Capture value in marketing feeder calves
July 3, 2014
As the time for marketing feeder calves approaches there are several things to consider when getting ready to sell these calves to ensure the most value is received for them.
Overall health of the animals is very important and documented health protocols are important to the buyer who is purchasing the feeder cattle.
"Documented vaccination protocols deliver buyer confidence in the product they are buying," says Clint Berry, Allied Genetic Resources, Superior Livestock, when talking about profit drivers from a seller's standpoint.
He also emphasizes that trusted genetics are important for feeder cattle buyers. Having a trusted and reputable seedstock provider is critical to any commercial operation. The genetics that are being purchased from these seedstock producers should be proven in values such as carcass merit, ability to gain and grade.
Berry says, "Reputation of your seedstock provider plays in the reputation of you marketing feeder cattle."
When placed in a feed yard, it is essential that cattle are healthy, grow quickly and grade well. When marketing feeder cattle it is important that these things are emphasized and appealing to buyers.
"Most of the grids are driven by grade, more than they are other factors and quality grade matters a lot in terms of getting premiums on the grid," says Tom Brink, former senior vice president and chief risk officer of JBS-Five Rivers Cattle Company.
According to Dan Dorn of Decatur County Feed Yard, the major profit drivers of a feed yard are feed efficiency, carcass merit and carcass weight. Regardless of who is going to be feeding out the calves, downstream value should be created, starting with quality cow herd genetics that incorporate these traits. Decatur County Feed Yard has seen up to a $300 difference in feeder value for cattle that have more profitable genetics.
Once buyers see how calves perform year after year they will be more aggressive in buying the calves, if they performed well. Berry describes that through building a reputation in the marketplace, and developing cattle that consistently perform, buyers will be enticed to compete for these calves and push them to the top of the market or higher.
"Heterosis is key," says Dorn, "You see so much better performance on the cattle, you see better grade typically, more muscle, feed efficiency is better, and so it hits all of the profit drivers."
Heterosis is the increased performance of the offspring when crossing two different breeds. This offers several advantages in a commercial setting, such as superiority in traits important to cattle feeding profitability, when compared to purebred animals. These crossbred cattle drive profit through efficiency, grade and gain. This value can easily be added by using Gelbvieh or Balancer® genetics in a crossbreeding system.
Participating in programs such as source verified and natural can also help capture a premium when selling feeder calves.
"Do as many of the programs as you feel you can and make it work. The more you do the more you are going to get out them," says Jerry Warren, Superior Livestock representative. "Programs help identify the value of cattle," which in the end is how profit is made.
Warren also suggests joining together with neighbors to put together a load of cattle that are similar in size and age. This can help to make feeder calves more appealing to a larger number of buyers. ❖