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Capturing value when you market at the sale barn

published: September 18th 2020
by: Martha Hollida Garrett

It is a topic that continually draws thought and discussion---how to get calves to bring more when you market them through your local sale barn.
    At the recent Texas A&M Beef Cattle Short Course, the topic was addressed by King Ranch Institute Professor Rick Machen, Ph.D. and Greg Goudeau, owner and operator of the Navasota Live-stock Auction, who also is involved in the cow-calf, stocker and feedlot sectors of the beef industry. Their program, held virtually due to the coronavirus, was delivered from the Nava-sota Livestock Auc-tion barn and featured live animals to demonstrate some aspects of the presentation.
    Goudeau said one real mistake he sees is overcrowding in the transportation phase.
    “One of the consistently wrong things we see is producers overcrowding trailers. You raise these calves, load them up to bring to market and then you overcrowd the trailers. Use your gates, partition the cattle. Make two trips. It’s easier to make two trips  than to have one calf (or more) arrive in an unmarketable or less than desirable market condition. Give your cattle room. You don’t want them hurt or covered with manure,” explained Goudeau.
    If an animal goes down in transit and cannot get up at the barn, then the animal has no value, Goudeau continued. They then have to be euthanized. Over-crowding is the cause in this scenario and the loss of a calf’s market value is big to your paycheck.
    He admonished producers to read the document they sign when they bring the cattle to the unloading area at the barns.
    “At my facility, you’re signing that the cattle have had the proper withdrawal times from any antibiotics administered. We also ask you to sign off that they have not been fed meat and bone meal and that they were born and raised in the United States. We also record the number of head you brought in, and by signing you are agreeing to that number,” he adds.
    He explained there are 13 cameras in use throughout the facility. Cameras are used at the unloading dock to record your face, your vehicle, vehicle license number and the cattle getting off the trailer. The cameras provide a way to track number of head and can monitor animal welfare methods. The footage is also used by the Texas & Southwestern Cattle Rais-ers Association to assist with theft issues. Even though the animals are also counted as they get off the trailer, if one loses a tag it could be separated and not accounted for. The footage easily allows the calf to be traced back to the owner, and clear up any other potential situations.
    “The market is dictated by supply and demand. I do not recommend marketing unweaned calves between Sept. 1 and Oct. 31. Histor-ically, the largest runs occur during this time. Surplus supply can drive the market down.  Also in Septem-ber, we start having temperature swings and that creates health problems. Buyers discount if they see or can sense health problems with calves,” he said.
    One of the most profitable things a cow-calf producer can do before selling calves is castrate all the bull calves.
    “Always castrate your calves before marketing them. I can’t stress this enough. It is worth your time and money.  If an animal weighs 400 lbs., you can figure a $4 to $8  per hundredweight discount on calves not castrated. If you have seven weights, that could be as much as $14 per hundredweight. Right now, a seven weight bull could be discounted $84. If you have 20 cows and they have 10 bull calves that you didn’t castrate then that’s $840 you’re leaving on the table by simply not castrating,” stressed Goudeau.
    Dehorning is also a practice that cowmen can use to increase the pay on their calves.
    Goudeau gave an example from the week’s previous sale. A group of 10 calves were brought in and six were polled, four were not. They split the groups on that criteria  and there was $7-$10 more paid for the polled calves. He said you can dehorn mechanically or have your veterinarian do it. Or the easiest way to dehorn, he said, is to use a polled bull.
    Machen cautioned that dehorning and castrating should be done well in advance, as buyers want to buy calves that have healed, completely. Freshly castrated or dehorned calves represent additional costs to the next level in terms of medicine and labor to doctor them. They are not willing to pay top price for calves with possible medical issues.
    He also encouraged producers to have their veterinarian castrate and dehorn the calves if they are not comfortable doing it themselves. He said it would still put more dollars in your pocket than leaving these two things undone for sale day. Goudeau suggested that cowmen who develop a strong relationship with their veterinarian and work in tandem to maintain complete health programs are better able to handle any health issues as they arise.
    Another area of discussion centered around hiring local professional cowboys.
    “These cowboys can gather your cattle, do total herd health programs for you, vaccinate per your instructions, and castrate and dehorn properly. Then when it comes time to market your calves, they can gather, pen and sort in short order, which is less stress on the calves you’re about to market,” Gou-deau said. 
