  BeefTalk:
Increased Calf Value, Not Premiums Can Be Realized
By Kris Ringwall, Extension Beef Specialist,
NDSU Extension Service
Does the cow-calf industry impact the feeding industry? Do the management
practices producers implement influence available feedlot profit? Does this year’s
bull semen order really change a producer’s bottom line? Is it possible to
capture added value?
Not only do beef cattle prices fluctuate around a historical 10-year cycle,
my experience indicates there is a similar cycle of beef cattle producer
attitudes in the relationship between owners of the pre-weaned calf and the
owners of weaned, background or feedlot calves. Cooperation is always on the
table, but calls for cooperation shift from party to party depending on who
seems to be getting the better deal.
The North Dakota State University Dickinson Research and Extension Center has
conducted several trials over recent years, trying to get a better handle on how
pre-weaning management and genetics impact subsequent performance of calves in
the feedlot and on the rail in the packing house. The last two decades, or
should I say cattle cycles, have been impregnated with ideas of increasing the
value of the calf through proper management and selection.
Two cycles ago, the NDSU Extension Service (as well as extension services in
many other states) focused educational activities around a program entitled
"The Green Tag." The heart of the program was the recognition of
superior genetics, sound management, well-defined calf preconditioning
guidelines, individual tag identification, calf certification and a well-tuned
marketing strategy.
The present cycle has seen Beef Quality Assurance programs slowly replace the
old "Green Tag" efforts, but the heart of the program is still the
same. The bottom line: develop and implement procedures that would increase the
value of the calves as they move into the feeding and harvest sectors.
Having worked with value-added programs through out the past two decades, I
believe the big question that still looms is, "Where’s the premium?"
While the premiums are difficult to find, data shows the ability to increase the
value of a calf seems very real.
For the past four years at the center, we have been able to document the
additional net revenue gain generated by different management practices or
genetics within sets of calves we controlled through harvest.
In 1997-98, a net gain of $47.89 per head on the rail was realized. In
1998-99, the net gain was $76.23 per head. In 1999-2000, the center realized a
net gain $33.17 per head and in 2000-01 there was a net gain of $46.98. A
summary of this profit potential results in an average net return of a whopping
$51.07 per head for the better-managed calves.
The treatments were not all the same but the profit was real. Complete
details are available in the Dickinson Research Extension Center Annual Report
on the Web (www.ag.ndsu.nodak.edu/dickinso/
) or by contacting your county agent. The $51.07 net return means with proper
management an additional $8 per hundredweight is available on 600-pound calves.
Superior genetics followed a similar pattern. The increase in average net
return in sire value based on performance of progeny on the rail was a nearly
unbelievable $85.64 per head. At six weights, calves of the better sires are
worth more than $14 more per hundredweight in the ring compared to poor
performing calves.
Now, let me go back to the original statement or question. Where is the
premium for well managed, well bred calves? The proof is in the data: identify
and verify the well-managed, well-bred calf, secure demand and the premium might
be there. But there is still no guarantee.
In the end, the industry is better off, yet the cow-calf producer must be
astute relative to marketing and retained ownership. Even then, commodity market
shifts can be devastating and the management of financial risk is critical.
May you find all your ear tags.
Your comments are always welcome at www.BeefTalk.com.
For more information, contact the North Dakota Beef Cattle Improvement
Association, 1133 State Avenue, Dickinson, ND 58601 or go to www.CHAPS2000.COM
on the Internet. In correspondence about this column, refer to BT0058.
###
Source: Kris Ringwall, (701) 483-2427, kringwal@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu
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