  BeefTalk:
Fear of Unknown Prompts Retained Ownership Reluctance
By Kris Ringwall, Extension Beef Specialist,
NDSU Extension Service
In life, it’s often the fear of the unknown that keeps people from trying new
things. The same is true in the beef cattle business. And that may be one of the
reasons why retained ownership has some detractors.
The biggest unknowns in retained ownership are the price when a producer’s
calves are ready for harvest and the cost of feed. My informed guess is that the
most often-discussed unknown is feeding costs. Yet, despite these unknowns, a
positive experience with retained ownership of calves should be a goal of every
cow/calf producer.
In my tenure as a livestock extension specialist, many demonstrations or
activities have focused on helping producers better understand their cattle
through maintaining ownership until harvest. How many of those experiences have
been positive? The number of producers that shift from selling their calves in
the fall or after a few weeks of backgrounding to selling the calves on the rail
is very small.
The North Dakota State University Dickinson Research Extension Center began
retaining ownership with the 1996 calf crop and continues today. Our primary
reason for retaining ownership is to continue to gather data to assess the
importance (or lack of importance) retained ownership should have in local beef
operations. One point that is absolutely clear: there is nothing simple about
retained ownership.
In previous columns I’ve discussed the importance of carcass value and fall
calf value. The total cost of feeding is another important part of the equation.
Few producers actually have the facilities or know how to feed their own cattle,
so a custom relationship must be developed.
As with any agreement, a certain amount of faith needs to be present as well
as a good competitive atmosphere. At the research extension center, the
requirement for absolute electronic data retrieval was essential. Having settled
on a yard, the total costs of having the yard feed our cattle could be noted.
After reviewing 12 lots of calves in recent years, the feeding costs have
varied considerably. But reviewing them does provide a feel for total costs per
head for feed, yardage, processing, veterinarian, alliance and miscellaneous
charges. The total cost includes everything paid to the feed yard and the other
charges are all those costs required to get the calves to the yard including
health certificates, brand inspection and shipping.
Our costs are based on totals. Many cattle discussions focus on feed versus
yardage versus management versus interest, etc. and often cattle producers are
snowed under with those numbers while trying to decide whether to establish a
relationship with a feed yard. They become overwhelmed and forget the total is
what you pay. There are no hidden costs when the number is totaled.
For us, the individual lot total feeding costs per head and other charges per
head for the twelve lots of cattle fed since 1997 were: lot 1, $217 feeding
costs and $24 other costs; lot 2, $237 feeding costs and $33 other costs; lot 3,
$263 feeding costs and $16 other costs; lot 4, $185 feeding costs and $23 other
costs; lot 5, $179 feeding cost and $21 other costs; lot 6, $200 feeding costs
and $18.74 other costs; lot 7, $222 feeding costs and $19 other costs; lot 8,
$284 feeding costs and $18 other costs; lot 9, $269 feeding costs and $18 other
costs; lot 10, $251 feeding costs and $15 other costs; lot 11, $284 feeding
costs and $15 other costs; and lot 12, $269 feeding costs and $16 other costs.
For the 12 lots of calves finished since 1997, the total feeding charge per
head has averaged $239 and $20 for other costs for a total cost of $259 per
every calf the Dickinson Research Extension Center has fed and placed on the
rail at harvest. Over the years, the low total cost was $200 per head and the
high was $302 per head.
For us to assess the value on the rail, we’ve had to pay an average of $259
per head. Has this been a positive experience? More in a future column.
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 BT0149.
###
Source: Kris Ringwall, (701) 483-2427, kringwal@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu
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Total Feeding Costs and Other Costs for Cattle
----------------------------------------------------
Lot Feedyard Cost1 Additional Cost2 Total Cost
----------------------------------------------------
1476 217.85 24.59 242.44
383 237.29 33.21 270.50
9337 263.42 16.90 280.32
9336 185.36 23.93 209.29
9292 179.33 21.27 200.60
8337 200.68 18.74 219.42
8328 222.10 19.84 241.94
7402 284.15 18.20 302.35
7401 269.22 18.20 287.42
6300 251.80 15.48 267.28
6299 284.56 15.72 300.28
6269 269.64 16.81 286.45
Average 238.78 20.24 259.02
----------------------------------------------------
----------------------------------------------------
1 Feed, yardage, processing, veterinarian, alliance,
misc. charges
2 Health certs, brand inspection, shipping
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