As today’s beef producers enjoy the higher returns associated with the present segment of the beef cattle cycle, consideration should be given to methods by which the returns of raising beef cattle can be further extended. Many producers today may be able to strengthen their cash flow position by becoming either involved for the first time or simply further involved in the process of backgrounding beef cattle.
Data for this study was compiled through the Carrington Area Farm Business Management Program. The information was drawn from the total farm and enterprise data, collected during the years 1996 through 2005. A total of 17,654 calves were involved in the backgrounding records.
The enterprise data collected for backgrounding followed the normal production cycle. The enterprises were begun when the calves were weaned and concluded when the calves were sold and/or transferred out into a replacement heifer or finishing calf enterprise. The time frame was typically from about November of one year until approximately mid-February or early March of the following year.
While producers were encouraged to use sale or purchase weight slips whenever possible, it must be acknowledged that some producers did not weigh all calves when they were entered into the backgrounding enterprises and used estimated weights, based off of calves that were sold or transferred out. For calves that were kept and transferred into breeding or finishing enterprises at the conclusion of the backgrounding enterprise, weights were often based off the herd mate calves that were sold.
As shown in Table 1, the 10-year period average weaning weight was 541 pounds with the calves averaging 722 pounds at the conclusion of the backgrounding phase. This amounted to a total gain of 181 pounds per head with an average daily gain of 1.83 pounds. The average increase in value during the backgrounding phase was measured at $99.84 per head. With average costs, not including the value of the calf at weaning, of $78.84 an average net profit of $21.00 per head was generated. Feed consumption averaged 10.91 pounds per day with an average feed cost of $30.69 per hundred pounds of gain or $55.70 per head.
Two of the main concerns producers should address in backgrounding calves are feed conversion and marketing. Segregating calves based on sex and/or calf size is one way to enhance feed conversion. The use of futures and options by themselves or along with cash-forward contracting, are tools that are available to help producers take some of the price risk out of backgrounding calves. The feeding of healthy weaned calves is an enterprise that can be completed with a minimum of labor and overhead expense and in many cases can be contracted out to commercial feedlots. Backgrounding calves is an enterprise that may hold the promise of additional profits for today’s beef producers.