Based on the current highs the market is experiencing, most would agree that all cattle are seeing premiums. Knowing markets change, it is critical to answer the question of how to keep your cattle at the top should conditions shift.
There are several practices that are proven to pay back. Ranchers often challenge me when it comes to performing any extra procedures or participating in programs that require fees, questioning how much they can expect on actual returns from the added investments.
The quite simple answer to that question is that it varies, depending on both the market and the buyers present at the sale.
Often, producers get caught up in the coffee-shop talk about who had the highest-priced calves. This community discourse, of course, has nothing to do with profit or even the average of all the calves sold that year, yet it remains a powerful tool for ranchers to use in their communities for bragging rights.
As a veterinarian, I continually educate owners and operators on the importance of properly conditioning calves on the ranch prior to moving them to the feedlot.
The key is to not only complete the vaccinations and procedures, but also to advertise to potential buyers that protocol was followed and documented properly.
Recently, I had a discussion with a cattle buyer who stated that if he did not have documentation of the shots given, he would consider the animals unvaccinated entirely. Documentation is key – record what was given and when.
Age and source verification is one of the easiest marketing tools available to owners, enabling them to secure premium prices.
With export markets increasing, selling verified calves has a high probability of a premium. Based on current figures, it is expected that the U.S. will export more beef than it imported in 2011 and, depending on the value of the dollar, this trend is expected to continue.
There are several verification programs offered by numerous companies to capture specific markets like the NHTC (No Hormone Treated Cattle) for the EU market that a producer can participate in.
The most common program is age and source verification from a PVP (Process Verified Program). This is a certified program from a company that has been approved by the USDA.
Unfortunately, there are currently no exact standards set by the USDA, resulting in differences between programs.
The key point to keep in mind is that, while there are subtle differences, they all have the potential of returning a nice premium in a market where exports are strong.
As a cattleman, I would study the program differences and work with the company that offers the most customer service and willingness to guide you through the entire process.
Most outfits offering the tests now have simple phone audits and questionnaires that bring the total cost to somewhere between $2 and $4 per head. Not all require electronic identification, but due to the ease of recording the animal without transcription errors, EIDs are becoming the norm.
Recently, there has been discussion with regard to the impact of PVPs on domestic cattle pricing should Japan opt to accept U.S. cattle under 30 months old versus their current standard of 20 months old and under.
Until this change happens, all discussion is speculative, but considering the returns that PVPs have had, I expect them to continue to return a margin of profit.
Knowing where to market your cattle to receive a premium for PVP programs carries a great deal of weight when it comes to getting top dollar.
If the buyers that are expressly concerned with PVP cattle are not present at your auction, chances are you will not recoup the costs invested with the program.
The video auctions that expose cattle to large numbers of buyers have proven to be the best source of premiums.
If you are involved in a private sale, make sure you understand that the buyer has an advantage if he is selling the PVP cattle to a packer paying a premium.
As a farmer or rancher, you should at least have a piece of that premium. I have talked with many ranchers that have sent calving records along with their calves or with a buyer when they were requested.
I advise them to complete the verification on the ranch so that you can receive the premium. There is an input cost to do this, but the return has been consistently positive.
Cattle prices continue to break records, yet cattlemen tell me that they are not as profitable as when calves were less expensive.
As a rancher, you need to take advantage of available programs that will improve profit margins. Marketing age and source calves through sources that pay premiums for these animals is a good decision.
The process of keeping records and having them validated by a third party is not difficult and should be a part of your management plan.
For more information, explore the USDA’s Grading, Certification and Verification website: www.ams.usda.gov 
