How to Leave Money on the Table this Fall

September 25, 2013 03:00 AM
How to Leave Money on the Table this Fall

Feeder cattle prices are called a "runaway" this week. Declining corn prices has prompted cattle feeders to bid up yearling cattle prices to dizzying heights, which is great news if you’re a seller.

The market’s weakness--if weakness is an accurate term this fall--is the price of calves. Sure, those prices are at dizzy levels, too, but auction market operators call the demand for lighter cattle a little soft. In fact, last week’s National Feeder & Stocker Cattle summary from USDA’s Agricultural Marketing Service quoted new crop spring-born calves "weak to $5 (per hundredweight) lower, with the full decline noted in the Southeastern calf markets."

Much of the weakness in calf markets has been attributed to the absence of buyers who also have farming chores, since many of those farmers have been busy with fall field work the past couple weeks.

Want to know how to make up that $5? It’s simple, livestock specialists say, precondition your calves before sale day this fall. If you sell your calves straight off the cow you’re leaving money on the table.

"There’s a steep discount on calves that have not been preconditioned," says Mark Harmon, Joplin Regional Stockyards, Carthage, MO. He says he sees the discounts regularly as the auction market typically sells 5,000 to 6,000 stocker and feeder cattle each week this time of year.

Veterinarians and animal health professionals recommend that calves are vaccinated and weaned 45 days prior to sale. Specifically, such a preconditioning program helps calves get started eating and gaining weight, and the incidence of health problems is greatly reduced as the cattle navigate through the marketing process to their next destination.

Studies of market premiums suggest preconditioned calves can fetch a $5 to $10 per hundredweight premium for sellers, depending on the weight and quality of the cattle. That’s a $25 to $50 per head premium on 500-pound calves. That’s how much you’ll be leaving on the table if you skip preconditioning your calves.

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