Cattle Today

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CATTLE TODAY

HEALTH, GENETICS AND INFORMATION BUILD HERD VALUE

by: Clifford Mitchell

Animal husbandry has been one of the elements that cattlemen use to separate themselves from the rest of the pack. The pride of finishing the task, whether it means saving the new born after a difficult birth or heading an epidemic off at the pass, caretakers learn from each experience.

Not long ago researchers proved, all things being equal, management mattered. Documented data could mean more than doing a good job. It could add value to the calf crop. Health became one of the top indicators of value as cattle were passed through the production chain until they hit the harvest floor.

Pre-conditioning programs, new vaccines and increased education followed suit. Today, there is still value in the pre-conditioned calf. A calf with an insurance policy transferred to the new owner signifies it is hard to buy cattle, no matter what the genetic background, without a health history.

“If cattle haven't had a 7-way and at least one round of a modified live vaccine, my buyers will have very little interest. Sometimes the quality of the cattle will get me to bid, but it is at a considerably lower level than I would make if the calves were preconditioned,” says John Rule, Ranchers Integrated Genetics, Newalla, Oklahoma.

“We are working to educate our customers on the difference between modified live and killed vaccines. When people handle the vaccines right and give shots right, calves that have had two shots of modified live seem to stay healthier and respond to treatment better. I have little interest in calves that aren't pre-conditioned, moderate interest in calves that have had a killed vaccine and I am very interested in the calves that have had two rounds of modified live,” says Tom Williams, Chappell Feedyard, Chappell, Nebraska.

The debate of whether to pre-condition calves still exists, even though real dollars are being exchanged for the cattle with a clean bill of health. Add good genetics to this mix and the recipe is there to be successful when calves are marketed.

“Health concerns me more than genetics. Most of the people we do business with do a good job with health and have a good handle on their genetics,” Williams says. “Health and genetics are the ideal combination. If you have a calf that has the genetic potential to gain four pounds per day, he won't do it if he gets sick. A calf that never has a bad day returns the most genetic potential.”

“A plain set of calves that has had two rounds of modified live is worth more to me than a good set of calves with no shots,” Rule says. “We have to figure in higher death loss and more medicine on the break even price. It will take 45 days or more depending on the time of year to get those calves straightened out.”

Producers with the knowledge and facilities to wean calves could be money ahead. Weaning calves is a very delicate process. “Handle with care” is stamped on each calf through this difficult period. In an extremely competitive market, the pre-conditioned calf that is weaned writes its own ticket and has a place in most feedyards.

“Pre-conditioned and weaned calves command anywhere from a three to five dollar premium over their unvaccinated counterparts,” Rule says. “There are a lot of cattle that are pre-conditioned on the cow and feeders are still assuming some risk, with a balling calf, even though he's had all his shots.”

“When calves are weaned at home they are not exposed to so many things at one time. This gives the producers an opportunity to pump up their immune system before they come to the feedyard. Some people don't have the facilities or know-how to wean calves. In this situation, I want to wean the calves,” Williams says. “After 30 or 40 days, if the cattle were vaccinated right, there shouldn't be any problems. I figure death loss at a half percent for pre-conditioned, weaned calves; one percent for preconditioned calves that aren't weaned; and two percent, plus higher medicine costs for calves that aren't preconditioned.”

There have been many documented studies that show the stress of sickness will impact future performance. Pre-conditioned calves should decrease pull rates for a pen of cattle. According to Williams, recovery time will impact some performance figures more than an animal getting sick.

“We use ultrasound as one of our management tools. Even though you can't tell it from a visual standpoint, most cattle that were sick fall off a little in performance,” Williams says. “Generally there are no ill affects when you have a quick response to treatment. Cattle that have had a modified live tend to respond better. I am not talking about a chronic. I am talking about lost performance when an animal doesn't respond as fast to treatment.”

Even though more steps are being taken than ever before to preserve the safety and provide a quality eating experience, the buying public has become somewhat more demanding. Source and age verification is beginning to play a role in the marketplace. BSE scares along with customer demands have given power to the information chain and called for it to follow as ownership changes on the cattle.

“I have been able to write a premium for source verification into my grid because people are willing to pay for it and Swift wanted to pass it back to the producers. It will be worth the trouble for people to source and age verify their calves especially those that will be harvested next summer,” says Ken Conway, GeneNet, Olathe, Kansas.

“Source and age verification are valuable tools for the export market. Right now we don't have that market and it is a little frustrating,” Williams says. “We are a QSA approved yard. We can source and age almost everything in the yard at any given time.”

The value of source and age verification to the producer seems to be held in balance among the unknown potential of the foreign markets. As producers try to come into compliance with new ways of doing business, cattlemen realize certain steps need to be taken to get the most value from the calf crop.

“We don't know how long or at what volume the Japanese market will be open to U.S. beef in the future. Premiums are going to be a little slow in the beginning when the exports first get started,” Conway says. “It will pay premiums for people to keep this information together on groups of cattle they purchase down the line. I think branded beef programs will take the next step and want source verification for their supply. Down the road, once the supply of source verified cattle meets demand, premiums will tail off.”

“Source verified has value. Depending on what records go with those cattle and what program they go into,” Rule says. “The premium will depend on what it is worth to the packer until supply catches up with demand. There may be a time when non source verified cattle will be discounted heavily.”

“Source verified has value to us when it opens a market we weren't eligible for. About every calf in the yard has some form of ranch ID that traces it back to a cow. We also get to feed a lot of AI sired calves and it is fun to compare,” Williams says. “We keep a lot of data and spend a lot of time hand entering it. We have to have this data to make better decisions. On a daily basis, ultrasound makes us more money than source and age verified, because it helps us get the cattle marketed at the right time on the right grid. When we get them marketed right, we can realize better returns from a carcass premium standpoint.”

Third party audits are becoming more and more the norm in the beef business. Endless paper trails follow each bunch of cattle from place to place. Inquiring minds want to know cattle are being handled properly from point A to point B. Traceability is a concern, but most cattlemen realize it is time to take a step forward and are looking for avenues to embrace change.

“There is a lot of paperwork involved to verify source and age from a third party. This audit will verify record books and the information we get from producers,” Williams says. “We have to have traceability. If there is a problem we need to know where it came from. We have spent a lot of money to get QSA approved and we believe in the program, but we have seen very little return to this point.”

“Process verified along with QSA is growing more and more to meet the export market which is still uncertain at this point,” Rule says. “Food safety remains an issue. Whether it's the export market or a health conscious shopper, they get that comfort feeling when they know the cattle have been handled right.”

Every set of calves has its own standard of value. However, margins are growing tighter and buyers are looking for every chance to discount cattle that do not meet their checklist of demands.

To maximize the value in the calf crop producers must decide which programs work and add real value to their calf crop. Each step cattlemen take could mean profit or loss the next market period. My guess is producers will once again draw on inner pride to market the healthiest, uniquely accessorized product they can to fit individual production scenarios.

“Cattlemen need to plan ahead when they are marketing their product to help maximize value. Pre-planning will make the best of marketing efforts whether it is a country sale, calves on the video or a special preconditioned calf sale in the area. Knowing when you are going to market calves gives potential buyers time to make a plan and if you are paying a commission contact your sales representative, this gives them more time to market your calves,” Rule says. “The more bells and whistles that can be added from the seller's perspective, the more calves are worth. This will spark interest from more feedyards who will aggressively pursue those cattle. Cattle handled in this manner also add flexibility to end-point market strategies.”

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