The weaned calf market reached a peak in the fall of 2014. Since then, mixed with lots of volatility, the value of weaned calves this fall is roughly half that nearly two years ago. Many cow-calf producers who sell weaned calves to feedlots are asking if preconditioning calves is really worth it.
Yes, I believe it’s still profitable, especially in today’s bear market, because it adds more value to a saleable product, which traditionally attracts cattle buyers. Such preconditioning value is locked up by feedlot-destined calves that have been vaccinated, castrated, dehorned, low-stress weaned, has some feed bunk/waterer experience and have been fed a nutritious post-weaning diet for at least 45 days.
I find that much of this value can be illustrated on a three-P approach — practical benefits, profitable economics and positive experience.
Practical benefit can be realized almost immediately. This first P allows producers to sell more live-weight pounds of calf after preconditioning, rather than selling lighter off-the-cow-weaned calves. For example, preconditioning calves that graduate from a 45-day post-weaning feed and management program are geared to gain two pounds per day or about 90 lbs. more marketable weight. Given today’s feeder prices, the gross revenue for these heavier calves range from $140-160 per head.
Another practical benefit can be acquired through low-stress weaning of preconditioned calves. These humane methods of weaning calves include complete separation (on-farm), fence-lining weaning and two-step weaning. In contrast, many calves that are not preconditioned are often “truck weaned” as a low-cost management option.
Available research data has proven that many of these truck-weaned calves never fully recover and tend to cost feedlot operators about $25 to $125 per sick calf due to treatment costs, loss of feedlot performance and higher feedlot deaths. Some university extension studies also have estimated that non-conditioned calves such as “truck-weaned” calves will shrink between 10 to 15 per cent enroute to feedlot, while preconditioned calves will shrink only one-half as much.
Some producers and truckers who raise and transport humanely wean calves in autumn have expressed to me the economic benefit of preconditioning programs is inadequate. Their opinion cites an Alberta study (2012) that showed preconditioned calf sales garner an $8/cwt premium per spring calf by cattle buyers, but this extra $50 per 600-lb. calves ($8 x 600 lb./100) doesn’t often cover the extra costs of preconditioning. They say this bonus is narrower during wide price variations due to heavier weight discounts and market seasonality.
I disagree. For 2016, I present the following profitable preconditioning spreadsheet of profitable economics.
This table illustrates the current financial status of truck-weaned calves compared to preconditioned calves reared on a 45-day post-weaning feeding program (gaining two pounds per head, daily).
Other preconditioned parameters include:
- Premium is paid at $8 per cwt;
- Feed (forage, grain, mineral), health (vaccination, deworming, parasite), and yardage = $88;
- Current market values used, where applicable; and
- Graduated bodyweight discount of $10/cwt.
The final profit in this case is about $86 per preconditioned calf or about 97 per cent ROI (return on investment). Even if we eliminated the shrink factor (re: calves were shipped to a dry lot 25 km, away); a $51 per head would still be realized. In either case, this is evidence that extra revenue and profit can be drawn out from putting calves on a preconditioning program.
Regardless of its profitability, one person that believes in preconditioning weaned calves is a person I met at Forage Days in Vita, Manitoba, a couple of years ago. She said that her parents operate a 500-cow-calf operation near Brandon.
Rather than ship their weaned calves out of province, they sell about 400 verified preconditioned calves to a local feedlot. Depending on cattle feeder prices, the feedlot paid a premium (undisclosed), which covered all costs of preconditioning plus a nominal profit. My friend said the profit wasn’t the reason that her parents preconditioned their calves, but rather they had a guaranteed market (without trucking logistics) for their calves.
This positive experience coupled with practical and financial attributes, helps make preconditioned weaned calves simply worth more in today’s bear market.