Cow/calf production represents a long-term investment in land and cattle, necessitating long-term management practices that add value to the calves being sold, said Mark Johnson, Oklahoma State University Extension Beef and Cattle Breeding Specialist, in a letter to Extension agents called Cow/Calf Corner.
Accordingly, there is considerable economic value in correctly managing the genetics, calving seasons, weaning and marketing program, Johnson said.
In a rapidly evolving beef industry, the needs of the market have become more specific over the past 20 years, greatly increasing the opportunity for producers to market through value-added programs, most of which require specific genetics, production focus and management commitment, he said.
PRECONDITIONING CALVES
Preconditioning typically bundles the management practices of castration, dehorning, deworming, feed bunk training with a nutritional program to accommodate a 45-day on-ranch weaning period, along with two rounds of vaccinations that can be documented and used as a marketing tool, Johnson said.
Preconditioning programs with varying names and management requirements are sponsored by cattle organizations, livestock markets and pharmaceutical companies, he said. One such program is the Oklahoma Quality Beef Network, which provides producers the opportunity to certify calves and participate in special sales. The OSU Extension Service has information about the OQBN on its website.
The value of preconditioning management practices implemented on the ranch is well documented and leads to potential price premiums, Johnson said. After preconditioning, calves are marketed with added weight and a stronger immune system, better enabling them to cope with the stress of transportation, handling, commingling, new diets and new surroundings.
Research shows preconditioned calves perform better as stockers, through finishing and into carcass form, he said. Through preconditioning, cow/calf operators can influence the market value of their calves by following industry accepted management practices.
INHERENT ADDED EXPENSES
Preconditioning calves does come with additional expense of time, vaccines, feed, facilities, etc. and should be weighed against the potential added benefits, Johnson said. A budgeting tool also is available from OSU Extension.
In regard to capturing the added value of preconditioned calves, producers also should consider the possibility of retained ownership and marketing them later as yearlings or fed cattle, he said.
A producer’s final decision regarding adopting preconditioning practices and marketing strategies is based on many things, including time, tradition, labor availability, accessibility to marketing options and upfront costs like facilities versus the potential premiums, Johnson said. That being said, research at OSU and other universities has shown that preconditioning is not only beneficial to animal health and performance but also returns more dollars when sold at market.
CATTLE, BEEF RECAP
Fed cattle traded this week at $122 to $126.50 per cwt on a live basis, steady to up $1.50 from last week. Dressed-basis trading last week was at $197 to $198, up $2 to $8.
The USDA choice cutout Tuesday was down $5.09 per cwt at $292.34, while select was off $3.56 at $270.40. The choice/select spread narrowed to $21.94 from $23.47 with 131 loads of fabricated product and 26 loads of trimmings and grinds sold into the spot market.
The USDA reported Tuesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.05 to $1.12 a bushel over the Jul futures and for southwest Kansas were unchanged at $0.70 over Jul, which settled at $6.94 1/2 a bushel, up $0.19.
No live cattle delivery notices were tendered Tuesday against the Jun contract.
The CME Feeder Cattle Index for the seven days ended Monday was $146.72 per cwt down $0.11. This compares with Tuesday’s Aug contract settlement of $157.40 per cwt, up $1.05.