Capturing the Value of Preconditioned Calves
The following is a summary of a presentation
of Dr. Clyde Lane, Jr., Professor of Animal Science at the University
of Tennessee. Dr. Lane offered this research at Pfizer's Cattlemen's
College during the 2003 NCBA Convention.
Feeder calf producers want to receive a premium for calves that have
been preconditioned. The key to this premium is a desirable "package"
presented to the buyers to receive the full value of the calves. There
are several factors that contribute to this "package," including
weaning, health status, breeding, size and similarity of the group.
Most calves coming to feedyards from Tennessee and the southeast are
not weaned. Popular reasons cited are:
A trial was conducted at the University of Tennessee
(Neel et al, 2001) where a group of calves were divided into two groups.
Group one was left on their dams while Group Two was weaned, dewormed,
vaccinated, implanted and fed for 45 days in a dry lot situation.
The weaned calves were maintained on good quality hay plus concentrate
feed, fed at one percent of body weight. The supplement was a commercial
blend (16 percent Natural Supplement with Rumensin). Weaned calves
were administered 7-way clostridial and respiratory vaccines. Weaned
calves were also dewormed and implanted with a growth promotant.
The weaned calves gained substantially better than their non-weaned
counterparts.
When evaluating the cost for preconditioning these weaned calves,
the health treatments, supplemental feed and hay totaled nearly $38
per head, compared to just $13.52 for those not weaned - a difference
of $24.22 per head. In order to profit from preconditioning the calves,
the additional gain must be worth more than the cost of the gain.
Theoretically, weaned/preconditioned calves should be worth more to
the buyers, however that will depend on the marketing situation. Preconditioning
calves does not automatically result in increased returns. Calves
that have gone through a preconditioning program and then are sold
in a weekly auction will probably not be economically advantageous.
Producers must couple the preconditioning program with an aggressive
marketing program.
In Tennessee, there are several marketing opportunities for preconditioned
groups of calves. The information in Table 1 highlights the premiums
of marketing preconditioned calves in 2001 and 2002 at the Sweetwater
Pride Plus Sale.
In order to get the most premiums available, cooperation among producers
is essential. In the Sweetwater Pride Plus Sale, only a few producers
cooperated informally to market the lots of cattle with similar genetics.
A more structured approach often leads to even more premiums.
Producers in Giles County, Tennessee, organized the Giles County Beef
Alliance, where there is a formulated agreement on breeding, management,
health, a 45 day preconditioning program and a marketing program.
Each producer follows the same protocol. The premiums they received
for their cattle are in Table 2.
These results indicate that giving up some individuality in production
and marketing can improve returns. Other alliances have shown similar
results.
Producers can capture increased returns by preconditioning cattle,
if costs are closely monitored. Weight must be put on calves economically
during the preconditioning program. An aggressive marketing program
must be initiated to reap the value of the calves. The marketing program
must put together enough of similar genetics cattle to make them more
valuable to the buyer. Changing from a "business as usual"
approach can improve the returns of feeder calf producers. ©
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