The Backgrounding and Stocker Enterprises

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The Backgrounding and Stocker Enterprises

• AT 0614
• 10/11/04

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Consumer
Beef Industry Production/ Marketing Chain
Retailer
Packer
Feedlot
Backgrounder/ Stocker
Cow/calf
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Cattle Backgrounder or Stocker Operator

• Transition from bawling calf to feedlot ready
  cattle
• Health preparation
• Market forages and low cost feeds
• Repackage cattle -small groups to load lots

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Cattle BackgroundingWhat does it mean?

• Transition period
• 30 days to 9 months
• From bawling calf to feedlot ready cattle
• Vaccination and improve health history
• Feed and water trough train
• Repackaging of cattle
• Bought in small, dissimilar lots and repackaged
  into trailer load lots

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What does the backgroundermarket?

• Labor
• Facilities
• Management Ability
• Procurement
• Health management
• Marketing
• Feed

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Benefits to the Cattle Feeder of Backgrounded
Cattle

• Improved health performance
• Improved feed intake
• Improved feed conversion
• Lower cost of gain
• More even supply of feeder cattle

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Changes Ahead in Cattle Marketing

• Fewer calves sold off the teat
• More cow/calf operators in alliances and/or
  retaining ownership through feedlot
• Economic incentive for backgrounding
• Growth in custom backgrounding

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Making Short Term Backgrounding Pay

• 30 days is probably not long enough.
• Does not need fancy receiving feeds.
• Make the feed inexpensive but effective.
• Many of our cow/calf folks cant or shouldnt
  background their own calves.
• Is custom backgrounding, or a group of folks
  working together an option?
• Understand seasonal trends.

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Cattle Backgrounding and Critical Points for
Profit

• Purchase
• Price
• Quality and/or type
• Cost of gain
• Rate of gain
• Feed cost
• Marketing

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Dont whine or worry whether the buyers will pay
for weaned calves...

• Make the backgrounding program pay for itself

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The Stocker Cattle Enterprise
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Stocker Cattle meansGrazing Feeder Cattle

• Cool season grasses in Virginia
• Prairie grasses in Flint Hills of Kansas
• Winter wheat pasture in the Southern Plains
• Rye grass in the winter in the Southeast

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Factors influencing pasture weight gains

• Forage quality and quantity
• Flesh condition of the cattle
• Parasite control
• External
• Internal
• Implants
• Supplementation
• Minerals, energy, protein

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Stage of Forage Maturity vs. Stocker Gains
2.7
2.0
.72
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Effects of energy supplementation on stocker
cattle

• Increase ADG
• Increase feed intake
• May improve digestibility
• May reduce forage intake
• Increase stocking rate or density

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Adding grain to pasture cattle

• If grain source is high in starches and sugars
  (corn, barley,etc),
• Lowers rumen pH shift in fiber digesting
  bacteria
• Negative impact on forage intake and
  utilization
• Above .25 BW, expect reduced efficiency
• (ie. lt 1.5 lb. grain on 600 lb. cattle)

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Impact of increasing grain levelGrain
supplementation to steers grazing fescue

• Lbs. Of Corn ADG Gain Increase F/G
• 0 1.32 --- ---
• 1.4 1.75 .43 3.25
• 2.8 1.75 .43 6.50
• 4.2 2.00 .68 6.20
• Kentucky 1995

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Short Term Backgrounding TrialsSteeles Tavern
Oct. - Dec. 97 and 98

• Attempted to mimic farm conditions for spring
  calving cow herds
• Calves fed on the farm 42 days after weaning

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Treatments

• Hay grain
• Penned in barn and offered hay free
  choice(average quality 2nd cutting grass hay,
  12-13 CP) grain mix at 1 of body weight
• Pasture grain
• Grazed on aftermath pasture(mostly fescue) grain
  mix at 1 of body weight
• Pasture
• Grazed on aftermath pasture(mostly fescue)

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High energy supplements, but with low levels of
starch/sugars

• Energy from readily digestible fiber
• Corn gluten feed
• Soy hulls
• Brewers grains
• Wheat midds
• Distillers grains
• Citrus pulp

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Impact of type of energy supplement on steer gain
on stockpiled fescue

• Treatment Corn/SBM Soyhulls
• Initial weight 648 629
• Supp. Intake/Day 7 7
• ADG 1.4 1.8
• Kentucky

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Impact of type of energy supplement on heifer
gain on stockpiled fescue

• Corn Gluten
• Treatment None Corn Soyhulls
  Feed
• Initial weight 567 566 573
  573
• ADG .65 1.45 1.58 1.83
• Supp. Intake/Day 9 9 9
• Supp. F/G 11.25 9.68 7.63
• Kentucky

