AMES, Iowa -- Deciding how much to pay for a bull is no easy task, but knowing which factors to consider can help producers feel more confident in the decision-making process, says Patrick Gunn, a cow-calf specialist with Iowa State University Extension and Outreach.
“While no calculator exists to determine the exact price a producer should spend on a bull, there are multiple factors that can be considered to establish a base price,” he said. “Typical thumb rules I’ve heard for estimating the value of an average registered bull include two times the value of a fed steer, five times the value of a feeder calf at weaning, or 25 times the cwt price of feeder calves. Using these thumb rules in the current market gives us a range of $4,000 to $5,200, which is very representative of early sale reports from 2016.”
With the recent recession in cattle prices, it is natural to start looking for ways to reduce input costs for the enterprise. However, poorly justified or haphazard budget cuts often begin with the bull battery, Gunn said.
“I can’t stress enough the value in optimizing your marketing goals through improved male genetics, regardless of cost," he said. "With bulls representing 50 percent of the genetics of the program, you cannot afford to give up genetic progress in your herd at the expense of 'cheap' bulls that don’t match or advance your production goals."
Regardless of money spent on a service sire, the bull battery typically represents less than 10 percent of annual cow costs for the herd. But the difference in returns between good and below average sires for traits of interest could be 15 percent or more. This reemphasizes the value in “paying up” for a bull that truly meets a producer's marketing goals.
“Don’t forget the two primary factors that determine profit in the cow-calf sector are feed cost and pounds of calf weaned per cow exposed,” Gunn said. “That’s why there is no substitute for stepping up to the table to invest a few extra dollars in high-quality, registered bulls with proven pedigrees as well as performance and genetic testing.”
"In today’s marketplace, enhancing your factory with a bull that excels in economically relevant traits such as calving ease, maternal calving ease, stayability, growth and/or carcass traits will definitely maximize profitability in a volatile market," he said. As such it can be one of the best returns on investment for any enterprise.
It should be noted that purchasing a less costly bull does not necessarily imply a producer bought an inferior breeding piece. However, be sure the strengths of the new herd sire still improve and complement the existing cow herd without sacrificing marketing goals, Gunn said.
“As always, for more information on bull selection, consult with the team of experts you have assembled including your beef extension specialist and genetics provider,” Gunn said. “Good luck, and happy bidding.”