How much can I afford to pay for a bull?
A popular question this time of year is “How much can I afford to pay for a bull.” My go-to answer is usually… “How much revenue loss would you have from a pasture full of open cows?” After all, we often de-value the role of the bull. We forget that he is a crucial part of the equation to making our product.
Now, the question is a good one to ask. Especially after watching calf prices climb seemingly all of 2014 and the prices paid for bred heifers at year-end, it is only logical to wonder what a good bull will cost this spring.
Old rules of thumb are good to reflect on. For instance, “2 times the value of a fat steer” or “4 to 5 times the value of a feeder calf” are both common measures used by old timers to determine the value of a bull. So, I tested these figures with historical prices from the Illinois Performance Tested Bull Sale and prices paid for feeders and fats from National Agricultural Statistics Service (NASS). As it turns out, using values from 1996 to 2014 (last 19 years) the average bull price was 4 times the value of a feeder calf and 2.1 times the value of a fat steer. Looks like those old rules of thumb work pretty well.
To read the entire article, please visit the Cattle Network [new window]