Selling cattle at a premium

Marketing group finds success, more profit
By Vicki Hyatt | Sep 03, 2014
Each calf sold through the Mountain Cattle Alliance is weighed before shipping so the owner can be accurately paid and the trailer can be filled with animals of uniform weights.

Cattle producers in Western North Carolina have found a way to get top dollar for their weaned calves, something that not only helps their bottom line, but boosts the overall economy, as well.

Traditionally in the South, many farmers weaned their calves and took them directly to the market. The stress from the abrupt change, along with the need to find a whole new way to get nourishment, meant that these calves traditionally didn’t do as well as others in feedlots that were eased into a new environment. It also meant farmers were paid less for the livestock.

“There was so much sickness, buyers didn’t want to pay as much for calves straight off the cows,” said Beecher Allison, the area livestock agent for the N.C. State University extension program in the 1980s and 1990s. He worked with farmers in 18 counties in Western North Carolina at the time to find other marketing options.

“Farmers had no idea about the cost of gain, or what kind of price they could get by preconditioning, so we began doing research,” he said. “We started by holding a preconditioning conference and brought feeders down here to talk to us.”

The feeders explained they were willing to pay more for calves that were vaccinated, and “backgrounded,” or fed grain until they weighed between 700 to 850 pounds, a weight considered to be feedlot ready.

As interest grew, about 18 producers decided to form the WNC Preconditioning Association and sold their calves as a group in 1992.

“The producers went to Ohio and Indiana to look at their calves in the feedlot, and it was very enlightening,” said Allison, who has retired from his state job and now farms in Transylvania County. “They had no idea what they would look like at 1,200 pounds.”

It was the success of this program that led to the formation of the Mountain Cattle Alliance, a 22-county marketing group formed by John Queen, owner of Southeast Livestock Exchange, LLC, and operator of the WNC Regional Livestock Market in Canton.

Lisa Shelton, manager of John Queen Farms, said producers that are part of the Alliance agree to follow strict guidelines. This includes agreeing to a minimum 45-day period between weaning and delivery, and administering a standard regimen of vaccinations that are needed anytime cattle from multiple herds are intermingled, such as happens in feedlots. The guidelines also proscribe minimum nutrition requirements.

“We’re looking for people who are willing to give up the old tradition and use a new, scrutinized program where we’re adding value,” Shelton said.

Queen and Shelton visit the farms where preconditioning is taking place, and even video the herd for prospective buyers.

Once the preconditioned calves have been weaned at least six weeks and reach a desirable shipping weight of about 700 pounds, they can be ready for marketing. Calves that aren’t large or medium framed can be turned away since what buyers want are uniform loads where animals will reach a finishing weight is a predictable amount of time.

“We create uniform lot loads by using as few animals of possible in different weight breaks,” Queen said of the semi-trailer loads that were put together for sale early last month. “If animals are too big or too little, they won’t finish with the rest of them. Ideally, you want the weight spread within the 100-pound range.”

The Alliance is already making a significant profit for those participating. For instance, the state average sale price for steers weighing 750 pounds was $1.80 a pound, but steers in that weight category fetched $2.23 cents a pound, or an extra $322 a head, if sold through the Alliance.

There are costs associated with the premium payment, however. Additional herd health costs run between $12 and $15  head, and then there is the cost of feed for an estimated 60 days or so. Even so, the effort pays off, said Allison, who now sells his calves through the Alliance.

In mid-August, producers in the Alliance delivered their calves to the WNC Regional Livestock Market, where animals were sorted to fill semi-loads. The magic number sought was 50,000 pounds, and Queen said it took between 55 and 100 head to fill the trailers, depending on the weight. The loaded animals had been pre-sold to cattle buyers in a video auction on July 8 and set for delivery to feedlots in the Midwest on Aug. 12.

“This is an extra $1.5 million to producers in the region,” Queen said of the Alliance marketing success. “The beauty of it is the money stays in the region, and that’s more money in the pockets of grocers, retailers and those in the automotive or service industries. Everything stays here at home.”