Preconditioning Considerations For Spring-Born Calves
US - With fall just around the corner, Kentucky beef producers will soon begin crafting marketing plans for spring-born calves.
15 September 2009
2 minute read
Despite producers enjoying a less-challenging weather pattern this summer, many cow-calf producers have struggled to cover rising costs on a softer calf market, said University of Kentucky Agricultural Economist, Kenny Burdine.
"This makes post-weaning marketing plans especially important this year," Mr Burdine said. "Many cow-calf producers sell calves at weaning each year, regardless of what the market is doing."
Mr Burdine warned that weaning and preconditioning those calves can potentially increase their market value and also allow the producer to add some additional pounds before sale time.
Fall 2008 turned out to be touch on preconditioning programmes due to the dry summer making forage scarce. Having to use purchased feeds and a sharp fall in calf prices between weaning time and sale time, meant many producers could not cover costs. Mr Burdine said that many producers would have been better to sell their calves at weaning time.
The economist wants to encourage producers to think differently this year and sit down and make a market plan to work through a breakeven. He said, the calf market is stronger this year, and feed prices will likely be lower.
Mr Burdine believes it important that producers assess calf value at weaning time - looking at market reports and examining prices for calves similar to their own. He urged producers to also estimate preconditioning costs, figuring expenses for feed, mineral, medicine, labour, interest and other expenses. By adding the weaning value to these costs, producers will be abel to work out a breakeven. The figure left is the amount of revenue that the producer will need to have for the preconditioning programme to be profitable.
"Look at the current market report and see how the breakeven price compares to the current prices for calves in that expected weight range," he said. "Look at the futures market and examine seasonal price indices for some expectation of market direction."
Above all, Burdine emphasized that working through this process helps producers decide if preconditioning in 2009 makes sense for them and not be biased by outside factors.
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