Creating Value and Preserving Margin with Commercial Cows

Authors

Jim Lerwick, Lerwick Bros. LLC, Pine Bluffs, Wyoming

Date of this Version

December 2007

Comments

Published for the Proceedings, The Range Beef Cow Symposium XX December 11, 12 and 13, 2007 - Fort Collins, Colorado.

Abstract

If the object of the game is to do what one enjoys while making outstanding margin, we in the cow business have enjoyed one of the greatest opportunities in decades. Even though drought has made it an unequal distribution, and disease and politics have added considerable confusion, turning grass and other feed stuffs into marketable calves has been good. We have had challenges to enhance value for specific markets with new technologies. We have seen our aged cow and bull markets influenced heavily by border issues as well as premium meat markets disrupted by embargos and restrictions. Feed price has begun to make a major sort of production systems. However “good” calves produced in economically viable systems have been highly profitable.

We have been asked to discuss how we endeavor to create and capture value in beef calf production. In summary, we attempt to maximize revenue by creating measurable or perceived value to the grow out and finishing segments, while knowing what input costs produce the greatest margin potential and reducing those costs which are not contributors. We will try to share with you some of our thoughts in these areas, while openly admitting we are learning every year and have much to do to stay competitive with this dynamic industry.

I should mention that, as every production system, we operate within certain constraints and enjoy some specific opportunities in the southeast corner of Wyoming. Our diversification with both dry land and irrigated crop production puts labor constraints on the April through August time frame and summer pastures are five to two hundred miles from the headquarters. We calve heifers by the barn in January and calve cows February 1 to March 15, run the cows on cropland aftermath fall and spring, with pairs on summer pasture from April 15 to October sometime. We have high per head transportation costs but utilize trucks necessary in our crop production.