It's easy to watch thousands of calves prowling vast pastures or smaller groups trolling a feed bunk, and get to thinking the stocker and backgrounding business is all about the cattle.
It's not, though. It's about people, partnerships and converting forage and feed energy into something of higher value. Subsequently, it's about making beef more price-competitive.
If you ever doubted that, or if you don't know much about how this segment operates, take a gander at the special section in this month's issue feting the National Stocker Award finalists and the overall winner. Between what's here and lengthier articles available at the BEEF Web site — www.beefmagazine.com — you can get a flavor for the innovation that continues.
For instance, Shawn Mercer, Mercer Cattle Co. at Richton, MS — this year's National Stocker Award winner — makes an art of turning two-weight, high-risk calves bought one head at a time into a product feedyards want.
“We think our operation is unique in that we have consistently been able to limit death loss in extremely high-risk cattle that are assembled from several states and unknown health programs during the worst time of year to straighten out cattle — late summer and early fall,” Mercer explains.
Mercer and his family continue to exploit intensive rotational grazing to squeeze more production from ryegrass and native grass in a sustainable way.
“We're able to prove that cattle can be very profitable, and that we can take marginal land and make cattle make us money by utilizing our grass,” he says.
The Gallery Ranch at Dewey, OK — this year's winner in the drylot/backgrounding division — is mining data gathered on every head that flows through its backgrounding facility in the name of increasing efficiency. The Gallery family shares ownership and risk in a unique alliance with a livestock market and cattle feeder. Not coincidentally, the arrangement also exploits geography. The cattle head from Missouri to northeastern Oklahoma, then on to the western part of the state, rather than passing each other on the highway.
The Gallerys also test every calf for persistent infection (PI) with bovine viral diarrhea, and try their best to track down the producer of that calf.
“It's not a matter of finding them to say we won't buy your calves next time; we're already testing,” says Tom Gallery, who runs the stocker program with his brother Bill. “It's a matter of letting them know they have a problem that's costing them a fortune.”
Scot Holcombe at the Holcombe Ranch based at Bartlesville, OK — this year's summer stocker division winner — is also leveraging the notion of partnerships as he focuses on forage management. Every head he stockers on sweeping patches of the Osage country ultimately flows to the same cattle-feeding organization.
“You've been able to buy high-risk cattle cheap enough that it still works,” says Holcombe. “You might be low-cost when you look at the breakeven coming out, but you're going to have a lot of expenses getting there. Those aren't the kinds of costs you cut, otherwise you become a high-cost producer.”
Nothing is ever easy for anyone in the cattle business. Between these three operations, drought, flooding, blizzard conditions and a hurricane have all been endured during the past couple of years.
A redefined challenge
But the challenge in the stocker business is being redefined, perhaps more acutely than in other segments, by increasing input costs and availability, especially those for forage, be it grass or small-grains pasture.
On one hand, forage is worth more and the gains derived from it are more valuable. On the other hand, available grazing opportunities continue to dwindle as marginal ground is planted to row crops, and wheat farmers ponder the economics of growing a dual-purpose crop or keeping cattle off it altogether.
Given the intractable role of stocker and backgrounding in building cost-effective beef, it's too easy for this segment to blend into the background of the industry and into related enterprises, be it a feedlot or cow-calf herd. That's one reason these top operations are being recognized in this issue. That's also why BEEF will conduct a National Stocker Survey this fall in an effort to benchmark and characterize stocker management practices.
“I feel that my role as a stocker operator will become increasingly important over the next few years. With the higher price of corn, grass-based programs will also become an increasingly important part of the industry and its efforts to be competitive with poultry and hogs,” Holcombe says. “If we can take advantage of our lower cost on grass, we should be able to take some market share from our competition.”