Weaning time is soon upon us, and many producers will finalize marketing decisions in the near future.
For producers to capture the most value from their calf crop, they need to follow a carefully planned marketing strategy.
A majority of calves in the U.S. are marketed through livestock auction markets. Personnel at these auction markets can be great resources for producers with questions about improving the value of their calf crop. For 2011, we narrowed the list of strategies to maximize calf crop value to four items:
1) Start with a uniform group of calves.
The sale price of a large group of high-quality, uniform calves almost always is greater than that of similar-quality calves brought to the livestock auction in smaller groups, or of similar calves that have more variation in weight range. High-quality genetics and uniform groups (uniform in color, frame, muscling, flesh and weight range) are essential for any of the following items to add value to a group of cattle.
To improve calf uniformity, concentrate on purchasing high-quality breeding stock, managing breeding seasons to create a tight calving window (consider a 45-day breeding season) and possibly culling late-calving cows.
2) Implement a sound herd health program.
This is the easiest way to add value to the calf crop, but it has to be done correctly. Calves must receive the correct vaccines at the correct time.
Vaccines given to calves as they walk onto the truck do not have a large impact on the price buyers are willing to pay because most cattle will be revaccinated upon arrival at a feedlot. However, producers who vaccinated calves two to three weeks prior to weaning and followed all Beef Quality Assurance (BQA) procedures are more likely to be rewarded with higher prices.
An additional consideration is the type of vaccine that is given. Cattle feeders are looking for calves that have been given a modified live vaccine. Many feeders are not happy with the protection offered when calves are given a killed vaccine. Consult with your veterinarian regarding the vaccination strategy appropriate for your herd. Recent market dynamics have shown price swings of $5-$8/cwt. for the same quality of calves, depending on vaccination status, with higher prices paid for vaccinated calves.
3) Consider age and source verification.
Even one year ago, auction market staff had not received a lot of requests for age- and source-verified calves or special age- and source-verified sales. However, 2011 is a different story. This year may prove to be the most beneficial year to date for producers who age and source verify their calves. As long as Japan restricts imports to less than 21months of age, the demand for age- and source-verified calves will remain strong. The demand for age- and source-verified calves is high, but the process for verifying calves does not happen overnight.
Proactive management is required to initiate and follow through with the age and source verification process. Records must be in place and paperwork needs to be started well in advance of the sale to properly verify the age and source of calves. Talk to a third-party certification agency (for a list, click here) to learn if your calves and your records qualify for age and source verification. Use similar organizations to certify that your calves are suitable for natural and organic markets.
I encourage producers to spend time evaluating production costs and returns to ensure that they are obtaining a sufficient premium when marketing under a natural or organic label, compared with managing and marketing calves in conventional markets.
4) Talk with your auction market representatives.
Auction market representatives deal with cattle marketing on a daily basis. Questions about feedyard preference for calves, status of calf supply and demand, whether feedlots are running at capacity and the latest market trends are all part of daily conversation, whereas many cow-calf producers evaluate these questions one time per year.
In addition, auction markets may offer alternative marketing avenues for their customers. Special sales, Internet sales and video auctions are all ways that auction markets can work to offer their clients the best service possible.
I encourage producers to remain in contact with auction market staff and be flexible in terms of their marketing strategy. Consign cattle well in advance of the sale and let the auction market know as much about the calves as possible (for example, what color they are, when they were born, when they were vaccinated and whether they are age and source verified). The more information the auction market has, the better job it can do of marketing those calves.
In addition, feel free to ask auction market representatives about other ways to improve your cow herd and subsequent calf marketability. No silver bullet will make you consistently top the sale each time you sell calves. Concentrate on creating a uniform set of calves with cows that work in your environment. Manage your herd with good BQA practices, vaccinate in a timely fashion, age and source verify if the market is rewarding the effort, and remain flexible with marketing strategy and dates.