Making Your Calves Fit More Markets

About three weeks ago I had a conversation with a 70 year old gentleman from the Sandhills of Nebraska which started out with him inquiring about the availability of pasture in North Missouri and ended up with him describing the changes he had seen in the beef industry during his nearly 60 years of ranching. I truly enjoyed the nearly hour long conversation which he ended with a remark something to the effect that in his area marketing cattle was no longer a social event where you sent cattle to the auction barn and after they sold you bought lunch for all your neighbors who had helped you during the past year. He still sells his cattle through the local auction market in Valentine NE and still buys his neighbors lunch but he now sees selling calves as much more of a business transaction that had to be taken seriously. He now takes time to make sure he had things covered like documentation that health and vaccination programs had been followed, weaning dates recorded and proof of the age and source of the calves. This gentleman and his family operated a 1500 head cow-calf operation but his comments made me think about what the attitude of many Missouri producers were in regards to calf marketing.

According to the Webster Dictionary to precondition is "to put in a proper or desired condition". While Webster's doesn't mention a thing about calf preconditioning it is generally understood that to precondition a set of calves is to implement management practices to optimize an animal's immune system and nutritional status and minimize stress. If you plan to wean your calves the outcome that is desired is an animal that weans easily, doesn't get sick and starts eating quickly so that you can sell heavier calves at some time in the future. If you plan to sell your calves directly off the cow your goal is to increase your income by selling calves that have had all or at least a part of their weaning health practices done and should be easier for the buyer to take home and wean and in theory should be worth more to that buyer.

Almost every beef publication that a person picks up now has an article in it about the value to the beef industry of cow calf producers preconditioning their calves. Many research and demonstration projects have documented that preconditioned calves are healthier and start on feed quicker. At the same time these same projects also document that calves that are healthier in the feedlot gain quicker and actually grade better than calves that require treatment. After reading articles such as these many producers feel that they are being asked to pay the cost of processing calves and then the buyers are not paying enough "premium" to cover the extra costs. Unfortunately in the beef business we are not an industry in which all segments work well together. Typically when a seller wants to sell as high as possible a buyer is trying to get cattle bought as cheaply as possible.

The question gets to be does the extra cost of preconditioning pay. In the market we have been the past few years and are still in it is difficult to tell if there is a premium. As the feed yards need cattle to keep their pens full all classes of cattle are selling high. Work done through Okalahoma State University from 1995 to 2001 indicated that the average premium of preconditioned calves received a 4 to 5 % increase in sale price over non preconditioned calves. Premiums are elusive and hard to measure unless you can truly compare the prices paid for comparable sets of calves. One thing that needs to be kept in mind as producers are checking to see if they received a premium is whether or not they were selling the kind of cattle that the market was needing the day they sold cattle. For example if you are selling fleshy 700 pound calves during the time of year that the demand is for 500 pound light fleshed calves to graze you probably won't receive a premium just because you preconditioned your calves. The same goes for horned cattle, bulls and cattle with other problems. Having cattle that fit the market demands for the time of year you are marketing but also differentiate themselves from the other cattle available that day will make them appeal to more buyers. We all know from past experience that the more buyers interested in an item the more bidding there is on it.

If we look at data from most economists it appears that we are slowly but steadily building brood cow numbers which will lead to more calves on the market and lower prices. When more calves are available and buyers can be more selective in their buying is when the difference in calf value shows up. Now is the time to decide how you will prepare for the next down turn in the cattle cycle. A few marketing options to help your cattle appeal to more buyers include:

1) Age and Source Verification: The Missouri Department of Agriculture as well as other entities offer the opportunity for you to verify the age and source of your calves under several programs. Many export and domestic markets require or have indicated that they will require calves that they purchase to have third party verification as to their age and source. You have to have documentation as to birth date and some records to show approximate cow numbers. Not everyone will qualify as they don't have records. Some data is showing as much as a $6 to $8 premium for age and source verified calves. Information on this program is available from the Missouri Department of Agriculture or your local Extension Office.

2) Assistance from your genetic supplier: Many successful purebred breeders have built up a reputation not only for the bulls and females that they produce but also for the quality of the calves from the animals that they sell. Check with the breeder you are buying bulls from to see what they can do to help you market your calves. There are several Missouri genetic suppliers working with feedlots to help their customer's market calves and in many cases have opportunities or arrangements available to them that are unique.

3) University of Missouri Premier Beef Program: This program is designed to educate and assist producers in pooling and marketing calves. One of the magical numbers in cattle marketing is 50,000 pounds. Enough uniform single sex calves to make a pot load has value no matter where you sell them. Check with the Extension Livestock or Ag Business Specialist in your area for additional information on this program

4) Animal Health and Feed Companies: Many animal health and feed suppliers have programs where they help their customers market their cattle. Normally the cattle must fit certain health and nutrition specifications. See what opportunities are available in your area.

As technology use increases and cattle numbers grow change is inevitable. While independence is a trait that has always been held in high regard by cattlemen we need to take a lesson from not to distant past of the hog industry. As industry consolidation occurred some pork packers seemed to lose interest in dealing with producers who marketed only a few hogs a year or paid premiums to operations who could supply larger numbers at one marketing. There were some areas where groups of producers worked together in marketing and production and kept more markets open to them than those producers who chose to remain totally independent. I am not advocating that all beef producers in an area must do everything alike but maybe it is time to look over the fence or down the road and find someone whose operation is a lot like yours or existing program you could plug into and explore some opportunities for cooperation. This idea is one of "you don't have to be a big operator to be successful but it is to your advantage to be a part of something that allows your operation to participate as a larger one in the market place".