/8/2007 12:31:00 PM
Stocker Cattle: Reduced Risk Attracts Dollars
If things work right and calves survive the stocker pasture they will move on to the feedlot with less risk of sickness and death loss than the bawling calves weaned on the Interstate that you purchased. Even so, emerging industry reality indicates the folks who can document the health history of feeder cattle of all weights can earn more dollars.
As an example, a recent Kansas State University (KSU) study indicates that across 7,600 calves at a single Kansas sale barn on four different sale days in 2000 and 2001, calves that were part of special health certified sales earned an average of $24.90 per head compared to those selling in the regular sale. Keep in mind the weight ranges (281-954 lb. for the regular sale calves and 284-917 lb. for the special sale calves) was similar, as was the condition (3.7 and 3.5 respectively) and the average lot size (4.5 and 5.5 respectively). The point is at all feeder weights, in nonsorted small groups of cattle, a verified health program and history returned premiums.
In other sales that couple a verified health program with sorting and larger lot sizes, the premiums are more significant. For instance, a Texas A&M University (TAMU) study of cattle selling in special Jordan Premium Cattle Auctionsâ€"cattle are weaned, precondi tioned, identified with electronic tags, then sorted into same-sex, uniform load-size groups with no more than 75 lb. variation top to bottomâ€"the 17,958 Premium Auction cattle received a slide-adjusted average premium of $97.37 per head for steers and $101.51 per head for heifers compared to 28,796 nonbackgrounded cattle selling at 10 other traditional auction sales at the same time.
Of course, the reason buyers are willing to pay more has everything to do with the added cost of morbidity, mortality and the suppression of feedlot and carcass performance associated with cattle sickness.
For perspective, during the last full year of TAMU’s ongoing Ranch to Rail program, cattle that were never treated in the feedlot netted back approximately $123 per head more than those that wobbled to the sick pen even once. Back that into the buying price on the front end and those healthy calves were worth $23.31/cwt. more on the purchase price. Plus, in this age of adding value, markets have little patience for health-related shoddy management, whether created or simply passed along. Consider simple management basics like castration and dehorning. When it comes to horns, Oklahoma State University (OSU) found buyers discounting steers $3.03/cwt. And heifers $1.94/cwt. compared to their polled counterparts.
That was across 31,000 head of cattle sold in 15 different Oklahoma auction barns in October of 1997. A KSU study found much the same, pegging discounts at an average of $2.30/cwt.
As far as the value of castration goes, just look at what bull calves bring versus steers. Traditionally, folks who save their knife for a special occasion can expect discounts of $3-$7/cwt. Previous work done at KSU showed that calves castrated after selling suffered a decrease in performance of .35 lb. per day for 96 days; morbidity was 21% higher for post-sale castrates. Moreover, the increasing pressure food service giants, such as McDonalds and Burger King, are applying to the animal welfare practices of their suppliersâ€"based on increasing pressure they’re receiving from their customersâ€"will likely increase these kinds of discounts in the future.
Source: Beef Stocker USA, Dale Blasi
Stocker Cattle: Reduced Risk Attracts Dollars
If things work right and calves survive the stocker pasture they will move on to the feedlot with less risk of sickness and death loss than the bawling calves weaned on the Interstate that you purchased. Even so, emerging industry reality indicates the folks who can document the health history of feeder cattle of all weights can earn more dollars.
As an example, a recent Kansas State University (KSU) study indicates that across 7,600 calves at a single Kansas sale barn on four different sale days in 2000 and 2001, calves that were part of special health certified sales earned an average of $24.90 per head compared to those selling in the regular sale. Keep in mind the weight ranges (281-954 lb. for the regular sale calves and 284-917 lb. for the special sale calves) was similar, as was the condition (3.7 and 3.5 respectively) and the average lot size (4.5 and 5.5 respectively). The point is at all feeder weights, in nonsorted small groups of cattle, a verified health program and history returned premiums.
In other sales that couple a verified health program with sorting and larger lot sizes, the premiums are more significant. For instance, a Texas A&M University (TAMU) study of cattle selling in special Jordan Premium Cattle Auctionsâ€"cattle are weaned, precondi tioned, identified with electronic tags, then sorted into same-sex, uniform load-size groups with no more than 75 lb. variation top to bottomâ€"the 17,958 Premium Auction cattle received a slide-adjusted average premium of $97.37 per head for steers and $101.51 per head for heifers compared to 28,796 nonbackgrounded cattle selling at 10 other traditional auction sales at the same time.
Of course, the reason buyers are willing to pay more has everything to do with the added cost of morbidity, mortality and the suppression of feedlot and carcass performance associated with cattle sickness.
For perspective, during the last full year of TAMU’s ongoing Ranch to Rail program, cattle that were never treated in the feedlot netted back approximately $123 per head more than those that wobbled to the sick pen even once. Back that into the buying price on the front end and those healthy calves were worth $23.31/cwt. more on the purchase price. Plus, in this age of adding value, markets have little patience for health-related shoddy management, whether created or simply passed along. Consider simple management basics like castration and dehorning. When it comes to horns, Oklahoma State University (OSU) found buyers discounting steers $3.03/cwt. And heifers $1.94/cwt. compared to their polled counterparts.
That was across 31,000 head of cattle sold in 15 different Oklahoma auction barns in October of 1997. A KSU study found much the same, pegging discounts at an average of $2.30/cwt.
As far as the value of castration goes, just look at what bull calves bring versus steers. Traditionally, folks who save their knife for a special occasion can expect discounts of $3-$7/cwt. Previous work done at KSU showed that calves castrated after selling suffered a decrease in performance of .35 lb. per day for 96 days; morbidity was 21% higher for post-sale castrates. Moreover, the increasing pressure food service giants, such as McDonalds and Burger King, are applying to the animal welfare practices of their suppliersâ€"based on increasing pressure they’re receiving from their customersâ€"will likely increase these kinds of discounts in the future.
Source: Beef Stocker USA, Dale Blasi
