SWIFT CURRENT, Sask. — If the cattle cycle is predictable, then producers should be able to develop a strategy to counter it and make money throughout the entire cycle, says retired American livestock economist Harlan Hughes.
His advice: “Cull deep on the downward side.”
By getting rid of cows that are losing money and replacing them with low-priced heifers, producers can put their herd in shape for the upward side of the cycle.
During periods of high prices, heifers are producing high-priced calves. Hughes said producers should sell all of them.
He used 1996 as an example. Producers couldn’t give 1996 heifers away so they kept them. Now, they’re selling their offspring on the high side of the cycle.
“The 1997 heifer calf was one of the most profitable calves you could have held back.”
He said the same thing happened in 1987.
“In 2007, you can hold back heifers,” he predicted.
Selling all calves during high prices allow producers to build a good financial reserve for the inevitable low-price period.
