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At some point in time, perhaps sooner, perhaps later, we’ll move to a discount market where the good calves will bring market price and high-risk cattle will be severely discounted.
December 5, 2018
I had the wonderful opportunity to sit in on the sale of Integrity Beef calves earlier this week. Integrity Beef is a program coordinated by the Noble Research Institute in Ardmore, Okla., and the calves that qualify must meet a rigid protocol for health and genetics.
These calves are an example of what happens when you do things right, and watching them come through the sale ring at the OKC West Stockyards at El Reno, Okla., they showed the phenotypes of that effort.
Time will tell, of course, about how well they perform in the feedyard and on the rail. But history says they’ll do just fine, according to Robert Wells, the Noble beef cattle consultant and ramrod of the Integrity Beef program.
Exclusive survey: Value-added calves? Extra effort is worth it
The interesting thing about that, however, is when the calf-feds get sick with BRD, it’s not in the first three weeks after arrival. It’s from 50 to 90 days on feed.
At this point, nobody knows why. It’s a multi-factorial issue and researchers are still trying to tease out all the factors that might be a cause. Look for more articles on this in the coming weeks.
Nonetheless, those preconditioned calves are what the kind we call value-added and expect them to fetch a better price than “commodity” cattle. And typically, they do. That’s because they’ve proven their worth to feedyard managers. Wells tells me there is more demand for good cattle than are being produced.
This is being written immediately after the sale, so I don’t have price comparisons. Watching the sale, prices were softer across the board, but the Integrity Beef cooperators didn’t seem disappointed with how the calves sold.
However, talking with some of the Integrity Beef ranchers, the question came up about how much longer we can expect premiums on calves managed “the right way.”
For a good while now, the market has distinguished between high-risk cattle and those that will go on feed with little or no health problems. At some point in time, perhaps sooner, perhaps later, we’ll move to a discount market, where the good calves will bring market price and high-risk cattle will be severely discounted. Premiums will be gone.
A rising tide raises all ships and other preconditioned cattle, especially those with documentation to prove it, should and will continue to bring a premium. Bawlers will be discounted, as they should be.
And as long as feedyards can’t find as many of “the right kind” as they want, that relationship can and will and should exist. So, while “the good kind” may well become commodity cattle sometime in the future, right now, the demand and premium for the extra management that goes into producing value-added calves seems well worth the effort.
At least that’s what the Integrity Beef cooperators tell me. And they say it with conviction.
Senior Editor, BEEF Magazine
Burt Rutherford is director of content and senior editor of BEEF. He has nearly 40 years’ experience communicating about the beef industry. A Colorado native and graduate of Colorado State University with a degree in agricultural journalism, he now works from his home base in Colorado. He worked as communications director for the North American Limousin Foundation and editor of the Western Livestock Journal before spending 21 years as communications director for the Texas Cattle Feeders Association. He works to keep BEEF readers informed of trends and production practices to bolster the bottom line.
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