Jared Wareham: Selling Program Cattle Requires Right Ingredients
Simply participating in verified programs such as NHTC (Non-Hormone Treated Cattle), Verified Natural, GAP and a multitude of others, isn’t a guarantee of success or profit. Adding programming to your marketing strategies is similar to baking a decadent cake. It requires the precise combination of ingredients to create a world-class winner. One or two missing ingredients, a poor combination of others or the wrong ones altogether lead to failure. Undesirable results will always leave that long-lasting bad taste in your mouth. Here are insights that might help you calibrate your mixers to avoid disappointment.
The fallout risk involved with feeding natural cattle is substantial. Unweaned calves or calf-feds represent a very high-risk option. A calf that starts down the path to be fed as natural and requires treatment will have to be pulled out of that program forfeiting any chance of achieving the premium that comes when they sell as Verified Natural Fats. Fallout rates can easily creep into the 15% range for weaned cattle, let alone unweaned bawlers. If you only have the ability to sell unweaned calves, a natural program might not be the best fit, especially if you are geographically at a disadvantage for freight, shrink and stress. The longer they’ll have wheels under them as calves, the more you’ll be discounted. In some cases, those discounts can far outweigh any potential premium or profit.
The threat of economic loss due from high morbidity and mortality rates don’t just disappear if you sell weaned cattle. Therefore, just weaning cattle won’t guarantee a premium either. There are other ingredients that can add or subtract value: length of weaning period, vaccination protocols and rations. They play a huge role in value or “discountability.” Being weaned at least 45 days might not be enough anymore. Cattle weaned closer to 60 days or more represent the lowest risk populations to feed and will most likely demand more value. Check out the new VAC60 program established by Superior Livestock Auction. It presents a great opportunity to differentiate your calves or feeders for both documented length-of-weaning period and vaccination protocol. Remember, adding value is all about removing risk. Someone that wants to feed NHTC plus Verified Natural cattle must manage and budget their breakevens to account for health-related losses. The lower the risk of loss, the greater the price they can afford to pay.
Last, genetics are also a major component to successful feeding of program cattle. Growth and its direct impact on gain, more importantly cost of gain, has become a focal point of those with experience feeding program cattle. Cost of gain to feed NHTC and Natural cattle generally runs around $1 per head per day and can go up from there. Cattle that don’t have the benefit of an implant regimen need every ounce of genetic performance a feeder can muster to help manage feeding margins. Deficiencies in performance, frame and carcass weight become exacerbated under program feeding. Carcass genetics still matter but might be more easily managed than conventional feeders due to higher rates of marbling in non-implanted carcasses. With that said, a Verified Natural USDA Prime carcass is one of the highest valued chunks of beef available today.