Missouri Producer Says Decade
Of Data Backs Preconditioning
By David Bowser
Reprinted from Livestock Weekly
COLUMBIA, Mo. — Like most cattlemen, Mike John is concerned about adding value to a weaned calf through the marketing system.
John is director of MFA Health Track Operations in Huntsville, Mo., and is involved in the family's ranching operations.
He says the co-op's Health Track program is a VAC-45 program, a preconditioning program, and an age and source verification program.
"We've been at it for about 10 years," he says, "and have put almost 400,000 calves through it."
John says there's always been a debate about whether preconditioning programs pay for themselves.
"It depends upon what state you're in and what university does the research, in my opinion," he shrugs. "It depends upon what time of year most of the cattle are marketed."
John says he knows that sounds like a cop-out, but there are things to consider.
"I think seasonality is one of the primary issues," he says. "Based on the research that we've done in this part of the country, it seems to me like if you can market an 850-pound steer in the middle of August, that's about the best you can do."
There are a lot of reasons for that, he says.
"It has to do with the fed cattle market. It has to do with the supply of those kind of cattle at that time of year. It has to do with health issues. It has to do with pending weather problems. There are a lot of reasons why that happens."
In this part of the country, John says, making that decision is a difficult thing to do.
"That's not what the traditional cow-calf system creates in Missouri," he explains.
John says his market research indicates that when producers get into the fall and winter months, the spread between five and nine-weight cattle diminishes. That has been especially true, he says, in the last few years.
"Sometimes, it's almost to zero or maybe even a negative number," John says. "What that's telling me is that when you have a bumper corn crop and you have summer feed prices that tend to be lower in the fall, there's some real opportunities if that spread is narrow and you traditionally calve in February or March."
He says such a situation could be a great opportunity to add some value to those calves.
"Genetics is obviously a huge component," says John, who claims not to be an expert on the subject. "I'm not even going to go there other than to say that calves that grow well tend to precondition well and finish well in a feedyard."
Critical mass is an issue that John says the industry can't run away from.
"The average cowherd size in this part of the country is somewhere between 30 and 40 head," he says. "It might even be smaller than that."
That means the average producer does not have critical mass.
"Used to be that we'd think critical masses were truckloads."
He says there are differences of opinion on what a truckload is.
"When you look at a truckload of single-sex, single-phenotype, 150-pound weight range, it takes a lot of cows to get a 50,000-pound load of 550-pound calves," John points out. "It takes a LOT of cows to be a truckload, so critical mass is still an issue."
He notes that big groups of similar type cattle in the right kind of flesh and fill conditions will bring a premium at an auction sale.
"It's just a fact," John says. "We have to deal with that. As long as we understand that, we can move forward."
John says his group collects information on cattle in their preconditioning program. That information, he says, centers around health.
"We have tried to collect information on any animal that gets sick in our 45-day preconditioning period," John says. "I've got close to 300,000 calves in that database, and I can tell you that I can sort it by pharmaceuticals used for all those kinds of issues."
He says the health issues in his database range from .35 percent to five percent.
"The primary difference between the ends of that range," he continues, "is not which pharmaceutical products they use; it's the timing that they're given."
The lower end of the range represents a round of vaccines given that includes modified live four or five-way pre-weaning vaccines, he notes.
"Beyond a shadow of a doubt, if you sort for processes and opportunities, the pharmaceutical representatives could do a much better job explaining to you why that happens."
He says cattlemen know that when they give a vaccination, the lower the level of stress, the higher the level of immunity.
"When you give pre-weaning rounds of vaccinations, you can limit stress and increase your opportunity to build immunity."
He says that when he first started with this health program 10 years ago, he spent a lot of time at auction markets visiting with cattle buyers and discussing the value of the program.
What they were looking for 10 years ago is different from today, John adds.
"I would contend that thin and fleshy both have negative connotations in a lot of markets, and a lot of buyers say today that they're all trying to target weaned calves. They want that moderate conditioned calf that buyers have a pretty good idea isn't going to get sick and has been on an average plane of nutrition and is not stressed."
John says he sees terrific performance in feedyards based on certain genetic types after the cattle have been through a preconditioning process.
He emphasizes the shrink and weight gain in a preconditioning program.
"You can go find reams of data that have studied shrink and followed calves and preconditioned calves. The levels of shrink in those two categories are vastly different."
He says it only takes a comparison at an auction barn where both types of cattle are being sold.
