Cull Cow Money

[4Diamond]

I am curious how each of you views the money that you receive from cull cows. Is it profit from a cow that has done her job in the past and is of no longer use or is it money that must be reinvested to replace the cows that you sold? I know lots of people view it differently, I would like feedback. Thanks!

 

[muddyviewrancher]

IMO it could be considered profit from an older cow that has paid her dues and is past prime. If it is a young cow/ heifer is open or has to be culled for some other reason then it should be re-invested to replace that animal.

 

[RSL]

FWIW - The sale of a cull cow creates an increase in cash flow and an adjusting entry that finalizes her depreciation schedule. Cows born at the poor end of the cycle will tend to depreciate less than those born at the cycle highs (like now). For us, raising most of our own replacements, the actual cost is relatively stable and relatively low most of the time. This helps to keep our depreciation costs in check (our second biggest cost after feed.

 

[Aaron]

Heifer that didn't get bred, aborted, dead calf, poor first calf, didn't rebreed, etc. - cutting my losses.

Cow with a few calves behind her - breaking even.

Anything 6-7 years and older - bonus.

This approximation varies as to when in the price cycle the animal was brought into production.

As with RSL, raising our own replacements, knowing which cow-lines and cow/bull mixes work, our replacement cost is stable and relatively low. In other words, the bonuses far outweigh having to cut your losses. One of the big reasons I don't buy many newcomers and demand a premium for my breds. If I don't think it will last for at least a good 6-7 years, preferably at least 10, it won't stick around here beyond 12 months.

Whereas I know some bred heifer guys that only sell their bottom 2/3 and let nobody see the top 1/3, so you can't start bargaining on either group.

 

[Clarencen]

Never thought much about that. I guess my accounting program takes care of that. When you sell a cull cow, it is taken from your capital account, the sale price goes into income so everything still would be in balance. When you buy or even if you raise a replacement the cost comes from income, but your capital assets gain in value, still looks to me like a balance.