The Cattle Business -- Spring 1998 Retained Ownership Shipment

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The Cattle Business -- Spring Retained Ownership Shipment

Livestock Update, February 1998

Bill McKinnon, Animal and Poultry Sciences, Virginia Tech

There has been a lot of discussion these days about retained ownership, alliances and value based marketing. To the cow/calf operator who has always marketed his calves either directly off the teat or as backgrounded yearlings, the future can seem quite apprehensive. Most of the state's cow/calf producers are unaware of how their calves performance in the feedlot or on the rail or even how custom feeding arrangements operate.

The Virginia Retained Ownership Program (R.O.P.) offers our cow/calf operators the opportunity to gain feedback on the feedlot and carcass performance of their cattle while getting an up-close glimpse of the feeding and packing sectors. The program sponsored by the Virginia Cattle Feeders Association allows producers to consign as few as five steers to learn the basics of retaining ownership in calves. Individual consignor calves are commingled with other producers and shipped to a feedlot in Kansas where they steers are fed and marketed.

The Virginia R.O.P. program is in its fourth year of operation. In the fall of 1997 just over 200 steers were shipped to Decatur County Feedyard near Oblerin, Kansas as part of the program. Those cattle are currently in the process of being marketed now through May.

The Decatur County Feedyard was selected as the participating feedlot because of both their individual cattle sorting process and their participation in an alliance with Excel packing. Upon initial processing at Decatur, the steers are given an electronic identification, weighed, measured for hip height, and ultrasonically scanned. The information is utilized to project the marketing date for the cattle. As the cattle approach finished condition they are again weighed, scanned and sorted into smaller marketing groups. The factors of steer weight, back fat, cost of gain, and market conditions are utilized to sort the cattle into more uniform marketing lots with fewer discounted carcasses. The cattle are sold on a carcass grid as part of an alliance agreement with the Excel packing plant in Dodge City. Those cattle that have been sold through the alliance have averaged netting approximately $27 per head over the contemporary Kansas live cattle bid. Additionally, the packing plant provides back the carcass information.

The Virginia R.O.P. program will offer a spring shipment of cattle on March 25. The spring shipment is targeted to the cow/calf producer who has backgrounded his calves through the winter. Consignments including a $10 per head consignment fee are due by March 6. The $10 fee is used to offset the cost of tags, cattle weighing and other associated take-up costs. The balance is applied against the costs of feeding the cattle and data collection. Typically a month after the cattle are shipped to Kansas, consignors receive a prorated bill for trucking to Kansas. All other costs are financed and deducted from the sale of the cattle at slaughter. In addition to individual and group feedlot and carcass performance, consignors receive initial profit projections, copies of feed bills, profit/loss closeout information, interim performance reports, etc. Additionally, group tours of consignors to visit the feedlot and cattle near finishing time are organized. For additional information contact Bill McKinnon at Virginia Tech (540/231-9160) or Jim Johnson at the Virginia Cattlemen's Association (540/992-1009).

Go to Consignment Form.

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