For Brian Grant and Gideon Fox, risk management starts the minute that calves arrive at their stocker and backgrounding programs; it continues until they’re sold and shipped away. And testing for persistent infection (PI) cattle that spread bovine viral diarrhea (BVD) is vital in keeping animals healthy so that gain and performance aren’t hindered.

Grant massages all sides of risk management at Heritage Cattle Co., his Bowling Green, KY, operation that includes an order buyer service. He’s thinking about hedging opportunities and a health program the day calves are bought from regional auction barns.

Fox also runs high-risk, sale barn cattle for himself and customers. They’re preconditioned at his Columbia, TN, operation, then placed on stocker operations or feedyards. Both cattlemen know a slip up in either the animal health or marketing end can bust profit potential.

Grant says his operation annually “grows about 10,000 cattle on a 75- to 90-day rotation. They are predominately lightweight heifers. Since most are sale barn cattle, they’re high risk. Finding sick cattle early is essential.”

His overall processing program for calves in the grower program includes an initial vaccination for IBR/BVD PI3 and BRSV and a Pasteurella vaccine, blackleg, deworming, and depending on the time of the year, some sort of metaphylaxis. Cattle are tested for PI on arrival.

Fox and his cattle manager, Mike Parks, take a similar approach. “We handle all weights of cattle,” Fox says. “We custom precondition for some customers, sell some of our own to stocker operators in the Texas Panhandle, and retain ownership of some through feedyards in Nebraska.

“We vaccinate (against pneumonia and intestinal diseases) within two days after cattle arrive,” he says. “And we’re constantly tweaking and changing due to the conditions or time or year it is.”

Preventing BVD and bovine respiratory disease (BRD) are major targets of both the Grant and Fox programs. Both feel blocking BVD is best accomplished by testing to identify PIs at processing. They use a simple v-type ear notch test.

Calling the process “a hedge against BVD,” Grant has seen a major reduction in realizers, or cattle that don’t respond to treatment. Death losses are also down since he began PI testing in 2009. Cost of each PI sample test is about $3.50/head.

Grant says he performed his own study to determine if PI testing paid off. “We looked at health records for about 2,760 cattle we handled in 2008 before we started with PI testing and compared them to about 2,800 cattle we handled in 2009 after we PI tested,” he explains.

In 2008, they recorded 41 realizers and 88 deads. In 2009, the number of realizers dropped to 34. More importantly, the number of deads dropped to 35. The number of realizers dropped from 1.48% to 1.20%, and the number of deads from 3.18% to 1.25%. “Our pulls have dropped from 30% or more before we started PI testing to 8-10% now,” Grant adds.

PI cattle normally don’t show BVD symptoms. However, their mucus, tears, nasal discharge, urine, feces and semen all carry the scourge of the disease. Their “shedding” can infect any other animal they contact in a pasture or pen, resulting in BVD running rampant.

Fox says PI testing has nearly eliminated such situations. Pulls are down dramatically for cattle on his program at 3-4 weeks after arrival. “If you’re not doctoring them, they’re gaining,” he says. Parks and his processing crew have seen major improvements in animal health since PI testing began two years ago. “I’d call it financial suicide not to PI test,” he says.

Chris Chase, South Dakota State University veterinary science professor, says a BVD-infected animal can lead to more problems.

“BVD turns off all the defense systems,” Chase says. “Animals with BVD are more susceptible to BRD. The sooner we can find that PI animal and remove it from the herd, the better off we are. If you have a PI, you’ll always have a threat. You can’t vaccinate around it.”

Healthy, quality cattle bring more

John Michael Riley, Mississippi State University Extension economist, says today’s high cattle prices mean “buyers are being critical of the animals they’re purchasing. If they see any kind of concern on the health side, that’s a red flag and they’re more likely to back off.”

Riley says special sales for value-added calf (VAC) cattle in Mississippi have illustrated how premiums are paid for quality, healthy animals.

“Across all the sales, steers sold for about $10/cwt. over the average in-state auction price,” he says. “Heifers sold for about $13/cwt. over. That shows people are willing to reward folks that manage their herds very precisely with a watchful eye to have good quality cattle.”

Ted Schroeder, Kansas State University Extension livestock marketing specialist, has analyzed Superior Livestock Auction sale data over 10 years. He says all signs point to higher premiums for healthier cattle, and the demand for those cattle is stronger today.

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“It resonates pretty loudly that buyers need calves that will perform well and efficiently,” he says. “We worry about it all the time, but when you have these kinds of economic conditions, paying close attention to factors like that is becoming more prevalent.

“They want some kind of a combined preconditioning program, with a 30- or 45-day weaning, and an animal health program that’s recognized and accepted, and maybe even third-party certification.”

Schroeder says feedyards continue to seek “lot sizes that match, but we’re hearing more and more feedyards which look for assurances that cattle are healthy and are likely to perform well.”

Grant says a solid animal health program helps him obtain top prices for backgrounded cattle. When he uses feeder cattle futures to lock in a strong price, he knows he will have the product to back up his hedges.

“We have strong predictability as to how these cattle will perform when they go on feed,” he says. “We’re able to maintain a good reputation with our customers. They know they’re going to receive animals that should perform.”

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Grant adds that no one single segment of his operation makes it successful. “Nothing will do the job by itself; it takes the whole package,” he says. “It’s hard to do any kind of hedging or price risk management if you don’t have a predictable program. Anything I can do to mitigate some of the risk helps.” 

Fox says the value of selling healthy cattle is felt more in the reduction of input costs. “By having a good animal health program, we don’t have to fight through a lot of problems,” he says.

“Our medicine costs are lower. It takes less manpower. It’s hard to know how much you’re saving, but with fewer pulls, a lower death loss and better gains that result from healthy cattle, we know the value is there. That helps bring back customers who background cattle with us.”

Confidence in cattle that leave his Tennessee operation for western feedyards continues in Fox’s retained ownership program. “We know they should perform well, and we feed those cattle at feedyards that PI test themselves. We know they won’t have to fight off BVD,” he says. 

Larry Stalcup is an Amarillo, TX-based freelance writer.