Common preconditioning practices, such as weaning, vaccinations and bunk feeding can increase calf value.
Feedyard operators prefer weaned calves to reduce risks
By Holly Foster
Numbers don’t lie, and there is plenty of information to demonstrate that weaning calves prior to marketing will yield returns to a cow-calf producer. And it doesn’t matter about which part of the country you’re in. Video sale data, which is one of the best representations of a national average, indicate that more producers are responding to the signals sent by buyers to wean and precondition calves.
University of California Cooperative Extension researchers analyzed Western Video Market (WVM) sales data from 1997 to 2003. The results showed that less than 10% of calves were marketed as preconditioned in 1997, but by 2003, most calves were marketed as weaned with some sort of vaccination program.
A more recent study published in 2012 in the Journal of Agricultural and Resource Economics analyzed 10 years of sales data (2001 to 2010) from Superior Livestock Auction (SLA) and further supports that assumption. Also, this study more definitively separated the value of weaning from premiums associated with various vaccination preconditioning protocols, as the two practices often go hand in hand.
In 2001, weaning brought a premium of about $2 per cwt, but from 2008 to 2010, that premium was more than $4.50 per cwt. And that increase wasn’t simply a function of more demand for a finite product. Producers responded to buyer signals as the number of weaned calves marketed increased from 23% of the lots analyzed in 2001-02 to 34% of the lots by 2010.
The researchers hypothesized that the increased demand for weaned calves in recent years is a function of both the heightened awareness of the practice’s positive impact on overall animal health and performance, as well as the increase in more marketing agreements and alliance programs that offer premiums for specific management practices.
"Calf buyers are dealing with increased price risk with all classes of cattle and feedstuffs," says Lance Zimmerman, one of the co-authors of the study and a market analyst for CattleFax. "The U.S. average 550-lb. calf today is worth around $1,000 per head, compared to $800 just a few years ago. To calf buyers, that means the cost of mortality and morbidity increased 20%, too. And that is without even factoring medicine costs over that same period. Weaned calves offer buyers some degree of insurance against increasing costs from lost production."
Economic incentives. According to Jason Ahola, associate professor of beef management systems at Colorado State University, data from a 2011 National Animal Health Monitoring System (NAHMS) study involving in-depth interviews of cattle feedyard operators from the major cattle feeding states showed that 79% felt that weaning four weeks prior to feedyard arrival was "extremely effective" or "very effective" at reducing sickness or death loss.
"With record-high corn prices, feedlot operators are finding more and more ways to reduce risk," Ahola says. "One of the ways they can do that is by sourcing cattle that have been well managed prior to arrival at their lots. Common preconditioning practices such as weaning, respiratory vaccinations both preweaning and preshipping, and having calves bunk-broke are all factors that can influence the profitability of a set of cattle."
Jerry Etheredge has been operating Montgomery Stockyards in Montgomery, Ala., since 1991 and can vouch for the value of selling weaned calves. "Here in the Southeast, the average herd size is less than 50 cows, so sometimes it is difficult for a producer to effectively wean calves, but there is no doubt; it adds value."
In fact, Etheredge, quoting results from a recent sale, added that the value of weaning was as much as 6¢ to 8¢ per pound, and if a producer could market a full load of calves, the potential premium for weaned calves could be as much as 10¢ more than those that were being sold straight off the cow.
Etheredge does as much as possible to promote practices among consignors to improve the marketability of their calves, including having special sales that feature calves with specific vaccination protocols or that have been weaned.
"Weaned calves are simply easier to market," Etheredge says. "Since we have been in business, it has become harder to sell unweaned calves, especially to larger corporate yards. The calves that are marketed straight off the cow tend to go to smaller feedlots or backgrounding yards, and there are fewer of those in business."
- October 2013