High Stakes

The Preconditioning Conundrum

With calves bringing record-high prices right off the dam, some producers are asking, "What's the point of preconditioning?" (DTN/Progressive Farmer photo by Becky Mills)

It was April 17, and Georgia cattleman Stuart Griffin was scratching his head. "I just talked to a guy who got $1,100 for his calves at the stockyard. They were straight off the cow. I want to keep preconditioning. But what are we going to have to get to warrant holding these calves that much longer and taking that additional risk?"

Griffin still had 150 days before his calves would go to market. He figured he'd need to see $1,500 to justify the time and expense.

"It isn't that we're making that much more money preconditioning right now, we're just handling more money," he said. "There's not a whole lot more of that money sticking to us."

SET STANDARDS

Griffin isn't the only producer asking himself whether preconditioning is worth the effort. It's a hard decision, because it's more than dollars and cents for many in the cattle business. It's about pride and about staying committed to a system that has proven itself over time.

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For seven years, Griffin has been weaning his Angus-based calves at around 600 pounds and then preconditioning them for at least another 60 days before selling them in truckload lots. At that point, they will average 750 pounds. He estimates he puts the weight on them for around $1 per pound, grazing them on Tifton 85 bermudagrass and feeding them each day 10 pounds per head of sorghum silage top-dressed with soy hull pellets and corn gluten.

HEALTH FIRST

He's as adamant about keeping them healthy as he is about keeping them well-fed.

"If I can catch the calf when it's born, I'll go ahead and give it an intranasal vaccine," he said. He uses Inforce 3 against bovine respiratory syncytial virus (BRSV), infectious bovine rhinotracheitis (IBR) and Parainfluenza Type 3 (PI3).

In February, when fall-born calves are 3 to 5 months old, Griffin castrates and implants them, repeating the Inforce 3 vaccine. He also deworms and gives calves Bovi-Shield Gold 5 (modified live virus) to protect against IBR, PI3, BRSV, BVD (bovine viral diarrhea), leptospirosis and vibriosis. And he vaccinates against blackleg.

At weaning, the producer repeats the Bovi-Shield Gold 5, blackleg and deworming. He spends around $5 a head on his health program.

"You waste feed when you precondition if you don't have a healthy calf," he said. "Knock on wood, we hardly ever have any sickness. I would rather prevent it than cure it."

A TOUGH CALL

University of Tennessee ag economist Andrew Griffith agrees preconditioning is a hard decision now. But he sees it as insurance against a downturn.

He said for the past five years, the average price for preconditioned calves in his state has been $73 higher than the same type calves sold at a weekly auction. He isn't advising producers to blindly invest in calves without knowing if they'll see a return. He stressed those who do precondition need to make sure they have a marketing method that will return the extra dollars.

In Griffin's case, his calves are eligible to sell with the Southwest Georgia Feeder Cattle (SAFE) board sale. Here, preconditioned cattle in truckload lots generally bring $8 to $15 more per cwt compared to the same type and quality of calf sold one head at a time in a weekly auction. If Griffin chooses not to precondition this year, he said he can sell at the weekly board sale.

Economist Griffith added producers who precondition their own calves generally carry less risk than a stocker operator and hopefully see a better profit margin. He points out if a cow/calf producer only gets an extra $50 a head on a load of 800-pound steers, that's around $3,000 more for the load.

When producers have set a standard and market cattle the same way every year, the economist adds reputation comes into play. "If you don't precondition your calves and they get sick, the buyer may not want to pay as much next year. So there can be long-term implications."

(VM/CZ)

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