Virginia Quality Assured Feeder Cattle Program Offers Value-added Calves

Livestock Update, August 2003

Scott P. Greiner, Ph.D., Extension Animal Scientist, Beef, Virginia Tech
Bill R. McKinnon, Fieldman, VA Cattlemen's Association
John B. Hall, Extension Beef Specialist, Virginia Tech

The Virginia Quality Assured (VQA) feeder cattle program continues to be a successful option for offering buyers a certified, value-added product. During 2002, over 5000 head of VQA certified feeder cattle were sold at a distinct price advantage compared to graded, in-barn sales during the same week (see sale results below).

The Virginia Quality Assured feeder cattle program was initiated by the Virginia Cattlemen¹s Association for those feeder cattle owners who believe in producing a value-added product. At the same time several cow/calf operators are seeking a means of identifying and differentiating their value-added cattle from an average set of feeder cattle. The value added is in the form of an improved health program, along with an opportunity to document genetics for growth. The VQA program has four levels of certification: Gold tag, Gold tag with "W," Purple tag, and Purple tag with "W."

Gold tag	Vaccinated against 7 strains of clostridial, IBR, BVD, PI3, and Pasteurella. Castrated, dehorned and healed. Heifers guaranteed open.
Gold tag with "W"	Same health program as Gold tag with the calves weaned at least 30 days and drinking from a water trough and eating from a feed bunk.
Purple tag	Same health program as Gold tag. Calves sired by bulls which meet minimum requirements for yearling weight EPD.
Purple tag with "W¹	Same health and genetic requirements as the Purple tag with the calves weaned at least 30 days and drinking from a water trough and eating from a feed bunk.

In 2002, the vaccination program included BRSV. Vaccination for BRSV is optional for calves marketed in the program in 2003 - 2004. The VQA committee accepted the recommendation of consulting veterinarians to make BRSV optional. This would allow producers to use a modified-live vaccine for IBR, BVD and PI3 that was approved for calves nursing pregnant cows. The cows have to be vaccinated prior to breeding with an approved product, but this allows the option of administering all VQA required vaccinations to calves at a single working.

Purple Tag Sire EPD Specifications
The VQA purple tag is used to identify cattle that meet both the prescribed health program and are sired by bulls that meet minimum growth EPD specifications. The intention of the sire growth EPD specifications is assure calves carrying the purple tag have the genetic potential to achieve reasonable levels of growth performance post-weaning.

For cattle to qualify for the purple tag, their sire must meet breed-specific yearling weight EPD minimums. Yearling weight EPD is the best indicator of genetic potential for feedlot average daily gain. Feedlot profitability is highly related to cost of gain, which within a pen of cattle is a function of feed efficiency, growth, and health. Unfortunately, genetic tools for direct selection of feed efficiency are not available due to the challenge of measuring feed efficiency on individual cattle. The favorable relationship between growth and feed efficiency results in yearling weight EPD being the most practical tool for enhancement of feedlot performance.

The VQA breed minimum yearling weight EPD requirements for bulls born in Fall 2002 and Spring 2003 are shown in Table 1. Calves sired by bulls with yearling weight EPDs greater than or equal to the minimums published are eligible for the purple tag. In the event a bull does not have a yearling weight EPD, weaning weight EPD is used as the specification. These EPD specifications are based on information published in the Spring 2003 breed sire evaluation summaries, and will be applicable to yearling bulls purchased fall 2003 and spring 2004. The sire EPD specifications have been set at birth year breed average for most breeds. Due to the growth advantages of the Charolais and Simmental breeds, bulls of these breeds must have a yearling weight EPD in the top 70% of their respective breed to qualify. Please note that the Gelbvieh EPD requirement has been increased to breed average.

Table 1: VQA Purple Tag
Sire Minimum Yearling Weight EPD Requirements

	Bull Birth Year (Fall-Spring)
	F'02-Sp'03	F'01-Sp'02	F'00-Sp'01	F'99-Sp'00	1998	1997	1996	1995
Angus	64	61	56	56	57	56	51	44
Charolais	18	18	17	15	15	15	-2	-2
Gelbvieh	66	56	56	56	56	53	5	5
Hereford	59	57	56	54	55	52	50	46
Limousin	24	23	21	19	20	17	17	12
Red Angus	50	49	46	42	44	43	37	38
Salers	21	21	20	19	18	17	17	15
Shorthorn	21	20	18	18	18	23	25	20
Simmental	51	52	52	48	47	47	42	8

Minimum EPD is breed average for all breeds except Charolais and Simmental (top 70th percentile) Gelbvieh- top 70th percentile for years 2001-02 and prior, breed average thereafter Percentage bulls (ie. Balancers, half-bloods, etc.) have slightly different specifications For breeds not listed, contact your local extension office.

