December 7, 2015
Despite historically high calf prices, buyers continue to pay more for calves with added health assurance, but not necessarily the way people often think of such programs.
Take a look at data from Superior Livestock Auction since 1995, when 12.7% of the calves marketed in summer sales (28,714 head) were designated as weaned. A decade later, 36.4% were (184,826 head); just slightly less than 38.0% were designated as weaned 10 years after that (179,086 head).
The three-fold increase in weaned calves the first 10 years is understandable. It's when the marketplace was establishing premiums to spur more producers to wean and precondition more calves. These typically conform to VAC 45 protocol: vaccinated, weaned and preconditioned at least 45 days before marketing.
The stagnancy since then also makes sense when you consider the increasing number of calves vaccinated according to VAC 34 protocol: vaccinated three to four weeks ahead of shipping.
Only 9.7% of calves in the 1995 Superior data were VAC 34 calves. This year, 50.2% are. According to the Superior data, premiums continue to be paid for VAC 45 and VAC 34 calves — the most for VAC 45.
“The market is a great teacher every day, and what I think these data tell us is that there continues to be added value in calf health programs, but weaning and preconditioning is not practical for many large ranches,” says Ken Odde, head of the Animal Sciences and Industry department at Kansas State University.
Odde and analyst Mike King have coordinated analysis of the Superior data for decades and provided the information above.
You can argue how closely the Superior data reflect the composition of annual calf marketing across the industry. Logic suggests the trends make sense.
“Thousands of producers continue to sell their calves right off the cow, and in my view, that’s often in the best interest of the calf and economics,” Odde says.
That may seem counterintuitive. After all, weaning and preconditioning make a world of intuitive sense when it comes to animal welfare. By now, most of us have heard the commonsensical analogy of stripping and shipping calves being the equivalent of sending your 5-year-old off to the first day of kindergarten without any vaccinations.
Economics also suggest benefit, as long as an operation is equipped with the necessary facilities, labor, feed and expertise to wean calves, and get them to add enough weight cheaply enough. In these cases, preconditioning price premiums can be icing on the proverbial cake, rather than the reason for undertaking the process.
Conversely, Odde believes calf welfare can benefit even when the decision to wean and precondition runs counter to economic sense, because any combination of the aforementioned factors is unavailable.
For instance, Odde points to the many large, non-contiguous ranches in the West. Calves are often gathered and shipped from multiple locations that are miles apart —sometimes hundreds of miles.
In such cases, Odde explains, “Calves benefit by getting them off of the cow and into what I describe as a professional backgrounding setting where calves are maintained with a focus on minimizing stress and preventing disease, getting them on feed and water, and protecting them from the elements.”
So, premiums for weaning and preconditioning offer extra economic incentive to producers who are able to wean calves without making drastic changes to their current management and infrastructure. For those unable to wean and precondition, the market continues to offer economic incentive to vaccinate ahead of shipping.
“With the premiums highlighted in the Superior data, producers currently selling calves off the cow are telling the market that there’s not enough premium for them to change their management in order to wean and precondition calves,” Odde says. “Likewise, given the growth of the VAC 34 category, sellers seem to be saying that market premiums have been sufficient for them to add pre-market vaccinations.”
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