To remain profitable cow-calf producers need to add value where they can to increase the demand for their calves, and some management and health programs consistently increase sale price of beef calves, said Oklahoma State University Beef Nutrition Specialist Paul Beck, in a letter to Extension Agents called Cow-Calf Corner.
An analysis of calf sales through the Superior Livestock Auction by Kansas State University and Merck Animal Health looked at various factors that affected calf sale price.
SEX MATTERS
Calf sex had a large effect on sale price, Beck said. Steers brought premiums of $19.26 per cwt, and mixed lots of steers and heifers brought $4.90 premiums.
Bull calves received average discounts of $5 to $7 per cwt, compared with steers, with some reaching $20, he said. The presence of horns led to an average discount of $3.57 per cwt or about $20 a head.
2021 survey data of Oklahoma cow-calf producers indicated that 71% of them castrate their calves and 77% practice some form of horn management, Beck said.
One practice that did not affect sale price was implanting, he said. In this study, 49% of calves were not in programs that banned the use of growth promoting implants.
The 10- to 20-pound increase in sale weight from implanting with a value of $18 to $40 a head is being left on the table, which is the equivalent of a $3- to 7-per-cwt discount for the calves sold, Beck said.
BREED MATTERS
Breed also was a significant factor affecting sale price, he said. Nationally, brahman-influenced cattle were discounted by $7.43 per cwt, but in the Southern Plains the discount was only $1.56.
Brahman breeding is essential to match cows to the environment, they are known for heat and insect tolerance and provide hybrid vigor to crossbreeding programs, Beck said.
PRROGRAMS MATTER
There are several programs that add to the sale price that may incur some added costs of management, paperwork, ear tags or audits, Beck said. Beef Quality Assurance certification added $1.40 per cwt, or $8 a head, to sales prices, showing buyers see benefits in this certification. All-natural programs have different requirements that must be considered, but these added from $0.87 per cwt (Natural+) to $6 per cwt (NHTC) in premiums.
Value-added health programs also showed added value, he said. Vaccinated but unweaned calves in the VAC45 program (vaccinated twice and weaned for 45-days received an $8.64 per cwt premium nationally and a $9.87 premium in the Southern Plains.
In 2022 study, preconditioning program premiums for OQBN VAC-45 calves was $18.67 per cwt relative to unweaned non-preconditioned calves with no indication of vaccination status.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $163.20 to $166.06 per cwt, compared with last week’s range of $164.03 to $165.84. FOB dressed steers, and heifers went for $257.12 to $260.18 per cwt, versus $257.00 to $262.24.
The USDA choice cutout Wednesday was down $0.34 per cwt at $280.29 while select was off $1.46 at $268.90. The choice/select spread widened to $11.39 from $10.27 with 87 loads of fabricated product and 28 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.60 to $1.70 a bushel over the May corn contract. Bids in Kansas were steady at $0.75 over May, which settled at $6.50 1/2 a bushel, up $0.03 1/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $191.27 per cwt, down $0.07. This compares with Wednesday’s Mar contract settlement of $191.45 per cwt, down $0.27 and Apr’s $198.20, up $0.97.