An Oklahoma producer recently asked about which bulls to purchase for their commercial cow-calf operation. The operation needs two more Angus bulls this spring and has narrowed the selection list down to five bulls which were all available to purchase private treaty (see Figure 1).
Figure 1.
| ID | CED | BW | WW |
YW |
CEM |
HP | MW |
Marb | $B | Price |
1 | 12 | 0.2 | 70 | 120 | 9 | 13 | 76 | 0.35 | 154 | $10,000 |
2 | 4 | 2.9 | 82 | 141 | 12 | 6 | 96 | 0.79 | 180 | $8,000 |
3 | 15 | 0.1 | 78 | 135 | 14 | 17 | 86 | 1.80 | 215 | $12,500 |
4 | 5 | 3.5 | 91 | 157 | 8 | 5 | 99 | 0.71 | 185 | $7,500 |
5 | 11 | 0.7 | 63 | 108 | 8 | 10 | 65 | 1.90 | 189 | $5,500 |
The bulls are all spring yearlings and will be approximately 15 months of age at turnout and accordingly should be expected to cover 15 cows this year. All the bulls have passed a breeding soundness exam and sell with a registration paper and a breeding soundness warranty. So, the buying decision boils down to identifying the right bulls for this operation. The right bulls to buy are the ones most capable of adding value to the calf crop sired relative to their purchase price. In order to do so the bulls need to:
• Complement the females to which they will be mated.
• Offer genetic values of economic relevance to the marketing endpoint of the calves they will sire.
This operation intends to use the bulls as terminal sires on spring-calving cows, 4-6 years of age. After weaning, the calves will run on cool-season grass until marketed as yearlings. In this operation the trait of primary economic importance is Yearling Weight (YW).
In order to calculate the profit potential of each bull, we will assume each bull will sire 135 calves over their lifetime of service, each will have the same salvage value and the value of a pound of yearling weight sired will be $2.
Using the least expensive bull as our starting point:
• Bull 5 serves as the baseline for least YW sired with a 108 YW EPD at expense of $5,500.
• Bull 1 is expected to sire 12 pounds more YW per calf, this multiplied by 135 calves results in an additional 1,620 lbs. A total of 1,620 lbs. of YW at a value of $2 equals $3,240. The purchase price of Bull 1 is $4,500 more than Bull 5.
$3240 – $4,500 = $ -1,260.
So, Bull 1 is a worse choice than Bull 5 by $1,260.
• Bull 2 is expected to sire 33 lbs. more YW per calf, this multiplied by 135 calves results in an additional 4,455 lbs. A total of 4,455 lbs. of YW at a value of $2 equals $8,910. The purchase price of Bull 2 is $2,500 more than Bull 5.
$8,910 – $2,500 = $6,410.
So, Bull 2 is a superior choice than Bull 5 by $6,410.
• Bull 3 is expected to sire 27 lbs. more YW per calf, this multiplied by 135 calves results in an additional 3,645 lbs. A total of 3,645 lbs. of YW at a value of $2 equals $7,290. The purchase price of Bull 3 is $7,000 more than Bull 5.
$7,290 – $7,000 = $290.
So, Bull 3 generates $290 more relative to his purchase price than Bull 5.
• Bull 4 is expected to sire 49 lbs. more YW per calf, this multiplied by 135 calves results in an additional 6,615 lbs. A total of 6,615 lbs. of YW at a value of $2 equals $13,230. The purchase price of Bull 2 is $2,000 more than Bull 5.
$13,230 – $2,000 = $11,230.
So, Bull 4 is a vastly superior choice than Bull 5 by $11,230.
Another way of looking at the buying decision is looking at the cost over their lifetime of service.
• Bull 5 will sire 135 calves at a cost of $5,500.
• Bull 4 will sire 135 calves while paying this cow-calf operation $5,730 for the opportunity.
• Bull 3 will sire 135 calves at a cost of $5,210
• Bull 2 will sire 135 calves while paying this cow-calf operation $910 for the opportunity.
• Bull 1 will sire 135 calves at a cost of $6,760. — Mark Z. Johnson, Oklahoma State University Extension beef cattle breeding specialist
