The relative value of bred cows

Source: Farm Progress. The original article is posted here.

The relative value of bred cows

By: James Mitchell, University of Arkansas

Many analysts expect the beef cattle industry to expand the cowherd in 2025. This won't be confirmed until the release of the January 2026 Cattle Inventory Report. When herd expansion begins, replacement heifers and bred cows will become increasingly valuable. As one might expect, replacement heifer and bred cow prices are correlated with feeder cattle prices.
Cows that are open but otherwise healthy can enter two marketing channels: cull cow or bred cow markets. In most circumstances, cows leaving a cow-calf operation are sold as open cull cows. However, cyclical cattle inventories and supply dynamics provide scenarios where the value of bred cows dominates the value of open cull cows because of herd expansion.
The orange line in the figure is the price of a Breaking 75-80% cull cow sold in Joplin, MO. Breaker cows correlated approximately to a cow with a body condition score of 7-8. So, a cow that is open but in good condition. The green line in the figure is the price of a cow that is 4-9 months bred and sold in Joplin, MO. The blue line is the price of a bred cow compared to that of a cull cow. A price ratio that is less than one indicates that a cow is worth more as an open cull cow. A price ratio greater than one indicates that bred cow value dominates cull cow value.
The figure indicates that cull cow and bred cow prices are both increasing. Cull cow prices increase due to lower beef cow slaughter in 2024 and fewer cows available for slaughter. Bred cow prices have increased as some operations transition towards herd expansion. An increase in the price ratio implies that bred cow prices have increased faster. This increase in the ratio is a function of where the industry finds itself in the cattle cycle.

The Markets

There is a tendency for calf prices to hit a summer slump in May and June, and some of that might be happening. In the Southern Plains, 500-600 pound steer prices have declined 7 percent in the past two weeks. Alternatively, feeder cattle prices build seasonally through the summer before peaking in August. In the Southern Plains, 700-800 pound steer prices held steady at $260 per cwt the past three weeks. Choice boxed beef prices increased 1% last week and are 13% above year-ago prices.

Pasture Conditions

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