Retained Ownership

11/10/2014

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Cattle Newsletter - November/December 2014

Retained Ownership

There are many options when it comes to what to do with your calves in the fall, from marketing to backgrounding. Another viable option is retained ownership, whether on your own farm or at a feedlot.

It is currently very profitable to sell your calves at weaning. However, with the right management, it can be even more profitable to keep them and feed them out. When deciding what to do, you should first figure out approximately how much input you already have in the calf, including the costs of keeping its mother for the past year as well as any creep feed, etc. that went directly to the calf. Then it is time to look at your options.

The cost of inputs that have already been put into the calf up until weaning is the current breakeven, which the selling price must meet in order to not lose money on the calf. By adding in expected feed and labor costs for given periods of time, you can calculate the breakeven selling prices for keeping the calves however long you anticipate. Depending on your individual management and availability of feed and facilities, it may be best to only keep the calf for a couple of months, or it may turn out to be most profitable to feed them out all the way to slaughter weight.

Many feedlots offer the opportunity to feed your cattle at their facility while retaining ownership of your own cattle through the feedlot phase. The producer pays the feedyard for feed, yardage, health costs, and other inputs, depending on the feedyard. Then when the fattened calf is sold, the producer receives the check.

Beefbasis.com is a good starting point when you are looking for marketing data.The "best" option for what to do with your calves in the fall will vary by farm and by year. In order to be the most profitable from year to year, consider all of your options and pencil them out to figure out what will work the best for you.