As the calendar turned to October, you have probably noticed the discussion about the falling feeder cattle markets this fall, which lead to the question of what everyone planned to do with their calves.  There were more than likely many different theories from those who were going to sell as soon as possible right off the cow to those who planned to stick with the status quo and do the same as they have for many years.  In my office, phone calls about whether or not to background calves were almost as popular as the calls about crop land rental rates, and both of those questions were equally hard to answer.

The November Feeder Calf Contract fell from the 190/cwt range a year ago to the current level of under 130/cwt.  Those changes in the market have caused a drastic difference from where we sat a year ago, and have made the question of what to do with the calves a hot topic. 

When deciding whether to sell the calves a weaning or to background to a certain weight, a producer must consider their available resources of feed, pen space, and labor.  These items along with the knowledge of how their cattle perform on feed are very important when making the decision.

Currently if a producer were to wean 550 pound calves with plans to feed them for 90 days and for them to gain 3 pounds a day at 45 cents of feed cost per pound of gain, the breakeven selling price at the end would be around $124/cwt.  If the cost of feed were to go up to 50 cents per pound of gain, the breakeven price becomes $126/cwt.  Just a small increase in costs can make a large difference in the price needed on sale day.

Producers looking to make this decision based on their own numbers can certainly call with any questions.  Additional data and breakeven price tables will be available at www.ndfarmmanagement.com.

Jory Hansen
Farm Business Management Instructor