Farm Business Management Update, June 1998
By Henry S. Snodgrass III of the Department of Agricultural and Applied Economics, Virginia Tech
Hopefully, you had a marketing plan in place when you purchased the stockers you have grazing right now. Now is the time to start thinking about a marketing plan if you have not already done so.
As you move through the summer, a lot of factors will come into play, which will affect the pricing of your cattle. The quantity and quality of grass you have can be a deciding factor. The outlook for corn prices will impact the price cattle feeders will be willing to pay for cattle. In certain years, the cattle cycle will have a definite impact on the market place. When you sell will have an impact on price. These are a few of the many things which come together to influence the price you will receive for your cattle on market day.
Knowing in advance what price per pound and what gain you need for a positive net return on your calves is one step in the marketing process. The Extension Farm Business Management Agents have a computer template which can be used to arrive at the selling price needed to give you a positive net return based on your cash expenses and expected weight gain of the cattle.
Evaluating your marketing options for the cattle is another step. Do you have the numbers and type of cattle to direct market? If not, is marketing through a graded sale an option? Retaining ownership is another option for some producers.
With the information at hand, you are ready to look at your options and decide what marketing method is best suited for your situation. If you have decided you will be pleased with a $65 return per head above cash cost and you see an opportunity to get this return, you should consider taking it. Holding out for a high dollar can be an expensive guessing game.
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