Cattle Market Warning: Don't Overpay for Breeding Stock

Cattle producers may be enjoying record profits this year, but University of Illinois Beef Specialist, Travis Meteer says that now is not the time to overextend on high-priced breeding stock.

He warns that buying cows at the top of the market carries long-term financial risk, especially with her cycle expected to eventually turn. If you're gonna buy a high-priced cow, you need to sell a high-priced cow. And so if we're doing that, looking at cow depreciation and that curve, that cow, really, the significant depreciation that occurs is late in life.

“And so we just have to manage that. And we know if you buy a cow for a high price at the, at the point of the lowest inventory. Then waiting for that cow to be 8, 9, 10 years old and selling her at the, at the point where we've recovered the most numbers and sell at the highest inventory of the cycle. That's a great way to lose money. But if we're. Cognizant of appreciation and depreciation. We can keep these heifers, we can turn 'em into bread heifers that are profitable. Next year. We can. We can make young cows and we can sell good-priced young cows and still be profitable here in the years to come.”

Meteer says producers who pay premium prices today could find themselves holding expensive cows. Once inventories rebuild and prices soften, making it harder to recover those upfront costs.