Sell Calves in Groups for Higher Returns

Becky Mills, Contributing Editor

It's hard not to envy cattle operations that can market calves in uniform truckload lots. All you have to do is sit ringside in a sale barn and compare the prices your handful of steers brought with those sold by the semi-load.

Producers in southwest Virginia are envious no more. Cattlemen, even those with smaller herds, can get big herd prices. Their secret is the Abingdon Feeder Cattle Association (AFCA), which didn't stay secret for long. After selling 500 head in its first sale in 2005, the group is now topping 100 loads a year.

Lebanon, Virginia, cattleman Zac Ketron says the reason is simple. "People who don't have a load can get load lot prices."

The process starts on the farm. First, producers wean and precondition their calves according to Virginia Quality Assurance (VQA) guidelines. This includes at least a 45-day postweaning time, when calves complete a double round of respiratory vaccinations and clostridial vaccinations, and receive a radio-frequency identification (RFID) tag. They're dewormed and healed from castration and dehorning, if needed. The calves also learn to eat out of a feedbunk, drink from a trough and recover from the stress of leaving their mamas.

Two to three weeks before sale day, a Virginia Department of Agriculture and Consumer Services (VDACS) grader and a county agent go to the farm and get an estimate of the calves' weights and grades. Those calves are matched by computer with similar calves from other farms to form a truckload.

Russell County Extension agent Scott Jessee also videos the calves while on the farm then edits and uploads them to DVAuction, which puts them on its website and broadcasts the sale. The sale is held at Tri-State Livestock Market, in Abingdon, where a conference line is used to help connect buyers and sellers.

A week after the sale, producers bring their calves to Tri-State -- steers on Monday and heifers on Wednesday. Each calf is weighed, graded again, sorted into truckload lots and shipped. Each calf on a truck gets the same price per cwt. Buyers get a uniform truckload, often with only a 50- to 60-pound weight spread between calves.

GROUP HELPS PRODUCERS

Ketron sees this as a real plus. Even with tight 60-day fall and spring calving seasons, he notes, "There has been a year or two when my weights would have been enough, but my calves haven't been uniform enough for a load lot of their own."

If a producer's calves aren't ready to sell at the same time, AFCA has seven sales spread throughout January, March, July, August, September, November and December. "We have a lot of calving seasons, spring, fall -- and 365-day seasons," Jessee says.

Participation in the AFCA isn't a free ride by any means. If you've weaned calves on the farm, you know how quickly they can destroy a fence to get back to their mamas. Then there are the feed and vaccine costs. Abingdon producer Wayne Campbell figures he spends around $200 to $250 a head to precondition then graze them until sale time. That includes paying himself minimum wage, the expense of the health products and the cost of leased land. In return, his black baldy calves usually go from 450 to 550 pounds at weaning to 800 pounds at sale time.

Campbell likes the return on investment. Besides the increase in pounds from grazing the healthy calves, after almost 20 years of participating in AFCA, he estimates the per-head premium ranges from $20 per head to $100.

Jessee, who has been a leader in AFCA from the start, as well as a participant with his own calves, says the average premium for the last 20 years is closer to $105 per head. For expenses, he explains, "If they are preconditioned in confinement, it runs around $40 for hay and $45 for grain. The added weight gain during backgrounding helps to offset the feed expense. Grazing helps to cheapen it even more."

Sale fees are minimal, usually around $25 per head. Tri-State Livestock Auction charges $13.50 for commission, yardage and insurance, as well as clearing the transaction and loading the trucks. AFCA gets $5 per head, which includes advertising, the electronic tag and DVAuction expenses. The Virginia Cattlemen's Association (VCA) collects $4 per head, and VDACS receives $1.75 per head.

Besides the enticing economics, participants say there is a list of reasons the sales are successful. "We all work together," Campbell explains. That includes an alphabet soup of AFCA, VDACS, VCA, Tri-State Livestock Market and the Virginia Cooperative Extension service. "If it wasn't for Scott Jessee and Phil Blevins, the county agents in Russell and Washington counties, we wouldn't have a sales association," he emphasizes.

A LONG HISTORY

The group also has history in its favor. AFCA was formed in the 1960s when unweaned calves were sold under the group's name. VCA, with help from VDACS, also has its successful, long-running graded in-barn, board and Tel-O-Auction sales. AFCA sells under the "board sale" category. AFCA also uses VQA health guidelines, which were developed by the Extension service and VCA.

Jessee notes Tri-State Livestock Market is a key player with its many pens to help in the sorting process. Since they also handle the money, the sales are bonded.

In addition, the Abingdon group has quality in its corner. The VDACS grader is quick to pull out calves that don't fit. "I tell them I want them to hurt my feelings here on the farm not after I've hauled them to the sale barn. We want to sell the best," Campbell stresses.

In his case, his feelings usually stay intact. Out of his last 51 head, not one was turned down. If he does have a calf that doesn't make the grade, Campbell sells it at Tri-State's regular sale day on Fridays or takes it to a nearby buying point.

"To be a successful marketing group, the producers have to buy into it and stick with it," Jessee says. "Most producers have learned by now and know which animals work, but it doesn't happen overnight."

AFCA also helps boost the genetic quality of area commercial operations by holding a spring bull sale. The bull sale also gives its purebred members another marketing opportunity.

In Ketron's case, if he doesn't think his purebred artificially inseminated (AI) SimAngus and Angus calves are seedstock quality, they're castrated and sold as feeders. He says the AFCA sales also add value to the heifers he doesn't keep as replacements.

One of the few downsides as far as buyers are concerned is calves have to be commingled rather than coming from a single source. "We used to have some concern, but once the buyers tried them and were successful, there hasn't been much of a problem. Some of the cattle have even gone to Canada," Jessee explains.

Buyers are also protected by guarantees. Males are guaranteed to be steers, and a rebate is given if a stag slips by. The same goes for pregnant heifers.

"The buyers really like the cattle and wait for the Abingdon sale," says VCA field representative Butch Foster, who goes with the VDACS graders to participating farms. In addition, he serves as an auctioneer for the sales. He also has his own stocker operation and gives one of the best endorsements for the group.

"I try to buy some of the cattle, but they are so expensive I can't afford them," he quips.

**

FOR MORE INFORMATION:

-- Abingdon Feeder Cattle Association Sales and DVAuction: https://afca.dvauction.com/…

-- Virginia Cattlemen's Association, Virginia Quality Assurance Program: https://vacattlemen.org/…

-- Virginia Department of Agriculture And Consumer Services, Graded Feeder Cattle Sales: https://www.vdacs.virginia.gov/…

[PF_0824]

(c) Copyright 2024 DTN, LLC. All rights reserved.