"The bawling calves are standing there for six or eight hours before they sell," he explains. "The preconditioned calves are standing there for six or eight hours before they sell, and it's pretty easy to tell which ones are going to shrink more."
John says the first time they had a significant number of calves in his program at an auction sale, they had six or seven thousand head of cattle at the sale barn.
"It was the strangest thing I have ever witnessed in my life, because there was not a sound in that barn," he says. "They were making no noise."
John says that was significantly different from what he was used to seeing with regular cattle.
"You take an extra five percent shrink, 25 pounds on a 500-pound calf, that's over $30 a head," John points out. "There are very few things you can do in a marketing system in your livestock operation that are going to garner you a $30 a head return."
He says ranchers have to add weight to get that return.
"You've got to make certain that you add the proper weight at the right time of year. You've got to look at your market and see what time of year you're going to sell at what the market is."
That’s different everywhere, he points out.
"It's different on everybody's operation."
He goes on to say that if the cattle aren't gaining weight efficiently, they won't pay for the preconditioning process.
John says the company he works for has long practiced these principles.
"We give two rounds of vaccinations before weaning, and we have absolutely no trouble, and we push those calves pretty fast."
Those cattle are killed at an early age.
"The performance in the feedyard is still exceptional. I can speak to that from personal experience."
The question is whether the buyers of these calves are going to share information with the producer.
"There are some feeders who feel that if they're going to take 100 percent ownership of the cattle, they're not sharing anything with anybody," John notes. "There are other feeders who would be more than willing to share the information as long as they were able to deal with it and whatever their marketing quantity is."
In some instances, it's simply a matter of numbers.
"What we have found out is that if you have 25 traceable calves in a pen of 225, and they market the entire pen, the reason they're not getting carcass data back is not that they don't want us to have it; they're not going to jump through the hoops that it take to track those 25 head out of that entire herd."
John says his advice in that process is for those who are interested in getting carcass information back to make arrangements for it when the calves are being marketed.
"Honestly, that's very difficult to do if those cattle are marketed through an auction market, because they may not all go to the same place. They may go to different parts of the country."
Those cattle may go to different feedyards or different packers that have different philosophies concerning the sharing of information.
"If that is one of your criteria," John advises, "and something you're very, very interested in, you have to market directly or you have to take some role in making that sale."
He says his company has the vaccination records, health records, weaning records, birth records, and RFID tags.
"It's extremely easy to share that information, but that doesn't mean all those calves end up in some critical mass format somewhere where that exchange of information is easy."
As with many programs, John's program comes down to management versus genetics.
"In our system," John says, "the vast majority of economic return is the management."
In any one marketing venue, he explains, there can be four or five times more variation in genetics, flesh, fill, frame and phenotype in any group of calves than there will ever be in a premium for age and source verification or programs like VAC 45.
Those things make much more difference in the value of calves, John says, than whether it has a program date.
"You might think that's a strange statement coming from a guy who depends upon those programs," he says, "but we have collected complete data downloads from many different sale venues, many different environments, and compared them with non-age and source and non-VAC 45 cattle during the same week and the same location."
He says that with the exception of specific market anomalies, there is somewhere between a $5 and $14 per hundredweight advantage for cattle in their program over other cattle.
The key, John contends, is putting cost-efficient gain on cattle.
"It's much less stressful to wean them at the range of origin; you get much better levels of immunity in that environment. You eliminate the need for antibiotics. It is just a much better environment to get calves weaned and get them prepared for the next step."
John says backgrounders have known that for 50 years.
"They've been the most profitable segment of the cattle industry for at least 50 years," John points out, "and that's how they've done it. It's not rocket science."
He says the goals of the program are specific.
"The cowherd is shrinking," John explains. "Our goal as a farm supply cooperative is to keep as many cow-calf producers in business as possible."
Beyond that, he says, there is value to information and being able to track animals back to their origins.
"I don't see that particular effect going away."
He thinks there will continue to be value in origin verification of cattle.
"If that value stays there, that will be one of our tools to keep people in business and to continue to provide them with that opportunity to get in that process, to do a lot of that work for them. We have retail locations all over our market area in Missouri and the states surrounding Missouri."
He estimates that there are three to four million cows in their market area.
"In our supply system," John says, "a lot of our biggest customers are the current and traditional marketing systems. We continually get more interest from our producers who participate in more cooperative-type marketing ventures where this information moves both directions."
He doesn't see that trend slowing down or stopping.
"I can see more of an interest in a kind of cooperative marketing moving forward," John says.