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Beef Quality Corner: Retained Ownership Grows

Livestock Update, July 2000

Bill R. McKinnon, Extension Animal Scientist, Marketing, Virginia Tech

The trend toward cow/calf operators maintaining ownership in their cattle past weaning continues to grow across the country. A 1999 survey of Cattle Fax members running a total 585,000 cows indicated that 54% of the calves were retained through a grazing or backgrounding program. A total of 29% of the calves were retained through the finishing phase. This set of producers also maintained ownership of 11% of their calves on through the packer and processing phase. As evidence of the growing trend in owning calves longer, only 18% of CattleFax producers retained their calves through the feedlot in 1990.

The trend of retained ownership after weaning appears to also be taking hold among Virginia producers. More calves are being backgrounded, if even for a short time period. Local groups of Virginians are working together to ship loads of cattle to feed yards. A growing number of the state's producers are also participating in production/marketing alliances.

With the industry movements toward cow/calf operators having their calves finished and the increased importance of vertical alliances, more producers need information on how their cattle perform after weaning. The Virginia Retained Ownership Program was established to help producers learn more about custom cattle feeding and receive feedback on the feedlot and carcass performance of their cattle. The ROP program allows cattle producers to send as few as five head with other producers to learn how their cattle perform.

The ROP program commingles the calves of several producers into loads for shipment to Decatur County Feed Yard at Oberlin, Kansas, the cooperating feedlot. At the time calves are delivered to the take-up points in Virginia, the calves are individually weighed, a feeder cattle grade is given, and a current feeder cattle price assigned to each calf. Once the calves arrive at the feed yard, they are fed as one group. The feed yard utilizes ultrasound technology and computer software to market the cattle on an individual basis at their predicted optimal endpoint. The cattle are marketed on a carcass value grid as part of an alliance agreement between the feed yard and the packer. The feed yard also calculates an individual feed and processing bill on each steer or heifer.

The "up front" expenses for participating producers include a $5 per head consignment fee, which is half the cost of previous years. The consignment fee covers the costs of ROP ear tags, weighing the cattle at take-up, mailings, etc. After shipment to the feed yard, consignors are sent a prorated bill for their portion of the haul bill to Kansas. The feedlot costs are financed until the cattle are sold. At closeout time, the consignors receive the value of the carcasses produced minus the feedlot costs.

Participation in the programs allows producers the opportunity to receive individual feedlot performance on their cattle such as average daily gain, projected feed conversion, health performance, etc. Carcass data collected includes carcass weight, back fat thickness, ribeye area, and quality grade. Consignors also receive interim reports on the progress of the cattle.

The ROP program is open to both steers and heifers. It is suggested the cattle weigh at least 500 pounds and be weaned at least 30 days before shipment. To further reduce the incidence of sick cattle, they should be vaccinated with a 7-way clostridial product, IBR, BVD, PI3, BRSV, and Pasteurella. The vaccination program should be completed at least 10 day before shipment. It is also suggested that the cattle be feed bunk and water trough broke. A complete list of backgrounding guidelines is available through local Extension offices.

Two shipment dates for ROP cattle have been set for September 22 and November 29. Shipment points are located to accommodate the largest number of cattle consigned. For further information regarding the Virginia Retained Ownership Program contact Bill McKinnon, Extension Animal Scientist at Virginia Tech, (540) 231-9160.

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