Though cattle prices are still strong, the struggles cattlemen are facing can be overwhelming. Whether you’re facing the effects of drought, market volatility, inflation or high input costs, these uncertain times can also lead to an abundance of opportunity for those willing and able to get a little creative from a management perspective. To take a deeper look into this idea, our team visited with Karla Wilke, associate professor of range management and cow-calf specialist with the University of Nebraska, regarding options for income generation and enterprises.

Yearlings offer diversification option

Growing up on a stocker and farming operation in the Texas Panhandle, Wilke’s background drives her to continue to find pathways for producers to build security by diversifying their operations. One option involves comparing the investment and commitment of growing yearlings vs. managing a mature cow herd. Even if a producer retains calves from weaning until they’re sold to a feedlot, they’re still marketing that animal before it reaches 2 years of age. Cows, on the other hand, are a long-term commitment and require a larger forage investment.

“Let’s say [yearlings] average 850 pounds (lb.), then that is going to use about 0.8 animal unit months’ (AUMs) worth of grazing. A cow-calf pair that weighs 1,700 pounds is going to be 1.7,” notes Wilke. “So, essentially, two yearlings can graze for every cow-calf pair.”

What that means from a management perspective is that if cattlemen find themselves in a drought situation and need to liquidate animals, they can sell two yearlings and not lose much other than a couple months of additional grazing. If a producer needs to sell a cow-calf pair, they’ve lost a much larger investment.

The depreciation of mature females within each cow herd isn’t a cost that producers necessarily write a check for, but it’s still a very real cost within each operation, says Wilke.

“Cow depreciation, in the simplest terms, is the cost to purchase or develop that female minus whatever salvage value you got out of her divided by the number of calves that she produced for you. If you paid $2,000 for her, then sold her for $800 and she’s had something like three calves, then her depreciation was $400,” explains Wilke, noting that losing that much money on a female is a significant loss for most operations. “If you have to liquidate [that female] because of drought, that becomes a very costly move that sometimes we have to make.”