The Cattleman July 2009 - Influence the Price of Your Calves

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Influence the Price of Your Calves

You spend six to nine months raising your calves. Could you spend a day marketing them?

By ROBERT FEARS

It is hard to decide which map to take on a trip if you do not know where you are going. The same principle applies when producing beef cattle for top value.

"There is a difference between selling and marketing," says Steven Lastovica, who co-owns Milano Livestock Exchange with his brother, Ronald. "Selling is simply disposing of something you happen to have. Marketing is planned, and the plan needs to be in place prior to the conception of the calf."

The Lastovica brothers have owned and operated the Milano Livestock Exchange for 23 years and have marketed more than 1.25 million cattle. They work with their customers daily to offer advice on raising cattle to bring good prices. As a result of this service and their marketing efforts, some customers have been with them since the day their doors were opened for business.

"We just offer suggestions," says Steven. "The cattle and investments belong to the customers, so they need to make the final management decisions. But we are here to help where we can.

"Watch the markets and observe which type of calf is getting top price," he suggests. "Then using this information, incorporate product goals and objectives into a marketing plan.

"Decide whether calves are going to be produced for the replacement market or as feeders," Lastovica further explains. "Then put genetics together that will produce the desired product."

He emphasizes, "To get top dollar, you have to market cattle – not just sell them. Select cows and bulls that can meet the objectives and goals of the marketing plan. Do not just accept anything that comes along."

A cow-calf business is like the proverbial three-legged stool. Genetics, management and marketing are required to keep it viable. If one of these legs is missing, neither the stool nor the business will remain functional.

Buy the best you can afford

"When it comes to genetics, buy the best bull or bulls you can afford," says Lastovica. "Buy bulls with good expected progeny differences (EPDs), performance data and conformation. Select bulls that have an ability to produce calves with low birth weights and high growth rates that result in heavy weaning weights."

EPDs are an effective tool for evaluating a prospective herd bull because they can be used to predict the genetic effects of a herd sire on a group of his calves.

The traits for which EPDs are measured and produced vary among the beef cattle breed associations, but the most commonly found EPDs are for birth weight, weaning weight and yearling weight of the offspring.

Calving ease of first-calf heifers, milk production by the daughters and scrotal circumference are also commonly measured to produce EPDs.

Breed associations publish EPD averages each year. EPDs from the prospective bull can be compared with the breed averages to get an idea of the bull’s value and a prediction of how the sire will perform.

Compared with EPDs, production data provide history rather than predictions of the future. The same measurements predicted by EPDs can be studied in production records. Birth weights, weaning weights, yearling weights, ease of calving and milk production of the prospective bull's offspring can be evaluated if he has been in service. If he has not, study performance records of his sire and dam.

Physical conformation can indicate how the bull will perform and is an indication of the physical characteristics that will be passed to the offspring. The only way conformation of a bull can be evaluated is by looking at the animal.

Lastovica says, "EPDs do not measure traits such as bone size and structure, overall animal thickness, structural soundness and fleshing. These traits can only be determined by looking at a bull's conformation.

"A bull should have a long and deep body, a wide back and big feet," continues Lastovica. "A bull needs to be structurally sound."

Strong feet and legs are important not only for his own performance, but to pass on to his offspring as well. Calves with bad feet and legs will not bring top dollar at market because they will not have durability, either as a feeder or herd replacement.

Scrotal circumference is also important. Research shows that a bull with average or above average scrotal size as a yearling usually matures quickly and that his daughters reach early puberty.

Before your purchase of a bull is completed, request a fertility test on the bull.

"We are strong advocates for Bull Power," Lastovica emphases. "A bull is 50-percent of the calf crop and sometimes more. Buying good bulls is the single most important investment that a producer makes.

"Cows that do not deliver and raise a calf with good conformation every year should be culled," continues Lastovica. "Only cows that annually wean the type of calves described in the marketing plan should be kept."

Good management complements good genetics

In addition to good genetics, sound management practices are necessary for producing high-value calves.

"My brother and I believe in castrating bull calves at a young age," says Lastovica. "Steer calves will usually bring more money than bulls – but more importantly, some buying orders call for steers only. A pen of bull calves may miss some bids.

"We encourage our customers to vaccinate for blackleg and pasturella," continues Lastovica. When castration and vaccination are done at the proper age, there is very little stress on the animal; both practices enhance value.

"When it comes to herd health, we tell our producers to do what is necessary to deliver healthy calves to the market. At the same time, input costs need to be managed to produce a profit. If a management practice adds value to the calf crop, then it is probably a wise investment."

A good marketing partner completes the plan

Good genetics and management will not necessarily result in top sales prices unless effective marketing procedures are put in place. A solid partnership should exist between a producer and the marketer.

"Cattle prices vary greatly between auctions – so producers should visit several exchanges and discuss their marketing strategies," stresses Lastovica. "Learn whether a manager is aggressive, innovative and professional. Find out if they have seasoned buyers. Ask the manager how long he or she has been in the business and whether they understand it. Another fair question is: 'Why should I do business with you instead of one of your competitors?'"

Lastovica firmly states, "We tell producers that if we cannot get them a higher price and provide better service than our competitors – then they should not bring their cattle to us.

"You trust your assets and livelihood to the auction company and they are working for you," Lastovica insists. "So, you should expect them to get top dollar for your livestock. A good marketing partner will let producers know when the market is down and give them a prediction on when it will be back up. "

"Since you spend six to nine months raising your calves, you should be able to spend a day in properly marketing your products," continues Lastovica. "It is not uncommon for producers to drive past two or three auctions to get to one that will do a good marketing job."

Robert Fears is a freelance writer and ranch management consulant.

"Influence the Price of Your Calves" is from the July 2009 issue of The Cattleman magazine.