Premiums are obtained on feeder cattle not only through participating in value-added programs, but by having a solid foundation when it comes to the basics of cattle management.
Zoetis analyzed Western Video Market (WVM) data from video auctions held from 2014-22 in order to document the premiums and discounts earned by utilizing certain management considerations and strategies. The animal health company has been analyzing WVM data since 2012, evaluating about 2 million head of cattle cumulatively. Trends are presented across time, season of the year, sex and wean status of calves, weight of calves, vaccination, value-added programs and use of growth implants.
{{tncms-asset app=”editorial” id=”98bfb624-f8ad-11ed-b32b-e7a7464f72c0″}}
While participating in third-party programs can certainly help your bottom line, it is important to consider all factors that go into feeder calf management.
“There are many third-party verifications, which have value, but people need to start with a solid foundation,” Holly Foster, WVM operations manager, told WLJ. “There needs to be a good vaccination protocol with the modified live vaccines that buyers are looking for, along with the genetics for targeting certain markets, and mineral and feed programs.”
One of the biggest points Foster stressed was that each operation is different, and producers need to evaluate their opportunities based on their inputs. There is no one-size-fits-all method for getting extra dollars in your pocket.
One of the biggest trends that has been noted over the years is the growth of third-party verifications. Over 60% of WVM’s lots are enrolled in some sort of third-party verification program, which shows the strong market signal being sent by packers and retailers to their buyers.
The Zoetis analysis found that since 2018, there has been a considerable increase in consignments with age and source verification, Verified Natural and non-hormone treated cattle (NHTC) programs (Figure 3). All other programs have remained constant.
{{tncms-asset app=”editorial” id=”98fabb8e-f8ad-11ed-9d57-a7446c58a44a”}}
The special marketing program with the largest price differential in the analysis was the Global Animal Partnership (G.A.P.) program. G.A.P.-certified cattle had a $4.59/cwt and a $34.36/head advantage over those not designated G.A.P, but they only represented 13% of total sale lots. NHTC and Verified Natural cattle followed with the next largest price differentials. Price per hundredweight for implanted lots declined slightly in 2022, however the price per head increased to near $80 in 2022 and far outweighed the value of the natural programs in that year.
When selling cattle in a video sale, producers have the opportunity to highlight the things they are doing in their programs. Opportunities to differentiate your cattle continue to be important, especially with some states’ long-lasting droughts, but the focus should always be on the basics.
Foster emphasized that producers who don’t feel like third-party programs are a good fit should be evaluating how they can maximize gains and pounds, especially with the record-high market we are currently facing. Producers may derive just as much value on a per-head basis as pursuing some of the third-party programs.
“If a producer isn’t pursuing an all-natural program or hormone-free verification, they may want to consider opportunities with growth technologies or a terminal cross-breeding program to optimize gain efficiencies,” Foster said.
But she also emphasized that when evaluating any management changes, it’s important to understand the cost and potential return on investment. “We encourage consignors to visit with their rep and do as much research as possible to find the best fit for their operation,” she finished.
