Greetings! My name is Jason Bradley, and recently I filled a need for an economic consultant here at the Noble Research Institute. I began my time here in March by working under the direction of Jon Biermacher, Ph.D., in the Center for Economic Information and Analysis. During that time, I stayed busy completing the requirements for my master's degree from Oklahoma State University. In June, I moved into my current position in the producer relations program. Even before I became a consultant, many cow-calf producers were calling with questions about what marketing options they should be looking into.
Participating in a preconditioning program, such as the VAC-45 or VAC-60 that require a minimum length of time the calf has to be weaned combined with a vaccine protocol, can offer a premium if marketed through a value-added sale. While this would be the ideal practice, sometimes there are situations that prevent this from happening and the calves need to be sold early.
In the October 2016 Ag News and Views, Senior Economist Dan Childs' article, Consultant offers strategies for cattle marketing decisions looked at some of the options that are available. One of the best strategies with the current market conditions is to turn a bawling calf into a yearling and get it sold. But this brings up the question: at what point does a calf become a yearling? Is it based on a preconditioning program or on the animal's physical traits? By looking at the auction reports from the seven sale barns reported by the USDA Ag Marketing Service (AMS), we can see there is an obvious discount for calves. This discount ranged from $10 per hundredweight to $20 per hundredweight, based on the Oklahoma Combined Weekly Auction Report published by AMS on Oct. 7, 2016.
To answer these questions, I did what I would recommend to everyone who finds themselves in this situation: call your livestock auction. I called a few sale barns and asked, "What criteria do you use when pricing a calf versus a yearling?" The results varied from a weaned and preconditioned calf all the way to just the physical appearance of the animal. Most answers pointed toward a calf that had received its first round of shots and had been weaned at least 30 days.
So if you find yourself in a market that is continually moving down, like it currently is, and you're in the situation where you need to sell your calves before you can complete a certified preconditioning program or participate in a value-added sale, you may want to reach out to your preferred auction barn. Find out what they are looking for in a calf that moves it away from that serious discount and meet those requirements before selling.
In the coming future, I look forward to the opportunity to work with producers in accomplishing their goals. As an economist, some thoughts I've always tried to use when making decisions are: Know what you're gaining from each decision and what you're giving up. Being well-informed is the best tool anybody can have. Here at the Noble Research Institute, we will do what we can to help you to find that information and understand it. And lastly, ask questions. No question is a dumb one if you don't know the answer.