Stocker cattle

Stocker sector makes beef industry engine hum

The stocker sector of the beef marketing chain is a vital yet fluid enterprise. Here’s a look at how stocker operators keep the cattle flowing.

Although the stocker sector is the most nebulous part of U.S. beef production—who the producers and cattle are at a given point in time is a moving target—it’s easy to argue the sector serves as the fulcrum that makes current industry efficiency possible.

That has everything to do with the fact that such a high percentage of U.S. cows calve in the first half of the year—72%, according to the most recent Overview of the United States Cattle Industry from USDA’s National Agricultural Statistics Service (NASS). Most of those in the spring months.

It also has to do with the fact that so many U.S. operations with beef cattle produce so few cattle and they do so across such a variety of environments and management schemes.

READ: How to build a successful stocker business

Stocker operators warehouse cattle, spread seasonal surpluses and deficiencies into a balanced mix of volume, which in turn, makes it possible for U.S. consumers to purchase fresh beef every day of the year for the same relative price.

The stocker sector assembles cattle and sorts them into more homogenous lot-sized groups—weight, sex, type, etc. Along the way, stocker producers straighten out the high-health-risk cattle that most feedlots want to avoid.

On both counts, if not for the stocker sector, odds are that cattle prices would be lower on average, while there would be sweeping seasonal gaps in cattle and beef prices.

Derrell Peel, Extension livestock marketing  specialist at Oklahoma State University (OSU), often and rightfully describes the stocker sector as the beef industry’s shock absorber.

“The stocker sector serves a critical role in providing flexibility to enhance beef industry competitiveness, including adjusting production in response to feed and forage market changes, enhancing the quality of feeder cattle by adding weight and age to stocker cattle, and regulating the flow of cattle from cow-calf production to the feedlots,” Peel explains.

There are lots of ways stocker operators skin the proverbial cat, too. Just consider the past winners of BEEF’s National Stocker Award sponsored by Zoetis. You can read about them online and also meet the newest winner in the December issue of BEEF.

READ: Dave Steinbecker Jr is the 2017 BEEF National Stocker Award winner

Yet, relatively little is known about who stocker operators and backgrounders are exactly, and what makes them tick.

That’s why OSU teamed up with NASS last summer to survey the state’s cattle producers.

Specifically, Peel says the primary objective of the survey was to identify stocker producers and how the stocker industry in Oklahoma operates. He explains, “This survey will provide insight into stocker production and management practices, including timing and duration of stocker production; health management; forage use; purchasing and marketing of stocker cattle; timing and distance of shipping; and biosecurity practices.” 

The dearth of stocker data is also why BEEF magazine conducted the National Stocker Survey (NSS), sponsored by Elanco Animal Health, a decade ago. It remains the only national effort along these lines. Despite its age, the results remain valid relative to newer efforts. I reviewed it and presented highlights earlier this fall to New York producers as part of a new stocker short course offered by Cornell University.

For instance, of those involved in stocker/backgrounding production, only a minority are involved in the sector exclusively. 

According to preliminary results from the OSU survey, 5.1% indicated stocker-backgrounding was their sole involvement in cattle production. Another 19.4% indicated they were involved in both stocker and cow-calf production. All told, 45.3% of producers responding to the survey are involved in some form of stocker production when separate stocker/backgrounding activities are considered along with retained calves from cow-calf production.

READ: Winter stocker potential improves

That’s similar to results from a survey conducted by Kansas State University (KSU) a couple of years ago where 45.06% identified themselves as cow-calf producers who also participate in the stocker business. In the KSU study, 25.32% of respondents said they were in the stocker business exclusively.

These results gibe with NSS findings. Pure stocker operators—defined as those involved only in stocker/backgrounding production—represented 17.2% of all operations that stockered or backgrounded cattle at the time. Cow-calf producers that also stockered and backgrounded their own and/or purchased cattle was the largest group (64.6%). Whole-cycle operations—those involved in cow-calf, stocker and cattle feeding—represented 10.6% of the mix. Feedlot operations that also ran stockers or background cattle accounted for the remaining 4.8%.

One question posed in the NSS was what producers deemed the most significant barriers to their competitiveness in the next five years. The primary barriers identified: feed input costs, other input costs, potential return on investment, land purchase prices, land lease prices and availability of land to purchase and lease.

Despite all of the market shocks over the past decade—everything from the Great Recession to the massive drought-forced national cowherd liquidation that led to the smallest herd and calf crop in more than 50 years, and now the most aggressive cowherd expansion in history—I suspect that list would be much the same today.


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