We are big believers in retained ownership, assuming you have the right cattle, handled in the right way for the right target. In our case, our target is high-quality beef, specifically the CAB market. To find out what qualifies for CAB, read more here.
2007 certainly had it's challenges. Calf prices (opportunity cost) were very high, the corn market went WILD and the weather was pretty bad, although not as bad as out in W. KS and E. CO. However, we felt like we'd done absolutely everything right for our cattle which allowed them to express more of their genetic potential. They were Sandhills System calved, early weaned, fenceline weaned (low stress), properly vaccinated, non-PI exposed, non-aggressively implanted, provided with plenty of calories during critical marbling deposition phases, gently handled and fed a diet conducive to marbling deposition. The cattle paid us back in spades, gaining 3.8 lbs/day during the finishing phase to process at an average of 1260 lbs at 14 months of age with 55% of those cattle qualifying for Certified Angus Beef or USDA Prime. In addition, when all the premiums were counted, the cattle earned $122.26 per head MORE than the average live price during the same time frame. We had 139 spring steers in this group which equals a $17,000 premium on one pen of cattle. I don't care what your parameters are, $17,000 is a significant difference.
What's even more interesting to note, besides the premiums is the fact that even with the very high fall calf market and the exploding grain market, we were significantly better off having retained ownership. For our final evaluations of these calves, we used the following numbers with deads in (one dead, one pulled for personal use):
| In weight (August 30, 2006) | 480 lbs |
| Value of calf 8/30, $/lb | $1.38 |
| Value of calf 8/30, total $$$ | $661.02 |
| Opportunity cost of calf | $30.85 |
| Feed & vet costs (growing & finishing phases) | $338.55 |
| Value of finished animal | $1287.73 |
| Net return per head over selling 8/30 @ $1.38 | $257.31 |
Another way to look at the numbers above is that we would have to have been paid $1.91/lb for those 480 lb calves on August 30, 2006 to have come out with the same bottom line. Now, I'm not going to say that we'll never lose money retaining ownership. We have and we will again. However, by stacking the deck in our favor with all of those factors mentioned above then having the right marketing outlet, we can certainly weight the odds significantly in our favor.
If what we've done piques your interest, please contact us. We love to help our customers get started with as few as 5 head to see if retained ownership is right for them! We'd love to help you too.