The Cattleman November 2009 - Does Preconditioning Pay?

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Rancher's Managment Guide: November 2009

Does Preconditioning Pay?

While there are no guarantees of more dollars in your pocket, preconditioning weaned calves before selling them gives you more marketing choices and gives your calves a better chance at a better price.

By Ellen H. Brisendine

Is it worth it to keep your calves on pasture for 45 days after weaning and before selling them, and vaccinate them twice in those 45 days? Will you get the money back that you put into those calves? Doug McKinney says there's no guarantee the answer will be yes every year, but a preconditioning program is a proven technique to make more money and it is a market-leveler for producers of 150 head or fewer.

McKinney is a cattle producer and carries the interesting title of beef cattle value enhancement specialist with Oklahoma State University's Cooperative Extension Service. He can empathize with wishful thinking from producers who expect $10 to $12 more per hundredweight for their extra work and expense of a preconditioning program.

McKinney suggests more modest expectations. "Preconditioning does pay," he says. "Calves will shrink 6 to 12 percent when they are weaned." In a preconditioning program, calves should be on a good nutrition program to help them grow and get them prepared for the stocker buyer or the feedlot buyer. "That calf is going to be heavier. At a $1 a pound that can be $50 right there.

"If you sell in large groups, you're going to get a premium. It won't be more than $3 to $6 a hundredweight, but $6 on a six-weight steer is $36. Add to that the $50 in extra weight the preconditioning program put on the calf and that's more than $80 bucks. It doesn't take long to see that you can make money at it."

Start thinking about next year now

McKinney provides unbiased information to producers about value-added programs, how they work and who to contact -- natural, organic, age-verified, source-verified, VAC 45 programs. "Then the producers can make their best decisions," he says.

In a perfect world, McKinney would like to hear from producers before the bulls go in with the cows for breeding season. "The earlier you make these plans and preparations, the more successful you can be. We can really get some things going in their direction and maybe even open up the possibility of more doors. If the ranchers want to produce calves for a natural program, or an organic program, it's better to call me before those calves even hit the ground -- the earlier the better.

"In some cases, producers will wean their cattle not knowing what they are going to do with them. Then they start looking at these VAC 45 sales, or special preconditioned stocker calf sales, or they decide they want to participate in a source- and age-verified program or a natural program. They can't wait until weaning to start looking. They need to have a plan in place long before weaning.

"There are a lot of markets that have special stocker sales or value-added sales. They need verification that those cattle have been weaned a minimum of 45 days. The best advice I can give any producers reading this article at the first part of November who don't know where to go, first contact the livestock market hosting that sale. See what their requirements are. Some will require paperwork, but a lot of them do not. They all will have a common denominator. They need that minimum 45-day weaned time. That's going to be the most critical part of these VAC 45 sales."

45 days?

The 45 in VAC 45 means the calves have been weaned for 45 days before being offered for sale and have received two rounds of vaccinations for common livestock diseases. "VAC 45 is the most commonly used program in the industry," he says.

This program can help level the playing field in the market place for owners of small herds. Truckload lots are more efficient for order buyers to buy. They often pay premiums for the convenience and pay less for inconvenient small lots of cattle.

"VAC 45 sales are designed for the person who has 150 head or less. It gives them an opportunity to comingle their calves and offer them for sale with other cattle produced under similar management practices, with the same weaning requirements and in larger lots so they can receive that premium."

A preconditioning program such as VAC 45 has other benefits, McKinney says, such as "reduced cattle stress, decreased cattle shrink, improved immune system, and in a perfect world the producer would sell heavier cattle."

When McKinney began his work as a specialist, he surveyed every feedyard in Oklahoma and heard two common comments. "One, they actively seek preconditioned cattle; two, they would pay a premium for preconditioned cattle because there are not enough out there. The feedyard buyers tell me that sometime in the near future, a preconditioned calf will be the market standard. One that is not preconditioned -- and is just weaned -- will be discounted just like a bull compared to a steer."

One extra calf

McKinney has seen this rule of thumb hold true in the herds he's worked with, "In a preconditioning program, for every 10 calves, you're getting an extra calf to sell. Regardless of the kind of value-enhancement program they participate in, I tell producers there's never a guarantee. But, if you're not ready to take advantage of the opportunities, you'll never be able to make the money off of it."

"RMG: Does Preconditioning Pay?" is from the November 2009 issue of The Cattleman magazine.