The majority of the cattle marketed through the VQA program qualify for the purple tag. Consequently, buyers have come to identify with both the genetics and management of the VQA program.

VQA Marketing Strategies and Results
Before producers go to the effort to VQA-certify calves, thought should be given to the how the cattle will be marketed. Simply showing up at a sale with a load of VQA tagged calves without previous contact with market operator is likely to lead to disappointment. To command a premium price, VQA calves need to be sold in truckload lots and well advertised.

The VQA tagged feeder cattle were marketed through several different methods during the year. Many of the cattle were sold in commingled load lots through telo-auctions. Groups of cattlemen from the Buckingham, Amelia, and Highland/Bath areas marketed several loads of cattle comprised of multiple owners¹ cattle. In few cases single owners marketed their VQA calves via telo-auctions. The Fredericksburg feeder cattle association has held special VQA graded sales for the last three years.

The 5000+ head of VQA feeder cattle sold in 2002 were generally either heavier weight calves or backgrounded cattle. Approximately 99.9% of the VQA steers ranged from 500 to 900 pounds. Almost 93% of the heifers marketed with the VQA tag weighed between 500 and 800 pounds.

Although the price advantage per head of VQA calves over calves sold at Special Graded Feeder calf sales (Table 2) was double the approximate $6.50 (including labor) cost of VQA certification, the price advantage was below the six-year VQA average premium (Table 3)

Table 2:
2002 VQA Feeder Cattle
Special Graded Sales

]

	Number of Head	Average Weight	Premium $/Cwt.	Premium $/Head
Steers	3508	669	$1.81	$12.10
Heifers	1581	624	$2.89	$18.03
Weighted Average	5089	655	$2.13	$13.94

The lower than average price advantage for 2002 VQA cattle resulted from calf weights as well as market pressure. One third of the VQA calves sold fell into the 700 + weight class that over the six years have averaged a premium of about $13.00 per head for steers and less for heifers. As might have been assumed, in most cases, there was little price advantage to selling steers over 800 pounds and heifers over 700 pounds with the VQA tag.

About 30% of the VQA calves were sold in the first 7 months of 2002 when finished cattle prices and futures were at or below breakeven for most cattle feeders. In addition, feeder calf prices were high. As a result, buyers were not willing to pay premiums for calves, especially heavier calves. By fall feeder calf prices were lower and finished cattle futures were on the rise so buyers were willing to pay premiums for quality healthy calves with growth potential. For example, a group of 6-wt steers sold in July brought a premium of $9.26. However, a similar set steers from the same consignor sold in October for a $17.59 per head premium.

Table 3:
Six Year History VQA Feeder Cattle
vs.
Special Graded Sales

Steers		Heifers
Weight	Premium $/Cwt.	Weight	Premium $/Cwt.
500-599 lb.	+ $4.40	400-499 lb.	+ $2.28
600-699 lb.	+ $3.48	500-599 lb.	+ $3.88
700-799 lb.	+ $1.75	600-699 lb.	+ $3.00

VQA sale results over the years demonstrate that putting a VQA tag in lower quality or inconsistent cattle will not help them garner premium prices. Loads with high variation in weight and type of cattle, and partial loads of calves rarely bring a premium relative to the special graded feeder calf sales.

All producers selling VQA cattle must be Beef Quality Assurance (BQA) certified. Beef Quality Assurance certification of beef producers increases the adoption of best management practices, to further ensure the production of safe and defect-free beef. In addition, several beef alliances require participants to be BQA certified. The Virginia BQA program is part of the Mid-Atlantic BQA program which includes Virginia, West Virginia, Maryland, Pennsylvania, New York and New Jersey. The Mid-Atlantic BQA program meets all the requirement of the National BQA program, and is accepted across the U.S. For more information on BQA certification, contact your local Extension office or Dr. John B. Hall at jbhall@vt.edu .

The positive reputation of VQA cattle is established with buyers, and recognition of the program by buyers continues to grow. The overall buyer feedback to this point has been excellent. The recognition of the improved health and growth behind the VQA tag is growing where ever the cattle are finished and marketed. For more information on the VQA program, contact your local Virginia Cooperative Extension office or the Virginia Cattlemen¹s Association.

Visit Virginia Cooperative Extension