Health Influence on Calf Prices

Livestock Update, October 2000

Potential health of calves is one of the significant factors that buyers consider when making a decision about how much to pay when buying calves. Most buyers are willing to pay more for calves that have a greater potential for staying healthy than for calves that are at a high risk of developing disease.

Research backs up the wisdom in paying more for calves that are likely to stay healthy. Calves that are at a high risk for disease sustain higher death losses, have higher drug costs, require more labor for treatment and observation, make slower gains, have poorer feed efficiency and have lower quality grades at slaughter. Table 1 below compares the outcomes for calves that were part of the Texas Ranch to Rail program for 1999-2000 depending on whether they became sick or stayed healthy.

Table 1. Comparison of outcomes and costs for calves in the Texas Ranch to Rail program depending on health status.

Average In Weight of Sick Steers = 603 Lbs.
$148.92 ÷ 6.03 = $24.70/Cwt. Less as Feeders

The difference in net returns of $148.92 per head made calves that got sick worth $24.70 per hundredweight less than calves that stayed healthy. Of course, these losses are factored into cattle that move to feedlots. In the Ranch to Rail group about 15% of calves got sick. If the losses of sick calves are distributed over the whole group each calf's value would decrease by nearly $4 per hundredweight to pay for the differences in net return for sick calves.

Calf producers who take appropriate steps may be able to increase sale prices if they can give buyers assurance that calves will have less disease than the average. Following are some questions producers might ask themselves as they seek to recover these dollars:

• Are my calves marketed so that there is minimal exposure to other cattle?
• