Stocker cattle

Snapshot of today's stocker operater

Cow-calf producers continue to be the largest portion of the stocker sector, but the number of those exclusively in the stocker business and those who have both stocker cattle and cattle feeding enterprises is growing.

At least that’s true if you apply feed-sack logic when considering the results from a recent Kansas State University (KSU) survey of the stocker sector, alongside results from BEEF’s landmark National Stocker Survey (NSS) eight years ago. BEEF readers in the stocker business were the focus for both studies.

In the KSU study, 45.06% identified themselves as cow-calf producers who also participate in the stocker business. That compares with 64.6% in the NSS. Respondents who said they were in the stocker business exclusively were 25.32% in the KSU study, 17.2% in the NSS. In the KSU study, 11.85% said they were involved in feeding cattle and the stocker business; it was 4.8% in the NSS.

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There can be no direct comparison, but the logic makes sense. The KSU study reflects cattle sold by respondents in 2013 and 2014, when some cow-calf producers couldn’t extend their ownership risk much beyond weaning because of drought. At the same time, tight cattle numbers mean more commercial feedlots are reaching deeper into the system to develop and maintain supply chains, while more Corn Belt farmer-feeders have begun or renewed feeding cattle as another way to market their crops. As for that stocker-exclusive group, financial requirements and equity risk place a premium on turning more cattle.

If you’re in the stocker business today, according to the KSU study, most likely you:

• Depend on the cattle business for the majority of your income. Of the respondents, 63.35% say they depend on cattle for more than half of their household income; 36.80% depend on cattle for three-quarters or more of their income.

• Have more than a high school diploma (65.71%). Among respondents, 8.08% have a technical training certification or an associate’s degree; 46.68% have a bachelor’s degree; and 10.95% have a postgraduate degree.

• Have a lot of experience. Seventy-two percent of respondents have more than 30 years of experience in the cattle business. Only 4% have fewer than 10 years of experience. The average age of respondents was 57 years.

• Place and manage more than one turn of cattle each year. Of respondents, 65.17% place multiple sets of cattle each year, and 63.91% own stocker cattle for 121 days or more.

• Know the source of your cattle. The number of respondents saying they buy cattle with some knowledge of their origin is 57.66%: calves retained from cow herd (27.06%); from auction, with knowledge of source (13.99%); purchased direct from source (11.11%); purchased from video (5.50%). 38.69% bought from auction without knowledge of the source.

• Use these tools to manage risk: Focus on low-cost production (67.33%); buy high-quality cattle (56.01%); use futures (37.34%); forward-contract inputs/outputs (33.21%); buy lower-priced feeders (31.06%); retain ownership via feedlot (27.83%); use options (26.57%).

These kinds of snapshots are always incomplete because the stocker business is transient by nature. Cattle enter and exit, as do stocker operators who choose to participate for this turn of cattle or not until sometime down the road.

Taking such snapshots continues to be of great value, though, since the stocker sector is so critical to the U.S. cattle and beef businesses. It’s where the supply chain gets ironed out, so cattle and beef are everywhere they need to be year-round despite the fact that the majority of calves arrive in a handful of spring months. It’s also how standing and harvested forages make their way to town.

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