Quality drives purchase
Consequently, at first blush, it's surprising to see that desired profit per head ranks a lowly third in terms of determining the length of ownership/management in calves. On the other hand, though the stocker business is transient in nature, more liquid and easier to enter and exit, once pasture has grown or is leased, the only way to dilute costs is with more days and more pounds grown on it. That may explain why grazing period and desired selling weight rank ahead of desired profit in determining ownership length in a set of calves.
Moreover, profit and loss data is the most commonly collected performance measure reported by all operation types. 79.1% of pure stocker operators say they collect it, vs. 71.4% for FS, 69.9% for CCS and 65.6% for WCS.
How stocker operators aim to make a profit is another popular notion dispelled by the survey. Typically, the cattle industry regards stocker operators as those who sort-up, shape-up and straighten out the mistakes of others, by purchasing cattle below average market prices. According to the survey, 23.9% of pure stocker operators say they buy cattle below the average (straightening out someone else's problems), while 65.3% say they buy at market average and 10.8% say they buy over the market. When you consider that cutter bulls account for some of the purchases presumably below market average, this is even more surprising.
Significantly more WCS operations than the other categories report buying under the market (Figure 2). Larger operations are more likely to buy cattle in back of the market; 36.8% of operations running more than 2,500 head (all categories) say they do.
The youngest producers (younger than 35 years old, all categories) are also significantly more likely to buy cattle below the market average (35.3%) than older producers.
In fact, stockers of all operation types and lengths of tenure say buying high-quality cattle is a chief tool for managing market risk. Historically high cattle prices and the relative tightness of calf supplies might have skewed current reality away from traditional norms.
In the pure stocker group, 66.1% of respondents say they focus on low-cost management to manage market risk. Buying high-quality cattle is a management tool used by 58.4%. Futures contracts are the next most frequently utilized (25.8%), followed by purchasing cheap cattle (21.6%).
As well, 30.4% of pure stocker operators utilize retained ownership through the feedlot for risk management. Compare that to 26.2% of the CCS group, 54.4% of those in the WCS category and 75.7% of the FS group. The older producers are, and the more time they've spent in the business, the more likely they are to retain ownership through the feedlot on half or more of their cattle.
Whether or not they retain ownership through the feedlot, 14.3% of the pure stocker respondents say they receive feedlot data on 50% or more of their cattle; 5.5% say they receive carcass data on half or more of the cattle.
Though in the minority, a segment of stocker producers also aim some of their cattle toward value-added production, be it the natural market, age-verified, genetic-based or something else. 6.7% of pure stocker operators say their cattle are geared toward value-added programs, that's about half as many as in the other categories (14.7-19.2%). Likewise, as cattle numbers increase, operations are less likely to manage cattle for value-added programs, or as large a percentage of their cattle for those programs.
On the other hand, the youngest producers are most likely to aim for value-added markets: 17.7% of those younger than 35 say half or more of their cattle are intended for value-added; 11.8% for those aged 35-44; 14% for those 45-64; and 14.6% for those 65 and older.
Among respondents (all categories) indicating more than half their cattle are owned/managed with value-added programs in mind, 37.5% say 51-75% of the cattle they buy and manage are intended for value-added programs; 62.5% say 76-100% are intended to go that direction.
Though it's not surprising to find a low percentage of stocker operators managing for value-added programs, it is surprising too that so few of those stocker programs heavily vested in the strategy (managing more than half of their cattle with value-added intent) require certification of necessary attributes to make cattle eligible for specific programs via Quality Systems Assessment (QSA) or Process Verification Programs (PVP).
Among pure stocker operators who own/manage some cattle with value-added intent, 62.2% require source verification; 51.4% require age verification; 37.8% require genetic verification. Yet, only 19.1% require that verification come via a QSA or PVP.
Another survey surprise is how little health risk stocker operators report, compared to long-held beliefs and experiences. In other words, lots of stocker producers would be tickled pink to enjoy the numbers reported in the survey.
Among pure stocker respondents, 43.1% say their typical pull rate due to bovine respiratory disease (BRD) within the first month is less than 5%; 12.3% say it's more than 20%; 43.5% of pure stocker respondents say their typical death loss within the first 90 days, due to all causes, is less than 1%; and 9.4% say it's more than 4%.
On average, pure stocker respondents say 27.5% morbidity due to BRD is considered high-risk; 15.1% is considered medium risk; and 6.6% is considered low risk. By those definitions, pure stocker operators say of the cattle they receive, 37% are considered high risk; 56.6% medium risk; and 58.2% low risk.
Operations running 2,500 or more head (all categories) say 31.5% morbidity due to BRD, on average, is considered high risk; 16.5% is considered medium risk; 7.1% is considered low risk. These operations say 35.9% of the cattle they receive are high risk; 43.8% are considered medium risk; 49.5% are low risk.
On average, 26.9% of those running 2,500 head or more say their typical pull rate due to BRD within the first month of arrival is less than 5%; 21.8% say it's 5-10%; 27.7% of producers say it's 11-20%; 23.5% say it's more than 20% (Figure 3).
Death loss within the first 90 days, due to all causes, is less than 1%, according to 33.3% of those running 2,500 head or more. 51.7% say it's 1-3%; 15.0% of these producers say typical death loss is 4% or more (Figure 4).
Youth apparently is as tolerant of health risk as larger operations are. Producers younger than 35 say high risk for BRD is 30.2%; 15.8% is medium risk; 6.9% is low risk. These producers say 39.4% of the cattle they receive are high risk; 48.1% are considered medium risk; 64.4% are low risk.
On average, 59.1% of operators younger than 35 say their typical pull rate due to BRD within the first month of arrival is less than 5%; 19.4% say it's 5-10%; 6.5% of producers say it's 11-20%; 15.1% say it's more than 20%. Death loss within the first 90 days, due to all causes is less than 1%, according to 57% of producers younger than 35. In this group of producers, 37.6% say it's 1-3% and 5.5% say typical death loss is 4% or more.
As logic suggests, the larger an operation is, the more likely it is to receive more cattle from longer distances. 17.1% of operations with 2,500 head or more report the typical length of time purchased calves are hauled between collection point and processing facility is more than 14 hours; 13% say it's 10-14 hours.
In terms of operation type, 9.4% of pure stocker operators say the typical haul is 10-14 hours; 5.1% say more than 14 hours.
The challenge of how to effectively employ testing for calves persistently infected with bovine viral diarrhea virus (PI-BVDv) has most stocker operators waiting, according to NSS.
16.2% of pure stocker respondents say they test over half the cattle they buy for PI-BVDv, compared to 15% of CCS, 20.4% of FS, and 22.6% of the WCS group.
Most unnerving is the fact that 8.8% of the pure stocker operators who test and find calves positive for PI-BVDv market them through the local auction without identifying them as such. That's similar for the other operation types. Ironically, 16.2% of those aiming half or more of their cattle at value-added markets dispose of PI-positive calves by taking them to the local auction without identifying them as such.