The beef cattle industry is experiencing record cattle and corn prices, uncertainty and volatility, which makes producers wonder if backgrounding calves is a viable option.

“I think the answer is very positive,” says North Dakota State University Extension Service livestock economist Tim Petry.

Corn prices and the weather are the two important factors that drive feeder cattle prices and the backgrounding potential, he adds.

Because of the volatility in feed costs, producers should check prices before buying the feeds they’ve always bought, according to Karl Hoppe, area Extension livestock specialist at NDSU’s Carrington Research Extension Center. Plus, producers have many more in-state feed options.

“A lot of coproducts are available now,” Hoppe says. “There are a lot of feed resources in the state.”

Coproducts are products developed during the production of another product, such as ethanol. Distillers grain is one of those coproducts. North Dakota’s five ethanol plants produce enough distillers grain to provide 19 pounds per cow per day for six months.

“While coproducts are available, demand is pushing prices for some coproducts, such as wheat midds, to be greater than corn,” Hoppe cautions.

Backgrounding does carry some risks: possible health issues and death losses, poor performance and falling markets. However, producers have ways to minimize those risks, says John Dhuyvetter, area Extension livestock specialist at NDSU’s North Central Research Extension Center near Minot.

“This year, the price discount for heifers is greater than normal,” he says. “This might be a good time to consider feeding heifers instead of steers.”

Producers also need to find ways to maximize the value of their calves. Carl Dahlen, NDSU Extension beef cattle specialist, recommends producers consider age and source verifying their calves and implementing a sound herd health program, which means making sure calves receive the correct vaccinations at the correct time.

“The North Dakota Department of Agriculture in Bismarck provides an age and source verification program - North Dakota Verified,” he says. “The North Dakota Beef Improvement Association provides CalfAid, another age and source verification program. Many other third-party verification programs are available across the nation.”

To learn more about backgrounding, go to http://www.ag.ndsu.edu/cattledocs to view the presentations from NDSU Extension’s recent “Backgrounding Cattle 2011: Costs, Prices and Possibilities” videoconference.

NDSU Agriculture Communication - Oct. 20, 2011