However, simply employing these traditional methods today no longer enables cow/calf producers to distinguish their calves as being higher-value compared to “commodity” or “plain” cattle.
In today’s weaned calf marketplace, there are a large number of opportunities to add value by making a calf crop unique.
Many options are self-imposed and self-verified (they are simply based on a producer’s word), while others require a third-party verification.
And some options relate to characteristics associated with a group of cattle (i.e. traits the animals possess), while others include background and historical information associated with them (e.g. documented performance). Some common options include:
- Source and age verified (SAV)
- Organic certified
- Naturally raised verification
- Non Hormone Treated Cattle (NHTC)
- Verified “green”
- Humane handling verified
- Weaned 30, 45 or 60-plus days
- Trained to bunks and waterers
- Vaccinated/preconditioned
- Breed-based
- Historical feedlot/carcass performance data
- Tested free of BVD PI calves
The USDA’s National Animal Health Monitoring System (NAHMS) surveyed over 2,000 cow-calf operations in 24 states to characterize on-farm and on-ranch management practices being utilized on beef cattle.
These 24 states contained 79.6 percent of all beef cows in the U.S. In that survey, the USDA asked producers about several management practices they employ to add value to their calf crops, including use of marketing channels, forward pricing and vaccination protocols, as well as sharing of calf crop health information with buyers.
About two-thirds of cow-calf operations did not use specific production practices to target a specific marketing channel (e.g. breed-influenced programs, age and source verification or certified organic; Figure1).
Among smaller producers (1 to 99 beef cows), the most common marketing channel target was the “breed-influenced” option (which was done by 12 to 16 percent of producers), for the purpose of accessing breed-associated branded beef product lines (e.g. Certified Angus Beef).
Among mid-sized (100 to 199 cows) and large operations (200 or more cows), 16 to 29 percent of producers focused on breed-influenced marketing channels, respectively, while 15 to 29 percent targeted age and source verification, respectively.
Less than 1 percent of producers indicated that they employed production practices to target the USDA certified organic marketing channel for their calves.
At a time in the beef industry when profitability is not assured, and nearly impossible to achieve for high-cost operators, it’s unclear why the majority of producers do not use production practices consistent with one of these value-adding options.
This occurs even while premiums of $5 to $20 (or more) per head, depending on market conditions, have been documented among cattle with age and source verification.
In addition to adding value through marketing channels, some cow-calf producers improve their profitability by reducing calf price risk in the marketplace, including using forward pricing for their calf crop.
This includes agreeing to sell calves well in advance of delivery after weaning, which can occur through livestock video auctions, online livestock auctions or simply via the private treaty sale of calves directly to an order buyer or feedyard.
Interestingly, based on this USDA survey, only about 1 of 28 cow-calf operations forward price their calves (Figure 2).
It should be noted that these producers also tend to be larger producers, and therefore calves they forward price represent almost 10 percent of the U.S. calf crop.
This is evidenced by the fact that 15 percent of large cow-calf operations forward price their calves (which represent 19 percent of the calf crop), compared to just 2 percent of small producers (representing only 2 percent of the calf crop forward priced).
Only 35 percent of cow-calf producers provide a buyer with information about their calf health program.
However, the amount of information cow-calf producers provide to buyers is highly dependent on size of operation (Figure 3). Only 28 percent of small producers (1 to 49 cows) provide buyers with calf health information, compared to 58 percent of mid-sized operators and nearly three-quarters (74 percent) of large operations.
Consistent with information sharing, more large producers sell their weaned calves to the same buyer year after year (Figure 3). Sixty percent of large producers tend to have repeat buyers for their calves, compared with just 27 to 37 percent of small operations (1 to 99 cows).
To clarify, it should be stated that producers with less than 200 cows (small and mid-sized operators) are rarely able to sell a truckload lot (i.e. 50,000 pounds of cattle, or about 100 calves that average 500 pounds) of calves of the same sex that are fairly uniform.
Lacking the ability to sell a truckload lot makes selling calves to the same buyer over time much more difficult, particularly if calves are sold through a livestock auction market.
Survey results indicated that slightly more than two-thirds (69 percent) of cow-calf producers used vaccinations on any of their cattle (Figure 4), but there are large differences by herd size. The vast majority (over 92 percent) of mid-sized and large operations use vaccinations on any beef cattle, while only 59 percent of the smallest producers (1 to 49 cows) use vaccinations.
In contrast, only 39 percent of all cow-calf producers vaccinate their calves for respiratory disease, which is thought to be the largest contributor to losses in feedyard performance and profit.
Only about one-quarter (26 percent) of the smallest operators vaccinated calves for respiratory disease, while 82 percent of large producers did so.
Even with the initiation of numerous value-adding opportunities in the U.S. beef industry over the past 10 to 15 years, most cow-calf producers have not taken advantage of these options.
However, even risk mitigation strategies, including the use of forward pricing and vaccinations against respiratory disease, which have been available for decades, are not used by the majority of producers, particularly small cow-calf operations.
Finally, more than half of mid-sized and large operators are providing health information on their calves and tending to sell their calves to repeat buyers, most likely due to the benefits of selling a truckload lot of calves. 
Jason K. Ahola
Associate Professor
Beef Management Systems
Colorado State University
Jason.Ahola@colostate.edu
