Cow-calf producers have a number of factors to consider when weighing the decision of retained ownership.
Here are three tips to keep in mind when it comes to retaining ownership:
1. Feedlot Relationships
The key word in looking for a feedlot to partner with is “relationship” says Josh Maples, assistant professor of agriculture economics at Mississippi State University. “The first thing that I talk to a producer about whenever we’re talking about retained ownership is trying to build a relationship with a feeder.” A cow-calf producer needs to do their homework prior to entering discussions with a feedlot and also talk to other people who have done business with a feeder they are considering. “That relationship to me is one of the most important things, and just making sure you feel comfortable with where you’re sending your cattle.”
2. Don’t Get Complacent
Marketing decisions shouldn’t be made just because that is how you’ve always done it. “I think it’s always worthwhile to assess decisions because the circumstances are changing in these markets,” says John Nalivka, president of Sterling Marketing. A producer who may traditionally retain ownership might want to reevaluate things if the cattle market is taking a dive during a particular year. The same applies to someone who markets calves after weaning and the market is rallying.
3. Capture Value for Your Cattle
For producers who don’t have cattle that can be marketed through branded beef or natural programs there isn’t much potential for profitability with retained ownership, says Derrell Peel, Oklahoma State University Extension economist. “But if you can identify and tap into one of these value added programs, then certainly feeding out quality cattle can work.” Peel adds that the cattle market tends to shoot for average and cattle producers can get rewarded aiming for the top. “Sometimes the only way to capture the value of the cattle you have in their potential is to realize that potential yourself by feeding them out.”