Many cattlemen began reassessing their strategies this fall when the beef market took a tumble, but in general cattlemen should forge ahead with rebuilding cow numbers because the U.S. is still roughly two million beef cows short of what it needs, according to area extension specialists.

Many cattlemen began reassessing their strategies this fall when the beef market took a tumble, but in general cattlemen should forge ahead with rebuilding cow numbers because the U.S. is still roughly two million beef cows short of what it needs, according to area extension specialists.

Rick Funston, a North Platte, Nebraska, beef reproductive specialist widely considered the guru of heifer development, travels the world giving workshops on how to best manage cow-calf operations.

“Last year was an extraordinary year, but we’re still in a good time in the cattle business,” he said recently.

One thing to keep in mind is that to this point the U.S. has been able to keep up with beef demand, in part, by liquidating cows, mostly in response to drought. According to estimates by Denver-based CattleFax, nearly 4 million cows went to town during the drought years.

“A lot of the beef sustaining our production was from cull cows,” Funston noted. “Those cull cows are gone now.”

The U.S. herd is down to where it now accounts for less than 20 percent of world’s cattle, he said.

Derrell Peel, a livestock marketing specialist with Oklahoma State University who writes a widely read column on the cattle market, said producers shouldn’t let recent market volatility throw them off their long-term game plan.

“What happened this fall doesn’t change the big picture overall,” he said in a recent interview. “We are in rebuilding mode at least into 2017.”

As early as 18 months ago, some analysts started worrying the industry was saving back too many heifers too quickly. In Peel’s view, “It was wrong then and it’s still wrong. Maybe by this time next year, but not yet.”

“We’ve seen the peak in prices, but we haven’t seen the end of high prices for several months to come,” he continued. “The party is not over, it’s just changing.”

Feedlots have been slow to market finished cattle, feeding them to heavier and heavier weights, Peel explained. The resulting backlog caught up with the entire beef complex back in September.

“The feeders didn’t want to lose $250 a head so they ended up losing $500 a head instead,” Peel said. “Overall, though, cattle numbers are still tight.”

Funston said the recent market fluctuations were a reminder producers need to do everything they can to control costs and operate efficiently.

Cattle producers can increase output more quickly by improving conception rates than by retaining heifers, he pointed out. “If we improved conception nationally by just 1 percent, we could put a large number of feeder cattle on the market immediately,” he said.

As producers specialize their management systems, one niche that has emerged is the opportunity to develop heifers to sell as replacement females for other producers.

“We have an aging population in this industry, and a lot of these ranchers don’t want to calve out heifers anymore,” Funston said.

Specialization offers clear advantages to both the buyers and sellers, he added.

“A question I get asked all the time is on raising versus purchasing females,” he said.

“Data out of Colorado from years ago shows it’s basically a wash between raising and purchasing heifers. But what we should ask ourselves is what is the opportunity cost of not going to a terminal sire selection program?”

Some industry observers now believe 200 head is the minimal threshold where it makes economic sense to retain your own replacements, Funston said. Smaller herds might be better served buying young cows that have been developed by someone else and calved out once or twice, he said.

That’s because retaining heifer calves and calving out first calf heifers forces ranchers to maintain herd bulls selected for calving ease, smaller frame size and maternal traits rather than for growth traits.

To put it in perspective, roughly 80 percent of that rancher’s genetic selection is going to serve a 15 percent replacement rate.

Instead, by buying mature cows as replacements, the same rancher could focus his bull battery entirely on high growth and performance.

The upcoming Range Beef Cow Symposium will feature numerous presentations on how cow-calf producers can be more productive and efficient in the years to come. Funston has been a past presenter at the conference, which rotates between South Dakota, Nebraska, Wyoming and Colorado every other year. This year’s event runs Nov. 17-19 at the Ranch in Loveland with Colorado State University serving as the host institution.

Anyone can register at the door, according to coordinator Jason Ahola, a CSU beef production systems specialist. Daily registration ranges from $40 to $60.