Tips on How Ranchers Can Get A Better Price For Their Calves
Published on Wed, 09/27/2023 - 3:33pm
Tips on How Ranchers Can Get A Better Price For Their Calves.
By Heather Smith Thomas
The cow-calf business isn’t easy. One of the biggest challenges is making it profitable, since calf prices fluctuate and are generally a bit low compared to rising input costs. This year, for a change, cattle prices are high--which makes it a lot easier--but there is never any guarantee that prices will remain that way. Most years, the margin of profit is slim, and producers have to manage carefully in order to come out ahead.
A rancher might be really good at taking care of the cattle, getting the cows bred on time, minimizing sickness, keeping calves healthy and growing well to weaning age, but where most of us could improve is in marketing those calves. Here are some tips from ranch families who have been making it work.
IN MONTANA - Mark and Della Ehlke raise registered Herefords and a few Angus cattle near Townsend, Montana. “My first suggestion is to precondition the calves before selling them,” Mark says.
“As a minimum they should go through the vaccination protocol, but then if you can hold those calves for 45 days the buyers are more interested because those calves stay healthier when they go to the feedlot.”
Some years, calves that have not been preconditioned are actually discounted by buyers. “Eventually it may get to the point that no one will take them if you don’t have them preconditioned,” he says.
It also pays to go the extra mile in taking proper care of these calves. “The more that you can be ahead of the curve on some of the issues that animal rights groups focus on, the better. Do whatever you can in the best interests in the cattle.”
Some ranchers sell into a niche market that may bring better prices (especially when calf prices are low) and go through verification programs that certify the cattle as being raised humanely (such as Global Animal Partnership’s humane certification or some other niche market or branded product) and part of a Beef Quality Assurance program. “The BQA certification would be your basic groundwork and if you can take it a step farther and target a niche market like Certified Angus Beef or Certified Hereford Beef you can do even better. Within those programs there are even some narrower focused goals you can pursue but that becomes more intensive,” Mark says.
Depending on how much a producer wants to commit to, this can give more assurance of a decent price for the calves. A number of programs exist to help producers receive closer to what calves are actually worth.
“Cattle with some history behind them (genetics, vaccination programs, etc.) tend to be sought out, rather than passed over by buyers. There are some relationships being built with directors of these certified programs—back to registered producers who can pass information to their commercial customers regarding the genetics of those feeder calves. I think it all helps,” he says.
If you can verify the genetics, how they were raised, the vaccination history, etc. there will be more demand for those calves. “I’ve had conversations with procurement people on the Hereford side of things, and they know exactly what they are looking for and know the bloodlines that influence the characteristics they are looking for. Buyers are much more in tune with the genetic aspect today than in years past,” Mark says. Some lines of cattle do perform better in the feedlot.
Change calving season
“To take it a step farther, a person can also match their calving season to their environment and calve later in the year than February or March.” Some people who calve in May-June hold their calves over winter before selling them, or calve in the fall and have weaning-age calves to sell in the spring.
“Often there is a little upturn in the market in the spring—for fall-born calves that could go to grass,” he says. The supply of calves is more limited in the spring because most producers are selling their calves in the fall.
Just because a person has always done something a certain way (or the way Dad did it) doesn’t mean this is the only option. Other options are sometimes worth exploring, and might fit your program.
Be part of a Co-op
Producers need to fine-tune their marketing skills and plans. “We also need to do it with a more unified voice,” he says This is why being part of a cooperative group or marketing strategy like branded beef can be helpful, to educate the consumers about the product we sell. The consumer can have more confidence in what the rancher is producing.
“It is unfortunate today that a large proportion of the American population has no idea about what really good beef tastes like. There are people who have been in the inner city for generations and they don’t have a clue.” There is too much disconnect between the people who produce the beef and the folks who eat it.
Jack and Teresa Southworth raise cattle on the ranch Jack’s grandfather homesteaded in 1885 on the high desert of eastern Oregon. Here are some of the things they’ve been doing to get a better price for the cattle they raise.
