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The Cattle Business - ROP Changes

Livestock Update, August 2001

Bill McKinnon, Extension Animal Scientist, Marketing, VA Tech

In September, the Virginia Retained Ownership Program begins its eighth year of sending Virginia cattle to commercial feed yards to provide feedback for their owners. There will be a change in the cooperating feed yard in 2001. This fall, the steers will be sent to Midwest Feeders at Maple Park, Illinois. The feedlot is located about 60 miles west of Chicago. Moving the ROP program to Midwest Feeders should significantly lower hauling costs.

There will be two ROP shipment dates in the fall of 2001. A shipment on September 27 should suit the needs of fall calving herds and stocker cattle operations. A later ROP shipment on November 28 might better suit the calendar of spring calving cowherds. Only steers will be fed in the Retained Ownership Program in 2001.

With the industry movements toward more cow/calf operators retaining ownership in their calves 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 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 will reweigh and ultrasound the steers at re-implant time. The cattle will be sorted at marketing in an attempt to optimize the marketing point of each steer. The cattle will be marketed on a carcass value grid

The "up front" expenses for participating producers include a $10 per head consignment fee. The consignment fee covers the costs of ROP ear tags, weighing the cattle at take-up, mailings, carcass data collection, etc. After shipment to the feed yard, consignors are sent a prorated bill for their portion of the hauling costs to Illinois. 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 program allows producers the opportunity to receive individual feedlot performance on their cattle such as average daily gain, finished weight, 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.

Recent closeout information on 66 steers shipped in September of 2000 is presented in the table below. The average steer in that shipment made $49.87 above opportunity costs as feeder cattle, feeding costs, transportation, and interest. Factoring out one steer that died during feeding, the average return was $59.07. Dividing the cattle into thirds based upon profit level provides some comparison between various economic and performance measures. One very atypical result was that the "High Profit 1/3" actually had a lower average daily gain than the "Low Profit 1/3."

VA ROP September 2000 Shipment

Measure Average High Profit Third Low Profit Third*
Profit $49.87 $129.49 -$11.93
Va. Shipped Weight 722 729 698
Va. Feeder $/Cwt. $84.02 $82.19 $87.03
Cost of Gain/ lb. $.457 $.450$.463
Avg. Daily Gain 3.65 3.21 3.83
Days on Feed 149 174 134
Finished Weight 1197 1223 1156
Carcass Weight 750 793 750
Carcass Price/Cwt. $126.87 $130.70 $126.92
*calculated by excluding the deads

Producers planning on consigning cattle to the ROP program should plan on weaning their cattle at least 30 days before shipment, conducting a complete vaccination program, and start the cattle on feed. Guidelines for a preshipment health program are available through the local Extension office. Consignment for the September 27 shipment should be made by September 15. For more information contact Bill McKinnon at Virginia Tech, 540/231-9160.

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