Marketing calves: Getting more bang for your buck - Insurance and Maketing
Photo by Anthony Growe
BQA or Value-added Sales:
Many of our state’s livestock auctions have value-added sales. These sales require the preconditioning of calves and set a standard of certain management practices on the farm that improves the overall health and growth of the calves. This preconditioning adds value to calves for buyers. When preconditioned calves are marketed in a system that recognizes the value that has been added, cow-calf producers benefit from the higher prices.
Preconditioning has received considerable attention in recent years with interest in value-added programs for cow-calf producers, and beef quality assurance programs in the cattle industry. There are various preconditioning programs but most require a 45-day weaning phase with a sound nutritional program, specified vaccination protocols, castration of bull calves and bunk feeding. The purpose of preconditioning programs is to reduce stress from shipping calves at weaning, improve the immune system, and boost performance in feed lots.
In the southeast, almost 70 percent of calves are sold in the fall. This is why we see a seasonal price swing, with higher prices in the spring and lower prices in the fall. Producers could consider switching to fall calving and selling in the late spring to take advantage of higher prices. Although this higher price may be an incentive to change calving seasons, it will require a significant modification in management. To transition into a fall calving season, producers would need to delay their breeding season by roughly 6 to 7 months which means going 6-7 months without income from a calf crop.
Retaining spring-born calves through the winter is sometimes called “backgrounding”. This practice is also a viable option for producers who utilize auctions as the main route to sell their calves. However, there is more financial risk associated with retaining calves through the winter. If pasture is dormant or the price of hay or feed required to grow the calves is high, then profit margins will be thin and could result in the producer losing money.
On-farm sales:
Some operations are willing to buy groups of cattle (usually for backgrounding, replacement heifers or feed lots) without going to an auction. Buyers may pay a premium for on-farm sales since the animals will be sold in their familiar environment which minimizes stress and disease. To be successful in on-farm sales, you must build your own reputation as a producer, which means offering cattle with consistent genetics and implementing a good preconditioning protocol (i.e. health and vaccination protocol) for your herd. On-farm sales are more demanding since the calf producer is marketing cattle to attract potential buyers. The downside to on-farm sales is most buyers who are willing to pay a premium typically buy calves by the “truck-load” which is usually a minimum of 60 calves.
For the smaller cattle producer who wants to make on-farm sales, there are advertising opportunities through the NCDA&CS Ag review and certain websites such as hitchpin.com or craigslist.com. Also, let your local extension agent know what you have available to sell. We often get calls from clients LOOKING for specific types of cattle!
Direct Beef Sales:
Another route to marketing your cattle is through direct beef sales. This method of marketing calves has re-gained popularity over the last couple of years. Direct beef sales allows the farmer to be the “price setter” and not a “price taker”. Essentially, the producer provides beef products to customers and has ownership from the moment of conception to the time it’s ready for consumption. With supply chain challenges, there are great opportunities for cow-calf producers to direct market beef to eager consumers. Although direct beef sales significantly increases the value of calves, there are greater risks associated with producing your own beef. Finishing calves, either on grass or grain, requires more inputs such as feed, pasture maintenance and labor. Additionally, finishing cattle for quality beef takes 18-24 months which is a long-term investment compared to the conventional practice of selling 6 to 8-month-old calves. When starting off in direct marketing, it’s important to budget for various expenses, (like butchering fees and freezer space) to ensure it is profitable to your operation.
When marketing beef cattle, there are many options that can add to the value of your calves. On-farm sales, value-added sales and direct-to-consumer beef sales are all viable options for the cattle producers looking to increase the income on their farm. Before making any significant change to your operation, sit down and make a budget, including labor and all input costs, to make sure the change will cash flow. If you have any questions concerning livestock management please call the Richmond County Extension office at (910) 997-8255. Visit our website at http://Richmond.ces.ncsu.edu, and follow us on Facebook.
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