If a person can winter calves relatively inexpensively, it often pays to keep them, to sell as yearlings. Often the money you get from a yearling (especially if you sell in the spring when demand for feeders or grass cattle is high, supply of calves is short and prices are generally higher) more than makes up for the winter feed.
“We’ve always sold yearlings, so it wasn’t that big a jump for us to retain ownership through the feedlot-finishing phase,” Jack says. When a person retains ownership there is opportunity to capture more of the value of that calf at harvest.
Find a cooperative to partner with
“We’ve been selling though Country Natural Beef for many years and feel there are many benefits. First, we have a stable price, compared to selling calves at an auction or to a cattle buyer. We always know, within a few cents, what we will get for them--which helps with planning and budgeting. It enables us to make a plan, and know that the rug won’t be pulled out from under our feet,” he says.
Be involved from pasture to plate
“By being involved all the way through the feedlot-finishing phase and selling the meat to our customers (the consumers) we learn a lot—about the meat business, packers, the difference between retail grocery store trade and restaurant trade. For us, grocery stores do a better job of selling the whole carcass. It’s good to have the restaurant trade--they are important part of our co-op in marketing—but you wouldn’t want to base your whole business on just the restaurant trade; they can’t sell the whole carcass,” he explains.
Learn about your own cattle and how to improve them
“Knowledge we gain about our cattle is another value that we get from being part of Country Natural Beef. We take the cattle through the feedlot phase and know how they do. We raise our replacements and need to not only know what our steers do in the feedlot but also need heifers that make good cows. We need all-around cattle that can do it all, so we raise our own bulls through an AI program which enabled us to use the economic index EPDs. Simmentals have their All-purpose index, Red Angus have their ProS index, and Black Angus have their dollars-combined index. Any of these can help you select sires that not only produce good replacement heifers but also have profitable feeder cattle with good carcasses,” Jack says.
Learning more about your cattle and how to make them more consistent in the long run helps ensure a better price. It’s also very satisfying, to be able to put together cattle that will work at all levels, and see the progress in your own herd.
Tips From A Cattle Buyer
Scott Whitworth (a rancher himself, who has bought calves for order buyers and then as a Rep for Superior Livestock for many years) has tips for producers that could help them get more money for their calves. “The first thing that might make a difference is timing—when they sell calves. Most years, the market drops in the fall when the majority of people are selling calves. Try to sell them in the summer, before the fall glut hits,” he says.
Many producers now sell on Superior’s summer sales and contract for a price at that time, for fall delivery, with the price locked in at the summer price. This is when feedlots are trying to get calves lined up to fill their lots, and the price is highest.
“The feedlot folks know that the good calves sell early—the ones that have some genetic history and vaccination programs—and are willing to bid more for those,” says Whitworth. Ranchers who just load up their calves at weaning time and haul them to a sale barn usually won’t get the best price.
“Every feedlot and backgrounder is watching the summer sales, so those calves have national exposure and more buyers bidding on them,” he explains.
“Another thing that can help, when planning how and where to sell your calves is genetics,” he says. If the buyers know what they are—with proven genetics that do well in the feedlot, those calves will be more attractive and get more bids.
There are also several preconditioning programs that help ensure that the calves will be healthy and won’t be set back when sent to the feedlot. “The industry standard is the VAC 45 (calves weaned for 45 days and have had their vaccinations—once at branding time and again before and after weaning). We have a lot of demand for those calves,” says Whitworth. They are past the stress and have good immunity.
Implant status and Bangs vaccination for heifers may not matter in some regions, but in the West any heifers that might end up as replacements must be Bangs vaccinated. There are also some programs like NHTC (non-hormone treated cattle) that bring value. “This just means they are not implanted. They don’t have to be all-natural; they can be just NHTC, which makes them eligible for export to a European market,” he explains.
“Also important is to have the history and story behind the cattle; housewives want to know where the meat came from. They want to know the animal came from a sustainable ranch and was healthy, and taken care of humanely,” he says.
“To list the things that help producers get more for their cattle, a vaccination program would be first, and statistics prove this. These numbers are based on price averages and research and varies from state to state, but in general VAC 34 adds $2.58 cwt or about $15.48 per head; VAC 45 adds $7.51 cwt or about $45.06 per head, and VAC 60 adds $7.92 cwt or $47.52 per head,” he explains.
