Capitalizing on calves: Management, or lack of it, will impact your operation’s profit in 2012

As spring approaches and cattle of all classes and weights continue to push markets higher, most producers are beginning to plan for their 2012 calf crop, and the stakes have risen for this year’s calves.
    “In the current situation, the cow/calf producer is the one likely to benefit the most from the ‘bull run,’ and it’s as important as ever to compare the value of your calf relative to your situation’s ability to put more pounds on,” says Kansas State University Livestock and Meat Marketing Specialist Glynn Tonsor.
    “Things like breeding performance and weaning performance are all more important today, because everything you sell has more value, and everything you fail to manage well costs you more money,” states Tonsor. “Not cutting corners is even more important than it used to be.”
Heifers gain attention
    In addition to watching management decisions within a beef herd, UW Extension Beef Specialist Steve Paisley says the 2012 market provides a huge opportunity for heifers even more so than steers.
    “Even commercial heifers have a real opportunity to be marketed as replacement or bred heifers,” says Paisley.
    Kit West of Heifer.Pro near Wheatland says he has seen fewer replacement heifers offered for sale.
    “Some larger ranches are starting to retain a few more heifers, and there aren’t as many quality replacement heifers coming to the sale barns,” says West. “I think many of those ranches are keeping heifers back to invest in their own herds, or they’re using them for another cash flow and are selling them as bred heifers in the fall.”
   Of today’s prices for replacement heifers, West says there are still deals to be found.
      “Different enterprises have different cash flows, and some can afford to pay the higher price for $1,900 to $2,000 heifers, but if you try hard you can find heifers for $1,600 to $1,700 that are good quality,” he explains.
    West specializes in purchasing replacement heifers, growing them through the summer on grass and selling them in the fall as replacements. He also offers heifer development services for producer-owned heifers.
Add weight to commercial calves
    On the steer side, Paisley says producers should seek after any way they can add additional weight before the animals are marketed.
    “It’s unusual, but right now we’re getting the same price per pound, whether the animals weight 500 or 800 pounds,” he says, adding that strategic supplementation could be used with stocker cattle or for weaned calves in late summer.
    “The value of those pounds added is higher than it’s ever been, so unless the cost of providing it has gone up, it makes sense to keep or start supplementation,” says Tonsor.
Consider implants, health programs
    Although natural programs have been encouraged lately, Paisley says producers should consider growth implants.
    “Many people have stopped thinking about implants, but they’re a way to add more weight,” he notes.
    “The other thing to think about is that, when calves get extremely expensive like they are now, many feedlots look closely at health and backgrounding programs, because the animals are worth so much more and they can’t afford to lose as many,” says Paisley.
Risk in retaining calves
    Paisley recommends that producers consider retained ownership on a portion of their calves, but he cautions that, while cattle markets are high, no one has a good feel for where corn and grain prices will go.
    “From a risk standpoint, there are some opportunities because the cattle price will stay high at the very least, or trend upward, but with the amount of risk in feed prices I would worry about retaining ownership on all of my calves,” he says.
    Tonsor adds that there is value in market timing, and holding off from selling in the midst of the “calf run” in the fall.
    “There tends to be some value in holding off on marketing your calves, so producers need to push the pencil to see if it makes more sense for them to sell at weaning or maintain ownership a little longer,” he notes.
Forage access a must
    Because forage production is better north of Interstate 80 right now than in the south, Tonsor predicts there will be more growth in the cattle herd in the northern U.S. first. He says that public lands grazing will be a critical factor in that growth, and that producers should do as much as they can to ensure continued access to grazing leases.
    “The details and the duration of producers’ access will be critical for them to maintain a comparative advantage relative to other places,” says Tonsor. “Making sure you have the access to forage locked up is pretty important.
Market implications
    “We are at a tipping point,” says West of the cattle market. “I think prices have gone so high that I don’t see them getting any higher. We could possibly plateau, which would be great, but prices are so high right now that they can’t get much higher without causing more issues in the retail beef market. If any wrinkle happens across the globe and commodities prices drop, a drop in the beef market could happen rapidly. I think it will either plateau or fall off, but I can’t see how we’ll sustain any prices higher than this.”
    Regardless of future markets, Tonsor says, “The cost of lax management or no management is higher today than it’s ever been, because of the money left on the table. The inability to manage feed waste is a bigger deal today than it used to be.”
    Christy Martinez is managing editor of the Wyoming Livestock Roundup and can be reached at christy@wylr.net.

Consider feed supplements to add value
    “The most effective way to get premium pounds on a calf is with a concentrated creep feed, which is an accepted method for a lot of producers,” says Ranch-Way Feeds Wyoming Territory Manager Jack Settlemire of adding pounds and value to calves in the 2012 cattle market.
    “An initial creep feeding program would be best once those calves get old enough to utilize the grass and creep feed at around 200 or 250 pounds,” says Settlemire, adding a note of caution regarding creep feed and replacement heifers because of added weight, but he says most ranchers have been selling both heifers and steers.
    In addition to creep feed, Settlemire suggest GAINPRO Ruminant Mineral, a free-choice medicated mineral designed for pasture cattle, including slaughter, stocker and feeder cattle.
    “I’ve used GAINPRO extensively on backgrounding cattle – both yearlings and calves – and it provides a better utilization of forage and is a universal product available through any feed dealer,” he says. “It has an affinity to use high-fiber diets much more efficiently than Rumensin or Bovatec.”
    “Whether creep feeding, backgrounding or in the feedyard, the pounds put on are costing less than the dollars per pound at the time of sale, and supplementing is still an effective way to add value to your calves,” says Settlemire.