A look at retaining ownership | TSLN.com

A look at retaining ownership

Dave Barz

For the Aug. 29, 2009 edition of Tri-State Livestock News.

I think I set a record! This is the first year in the 35-plus years I’ve lived in South Dakota that I have had to mow my lawn every week. Usually by the 4th of July my mower sits idle until fall when I used to rake leaves. Not only did the rains make more work for me, but it really produced an abundance of pasture grass. Hay producers weren’t so lucky. The hay was there, but it was impossible to get it put up properly. This resulted in tons of poor quality roughage. All this feed may present an opportunity for you to background, or retain ownership of your calves.

This year the calf prices appear to be slipping. This is a result of the meat market, and more importantly loss of equity in the feedlots. The high energy and feed prices have taken more than $5 billion in equity in the last 18 months. Some feedlots in our area have actually filed for bankruptcy protection. History tells us that the feedlots will have to show some substantial profits for a turn or two before the calf prices will increase. Now is the time to make your decision so you can add pounds as quickly and cheaply as possible resulting in your calves hitting the slaughter market before Memorial Day. We recommend you begin your pasture vaccinations now so you will have maximum immunity at the time of weaning. When you process the calves we recommend an implant, Ralgro or another calf implant and de-worming. These calves will gain 2.5 pounds per day when implanted and still sucking cows or an extra 35 pounds. The de-worming also removes competition for nutrients and increases gains.

Clients in our area have utilized radio frequency EID tags to add value to their animals. At slaughter some received $35-$37 per head. The cost was about $3.50 per head so they received a $2.50 premium per hundred for the tagging. They did not need a tag reader and all the records were found in their calf book. The calves merely need to be tagged and registered before they leave the ranch. Some of our feedlots are sharing the premiums with the cow-calf producer after the animals are slaughtered. Retaining ownership historically increases profits six of 10 years. With the emotional and financial pressure on the market many will background or retain ownership hoping for a better market in the future. If you have poor quality and an abundance of feedstuffs, this could be a way to utilize them. In the past we shipped our calves to Kansas and Texas for feeding. Now we can utilize our neighbors’ feedlots and keep as many dollars as possible in our home states. Many of my producers actually deliver corn to the feedlots for their calves thereby cheapening feed costs.

We are all hoping for an upturn in the market. Indicators don’t predict it will be in the near future. Making appropriate decisions now you can position your calves for rapid gains while utilizing your feedstuffs. Visit with your banker about retaining ownership. Some lots will actually purchase a percentage of your calves, pay for the feed, and then share the profits on a percent basis after slaughter. Your veterinarian, nutritionalist or extension specialist will help you calculate the financial scenarios enabling you to decide which method is best for you. In the future cooperation between all the segments of the cattle industry will help assure profits for all sectors.

I think I set a record! This is the first year in the 35-plus years I’ve lived in South Dakota that I have had to mow my lawn every week. Usually by the 4th of July my mower sits idle until fall when I used to rake leaves. Not only did the rains make more work for me, but it really produced an abundance of pasture grass. Hay producers weren’t so lucky. The hay was there, but it was impossible to get it put up properly. This resulted in tons of poor quality roughage. All this feed may present an opportunity for you to background, or retain ownership of your calves.

This year the calf prices appear to be slipping. This is a result of the meat market, and more importantly loss of equity in the feedlots. The high energy and feed prices have taken more than $5 billion in equity in the last 18 months. Some feedlots in our area have actually filed for bankruptcy protection. History tells us that the feedlots will have to show some substantial profits for a turn or two before the calf prices will increase. Now is the time to make your decision so you can add pounds as quickly and cheaply as possible resulting in your calves hitting the slaughter market before Memorial Day. We recommend you begin your pasture vaccinations now so you will have maximum immunity at the time of weaning. When you process the calves we recommend an implant, Ralgro or another calf implant and de-worming. These calves will gain 2.5 pounds per day when implanted and still sucking cows or an extra 35 pounds. The de-worming also removes competition for nutrients and increases gains.

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Clients in our area have utilized radio frequency EID tags to add value to their animals. At slaughter some received $35-$37 per head. The cost was about $3.50 per head so they received a $2.50 premium per hundred for the tagging. They did not need a tag reader and all the records were found in their calf book. The calves merely need to be tagged and registered before they leave the ranch. Some of our feedlots are sharing the premiums with the cow-calf producer after the animals are slaughtered. Retaining ownership historically increases profits six of 10 years. With the emotional and financial pressure on the market many will background or retain ownership hoping for a better market in the future. If you have poor quality and an abundance of feedstuffs, this could be a way to utilize them. In the past we shipped our calves to Kansas and Texas for feeding. Now we can utilize our neighbors’ feedlots and keep as many dollars as possible in our home states. Many of my producers actually deliver corn to the feedlots for their calves thereby cheapening feed costs.

We are all hoping for an upturn in the market. Indicators don’t predict it will be in the near future. Making appropriate decisions now you can position your calves for rapid gains while utilizing your feedstuffs. Visit with your banker about retaining ownership. Some lots will actually purchase a percentage of your calves, pay for the feed, and then share the profits on a percent basis after slaughter. Your veterinarian, nutritionalist or extension specialist will help you calculate the financial scenarios enabling you to decide which method is best for you. In the future cooperation between all the segments of the cattle industry will help assure profits for all sectors.