Commodity Fundamentals: How to Trade the Precious Metals, Energy, Grain, and Tropical Commodity Markets

CHAPTER 21

Cattle

OVERVIEW

The cycle for cattle production begins with the birth of calves on a cow-producing ranch or farm. Producers breed their herds naturally or, to a lesser extent, through artificial insemination. Naturally bred herds consist on average of one mature bull per 23 cows. While natural breeding still dominates the cattle industry, artificial insemination has increased in recent years. Insemination allows a cattle producer to introduce additional genetic strains into a herd without having to bring in new bulls—strains that can improve the commercial value of the herd.

A cow's gestation period is nine months, and breeding generally takes place in the fall. This eliminates the risk of exposing the calves to cold winter weather and ensures an abundance of green pasture during the calves' first months. Most cows give birth to just one calf, but twins sometimes occur. Cows that do not become pregnant are generally culled from the herd and replaced by new female calves. Each year, 16 percent to 18 percent of cows are culled from a herd on average. Other reasons for elimination include bad teeth, advanced age, drought, or high production costs.

Calves remain with their parent herd for the first six months of their lives. Their sole source of nutrition at birth is milk, a diet that is gradually supplemented with grass and grain. Calves are generally weaned from their mothers when they reach six to eight weeks of age.

A cattle-producing operation requires a certain amount ...