    “Your local sale barn operator is a tremendous asset. They can assist you with finding professional cowboys and veterinarians. Ranchers should work to establish a relationship with their local sale barn operator. They have local knowledge, industry know-ledge and you should utilize that,” encouraged Machen.
    The program also touched on the types of calves buyers prefer to buy and the things they discount. Buyers have orders to fit certain specifications. These orders might specify muscling in black or black baldies, muscling in Charolais crosses with no pink noses, or red and red motley as the top priority. The factors for price include frame, muscling, uniformity, color, health and again, horns and whether the calves are castrated.
    Pink noses, lack of eye pigment and feathernecks  (stripe of white on top of the neck area of Hereford crossed cattle) are perceived in the industry as indicators of health issues. Goudeau said there is no scientific data that he knows of that backs that up, but it is a real perception and perception is reality.
    “Frame is important to buyers. Frame is an indicator of the pounds a calf will put on in the feedlot. Feedlot owners want the calves that have the larger frame, as they will put on additional pounds on the same amount of feed as those that don’t gain as much. Buyers pay attention to that. The term number one refers to an ideal frame size and muscle thickness. A short, medium frame calf will eat the same, but not put on the pounds  a large framed animal will and it brings less, because it won’t deliver as much at the next level,” explained Goudeau.
    Uniformity is important and one of the biggest negatives to that is color. Buyers have orders that specifically want black, red, smoky colored, etc.  One off-colored calf in a group can drive the price down as that one makes the others not fit the order.
    “Black hided cattle will usually out sell in terms of price, but your Charolais crosses will weigh more and pounds pay. So, I’m not going to tell you what breed to use as you have to determine what is best for you and your overall goals,” said Goudeau.
    “There are good cattle of all colors. Black hided cattle usually bring more, largely because of the great marketing efforts of Certified Angus Beef,” explained Goudeau, who also cautioned producers to be very careful about putting too much of any one breed in your program. Machen agreed, pointing out that the biggest value of crossbreeding is heterosis. Heterosis affects weights, health, performance and marketing, as a crossbred traditionally outsells a straightbred calf.
    The amount of Brah-man influence that buyers will accept was also discussed.     Goudeau said buyers become wary when the hump measures 3-4 inches. 
    “Again, perception is reality. The Brahman breed is perceived as one that doesn’t perform as well in the feed yards, doesn’t grade and isn’t as tender. There are cattle that do that in every breed and the Brahman crosses are often fighting that perception,” said Machen.
    Goudeau explained that a profound hump on the cattle requires it to be hand trimmed at the packer. It slows down the production line which is another reason buyers are hesitant on calves with a lot of Brahman characteristics.
    Another area that can add value is minimizing shrink. Goudeau recommended gathering your cattle early sale morning in a non-stressful and quick manner.
    “Load them in a non-stressful way and again, don’t overcrowd,” says Goudeau. “If one does become stressed, you could be better off keeping it home and bringing it another today to capture more value.”
    He also recommends calling your sale barn operator and telling him how many calves you’re bringing, so they can have a place ready for them as soon as they arrive and they can begin to eat and drink. At his barn they try to sell five to six head per minute. Most cattle sell with no additional information provided, but Gou-deau said he will announce vaccination protocols that have been followed if a seller tells him.
    Fall or spring calving can also be a factor, but again, it may be costlier for a producer to calve in the fall and have to feed nursing cows through the winter even though the calves may sell for more in the spring.
    “You have to figure out your inputs versus outputs and do what works for you,” said Goudeau.
    Machen added it is important to remember that the number one driver in the industry is reproductive efficiency—while you may select bulls that will add five pounds of weaning weight, if you don’t get a live calf on the ground it will not matter on sale day. One more calf (or raising that calf crop percentage number) will go a long way to adding to the money you capture on sale day.
    Machen pointed out the market is hardly ever static. The futures are changing, grain prices are changing and now the industry has been dealing with packing plants closures that have also played a huge role in prices. The market is sensitive to all positive and negative factors.
    Goudeau concluded,  “You’ve got to bring us something the market wants to get the top prices. I don’t want inferior animals, I work on commission and I want you to ideally, bring me calves that are dehorned, castrated, uniform and number ones—I can get you more money on those. I have the same costs regardless if they are the best or the worst calf of the day. But we take all kinds of calves and try to do our best for all customers.  We’re here to help our customers. We want we them to do the things at home that we can use to create value with and make the check they get have more value.”


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