Many cow-calf producers are finishing another successful spring calving season. Thoughts of marketing those new calves in the fall may be far from their minds. However, spring is an ideal time to start the marketing process, even though the actual sales date is still months away.
Last fall, the range in prices for similar weights and grades of calves at the same sale was wider than at any other time in history. Northern Plains auction markets recorded $15 per hundredweight (cwt) or even greater ranges in prices. Fall 2008 price ranges could be even wider.
A group of 550-pound calves that brings $15 per cwt more than another group at a sale returns an additional $82.50 per head. Keep in mind that an additional $50 to $100 per calf may be the difference between profit or loss this fall. Trying to reduce costs by that amount may be difficult due to rising feed, fuel and land costs. So, selling calves near the top of the range rather than close to the bottom will be important.
Since supplies of calves will be near last year’s levels, the two most important fundamental factors that will affect fall calf prices will be corn and fed cattle prices.
Corn prices are higher than last year and will continue to be volatile as news reports about planted acreage and weather in the Corn Belt and even worldwide are released. Usually, a 10-cent-per-bushel change in corn prices causes a $l-per-cwt change in the opposite direction in fall calf prices. Higher corn prices will continue to put downward pressure on calf prices, which is just another reason to try to add value to calves.
Fed-cattle prices in 2008 have been lower than last year because of deteriorating economic conditions in the U.S., increasing supplies of competing meats and struggles to regain export markets for U.S. beef.
Cow-calf producers have no control over corn and fed-cattle prices, but can influence some of the many factors that affect feeder-calf prices. What can be done to assure that calves bring the best possible price now is the question. Of course, good management practices, such as dehorning, castrating and marketing larger, uniform lots, help enhance prices.
However, other factors also can have a significant impact on prices. A first step is to visit the market where calves usually are sold for tips on management and marketing practices that can favorably impact prices. Decisions on whether to implement a number of value-added strategies need to be made now.
Calves that have had appropriate vaccinations that can be documented may bring premium prices. Check with both your veterinarian and market to determine what health program is best for your area.
Calves that have been weaned and bunk-trained usually are preferred by feedlot buyers.
Natural beef is increasing in popularity and calves that qualify for natural programs may bring premium prices. The key is being able to document that calves have not received growth implants or antibiotics.
Age- and source-verified calves may bring a premium because beef exported to Japan must be verified as coming from cattle that are 20 months of age or less. Several large beef retailers in the U.S. now prefer source-verified beef.
Documenting the feedlot performance of past calf crops, enrolling in beef quality assurance programs or marketing at special feeder calf sales sponsored by state or local purebred cattle associations may be other ways to increase calf value.
High-quality replacement heifers also are bringing premium prices. Bangs vaccination, uniformity of the lot, reputation of the seller and providing genetic information are important factors that impact prices.The key to enhancing fall calf prices is to start the marketing process early. Now is the appropriate time to implement the strategies that can add value to calves. Don’t wait until sale day to simply haul the calves to market and expect premium prices.