The Cattle Business

Livestock Update, June 1999

Bill R. McKinnon, Extension Animal Scientist, Marketing, Virginia Tech

Increasingly the cow/calf sector is going to see the economic signals to market calves more prepared for the feedlot. One of the most devastating routines impacting cattle health and profitability that the industry practices is the sudden weaning of a 500 to 700 pound calf and immediate shipment to a distant feedlot. The stress of weaning, learning to eat new feeds, distant shipment, the introduction into a new group of cattle, etc. certainly contributes to the costs of bovine respiratory disease or "shipping fever". Whether studying the results of the Texas Ranch to Rail or the VA R.O.P. feedout programs, it costs the cattle feeder $50 to $75 for every steer or heifer that goes to the hospital pen. If a calf get sick in the feedlot, medical costs and costs of gain go up while average daily gain and carcass performance goes down.

The industry will increasingly be sent the signal for calves to be backgrounded for at least 30 days by the cow/calf operator, a commercial backgrounder, or by a custom backgrounding operation. A backgrounding period helps the calf make the adjustment from "Mom" and grass to more dry feed in the diet without the additional stress of the long haul and the introduction into a group of strange cattle. The backgrounding phase also offers the opportunity to protect the cattle against respiratory disease by incorporating an effective vaccination program. Many of the state's small part time herds do not routinely have the feed, time, facilities, or management resources to background their own calves. The possibility of several neighbors working together to background their calves seems to be an option for many Virginians.

Many cow/calf operators say that they must be convinced that the buyers will pay for the cost of backgrounding before they would consider weaning their calves. Asking for a guarantee that buyers will pay more for a set of backgrounded calves is unrealistic. How many cow/calf operators would pay a purebred breeder $2000 for a bull when other bull buyers are only willing to pay $1700? How many commercial bull buyers after buying a bargain bull at an auction then go up to the seller and pay him another $200 because the bull is worth it? A backgrounding program that must have a premium price for the finished product probably utilizes feeds that are too expensive or puts on too little gain. A set of backgrounded cattle with excellent health and growth performance history in the feedlot will bring repeat business.

Some producers have heard from their neighbors that it will take 30 days just to regain the weight lost during the weaning process. That is probably true if those calves are only fed some of that late June or 4th of July fescue hay or maybe only a pound of added grain. Most calves are probably growing at 1.5 to 2.25 pounds per day on their mothers. It makes sense that lowering those calves nutritional plane will result in poor growth performance. There must be sufficient weight gain on the calves to provide added pounds to make short term backgrounding programs pay. From an economic standpoint, a 30 day post weaning period is typically not long enough to produce the added pounds to offset backgrounding costs. A slightly longer period of six weeks or 45 to 90 days tends to start providing enough gain to produce profits without requiring the major amounts of feed consumed by tradition winter-long programs.

During the fall of 1997 and 1998, short term backgrounding trials were conducted at the Shenandoah Valley Agricultural Research and Extension Center at Steeles Tavern to mimic on-farm conditions faced by many of Virginia's cow/calf producers. During both years, steer calves were weaned the last week of October and kept an additional 42 days and placed on three different treatments. Steer calves in Treatment 1 were put in a barn lot and fed moderate quality hay free choice and approximately 1% of their body weight of a grain supplement daily. Treatment 2 placed the steers on a mostly fescue aftermath pasture with the daily addition of 1% of body weight of the same grain mix fed to Treatment 1. Steers in Treatment 3 were grazed on the same type of pasture utilized by Treatment 2. The steers were weighed at weaning and at 21 days and 42 days later. At weaning, the steers were implanted and dewormed and had received a typical preweaning vaccination program several weeks before weaining. The steers were basically Angus and black baldie calves with 40% of the calves being Charolais sired in the 1998 trial.

The grain supplement was designed to be simple and cost effective and was comprised of 83.6% ground shelled corn, 10.4% soybean meal, 5% molasses, and 1% ground limestone. The average cost of the grain mix was $162 over the two years. The average crude protein of the mix on a dry matter basis was 13.7%. The mixed second cutting hay fed had an average crude protein level of 13.5% on a dry matter basis.

Table 1. Shenandoah Valley AREC Short Term Background Trials, 1997 and 1998 Averages

	Treat. 1 Hay+Grain	Treat. 2 Past.+Grain	Treat. 3 Pasture
Start Weight	532	537	539
Ending Weight	621	636	614
42 day Gain	89	99	75
Average Daily Gain	2.12	2.36	1.79
Grain consumed/Hd.	186	186	-
Avg. daily gain intake	4.43	-
Hay consumed/Hd.	387	-	-
Total feed cost/Hd.1	$26.68	$22.21	$9.52
Total cost of gain/Hd.2	$43.23	$38.81	$20.96
Total cost of gain/Cwt.	$48.58	$39.20	$27.95
Initial cattle value/Cwt.3	$81.00	$81.00	$81.00
Cattle sale price/Cwt. 4	$76.75	$76.25	$77.00
Net income	$2.47	$11.17	$15.23

¹ Hay @$60/ton, pasture @$.17/hd./day, grain supplement @$162/ton
² Includes 10% interest on cattle value, labor @$8/hr., vet costs @$6/hd.
³ Opportunity sale value, 2 year average, late October, VCA sponsored sales
⁴ December sale price, 2 year average, VCA sponsored sales

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