Age- and source-verified, weaned, preconditioned, non-hormone-treated, all natural, BVD-free — ranchers today face an array of potential marketing claims for their calves, and many of them can bring premiums on sale day. But to capture those premiums and profit from their efforts, producers should begin planning early, identifying processes that will work on their ranch and targeting markets that will pay for them.
Know the market
Due to short supplies, prices for this year’s calves could reach record levels, and sale data show that price spreads continue to widen between the top and bottom calves at market. According to Joe Lichtie, productions manager with Superior Livestock Auction in Fort Worth, Texas, the average calf price from 2,900 lots sold through Superior auctions last summer was $163.66 per hundredweight, the highest price in the company’s records and almost $20 per hundredweight higher than the 2011 average. One set of 150 Angus-based VAC 45 calves from the TA Ranch in Saratoga, Wyo., sold via video on June 27 at $286 per hundredweight for delivery in November — the highest price Superior has ever recorded.
Cattle-Fax analyst Lance Zimmerman has studied value-added markets over several years and says the price increases we’ve seen for calves in recent years have made quantifiable, verifiable attributes worth more than ever for the cow-calf producer. Buyers are increasingly investing more on cattle, feed and other inputs, adding to a risk level that already is high due to tight margins and market volatility. They cannot afford to take additional risk on the health and performance of cattle. The days of sellers getting top prices by just saying their black calves have “had all their shots” are over, Zimmerman says.
Health reigns supreme
Besides sale weights, health protocols remain at the top of the list of value-influencing attributes, says Jackie Moore, who owns and operates Joplin Regional Stockyards. Other verifications have emerged that can add value, but first and foremost, he says, buyers need calves that will stay alive and healthy.
Moore says buyers at Joplin, especially the high-volume buyers for the largest feeding companies, want documentation on ranch health programs including vaccination protocols and the length of time calves were weaned. They are willing to pay for that documentation, and you want the big players bidding on your calves, Moore says. At most sales, he adds, a handful of buyers are bidding on calves of unknown background, while virtually all the rest are bidding on health-verified calves.