Ranching for profit has long been a business of tight bottom lines. Savvy ranchers are always looking for ways to reduce costs and spread them over more production points for greater profit. In doing this, one area of expense that might come under question is the price for good bull genetics: is it really cost-effective to pay more for a genetically superior bull?
Bull prices change frequently with the ever-changing markets, but investing in superior bull genetics routinely comes at a higher cost. Research done through the Noble Research Institute by Steve Swigert, agricultural economics consultant, show an additional $31.09 cost per cow for using known bull genetics versus using a bull with unknown pedigree and performance bought at a sale barn. In further research, Swigert investigated bull costs per cow for three different kinds of bulls: 1) bulls with unknown genetics bought at a sale barn, 2) bulls with known pedigree but limited performance information bought from a neighbor, and 3) bulls with known genetics with expected progeny differences (EPDs) bought from a seedstock supplier. Swigert found the total annual economic bull costs per cow to be $23.45, $36.14, and $54.54, respectively, assuming each bull was mated to 25 cows a year for five years.
Clearly, using known bull genetics comes at a greater cost. The follow-up question, however, is if the greater cost leads to greater returns. Swigert found using known bull genetics increased weaning performance of calves by roughly 100 pounds per calf. Pricing the value of increased weaning performance at $1.10/lb (in 2013), the value of increased performance came to roughly $110 per calf. The study further found an increase in yearling performance at $66 per calf, measured by difference in average daily gain. The total increased value credited to increased weaning and yearling performance came to $176 per calf from bulls with known genetics. In cow terms, that comes to a $144.91 marginal return per cow per year when mated to bulls with superior genetics. In bull terms, a genetically superior bull who sired 125 calves over five years had an additional marginal income of roughly $18,113!
Those are impressive numbers, but it can still be difficult to bite the bullet and write that large check for a bull on sale day. Large capital investments do come with a certain amount of risk. Is the risk actually that much greater for more expensive bulls with known genetics? According to an article by Troy Marshall in 2011 for BEEF magazine, the average service cost per cow at 25 cows per year for a $4,500 bull is about $63.14/cow. With the same assumptions, the difference between a $3,750 bull and a $5,250 bull on average cost per cow serviceded is $9/cow. When comparing that to the added value from increased calf performance at weaning, it doesn’t take very much for a more expensive bull to start paying for itself. Based on the calculation of actual costs of a bull per cow from Jim McGrann, Texas A&M emeritus professor, it only takes an added 12 pounds of weaning weight to justify paying $5,250 versus $3,750 a bull.
Buying bulls with unknown origin direct from the sale barn also comes with its own added risk, genetics aside. In an article by Laura Mushrush for BEEF magazine, Dr. Matt Spangler was quoted as calling the risks of such a purchase “multifold”. He points out you might be compromising your operation’s biosecurity since you have no idea what potential disease risks, both reproductive and otherwise, come along with that bull. By comparison, when genetics are purchased directly from a seedstock provider, the buyer will have access to test results for various diseases such as persistently infected (PI) carriers of bovine viral diarrhea. Additionally, many bulls purchased directly from seedstock providers are often yearlings, or come with a virgin bull certificate in the case of older bulls over 18 months. This ensures the buyer will not be introducing damaging reproductive diseases into their cowherd. Spangler points out the uncertainty of buying bulls direct from the sale barn, “…You have no idea if the bull is even fertile, or if he’ll pass a breeding soundness exam”. Couple that with no real idea of how the bull will perform in terms of genetic potential as a parent, and Spangler concludes, “Even though the bull may be much cheaper, it could be a very expensive decision to make if he happens to be diseased, unfertile, or counterproductive to the rancher’s goals”.
If bull buying is a game of dollars and cents, purchasing a bull with known superior genetics from a seedstock producer definitely pencils out. Comparatively, sale barn bulls with unknown origins and disease profiles are both high risk and potentially low producing. Despite a somewhat greater cost per cow, added value from greater weaning and yearling performance of calves coupled with greater security from potentially costly disease risks make buying seedstock bulls with known genetics a “no brainer”.
Swigert, Steve. “Buying known bull genetics adds value”.
October 2015. Noble Research Institute Ag News and
Marshall, Troy. “How much can you afford for a bull”.
March 2011. Beef Magazine.
Mushrush, Laura. “Don’t play Russian Roulette with your
cattle genetics”. February 2017. BEEF Magazine.