Over the next two months, many ranchers will wean their calves and historically, the majority of calves are sold within 45 days of weaning. Many calves in fact are sold and shipped on the day of weaning, a practice that generally places more stress on the calves and results in greater sickness and death loss. Some producers favor this alternative because after they wean the calves, they are done with them; and their stress level (not the calves) is reduced.
However, it will likely result in an increase in your net income if you will invest some time, antibiotics, and feed into these calves before they are sold and shipped.
There have been several recent studies conducted to evaluate the economics of pre-conditioning calves. A study on preconditioning calves by Oklahoma State University reported that sickness declined from 36.4 percent to 9.2 percent, death loss decreased from 4.3 percent to 1.5 percent, average daily gain increased from 2.6 to 2.9 pounds, and percent grading USDA Choice increased from 36 percent to 50 percent for preconditioned calves versus non preconditioned calves in Texas feedlots.
The Texas A&M Ranch to Rail project reported that healthy calves were $87 per head more profitable than sick calves. By considering the reduction in sick calves and the increase in healthy calves as a result of a preconditioning program, the return to preconditioning would be $23.50 per head.
Another study by Oklahoma State analyzed Superior Livestock Auction data and found that calves that were certified to have followed the VAC45 preconditioning program received a $4 per cwt. premium in the auction. Those calves that were “rancher” guaranteed to have been previously vaccinated received a $1.10 per cwt. premium.
A study by Iowa State University on calves sold through auctions found that calves that were third party certified to have followed a preconditioning program received a $6.15 per cwt. premium and those that were “rancher” certified to have been preconditioned received a $3.40 per cwt. premium over non preconditioned calves.
Looking at these studies one might conclude that the benefit to preconditioning on a 500 pound calf would be between $5.50 (5x$1.10) and $30.75 (5x$6.15) per head. However, preconditioning changes the weight of the calf sold and there is a cost to preconditioning.
Let’s consider a simple example to evaluate the economics of preconditioning. Suppose you wean a 500 pound steer in the first week of October. Let’s assume that the value of that steer will be $125/cwt or $625/head. If you preconditioned that steer for 45 days and put on an additional 60 pounds, then that 560 pound steer in mid November should be worth about $122/cwt or about $683/head. If that steer were on a meadow grazing and being fed an additional eight pounds of grass hay for 15 days, and then in a dry lot for 30 days receiving 17 pounds of grass hay, it should gain the 60 pounds.
Valuing the hay at $100 per ton you would have $32 in feed costs. Vaccination should cost another $7 per head and death loss should run about $4 per head. Your total cost for the 45 days would be $43 per head. Therefore your net from preconditioning would be $15 per head ($683-$625-$43). This example does not consider any premium for preconditioning that you receive at sale time. If you received an additional $4/cwt premium for your preconditioning program, then your sale price would be $126/cwt or $706/head. Then your return to the preconditioning program would be $38/head.
I could work additional examples where the calves were fed for varying days and at various rates of gain. However, I still may not arrive at your rate of gain and your feed cost situation. Therefore, I would encourage you to go through this exercise yourself. Many of you may find an economic advantage to preconditioning your calves before you sell them.