If you haven't heard… cattle prices are pretty good right now. This coupled with the retreat in corn price last fall and lowering feed costs, has cattle producers looking for their long-promised "good times". For nearly three years, the talk of herd expansion has been suggested only to be silenced by drought and high feed costs. So now that favorable weather patterns and lower commodity prices have been forecasted, the herd expansion hype is in full swing.
With the industry poised to bury the throttle on herd expansion, it is important that producers evaluate their own scenarios and avoid getting in the "keeping up with the Jones's" mentality. Illinois cattlemen need to ask themselves how expanding will make them more profitable.
Most farmers will tell you "more calves to sell equals more money." This is true to an extent. However, there are some real costs associated with expanding. Capital investment or loss of income from replacement heifers can be quite substantial with current prices. Thus, it is important to put the pencil to the paper and look at returns on that investment. Expanding will increase number sold and should lower overhead costs per animal. However, it is important to see increases in variable costs like feed, labor, vet, fertilizer, etc.
I bring these points forward because if you are in a situation where you do not have the land (pasture), machinery, or man hours to expand, then potentially herd expansion would not benefit the profitability of your operation. Increasing production comes with a cost. Those that can use numbers to increase the efficiency of their cattle business are the ones that will be successful in expanding the herd. Those that cannot, need to focus heavily on reducing costs (feed, labor, equipment, etc.).
I truly believe that Illinois has room for more cows. Producers that are willing to implement rotational grazing to increase the stocking rate capacity of permanent pastures will be pleased with the investment. Investing $200 an acre in fence, water, and rotational design can easily yield a stocking rate increase of 50%. That is like purchasing land for $400 per acre!
Cover crops, corn residues, corn silage, corn co-products, and modern cattle feeding facilities all give Illinois cattle producers a competitive advantage. I look forward to working with more farmers on taking advantage of these factors.
There is opportunity facing Illinois cattlemen right now. The opportunity is real. Those that are willing to devote some time to livestock can make them an integral part of a successful, profitable, and sustainable farming operation.