Feedlot data, retained ownership bring added economic benefit to producers

Loveland, Colo. – Cow/calf producers in the West sell 62 percent of calves within 30 days of weaning, explains South Dakota State University (SDSU) Extension Beef Specialist Julie Walker.

“Our bottom line is feeder calves, but in reality, our buyers are purchasing what we raised them on,” she explains. “It doesn’t matter whether we are at the sale barn, video auction or selling private treaty, the buyer will determine the final value of calves, minus his expenses, and that is what he can pay.”

Walker notes that the bottom line comes down to if the buyer is making a profit.

Marketing options

There are several options to sell cattle.

In 2006, 50 percent of calves were sold on a cash basis, and the remainder of cattle was sold using an alternative marketing method, such as a grid market.

“In 2012, this slide goes down to only 24 percent of calves now being sold on a cash market,” Walker says.

In thinking about these trends, she further notes having the information about how animals are performing in the feedyard can add value to those cattle because it gives the buyer more quality assurance.

A variety of programs are available to increase and capitalize on the value of feeder calves.

Program studies

Focusing on cattle health is one way to add value. Walker cites one study from tri-state cattle feeders by Busby in 2014 that looked at 45,000 head of cattle from the southeast and Midwest.

“At the outset, I’d guess the majority of the people in the Midwest have better cattle, and we assume that means they made more money, right?” Walker asks. “There are some differences in the cattle.”

First, calves weaned lighter in the Midwest, at 255 pounds compared to those from the Southeast, which finished at 320 pounds.

“They are about 70 days older, so we hoped they would weigh more,” Walker adds. “Their finished weights were virtually the same. Midwestern cattle averaged seven days longer on feed, and the morbidity and mortality was higher in Midwest cattle.”

In addition, the cattle from the Southeast also had a higher percentage of Choice, Premium and Certified Angus Beef cattle than those from the Midwest.

At the end of the period, southeastern cattle made an additional profit of $15 per head.

Without the data, however, she would have doubted the results based on previous understanding of production between the two regions.

Walker notes that data on specific management practices for each producer are limited, but they were able to see differences between calves treated for illness in the feedlot and those that were not treated.

“Busby, et. al. reported reduced feedlot gain and quality grade with calves treated two or more times compared to untreated calves,” Walker continues. “These differences in feedlot performance indicate the importance of developing a good vaccination program with our veterinarian.”

“The key here is that healthy calves are extremely important for good performance in the feedlot,” she says. “We know the more they are treated, the less they gain, and it impacts quality grade.”

Making a profit

“We make money with fast-growing animals and heavy, high quality carcasses,” Walker says. “Do we know which cattle in our herds are doing that? Most of us don’t.”

She further adds that data from SDSU’s Calf Value Discovery Program allows producers to delve into the differences between their calves.

“Within the program in 2014, net return varied within the pen by $300 or more per head,” she explains. “In 2015, the net carcass value between producers’ groups was $324. However, when comparing animals consigned by each producer, differences between the low and high net carcass value ranged from $172 to $813.”

The consistency of calves varied greatly within the pen as well as within calf groups, Walker continues, noting that carcass value within a pen differed by as much as $1,056.

“This indicates that management decisions required to develop a uniform group of calves varies by producers,” she says.

Management choices

After analyzing data, Walker explains that producers are able to make more informed decisions about retaining replacement animals to increase the consistency and uniformity in their calf product and increase their profits. The addition of data as a result of the retained ownership program provided that avenue.

“If all of a set of calves were retained without previous knowledge of performance, what would the results be?” she asks.

Walker used one producer as an example. In 1992-93, the producer grouped his calves by sire, and 13 of the 25 animals selected were Choice. With technology for selection limited at the time, he utilized data gleaned from the retained ownership program.

Data compiled for carcass grade, live weight, weaning weight and days to finishing were all utilized to select the highest performing calves. From 1992-93, where he saw hot carcass weights of 600 to 700 pounds and a range of zero to 80 percent Choice among sire groups, the producer has made improvements.

“Today this producer has achieved a 950 to 980 pound hot carcass weight, Yield Grade Three Prime carcasses, with animals reaching six pounds per day average daily gain and conversion at five pounds of feed per pound of gain,” Walker says. “He continues to gather animal performance and carcass characteristics on his calves to continue to improve and provide a quality end-product.”

While the process was long and took calculated selection and management decisions, she notes that significant improvements were seen.

“Retained ownership programs provide producers with knowledge of feedlot performance and carcass characteristics for a minimum number of animals, which can be used to improve the quality of animals to meet producers’ production goals and cattle demanded by feedlots,” Walker comments, “but there is no simple answer to management decisions.”

Walker spoke during Range Beef Cow Symposium XXIV, held mid-November 2015 in Loveland, Colo.

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at saige@wylr.net.