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Mineral programs for stocker cattleWhere are the
shortfalls

• Stocker Sample Cool Season
• Mineral Requirement Grass Mix Content
• Calcium .35 .37
• Phosphorus .20 .32
• Magnesium .10 .28
• Potassium .60 1.74
• Sodium ppm 700 66
• Sulfur ppm 1500 2470

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Mineral programs for stocker cattleWhere are the
shortfalls

• Stocker Sample Cool Season
• Mineral Requirement Grass Mix Content
• Zinc ppm 30 25
• Copper ppm 10 7
• Manganese ppm 20 67
• Iron ppm 50 125
• Selenium ppm .10 .15

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SWAREC (Glade Spring)Stocker Cattle Mineral Trial

• Complete commercial mineral
• vs.
• High selenium trace mineral salt

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• Mineral Selenium 90 TMS Complete
  Mineral
• Salt 95.0 - 98.5 17.0 - 19.0
• Calcium 0 14.5 - 16.5
• Phosphorus 0 7.0
• Magnesium 0 3.5
• Potassium 0 1.0
• Sulfur 0 2.0
• Copper, ppm 330 1050
• Iodine, ppm 70 70
• Cobalt, ppm 50 32
• Zinc, ppm 3500 3200
• Manganese, ppm 2000 3000
• Vitamin A,D,E 0 240,000
  20,000 200

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Complete Mineral vs. Hi Sel. TMSCattle
Performance, 132 days

• Complete Sel. 90
• Measure Mineral TM Salt
• ADG, 132 days 1.75 1.94
• Serum Ca, mg/dl 9.9 10.0
• Serum Mg, mg/dl 2.0 2.0
• Serum Cu, mg/dl 81.5 71.7
• Serum Zn, mg/dl 90.0 86.4
• Serum Phos, mg/dl 5.6 5.9
• Whole Blood Se ng/ml 157 171

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Complete Mineral vs. Hi Sel. TMSConsumption and
Costs, 132 days

• Complete Sel. 90
• Measure Mineral TM Salt
• Avg. Intake, Lb. .20 .12
• Avg. Intake, Oz. 3.3 1.9
• Total Lb/Head 27.0 15.5
• Cost/50 lb. 10.45 6.95
• Cost/Head 5.63 2.16
• Trial conducted May 16 - Sept. 25

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Stockers and Critical Profit Points

• Purchase
• Price
• Quality and condition
• Pounds gained
• Marketing

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Focusing on Pounds of Beef per Acre may get
you into trouble with stocker cattle
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The pounds of gain per head given up may not be
offset by the relatively minor reduction in per
head pasture costs
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Net Returns to 100 ac. Boundary Spring to
Fall Stocker Steers Ac. / Head/
Gain/ Lbs. Gain Added Net Income
Head Boundary Head Per Ac.
Cost/Ac. Per Boundary

• 1.5 66.7 300 200
  0 1109
• 1.5 66.7 325 217
  4 1463
• 1.0 100 325 325 4 3354
• 1.0 100 300 300 4 2223
• 1.0 100 275 275 4
  848
• .75 133.3 325 433
  12 4484
• .75 133.3 300 400
  12 2576
• .75 133.3 275 366 12
  744
• .75 133.3 250 333
  12 (623)
• Assumes 10 year(1989-98) average prices and VCE
  Farm Management costs

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With stocker cattle, certain costs must be
covered by the value of weight gains before any
return exists

• Reverse margin 17.50/cwt on 550 lb. 96.25
• Stocker interest 22.00
• Vet/medicine 15.00
• Salt/minerals 5.00
• Labor 4.20
• Marketing/hauling 13.00
• Other 6.00
• Death loss 5.00
• Subtotal 166.45
• Pasture 22 -27

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Because the backgrounding and stocker enterprises
are margin enterprises, the operators must be
aware of weight and seasonal price trends
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The value of increased feeder cattle weight gain
is not equal to

• The sale price per pound!

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Backgrounding and Stocker Cattle Measures of
Efficiency Profitability Benchmarks

• Average Daily Gain (ADG)
• Feed Conversion (FC)
• Feed Cost per Pound of Gain
• Interest Cost
• Total Costs Per Pound of Gain
• Breakeven Sale Price

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• Average Daily Gain (ADG)
• Pounds of gain / Days on feed
• Feed Conversion (FC)
• Feed consumed / Pounds of gain
• Feed Cost per Pound of Gain
• Total feed cost / Pounds of gain
• Interest Cost
• (Principal X Interest Rate)/365 X days borrowed

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• Total Cost per Pound of Gain
• Total costs of gain / Pounds of gain
• Breakeven Sale Price
• Total costs / sale weight