Preconditioning for profit

From the May 2016 issue of Drovers.

Improving the genetics of your cowherd, monitoring their level of nutrition and managing them through calving season are all critical to your success. Preconditioning your calves, however, might provide the greatest dollar return to your time and management.

"Preconditioning your calves is a no-brainer. It makes money for everybody in the chain and improves the quality of beef for consumers," says Dan Thomson, Jones Professor of Veterinary Medicine at
Kansas State University and the host of DocTalk on RFD-TV. "We've got to get more producers to precondition their calves." 

Thomson and a host of industry leaders continue to campaign for producers to implement the management program that improves animal health and welfare, increases beef quality and puts dollars in your pocket on sale day.

"New crop calves that have not been preconditioned are discounted heavily," says Mark Harmon, marketing manager at Joplin Regional Stockyards, Joplin, Mo. "We're seeing discounts of $20 to $25 [per] cwt for calves that have not been preconditioned compared to calves that are ready to turn out on Flint Hills grass."

Joplin Regional Stockyards co-owner Jackie Moore says those new crop calves straight off the cow are "a different type of calf" and encourages his customers to avoid the discounts they will find on sale day. "While the market isn't as wild as it was a year ago, there is still some value in weaning and preconditioning those calves," he says.

How much value? Data collected by Superior Livestock Auctions in 2013 found premiums of $6 per cwt over non-preconditioned calves, meaning a total premium of $30 to $36 per head. But that data was gathered before the dramatic market rally of 2014 when cattle prices skyrocketed. Today's market, even though it is down from the past year, remains higher than 2013, and market analysts say the preconditioning premiums are higher than those recorded in 2013.

Given the value of cattle, feedyards closely track cattle health and performance and know the value of preconditioned calves. Tom Brink, CEO of the American Red Angus Association and a former vice president at JBS Five Rivers cattle feeders, says current data suggests unweaned feeder calves should be discounted about $191 per head.

During a presentation at the 2015 Cattle Industry Convention, Brink cited multi-year data that calves managed in certified VAC-45 programs—with a full course of preconditioning vaccines and at least a 45-day weaning period prior to shipping—experienced a third of the feedyard morbidity and half the mortality of unweaned calves. They posted daily gains averaging 0.3 lb. higher than unweaned calves and better feed conversion.

Based on data showing the likelihood of high mortality rates in non-preconditioned pens and the financial losses, Brink calculates VAC-45 calves are actually worth a market premium of about $95 per head, due to the 30% reduction in morbidity and the 50% reduction in mortality.

Despite the obvious financial advantages for feedyards and their increasing willingness to pay premiums for preconditioned cattle, too many cow-calf producers still ignore the benefits of preconditioning.

"Getting more producers to precondition is one of the most important issues our industry faces," Thomson says. "It's an animal welfare issue, it's an economic issue and it's a beef quality issue. Preconditioning is the time when we're building the calf's immune response, building that health security and decreasing the animal's stress."

Thomson says preconditioning is defined as calves that are vaccinated, castrated, dehorned and weaned for 45 days on the ranch prior to marketing.

"They're through the bawl of weaning and they know how to find the feed bunk," Thomson says. "We've greatly reduced the risk of respiratory disease for the next owner."

Preconditioning aids in animal welfare two ways. Calves should be castrated as early as possible, ideally when they're a couple months old which reduces stress.

"The longer the testicles are attached to the calf, the more attached the calf is to the testicles," Thomson says. "If we wait until that calf gets to the feedyard to castrate him he's three times more likely to get sick."

Sickness results in higher costs, reduced feedyard performance and overall lower beef quality. But the benefits of preconditioning go beyond better health.

"You'll have more pounds to sell," says Dave Rethorst, outreach veterinarian at Kansas State University Diagnostic Laboratory. "Preconditioning means you're conditioning those calves for the next phase of their life."

The 45-day weaning program is just as important as the vaccinations. "A calf that is vaccinated on the ranch and weaned in the trailer on the way to the sale barn is a vaccinated calf, not a preconditioned calf," Rethorst says.

Preconditioned calves will weigh more at sale day due to the management of the preconditioning programs, he adds. The calves will receive feed in a bunk for 45 days, and preconditioning is the time to administer growth implants.

"Producers may grumble their calves didn't hit the market top, but the difference is in the pounds. If you've been feeding them you've got at least 50 lb. to 100 lb. more to sell if not more," Rethorst says.

Other positive impacts of preconditioning for calf producers and the entire industry include food safety and antibiotic use.

"Producers can have a positive impact on our industry's overall use of antibiotics through preconditioning programs," Rethorst says. "We've documented that preconditioned calves are less likely to become sick at their next home, so the next owner won't need to rely on antibiotic treatments. Preconditioning just helps everyone use fewer resources."

Rethorst also sees benefits from deworming at preconditioning. "We tend to think of deworming just from a gain standpoint, but when we deworm we help the calf increase the serum protein and the immune system works better. Every little bit helps when we're working to build up that immune system."

Good genetics and quality reputation are no longer enough to bring top dollar at the local auction or anywhere for that matter.

Cattle buyers—whether they are backgrounders or feedlots—are demanding preconditioned calves, and they're speaking loudly with their bids.

From the special section: Drovers Insight. This is a bonus section published periodically to provide additional information to cattlemen about issues important for the production of healthy, wholesome beef.