BLACK INK -- NO BIDDERS

by: Miranda Reiman

Imagine you've got a load a calves headed for the sale barn. You know that feeling of anticipation and hope, and perhaps some worry.

“How many buyers will be there?”

“What will they bring?”

Now try to imagine when you got to the auction market with those cattle, there simply was no market for them. You had to take them home because not a single hand went up.

File that under the “highly unlikely to ain't-gonna-happen,” category, but stay with me. If every single backgrounder and cattle feeder decided they weren't going to purchase “high risk” calves; if they refused to take unweaned, unvaccinated calves, that's virtually what would happen. In a world of no bidders, sellers of those type of calves would have to reevaluate their strategy.

You'd have a pretty quiet trip back from the sale. And I'm guessing those at home might feel a little like Jack's mom when he sold their milk cow for a bag of magic beans.

This story isn't likely to end in a beanstalk and a golden-egg-laying goose, but it could have a fairytale ending.

Earlier this year Purdue veterinarian W. Mark Hilton suggested a plan that would rid the industry of high-risk cattle.

“What if every buyer of feeder calves agrees not to bid on high-risk calves? As the auctioneer goes down and down in price, ‘$2.80, $2, $1.50, 23 cents? Sorry, boys, no takers. Take them back home.' In 30 days, you think that would change the industry?”

Well, do you?

It's a scenario cattle feeders might welcome. They hate sick calves. No one wants to spend the time, energy and money treating a “wreck,” and preconditioning is a proven way to reduce those instances.

Beyond that, those finishers know the lasting effects. Performance suffers. Final quality grade goes down. That's before we even mention consumer perceptions.

If you don't precondition, this might be the time to start.

Hilton shared an 11-year analysis of the Indiana cattle business that showed an average profit of more than $80 per head for programs that span more than 60 days. By retaining the calves for just a couple of months, profit went up nearly eight-fold in some instances.

When feed prices are low and calf prices are high, that just puts an exclamation point on those values.

Sure, when Hilton introduced that “no bidders” plan to a large group of producers it got a lot of chuckles, but the reality is that to some degree that IS happening in a much slower fashion across the countryside. Take a look at any sale barn study or video auction analysis and it will show the advantages for preconditioned, reputation calves (or the discounts for the opposite).

What side of that equation do you want to be on?

Next time in Black Ink® Steve Suther will look at ways to expand with cattle. Questions? E-mail mreiman@certifiedangus beef.com.







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