Stocker operators involved only in that segment of the cattle business are a rare breed. Those among that group who generate a majority of their income from stocker cattle are rarer still.
That may seem a rudimentary observation until you realize such characterization wasn't possible until the recent completion of BEEF magazine's National Stocker Survey (NSS).
“This is the first time we've been able to quantify who is involved in the stocker-cattle business and what drives their management and business practices,” says Dale Blasi, Kansas State University (KSU) Extension beef stocker specialist.
Blasi coordinated the involvement of 11 land-grant universities in preparing and analyzing the recently completed NSS (see “Survey partners,” page 22). Elanco Animal Health sponsored the extensive undertaking.
“We've had some information on a state basis, but nothing nationally and nothing as comprehensive as what this survey offers us,” Blasi says.
Thumb through the NSS “Overview and Detailed Summary,” and you'll find confirmation to what previous dogma and common sense suggest, but you'll also find plenty of surprises.
For instance, only 17.2% of stocker producers are defined by the survey as “pure” stocker operators, those involved exclusively in that segment of the cattle business. Far and away, cow-calf producers who also stocker cattle (CCS) are the largest segment of stocker operators (64.6%), followed by what are termed whole-cycle stockers (WCS) at 10.6% — producers involved from cow-calf through cattle feeding — and feedlot operations that also run stockers or background cattle (FS) at 4.8% of the survey population (Figure 1).
It's no secret some cow-calf producers retain their calves to grow. However, the survey highlights how many of them maintain stocker cattle as a separate enterprise, also buying calves to grow.
The NSS found 63.1% of CCS respondents say half or more of the calves they stocker come from their own operations, which means 36.9% of these operations are procuring half or more from someone else. Likewise, 44.7% of WCS operators say half or more of the cattle come from their own operations, meaning 55.3% of WCS operators are procuring half or more of the cattle they stocker and background somewhere else.
Size tells a story
Based on the operation types defined above, 52.3% of pure stocker operators say stocker cattle account for 50% or more of their annual gross income. That's the most of any operation type.
As common sense suggests, the larger an operation is, the more likely it is to depend on stocker cattle for annual income. 72% of operations running 2,500 or more head (all categories) say stockers account for 50% or more of their income.
Like other segments, however, stocker operations of that size are few and far between. 26.3% of pure stocker operations run more than 1,000 head (estimated annual marketings for 2008); 10.7% run 2,500 or more.
In fact, the average number of head owned/managed by pure stocker operators in 2008 (estimated) was 1,115 head, growing from an average of 875 head in 2002 (Table 1). As such, only 52.3% of these pure stocker operators say stocker cattle represent over half of their annual gross income; 29.5% of pure stocker producers also have off-farm employment.
Producer age is not a perfect barometer of operation size, either.
Operators (all categories) 35-44 years of age own/manage more cattle on average than the other age groups, growing from 809 head in 2002 to 1,054 head in 2008. However the highest percentage of operators (all categories) running more than 2,500 head are at least 55 years old (43.2%).
On one hand, the stocker industry has long been regarded as the most economically feasible entry point for young and new cattle producers. Relatively speaking, survey data confirms this as 41.2% of pure stocker operators have purchased/managed stocker cattle for fewer than 20 years. On the other hand, only 5.8% of pure stocker operators are younger than 34 years old.
Like other industry segments, the stocker/backgrounding business is equity intense. In the pure stocker operator group, 80.6% say they are sole owners of 94% of the cattle they manage. Conversely, the 15.8% of pure stockers involved in partnerships say 76.1% of the cattle they run are in partnership. 12.7% of pure stocker operators say they run cattle on a custom basis — 67.3% of the cattle they manage.