“Second, NHTC (Non Hormone Treated Cattle, which includes Age/Source Verification) adds $19.00/head,” he says.
“Third, the all-natural, source-verified cattle bring an additional premium. This might be a program like IMI Global, Angus Link or GAP 4 (which addresses animal welfare). These programs can add $32.00 per head (and the cattle have to be third-party-verified for this). In our area this number can be even higher. Last year it was $21 cwt more that feedlots would pay just for GAP 4 cattle.” In these programs they come audit the ranch and have the paperwork in order. This all comes back to the housewife wanting to know that the cattle were cared for and healthy.
“Fourth, BQA Certified adds about $3.00 per head, and fifth, progressive genetics adds $7.00 per head,” he says.
In addition, the weight of the calves and when they go to market is also important. “The ones that come earlier in the fall, such as October, and are heavier—and will fit the March-April-early May market—and have VAC 45 and all these other programs will often top the market. Even if they are heavier, those calves will bring the same price per pound as a 550-575 weight calf. They finish quicker in the feedlot, and the market is better during this time period,” says Whitworth.
Producers who can sell heavy, weaned calves in early to mid-October often do best. They outsell everything, because of when the kill date hits in April. The 550-weight calves coming in November are often hardest to sell because that’s when most calves are being sold. Some people might want to calve earlier and have calves ready to sell quicker in the fall, or calve later, to have calves that will go into a yearling program and sell in the spring,” he says.
But regardless of the weight and age, if calves have all these programs, they will top the market whenever you sell them. “Those programs (and records) will stay with them. Many backgrounders are getting hooked on these program cattle. They have to pay a little more for them, but there’s even more premium when they send them on to the feedlot as yearlings. The paperwork transfers to the new owner and eventually ends up in the packer’s hands.” There is buyer confidence all the way through.
Some programs vary by region, but “common” cattle don’t bring enough money anymore, unless it’s a year when supplies are short and buyers are willing to bid on just about anything. “Most years, you are better off to get on the programs, and show you are working at it, and care that you raise a quality product.”
Additional Benefits As Part Of A Co-Op
In addition to having a better market, the Southworth family says another benefit of being part of a cooperative like Country Natural Beef is the camaraderie. “Finding ways to satisfy the needs of the consumer, in ways that benefit the consumer, the rancher, the land, and the cattle, are important to us,” Jack says. This helps ranchers stay in business and continue to produce what the consumer wants to eat.
“We produce what they want, rather than producing what we want to sell. There is a difference. Years ago we’d just say here it is (take it or leave it). We don’t do that anymore. We try to listen to the consumer. It started by marketing cattle as antibiotic-free. Then there was antibiotic and hormone-free, natural, humane livestock handling (animal welfare certified) etc.”
This creates more of a connection between the producer and consumer. “I think it has increased the trust that consumers have in our beef products,” Jack says.
The only drawback he sees in being part of a group like this is that in a really hot market the stable pricing (with a co-op) can’t keep up with a quickly rising generic market. This doesn’t happen very often, however.
“I tell my friends and fellow ranchers that I don’t mind missing the peak of the market, but I have to avoid the valleys. Selling through a co-op protects me from the valleys, with a more consistent market, so if I don’t get the absolute peak, that’s fine. With Country Natural Beef we establish our price based on cost of production and know we’ll get a fair price that’s fair to the consumer and fair to the rancher.”
He encourages ranchers to find some kind of partnership rather than simply taking calves to the auction or going with prices the buyers might offer for your calves when they come around and look at them.
“One reason we’re in the beef industry is for quality of life; we enjoy raising cattle. Selling on the generic market feels awfully lonely! It’s a gamble, and you don’t have a long-term relationship with your buyer. With Country Natural Beef we have relationships with our fellow ranchers, our feedlots, our packers, and with meat cutters who sell our beef at the store level. This is a fulfilling life for us as ranchers. We are part of a team and it beats the heck out of a smile and a thank-you and a check from the auction yard--because that’s just a one-time thing,” he says.