Smart choices: more grass, better markets

High corn prices caused Iowa beef producer George Queck to rethink his feeding program, and the changes are still paying dividends.

Smart choices: more grass, better markets

High corn prices caused Iowa beef producer George Queck to rethink his feeding program, and the changes are still paying dividends.

Queck’s rethinking started out as a drive to finish his cattle using less corn. But it led to a series of changes to his cattle feeding and farm operation —changes he plans to stick with even though corn prices have declined.

Queck farms near Fontanelle in the rolling hills of southwest Iowa. His 600-acre operation is devoted mostly to corn and soybeans; however, he has nearly 75 acres of permanent pasture. Some of his cropland is thin ground he doesn’t want to plant to corn or beans every year, so he rotates some cropland to hay. To get a return on the permanent pasture and hay, he must have cattle.

In past years, Queck bought feeders weighing 600 to 700 pounds in November and December, and put them in the feedlot to be finished out by the next July and August. He also would buy 80 lighter calves — 450 to 500 pounds — and would background them until late May, put them out on pasture during the summer, and then finish them and sell them in November or December.

Pasture more profitable

Queck noticed through the years that the lighter feeders he put on pasture each summer and fed out to sell in late fall almost always made the most money. A look at his records identified two main reasons:

1. He could buy and background lighter feeders on his own pastures and stored roughage for less than buying higher-priced 600- to 700-pound feeders.

2. “Another reason why buying lighter calves consistently made more money,” adds Queck, “was that they were always marketed in the winter when the fed-cattle market is usually higher.”

So in the fall of 2008, Queck switched his entire cattle-feeding program to what had been making him the most money. He bought lighter-weight feeders — around 500 pounds — in December, January and February, and backgrounded them until May on stored corn silage and hay, plus some corn.

In early May he sorted 80 of the heavier calves and put them on feed while moving 100 head to his permanent pastures. He prepared those pastures by fertilizing them and improving the fencing for easier rotation.

The cattle he placed on full feed in late May he sold in mid-November at around 1,200 pounds. Cattle pastured during the summer he put on feed in late September. Those cattle he’ll sell at around 1,300 pounds for slaughter in January and early February.

Captured advantages

In summary, Queck’s new model is built on buying lighter calves from December to February, a time when most cattle buyers want heavier feeders, so his lighter calves can be bought for less.

He backgrounds those calves cheaply using his farm’s permanent pastures and stored forages. Then he sells the finished cattle into the usually higher fed-cattle prices of November to January.

“Lighter calves are also easier to forward contract,” says Queck. He places futures orders on every group of cattle he buys, and he will sell contracts if he can get the price he has targeted.

“Buying calves that I plan to sell a year later gives me more time to get the futures price I need than when I was buying heavier feeders,” Queck adds.

Queck also sees his system generating better gains, as cattle are finished in the cool fall. In his old system, he finished cattle in July and August.

The limiting factor for Queck’s operation is available pasture. He is using all his permanent pasture as intensely as possible. Any new pasture would have to come from renting pastureland, putting more of his cropland into pasture, or chopping more of his corn for silage — all moves he says don’t make economic sense at this time.

Paul Queck writes from Indianapolis. George Queck is his brother.

 

Research says winter offers a marketing boost

A new study shows George Queck’s move to take advantage of the seasonal fed-cattle price cycle is a smart one.

Queck was selling fed cattle in July and August, which are the hottest months to finish cattle and also the yearly low in the fed-cattle price cycle.

A new Iowa State University Extension bulletin details this. You can see this publication, “Seasonal Cattle Price Patterns,” online. Go to www.extension.iastate.edu/
agdm/livestock/pdf/b2-19.pdf
.

The study documents price patterns for choice steers, feeders and cull cows from 1999 to 2008. The chart below also shows these price patterns for choice steers that weigh 1,100 to 1,300 pounds were seasonally lowest in July and highest in November.

Prices were below the annual average from June to August; near the annual average in January, February, May, September and October; and above average in March, April, November and December.

01107003.eps

Choice steer seasonal price patterns, 1999-2008

01107003A.tif

COUNTERCYCLICAL: George Queck quit buying heavy feeders and instead buys lighter calves during the winter to background on his pastures for fall feeding.

01107003B.tif

WINTER WAIT: George Queck uses stored feed on his southwest Iowa farm to help him get lighter calves through the winter.

This article published in the January, 2010 edition of BEEF PRODUCERS.

All rights reserved. Copyright Farm Progress Cos. 2010.

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