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Northwest Iowa Dairy Outlooks

A local discussion of current science and issues concerning dairying in northwest iowa

Economist Stan Bevers reports that looking at Food and Agricultural Research Policy Institute projections, beef cattle prices are forecast to continue a steady climb upward near $170 per hundredweight by 2014. Bevers said cattle prices have seen some softness lately in price due to the uncertainty of the current corn crop. However, there will be a larger corn crop in the future and national cattle inventory levels are at their lowest since the 1950s, which signals high prices for the next couple of years.

When ranchers consider restocking, Bevers said it’s important to consider the cost of the initial investment, annual income the investment will generate, and the salvage value at the end of the useful life of the investment.

“Collectively, is she a good investment?” Bevers said, is the question each producer should ask.

Some factors Bevers said to consider when looking at potential replacement cows are:

  • Annual cow costs. These are $588.22, according to Standardized Performance Analysis.
  • Weaning percentage and weaning weights. The Texas Standardized Performance Analysis database averages are 82.1 percent and 525 pounds.
  • Future calf market prices.

Bevers said another factor to consider is the type of female you want to purchase. This could include cow-calf pairs, bred cows, or those requiring a development phase, such as heifers. He said longevity of ownership also needs to be a consideration.

“The longer you keep a productive female, the cheaper she is to own,” Bevers said.

Bevers said he has several spreadsheets that producers can use to evaluate their options. Visit http://agrisk.tamu.edu for this and other information.

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