Source: Saskatchewan Agriculture and Food
Given that forage feed is abundant and that Canadian Wheat Board prices for barley are as low as they are these days, cattle producers should consider retaining their calves this fall to background and then feed to finish, according to Saskatchewan Agriculture and Food (SAF) Livestock Development Specialist Bill Kowalenko.
“It is an opportunity worth exploring, given the abundant supply of feed grains and forage. Plus, many producers are likely to have a few extra tons of low quality grain from last year still in the bin,” Kowalenko says.
Traditionally, the Saskatchewan cattle industry does not retain the majority of the calves produced each year beyond weaning. This has resulted in a significant loss of opportunity to capture the added value that backgrounding or finishing feeding these calves could bring to our economy, explains Kowalenko.
However, Kowalenko sees encouraging signs on the horizon. Fed cattle marketings show that there were 64.8 per cent more heifers and steers finished in Saskatchewan in 2004, compared to 2003. There were 306,850 steers and heifers finished in Saskatchewan in 2004, as opposed to 186,250 head in 2003.
“It just may be that we are seeing a trend to address the lack of finished cattle in Saskatchewan, which has resulted from many producers’ decisions to background their calves rather than selling them in the fall runs. Many in the beef industry are of the opinion that more cattle are being fed in small Saskatchewan feedlots and on farms in 2004 due to the situation that BSE created.”
Whatever option producers choose should be the result of careful situation analysis, believes Kowalenko.
“The decision to retain calves involves each individual farm enterprise estimating its costs of production and cash flow needs as a first step. These provide a reference point for the producer to find out when animals must be sold to meet payment schedules.”
The second step is gathering market information, by following market trends and getting some projected livestock prices, such as using seasonal pricing trends, to find out when market prices might better fit producers’ individual “trigger” prices.
“In addition to deciding to retain calves and figuring out at what stage they ought to be retained, producers need access to adequate feed supplies, should they look to doing their own feeding at home,” Kowalenko notes.
“If producers look at having the calves custom fed rather than doing it on-farm, shopping for a custom feeder to provide the feeding service would need to be researched and negotiated. The sooner this process is arranged the better, so that specific dates for weaning can be determined. This results in assurances that the calves will have somewhere to go when the time comes, rather than leaving decisions to the last minute.”
When deciding to retain calves at weaning or to market some or all of the calf crop, a detailed look at projected costs, returns, and cash flow requirements of the overall farming operation is advised.
If producers are considering the option to retain some or all of their calf crop, knowing when to market them after backgrounding or keeping them through to finished weight should be based on a study of the market and whatever the farm operation’s cash flow needs dictate.
Remember to stay away from unrealistic price return forecasts… and wishful thinking.
For more information, contact:
Bill Kowalenko
Livestock Development Specialist
Saskatchewan Agriculture and Food
(306) 867-5559
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