Should I Sell My Cows When Prices Are High? Run These Numbers First
Lessons From The Ranchonomics Podcast Episode 6 With Bud & Rusty Williamson
Every meeting I go to lately, I hear the same thing: “Cows are high. I’m just going to sell all my cows.” So, let’s answer it head-on. Should I sell my cows when prices are high? My take? Only if the numbers say so. A record price tag on the cow is not, by itself, a reason to sell. As Rusty Williamson told me when I raised it, the right response is to pump the brakes and look at the full financial picture of your ranch first.
This is for cow-calf producers staring at all-time-high prices and wondering whether to cash out the herd. The clearest thinking on it comes from Bud and Rusty Williamson of Williamson Land and Cattle, full-time cow marketers whose business is built on buying and selling bred cows. If anyone has earned the right to weigh in on when to sell, it’s them, and every time a producer asks them should I sell my cows when prices are high, they start with the same replacement math.
Key Takeaways
- The honest answer to “should I sell my cows when prices are high?” is: not on price alone. Run the cost-to-rebuild math before you decide anything.
- Selling all your cows makes sense if you’re retiring in the next 12 to 18 months. Otherwise, a high price alone isn’t a reason.
- The real question is the cost to rebuild the “factory.” If a cow sells for $3,000–$3,500 but costs $3,800 to replace, you lost money, and your balance sheet drops while you have no calf revenue.
- Depreciation is real even in a rising market: a $3,200–$3,500 prime cow can fall to under $2,000 as an open cull, roughly $1,000 of value lost.
- Sell what’s profitable to sell, whether prices are high or low, and remember you’re not just selling a cow, you’re selling time.
Should I Sell My Cows When Prices Are High? Start With the Cost to Rebuild
When someone tells me they want to sell because of the number a cow is worth today, it tells me they haven’t looked at what it costs to rebuild the factory. The cow is the factory. So before you sell, run the replacement math. That math, not the sale price on paper, is the real answer to should I sell my cows when prices are high.
Say you sell an eight-month-bred cow or a pair and plan to buy a heifer calf back. Right now you can lay in a decent heifer calf for around $1,700–$1,800. But she won’t give you a calf this year. You have to hold her, get her bred, and cover the costs: winter feed, bull cost (and no, it isn’t still $50 a head when bulls are averaging $8,000–$12,000), open-conception risk, and any interest on borrowed money. Then add the big one: the roughly $1,700 in lost calf revenue for the year she’s not producing. Stack all of that on top of the purchase price and the picture changes fast. If the cow brings $3,000–$3,500 and rebuilding costs $3,800, you’re down $800 an animal unit in year one, and further behind in year two with no revenue. That’s the arithmetic behind should I sell my cows when prices are high, and it rarely favors selling out of excitement over a headline number.
When Prices Are High, Manage Depreciation Instead of Dumping the Herd
Here’s where the Williamsons turn the question around. Instead of asking “should I sell my cows when prices are high,” ask which cows are about to start depreciating, and sell those.
Depreciation means two things here, and it’s worth keeping them separate. There’s market depreciation (the real loss of value as a cow ages past her prime) and there’s tax depreciation on breeding stock. A cow appreciates or depreciates based on her age relative to the other classes in your herd, regardless of which way the overall market moves. So even with prices at record highs, a prime two- to three-year-old worth $3,200–$3,500 can be worth under $2,000 as an open cull at seven or eight, about $1,000 of depreciation that’s very real. This is exactly why should I sell my cows when prices are high isn’t the question worth obsessing over; which cows are aging out of their prime is.
There’s a quirk worth knowing: in the one year a cow “falls off the cliff” in age-value while the market happens to be rising, that year can show no depreciation. But she’ll usually fall double-hard when the market corrects. The smart play is to sell the cows getting ready to depreciate, buy back something younger at break-even, and sidestep that loss, while still taking the legitimate tax depreciation on your breeding stock. (I’m careful with that word: when we say depreciation, sometimes people hear tax and sometimes they don’t. Make sure whoever does your taxes understands both.) Whenever a rancher asks me should I sell my cows when prices are high, this is the depreciation math I walk them through before anything else.
You’re Not Just Selling a Cow: You’re Selling Time
Bud has always emphasized the value of time. When you go back to a younger animal, you’re buying the chance she becomes overvalued in your herd over the years you own her. A short-term cow (say a bred 10- or 12-year-old, a little thin) can be highly profitable because the depreciation has already been taken out of her by someone else, and you might own her only twelve months. Just match the cow to what your ranch is actually set up to do. Framed that way, should I sell my cows when prices are high stops being a yes-or-no question and becomes a matter of matching the animal to your operation.
And selling early when it’s profitable can free up more than cash. As the Williamsons put it, you go from having time and money tied up in inventory to having time and money available, so when an opportunity in land, feed, or cattle shows up, you can act. Bud Williams said it best: never run out of feed, never run out of money, and don’t run out of time. Keep that in mind the next time you ask yourself should I sell my cows when prices are high, because the timing of the sale matters as much as the price itself.
Frequently Asked Questions
Should I sell my cows when prices are high? Not on price alone. Selling the whole herd makes sense if you’re retiring within roughly 12 to 18 months. Otherwise, run the cost to rebuild: purchase price of a replacement, bull and feed costs, open risk, and a full year of lost calf revenue. Sell what’s genuinely profitable to sell, and sell the cows about to depreciate.
How do I know which cows to sell when the market is high? Look at relative value and depreciation. Sell the overvalued animals and the cows getting ready to fall off the age-value cliff, since they’ll lose value whether or not the market keeps rising. Keep the younger, undervalued cows that still have appreciation ahead of them, unless your ranch is better set up for short-term cows. In other words, should I sell my cows when prices are high really comes down to which individual animals are overvalued relative to the rest of your herd.
Will I lose money replacing a cow even at high prices? You can. If a cow sells for $3,000–$3,500 but costs about $3,800 to rebuild once you add the replacement, breeding, feed, and a year of lost calf revenue, you’re down roughly $800 per animal unit in year one, and your balance sheet drops further in year two with no income.
Can the Williamsons predict where the cow market is going? No, and they don’t try. They don’t worry whether the market is up or down because nobody knows; they only know what it is today. If today’s price makes a sale profitable for your operation, that’s reason enough to sell. If they could predict the market, they joke, they wouldn’t need to be in the marketing business. That’s also why they’ll never give you a flat yes or no to should I sell my cows when prices are high without seeing your numbers first.
The Bottom Line
So, should I sell my cows when prices are high? Only when the numbers, not the headlines, say it’s profitable for your ranch. Know your cost to rebuild the factory, manage the cows that are about to depreciate, and remember you’re buying and selling time as much as cattle. There’s no single “market,” so quit reacting to “cows are high” and start running your own numbers.
If you’d like help getting those numbers in front of you, our team at Ranch Right builds bookkeeping, reporting, and coaching systems made specifically for ag operations, so you can stop guessing and start managing. Next time someone at the sale barn asks should I sell my cows when prices are high, you’ll have an actual answer instead of a gut feeling.
More From the Cattle Value Series
- The Cattle Cycle: What Drives Your Herd’s Value: the full cluster guide
- Cow Depreciation: The Hidden Cost Eating Your Profit: why cows lose value even when the market doesn’t
- Does Market Timing Work in the Cattle Business?: why chasing the top and bottom fails
- How Does Drought Affect Cattle Prices?: how dry years reset the whole cattle cycle
This article draws on Episode 6 of the Ranchonomics Podcast with Bud and Rusty Williamson of Williamson Land and Cattle.