November 25, 2013
Last week’s Industry At A Glance discussed cattle morbidity and associated treatment costs. The discussion further noted that indirect costs have also increased proportionally. Lastly, the incorporated data indicate that respiratory disease and pneumonia continue to be the largest and most costly challenge to managing new arrivals at the feedyard.
That perspective is especially evident in some older data sourced from Texas A&M’s Ranch to Rail program. It’s some of the industry’s most comprehensive data clearly detailing individual animal differences between cattle that remain healthy through the feeding period vs. those that require treatment. The average difference depicted above is in excess of $90/head. Sick cattle have lower returns because of diminished gain, decreased efficiency, increased cost and poor grading performance.
The graph above illustrates, though, the importance of the market on the difference between sick and healthy cattle. The market during the Ranch-to-Rail results depicted above (1993-2001) averaged about $66. Fast forward to 2013, and today’s market is nearly double that. It’s not unreasonable then to assume the difference between cattle that remain healthy and those requiring treatment might encroach $200/head.
What’s your assessment of the value differences between sick and healthy cattle in the current business environment? Where would you peg the dollar amount? Leave your thoughts below.
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