The Art of Making a Herd Bull Budget

Buying herd bulls this year might be looking a little but different for ranchers these days.  They just might be going to a handful more sales than they usually do, circling out far and wide until they have what they need this season.  Why?  Simple. Because prices are high this year.  

Buying bulls can be a complicated decision to make.  The program a rancher is operating on, will lead directly to the decisions he will make looking at the next crop of herd bulls he will buy.  To begin, producers start looking for a specific breed that will either cross with the breed of his cows to bring on some heterosis or hybrid vigor or stay within the maternal breed making the offspring a purebred calf. 

Once a producer decides on a breed then they begin comparing sires within that breed, both phenotypically and their expected progeny data.  They need a bull that will travel well to cover the cows and distance between the cows well.  They need a bull that has energy and stamina, so it won’t quit and stay at the watering hole after just a few weeks.  They need a bull that is big and shapely but not too big that he won’t be feed efficient or squash a cow as he goes to service them.

At the same time, he needs to drop calves that have a lower birth weight and easy calving ease.  But the birth weight can’t be too low because smaller calves struggle to thrive in their first days or even weeks.  But too big of calves can cause a lot of problems, especially in first calf heifers.  These bulls need to drop calves that pick-up weight fast, having a high weaning weight, and an even higher yearly weight, demonstrating that they will grow well on their mothers and at the feed bunk.  

Their sons need to have large ribeye areas and high marbling if sold to the feedlot or high scrotal circumference if it will be the next generation of herd bulls.  Their daughters need to have good milk production, but not too much that they might develop mastitis or hypocalcemia, better known as milk fever if they choose to keep them as replacement heifers.

Their own numbers like PAP scores, a demonstration of their ability to thrive at high elevations, and scrotal circumference, a direct indicator of the number of sperm produced by a bull, are important to know how they will produce in reality, not just on paper. 

The age of the herd bulls can play into a producer's buying decision as well.  Does he get a more mature bull that is a long yearling or two year old that will cost more because of the extra year or growing.  Or does he save a little with the yearling bull that becomes fertile at approximately eleven months.

If a rancher really didn’t care about what he was throwing in the herd, these traits and information wouldn’t matter.  But since every rancher’s hope is that they are improving the genetics of each generation, they want to find bulls with strong traits. 

The problem comes that the best bulls are obviously wanted the most and therefore come at quite a price.  This is where the mental negotiations begin-  what to give up to get what producer wants most.

   Is it safer to put in a little more expenses and get the bull with the traits a rancher really wants, hoping that it means better genetics in his future herd?  Or is it better to lower the budget, set lower expectations in the sires genetics and hope that while the calves might be smaller and bring a smaller check at the end of the season, the fewer expenses will offset that in the long run.

The high cattle prices of 2025 are making these decisions even harder for beef producers.  The US cattle inventory is at an all time low over the last 65 five years at 86.7 million, dropping 2% or 500,000 cows in the last year.  Drought, increased expenses, changing demographics, and such are pushing ranchers to cull hard and replace only what is absolutely necessary.  

It might seem that a flooded market of feeder and fat cattle would drop cattle prices, but in reality, the shrinking herd size currently has a greater impact on cattle prices.  A limited supply of cattle means that there is a limited supply of herd bulls, specifically the best herd bulls with the best genetics. 

So the question remains, how much is too much to spend on a bull that could have a big impact on a producer's cattle genetics and program.  A little reverse math might answer that.  

Let's say a producer was willing to spend a little bit more on a new bull and cut a check $10,000.  A bull likely will be in service for 4-5 years before he is culled due to injury, temperament, or fertility issues and then be sold for about one third of his original cost.  For this bull, he would likely sell for $3300, making his actual cost $6,600. 

In his career as a herd bull, he will sire 100-125 calves.  (25 calves in a season for 4-5 seasons).  To cover the cost of that bull, those calves would have to be worth at least $660, not to mention the added expense of the mother and raising that calf.

A more simple, quick math equation sets a budget at 2.5 times the price of a finished, ready to be harvested, steer or 5 times the price of a steer calf.  March numbers average the price for a finished 1400 pound steer around $2,700.  This would set a herd bull budget at $6,750.  Current steer calf prices for a 550 pound calf set their price around $1800.  Multiplying that by 5 would set a budget at $9,000.  

These numbers and equations aren’t set in stone but producers that contract early and have this type of figure in mind, might find this estimated budget to be more useful.  

No one can set the budget for a producer, although it might feel that way.  The good news is that when herd bull prices trend upwards, so do calf prices.  Coming into a sale with a budget and plan in mind for what any operation needs, puts that rancher in the driver's seat.