Maximizing Value from Backgrounded Calves

CANADA - According to Alberta Agriculture and Food, last years Autumnal months in Canada calf prices were viewed by cow calf producers as unacceptable, so many producers chose to keep their calves over the winter on a backgrounding ration to try to market the calves into a stronger market.
calendar icon 21 February 2008
clock icon 2 minute read

The Alberta Agriculture and Food department say that despite of this increasing barley prices over the past few months, feeder cattle prices have adjusted downwards to compensate for the higher feed cost. One of the challenges is deciding whether to delay marketing for a few more weeks or to even put the calves back on grass and market them next fall as yearlings.

“In a stable price scenario, it is critical that the weight gain of the cattle is cheaper than the market price for that pound of gain,” says Ken Ziegler, beef specialist with Alberta Agriculture and Food’s Ag-Info Centre. “If the weight gained costs 75 cents per pound of gain and the selling price is 80 cents, then it is safe to assume that the feeding venture is adding value to the calf even though the margin is quite slim.”
Another challenge producers face is in trying to maximize the value of the calf sold when selling it. Many marketing choices exist that vary in advantage. Factors such as the risk of price and shrink come into play, and these will affect the net profit in the seller’s pocket.

“Over the last few weeks, editors of the website called have added some excellent fact sheets to the Marketing folder,” says Ziegler. “Shrink is a common reality that, while not fully understood, affects profitability. These well-written fact sheets on shrink have been added to the wide array of other marketing fact sheets available on the site.”

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