General Session I
Adding Value to a Weaned Calf Marketing System
COLUMBIA, Mo. (June 29, 2010) — Can beef producers make a program for preconditioned calves pay? Mike John with MFA Inc. and John Ranch Inc. says that depends on a number of factors. As director of Health Track Operations for MFA in Huntsville, Mo., John has run nearly 400,000 calves through the program, as well as the calves on his own farm, to gauge profitability.
Mike John“The factors I have come to understand in terms of profitability both on our own operation and through the MFA Health Track program are season, genetics, critical mass, health, condition, shrink and capturing any marketing program premiums,” says John.
Producers can benefit from the timing of sales. John observes that the best time to market an 850-lb. steer in the Midwest is mid-August, barring any exceptional corn price fluctuation. Since feed costs trend lower through summer and often through harvest, the ability to profit from added weight on spring-born calves should be significant.
Genetics is another important factor. “Calves that are bred to perform well in feedlots will also do well in preconditioning programs. Crossbreeding with bulls that have some frame, muscle, feed efficiency and weaning growth accuracies should pay off in such a program,” he says. “The more consistent the group of calves, the easier they are to feed. Genetic similarity and a 60-day calving period are worthwhile goals.”
Having a truckload of calves to sell increases efficiency and can bring higher prices. But the average herd size is less than 40 head, so producers tend to ignore the value of critical mass. John says tighter calving periods, combining loads with other producers and preconditioning programs that allow pooling are possible options to capture more value.
“Health is extremely important in a preconditioning program. Health Track records of calves that get sick during the 45-day preconditioning period show morbidity ranges from 0.35% to nearly 5%, based more on when vaccinations are given than on what brand. Using MLV 4-5-way preweaning as a first round provides the absolute best protection,” he says. “Adequate nutrition also plays a key role in developing immunity.”
As for condition, John says the market seeks medium-fleshed calves that have frame and muscle and will perform well and stay healthy. Maximizing weight gain into the appropriate season’s market without getting too fleshy is the best advice, he adds.
“Preconditioned calves also shrink less than bawling calves,” he says. “If you do the math, 5% shrink on a 500-lb. calf is 25 pounds. At $1.25 per pound, that’s $31.25. If you can save that much shrink, you can save that much money per head.”
Finally, John says you may have access to market premiums, but there are no guarantees you will get them. “There is a cost to value-added programs. You must determine if you have a chance in your marketing scheme to capture enough premium to pay it,” he says.
John spoke as part of a producer panel during the first general session of the 2010 Beef Improvement Federation (BIF) symposium. Themed "Gateway to Profit," the 42nd annual research symposium and annual meeting was hosted by BIF June 28-July 1 in Columbia, Mo.
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