on grass in late spring and sold in late summer or early fall.
“You buy them high and sell them low,” Lacy says. “Steers that weigh 700 pounds in September will bring about 85 percent of the purchase price of 500-pound steers in May.”
Lacy says this differs greatly from last year’s prices when cattle could be bought at a lower price and sold for $150 to $200 a head more.
“It’s a big risk right now to stocker cattle,” he says. “The sales price is tied to the price of corn. If we don’t have a good corn crop, it will affect the price of feeder cattle.”
Producers with cattle coming off winter grass or early weaning fall calves may consider custom finishing cattle as a way to make additional profits. Still, high calf values make custom finishing a risky venture, according to Lacy.
Fed cattle must bring $90 per hundredweight in the fall to make a profit, he says. “You really need to know your breakeven point and keep a close eye on the futures. Have a risk management plan in place, whether you’re on the feed or sale side.”
As part of a good risk management plan for cow-calf producers, Lacy recommends weaning calves early in case of a drought. “It will increase conception rate of your cows and give you higher valued calves.”
“After the BSE incident this past December, I think we’ve all learned a good lesson,” Lacy says. “Folks who have a risk management plan for their cattle sleep a lot better at night than those who don’t.”
Rebecca Bearden is a senior at Auburn University majoring in agricultural communications. She currently is completing her internship requirement with Southeast Farm Press.