The Cattle Business - Retained Ownership Update

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Virginia wraps up its second year of the Retained Ownership Program sponsored by the Virginia Cattle Feeders Association. In September 1995, 134 steers were shipped to Iowa and marketed in March. Another set of 115 steers were shipped from Virginia in late November to Kansas to be finished. The Kansas fed cattle were shipped to the packer in early June.

Consignors to the program found that early 1996 was a terrible year to have cattle on feed, as did the rest of the cattle industry. Surging feedgrain prices coupled with, at times, record fed cattle supplies made for a cattle feeder's nightmare. Strong Virginia feeder cattle prices last fall as compared to the rest of the country made the economics of feeding Virginia feeder cattle worse.

The steers sent to the Van Meter Feedyard in Iowa averaged losing $53.72 per head with one dead included. Those steers averaged selling for $64.45/cwt. to the packer with a cost of gain of 65 cents per pound. The steers left Virginia on September 23 weighing 731 pounds with an average feeder cattle value of $62.91 per cwt. The on feed average daily gain of the group was 2.83 pounds per day including a 4% pencil shrink at sale time. The gain was impaired by the extreme cold weather in Iowa in late January and February. The average shrunk sale weight was 1210pounds with an average carcass weight of 741 pounds.

On the rail the set of Iowa steers graded 65% Choice with 1 Prime and no Standards. The average Yield Grade on the steers was 2.65 with just 4 of the carcasses mathematically slipping into the 4 category. The steers averaged just .35 inch back fat and had 12.2 square inches for an average ribeye size. Eight of the steers or 6% qualified for the "Industry Target Steer" award sponsored by the Virginia Cattle Feeders. Several other steers just barely missed the standards by either hundredths of a pound average daily gain, tenths of an square inch in ribeye area or just barely not grading Choice.

The steers sent to the Hitch II Feeders in Garden City, Kansas were shipped to Montfort packing on June 4 for $60 per cwt. With corn being almost $2 per bushel higher in 1996 over last year, feed cost ran at approximately 68 cents per pound of gain. The group of steers had an average daily gain on feed of 3.57 pounds. With a 4% pencil shrink, the steers left the lot averaging 1200 pounds. This lot of steers had the highest rate of gain on any group consigned in the two years of the R.O.P. program. At this writing the carcass data has not been returned but will be published at a later date.

Plans are to again ship a group of Virginia steers in September and late November as part of the program. Consignment forms and information will be available in late July. The program provides valuable feedback to Virginia producers on the type of cattle they are producing.