As fall quickly approaches, time to think about how you are going to market your calf crop…
A marketing plan should answer the questions of what, when, how and where you plan to market your cattle. I like the first habit from Steven Covey’s book, The 7 Habits of Highly Effective People: begin with the end in mind.
- What is the end product you plan on producing?
- Is it a calf weaned on the way to market when some cash is needed?
- Is it a weaned, preconditioned calf to be sold in a special sale? Is it a backgrounded short or long yearling?
- Is it one or more registered animals to be sold to other registered breeders or commercial producers?
- Are you producing what buyers want? Remember, buyers grade the cattle at sales and bid accordingly.
If you plan to retain calves for a period of time following weaning, maximizing weaning weight may not be the best alternative. First of all, a live calf is of utmost importance. Your resource base is a key for determining whether you are going to wean the calves and grow them for some extended period of time. Are adequate feedstuffs available at suitable prices? Do you have the labor and facilities to be able to own the calves beyond weaning? Can you background the calves economically enough to justify owning them longer?
When do you plan to market the cattle? Historically, prices are highest in the spring and lowest in the fall. If you are producing cattle with added value, how can you maximize your likelihood of capturing that value? When and where are there special feeder sales? There are more feeder sales on a year-round basis. That flexibility can be a real asset when weather and volatile prices impact the marketing plan. The “when” question is also determined by when the calves are born. Some calve their cows in the fall, others prefer late winter/spring calving so the flush grass is available when cows are milking and need to be bred. So the “when” question needs to consider what the end product will be, the cost of producing that product, sale or marketing opportunities and expected prices relative to other time periods.
How will the cattle be marketed? Weekly auctions, special feeder sales, video sales and direct-from-the-farm sales are all commonly used to sell feeder calves . Numbers of cattle offered and the ability of buyers to acquire loads of 48,000 to 50,000 pounds are key to capturing added value. Small numbers of calves, regardless of the value that has been added, will not bring all they are worth when sold in a less than load marketing alternative. Evaluate your alternatives, considering price, lot size or ability to be part of a load offering; distance to market and wait in line; weight and shrink before sale weight is determined; and commission and services offered by the marketing agency.
If you can answer some of the questions addressed here, then you should have a marketing plan that will allow you to capture the value of what you have produced.
It is a have-it-your-way kind of business. Here is hoping your way is a profitable way.
Source: Bill Halfman, UW Extension Monroe County, Adapted from Emmit Rawls, University of Tennessee