Will you sell your calves straight off the cow this fall, or should you retain ownership all the way through slaughter? Could there be more profitable opportunities to market them somewhere in between? Though there is no clear marketing plan that fits every operation, there are steps that every producer should take to determine if retaining ownership is the right plan of action this season.

Know your production cost

The first step in developing a marketing plan is to determine what price the calf would receive if it were sold at weaning and what profit would be made. For example a 500-pound calf may sell for 95 cents this year. If the calf cost $375 to produce, then you have the opportunity to make a profit of $100.

The second step is to project the cost of putting that calf through the next stage of production, pricing the calf in at $0.95. So, in a sense, the back grounding program is buying the calf from the cow-calf enterprise. By determining the projected input cost you can determine the break-even price. You can then determine if the additional step in the program, the point forward from where the calves could have been sold, could actually make an additional profit.

Evaluate available resources

When projecting the cost of production, attention should be given to the availability of feed resources. In the fall of 1996, feeder prices were low due in part to the high price of grain. Since then, there has been a dramatic decline in the price of corn and a dramatic recovery of stocker and feeder prices.

Maintain a good health program

Despite market trends, there are a number of things that you can do to influence the profitability of a retained ownership program. When calves leave the farm or the ranch, they are exposed to a great deal of stress and new disease. By pre-vaccinating calves you can raise your calves' immunity to illness at a time when they need it most. Preconditioning calves results in reduced medicine cost and fewer costly death losses. In addition, calves that don't get sick gain far better then those that do. When retaining ownership, talk to the feedyard manager about preconditioning programs to avoid unnecessary duplication of vaccinations.

Calf quality affects profits

Calf performance - the efficiency in which the calf converts feed into muscle - is a factor that greatly affects profit potential. As a cow-calf producer you control performance by the breeding selections you make. With the use of performance information from the feedyard on feed conversion and average daily gain, you can manage your breeding program to produce calves that gain efficiently.

Another factor that you should consider when contemplating retained ownership is the number of calves and how uniform in size and type they are to one another. Placing entire pens of uniform calves into the feedyard will make them easier to manage and market at their optimum weight.

Selecting a feedyard

Selecting a feedyard that you are comfortable with must play an important role in your decision to retain ownership. Customer service is critical in feedyards that truly want retained ownership cattle. Talk to the feedyard manager and identify all potential cost involved. The feedyard can also help you explore marketing opportunities and limit your risk.