Ginette Kurtz
The Source
Opportunity awaits feeder cattle enrolled in
value-added programs.
It has been more than two years since Japan eased its import age restrictions on American beef. When the age requirement changed to 30 months or younger, many people thought the need for age-verified cattle was over.
Fast-forward to 2015: Currently the cattle market is in a similar seasonal market pattern to last year. The weather across the eastern and Midwestern United States suggests there will be an abundant corn and hay crop. Cow herd expansion continues, and some say it will not end until 2016.
Packers today are adding value to retail ground beef and chuck roasts by marketing some of those cuts as beef patties and flat-iron steaks. Cow-calf producers have the opportunity to add value to their feeder calves, too. Here are a few ways you can increase your profits.
Check out the research. Weaned calves bring more money. Most buyers look for calves weaned between 45 days and 60 days. They are willing to pay a $6- to $7-per-hundredweight (cwt.) premium, according to the latest data from 2014. One video auction reported that less than 1% of the calves sold during the previous summer video sale season were not weaned.
Vaccination programs are another way to add dollars to your paycheck. Vac-45 programs seem to be the standard buyers look for on sale day, yet some producers opt for a Vac-34 program. Either way, investing in a health program can bring a premium from $2 to $6 per cwt. There are vaccination programs that document when and what vaccination was given. A producer can opt to list that information in the sale catalog or have it announced from the block.
Natural, Nonhormone Treated Cattle (NHTC), Global Animal Partnership (GAP) and specific breed claims make up the next category that can enhance your premiums from $0 per cwt. to $9 per cwt. Natural claims can be documented by a third-party company, or producers can specify in the sale book or from the block that their calves will qualify for natural. Natural programs have different criteria.
If you are not enrolling in a program, write down what mineral, feed and antibiotic your calves have been exposed to so you can pass that information on to any potential buyers. It could make the difference between which calves he buys. NHTC and GAP are programs that attract producers with a large group of calves to sell because of the time and cost. Both programs use third-party verification. Breed claims can also have an impact on the price you will be paid. Currently, there are many Angus branded-beef programs in the marketplace. Branding your calves as being Angus can have financial rewards.
Last on the list to add value to your calf crop is age and source verification. Some of the value-added programs listed above require age and source verification to participate. The numbers show verifying your calves by a third-party age- and source-verification program can increase your price by $1.50 per cwt.-$3 per cwt.
Let’s go back and review for just a second using a 550-pound (lb.) calf on sale day. These premiums were calculated on a load lot of calves selling. We won’t worry about shrink in the example. It costs a producer who chooses to enroll in AngusSource® at minimum a $50 enrollment fee, plus the cost of tags. If a producer enrolls 80 steers weighing 550 lb. as a load lot, his AngusSource enrollment fees for visual ear tags will be $150. If he chooses AngusSource electronic identification (eID) tags, his total cost is $230. Finally, producers have the option to use matched pair sets. The matched pair set cost for this example is $310.
| $50 enrollment fee + (80 visual AngusSource tags ✕ $1.25) = $150 | |
| $50 enrollment fee + (80 eID AngusSource tags ✕ $2.25) = $230 | |
| $50 enrollment fee + (80 eID AngusSource tags ✕ $3.25) = $310 |
Is enrollment in AngusSource a good investment?
| Age-and-source premium (low) | Age-and-source premium (high) | ||
| $1.50 | $3.00 | ||
| Breed Premium (low) | Breed Premium (high) | ||
| 0 | $9.00 | ||
| Total | Total | ||
| $1.50/cwt. ✕ 550 lb. = $8.25 premium per calf | $12/cwt. ✕ 550 lb. = $66 premium per calf | ||
| This data was taken from a recent Adding Value CattleFax Webinar and the data used 550-lb. calves sold in load lots. | |||
Here is how the numbers crunch with the lowest premiums and the highest premiums.
| 80 calves @ $8.25 premium per calf = $660 – AngusSource enrollment cost $150 = $510 |
| 80 calves @ $8.25 premium per calf = $660 – AngusSource enrollment cost $230 = $430 |
| 80 calves @ $8.25 premium per calf = $660 – AngusSource enrollment cost $310 = $350 |
| 80 calves @ $66 premium per calf = $5,280 – AngusSource enrollment cost $150 = $5,130 |
| 80 calves @ $66 premium per calf = $5,280 – AngusSource enrollment cost $230 = $5,050 |
| 80 calves @ $66 premium per calf = $5,280 – AngusSource enrollment cost $310 = $4,970 |
The answer is YES, calves enrolled in an age, source and breed-specific program do bring more money. According to the data on the webinar, they said, on average, Angus calves brought an addition $7 per cwt. over other beef breeds.
Video sale season has just started. Get the full value for your Angus-sired calves today. Call the AngusSource Department to request your enrollment packet at 816-383-5100.
Editor's Note: Ginette Kurtz is the director of commercial programs for the American Angus Association.
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