Thinking About a Preconditioned Feeder Calf Sale? Rick Machen, Ph.D Associate Professor & Extension Livestock Specialist TAMREC, Uvalde

Purpose
The purpose of preconditioning and process verification for stocker/feeder calves is to minimize the morbidity and mortality experienced by calves as they move from their home ranch into the beef production system.
     The program is based on:
     - a minimum 45 day weaning period
    - a series of two modified live respiratory complex (IBR, PI₃, BVD, BRSV) 
      vaccinations 14-21 days apart. (Preferably, the second vaccination will occur at least
      14 days prior to sale.)
     - a series of two 7-Way Clostridial vaccines given on the same schedule as the viral
      vaccines mentioned above
     - a Pasturella vaccine given during the first round of vaccinations
     - treatment for internal parasites (and external parasites if present)

     It is recommended that the calves be held in the pen for a minimum of 3-5 days after weaning. A high quality preconditioning ration should be offered twice daily and cool, fresh, clean water should be available. The remaining 40+ days of the weaning program will likely be most economical and efficient if done in small pastures, grass traps or improved pasture. Supplementation with cubes, cake or a grain-meal mix may be necessary to achieve the desired gain of 1-1.5 lb/day.

Considerations:

1. Know the market price required to cover the cost of production. 
          I f that value is more than $5-8/cwt greater than the value of the calves at weaning,
            have a long visit with commission company personnel or other market experts
            before proceeding with a preconditioning program.

2. Realize that a preconditioning program will not change the muscle or frame score of feeder calves.
          If they are M-2's at weaning, they will still be M-2's on sale day. Accurate
          assessment of the quality of the calves is critical to predicting their performance in a
          sale. Perceptions indicate that as quality declines, so does the magnitude of the
         "premium" offered.

3. Sort off any calves that "won't fit" load lots of calves on sale day. Sell these at weaning.
          Whether it is color, quality, size, age, condition, weight, disposition, phenotype, tail
          shape or whatever. Calves not included in load lots and consequently sold as
          individuals at the end of the sale typically sell at a discount to their herdmates.

4. Realistically calculate what the preconditioning program will cost.

          Vaccines + anthelmintic = a minimum $6 -10 per head (essentially, a fixed cost)

          If you accept the minimum medicine cost above AND want to keep the total per head
          cost of the program (before pasture cost, interest, labor, capital equipment,
          depreciation, etc.) at or below $25, you can spend no more than $15 - 19 per head on
         pasture, hay, supplement and/or feed. That equates to spending less than 35¢ per
          head per day. To put that in perspective, if a supplement is fed 40 days and costs
          $200/ton, maximum amount allowed (daily) is 3.5 lb.
Realistically, $25 per head is about the minimum a producer can expect to invest. On a 500# calf, that is a $5/cwt investment (ignoring postweaning gain).

Realistically evaluate the magnitude of potential premiums.
          Feeder calf market prices influence the "premiums" that can be paid for
          preconditioned and process verified calves. For example, consider the spring 2000
          feeder calf market. Feeder calves were in short supply. Feedyard costs of gain
          ($/cwt) were in the mid to high $40's. Consumer demand for beef was on the rise.
          Feeders less than 600 lbs were bringing a significant premium relative to their value
          as fat cattle on the CME board. When 500# steer calves of unknown breeding or
          background brought $110/cwt or more, was it realistic to expect and additional $5-8
          premium on similar calves that had been backgrounded?

5. Evaluate the potential pitfalls.
          Timing - The minimum acceptable weaning period is 45 days. Research indicates
          that longer preconditioning periods are not necessarily more effective. Potential
         buyers coming to the sale expect a 45 day weaning period and are not prepared to
          pay additional premiums for longer weaning programs. Days 46 to ? cost additional
         dollars and add to accidental death risks. Therefore, plan your program as close to
        45 days as possible. Precaution: Long weaning periods have the potential to move
         weaned calves into a yearling market. There is very little (if any) demand for
         preconditioned yearlings.

         Sickness - Calves weaned and backgrounded on the ranch where they were born
         typically experience little or no health problems. However, if sickness did occur, the
         additional medicine costs and reduced performance could easily consume any
         potential premiums on sale day. Furthermore, fatalities due to broken necks, choking,
         strangulations, bloat, enterotoxemia, etc. quickly eliminate the profitability of a
         preconditioning program. Facilities (corrals, pens) need to be in good working order
         BEFORE attempting this program. The patch-on-the-fly program simply won't work!

         Nutrition Program - Often the biggest cost, yet greatest opportunity. Most producers
          will tend to spend too much on feed, hay and supplement. The gain target over this
         45 day period is 1.5 lb per day. Few producers can realize this gain on grass alone -
          thus supplementation is usually warranted. Contact an Extension Specialist or beef
          cattle nutritionist for assistance with development of a nutrition program.

In general:
     - hay is expensive relative to its efficiency of use and the performance (gain) it yields 
     - confinement feeding is seldom an economically feasible option
     - calf performance on bermudagrass in late summer or fall is typically less than
      expected 
     - forage quality is of paramount concern - nutrient requirements as a function of body
        weight are at their lifetime high. Again, IF calves are expected to gain 1.5 lb per day
        for 45 days, supplementation will likely be required.

         Freight - If the host commission company is not your traditional marketplace or is
          significantly further away, carefully evaluate the freight expense. Commission
          company personnel can be a huge help.

          Freight rates are less expensive ($/head transported) for trucks than pickup and
          trailer. Typically, truck rates are $2 per loaded mile (50,000 lb per load), while
          gooseneck trailers rates are $ 1.25-1.50 per mile for a 14,000-21,000 lb load.
         Poling calves with a nearby producer could fill a load and reduce freight expense.

         Shrink - Backgrounded calves typically exhibit less shrink than fresh weaned calves.
          Nevertheless, predict what that shrink will be and include it in your calculations.
          (Hint: Cattlemen who have always sold at weaning and never weighed a calf on the
          ranch haven't a clue what shrink has been doing to them.) Check with the host
          commission company to understand how they will handle shrink.

          The Sort - A heavy sort at the commission company can result in too many calves 
          being sold individually, usually at a discount to the load lot price. Discuss your
          calves and the sorting procedure with the host commission company personnel.

         Market slide - If the market is expected to fall during the 45 day preconditioning
          period, proceed with caution. Even small market declines of $2-4/cwt, when added
          to the $5+/cwt investment in the postweaning program, can become significant profit
          stealers.

6. Capitalize on the benefits!

     Those benefits include:

          - selling in large groups of like kind, weight, condition and quality. It is well 
            accepted that calves sold in groups command a premium compared to those same
            calves if sold individually.

          - building a reputation. Cattle buyers know where the good ones come from and
             they come back to get them time after time. What a pleasure - having someone ask
             for your calves. What a switch from dropping them off and hoping someone would
             pay top dollar.

          - producing a better product. Preconditioned and process verified calves are 
            less risk to the feeder or stocker operator. Calves that never get sick perform better
            in the feedyard, have a greater chance of grading choice and are more likely to
            produce a positive eating experience for the beef consumer.

Positive eating experiences.
Don't they fit somewhere in the beef industry's long range plan?

April, 2000