Selling Feeder Calves
This winter’s bottle calves went to the auction. I didn’t get a picture of them in the ring because I was too busy scribbling weights and bids. They were 21 to 23 weeks old and right in the 450-550 pound sweet spot for pricing. As the cattle get heavier their price per pound declines, so each additional pound becomes less valuable even though adding those pounds to the cattle isn’t any cheaper.
If we exclude the cost of mileage picking up the milk from the bottling plant (since my trips there were always part of my normal driving) and only count the actual cash outlays for purchasing the calves, hay, bedding, supplies, etc., we made a $575 profit per calf. When we calculate all the labor (sorting out the fresh from the spoiled milk at the plant, loading the truck, unloading the truck, thawing frozen bottles, opening milk bottles, feeding twice each day, manure cleanup, chipping ice in the water trough, carting empty milk jugs to the recycling bin at the dump, and general time spent working with the calves), all that work amounted to a before-tax wage of $9 per hour. And consider this: $9 per hour represents the payout in a record cattle market.
This works out for us because we have access to a small supply of near-expiration or “gently” expired milk. The simplistic solution to making more money is to add more calves. The problem is that we can’t count on more milk than we currently get. If we raised more calves then we’d have to purchase feed (either as milk replacer or calf grain ration, neither of which are appealing options), eating up most of the profit. Chasing bigger profits would involve more risk as the margins tightened. We have enough low-margin enterprises that we don’t need to make the calf-raising project one of them.
What are we going to do with this windfall? Buy more cattle of course. We’ll use the proceeds from these four Holstein steers to buy three weaned Angus steers from our neighbor. A year and a half from now those steers will be ready for butchering as grass finished beef. Get your orders in now! Just kidding, we’re not quite ready to take orders that far in advance.