CONSIDER ADDING TIME AND VALUE TO YOUR FALL CALF CROP
Originally published on October 16, 2003
October is the traditional month for marketing a weaned calf. However, with the U.S. border closed to live cattle from Canada, many cow-calf producers are considering backgrounding and finishing their calves to add time and value.
Tim Highmoor, of the Western Beef Development Centre, has developed a Feeding Option Calculator, which is a tool for producers thinking of keeping their calves at home.
The calculator is available free of charge at the Western Beef Development Centres website at www.wbdc.sk.ca.
If you have no feed, no facilities and no energy to commit to backgrounding, then you will most likely sell your weaned calves in the fall as usual.
If you had some feed and some personal energy, you may have already held back your preconditioning average daily gain and delayed the marketing of your 550 pound weaned calves until mid-November.
This strategy is illustrated in the accompanying chart Option #1, Preconditioning Calves. Readers should note that with a cost of gain being about 70 cents per lb., we were able to lower our break-even selling price to $1.03 from $1.05per lb.
Throughout the accompanying examples, a selling price of $1.05 per lb. has been used simply for demonstration. Users will input their own prices.
A second option is to retain your 550 lb. calves, put them on feed and background them over winter at an ADG of 2.3 lb. per day.
By late February, you would sell these cattle to a finishing lot at approximately 850 lb. each.
This is illustrated as Option #2, Backgrounding Calves for 130 Days.
The cost of gain is calculated at 58 cents per lb. and our break-even selling price falls from $1.05 to 92 cents per lb. By delaying the marketing decision by 137 days, we have secured a chance for better prices should the border open to live animals by the new year. Most producers also say backgrounding can be done with only minor modifications to existing facilities.
A third option is to wean your calves in mid-October, background them to late February and then finish them to 1,300 lb. by July 2004.
Not everyone will have the facilities to run both a finishing lot and a spring calving nursery.
Cash flow may also be an issue since there is a greater cash investment in feeding.
Option #3, Fattening Weaned Calves, has the lowest break-even selling price of 78 cents per lb. I believe there is an ever-increasing probability that by July 2004, the U.S. border will be open. We North Americans love to barbecue.
Finally, I know of one cow-calf producer who is planning to sell his calves in October and buy back into a share pen at his local feedlot on the same day the calves are sold. He said he may sell the calves at a loss, but by buying back into a similar group of cattle, there will be opportunity for him to reduce his loss without having to feed his own calves.
Highmoor has two other option calculators. One involves an 850 lb. yearling coming off grass in the fall and being placed on feed until it is ready for slaughter in mid-February 2004. The other looks at backgrounding and then grassing the fall 2003 weaned calves until mid-August 2004.
Allyn Tastad, chartered professional accountant, is a partner in the accounting firm of Hounjet Tastad Harpham in Saskatoon at 306-653-5100, e-mail at email@example.com or website www.hth-accountants.ca. All data and information provided is for informational purposes only. Readers are cautioned that laws and regulations are subject to change. Consult your accountant for current professional advice tailored to your situation.