In recent years we've seen impressive data from several studies showing the higher value of preconditioning and management options such as castration.
One problem is the data has been in dollar amounts. With feeder cattle prices now back where they were late 2011 to early 2013, memory has faded and the premiums might appear inflated.
To address that potential, Oklahoma State University agricultural economists Kellie Raper and Eric DeVuyst recently converted some of the figures from past preconditioned calf sales to percentages. This should make it easier for cow-calf operators who want to set up budgets to determine viability of preconditioning in the current market.
Percentages for management of calves in previous years might offer better estimates in preconditioning budgets this year.
Raper says, "The percentage measures come from a research study that uses data from 2010-2013. It does have a price slide built in for weight, but the price slide does not capture premium effects – only the weight effect."
"Any percentages reported are the effect of that specific characteristic, all else held constant," she adds. "For example, a black hided steer calf that is weaned would bring a premium of 1.25%. over a black hided steer calf of similar quality, frame, muscling, etc. but is not weaned."
The data is a combination of data from Oklahoma Quality Beef Network calves, which are those put into any of several preconditioned sales around the state, and calves that sold in those same auctions in nearby timeframes.
The premiums are relative to non-preconditioned cattle, and the preconditioned-calf premium is weighted average across the 2015 fall sale season.
Here are the percentages they found:
• Bull calves, those which are uncastrated, typically bring 5.2% less than castrated calves.
• Horned calves typically bring 3.3% less than polled cattle.
• Weaned calves typically bring 1.3% more than unweaned calves.
• Vaccinated calves typically bring 1.85% more than unvaccinated calves.
• Certified preconditioned calves typically bring 1.27% more than calves sold as not preconditioned.
• Also, heifers were discounted 9.75% relative to steers.
Although there have been premiums and discounts on certain weight classes of cattle over the years, Raper says this data was not analyzed in the study. For reference, you can look at the chart of sales data from 2015 Oklahoma preconditioned sales, showing cattle in the weight ranges 300-400 and 600-700 pounds received larger premiums than other weight classes, and relative to non-preconditioned cattle.
In the last several years, OQBN calves have sold at prices 5-9% above non-preconditioned calves in addition to selling at heavier weights, adds Derrell Peel, Oklahoma State University extension livestock marketing specialist. For information on the OQBN program and sales visit www.oqbn.okstate.edu/.
Peel also recently reminded cow-calf producers that some added management at sale time can further boost calf pricing.
"Calves generally sell best in moderate flesh," he said. "Thinner-fleshed, lightweight cattle are readily accepted and perhaps preferred by stocker buyers, while moderately fleshy, heavier calves may be acceptable to feedlot buyers. Excessively fleshy cattle are always discounted."
He said that's why you should learn the types of buyers and what they value at alternate sale venues available to you.
In addition, feeder cattle sell at higher values in larger lots, Peel said. Having just five head in a uniform lot increases price an average of nearly $5 a hundredweight compared to single-head sales and 10-head lots bring an average of $7 a hundredweight more than singles. Truckload lots often bring $10 a hundredweight more than single-head sales.
Combine several of these practices and you potentially could increase calf value by $100 per head, Peel said.
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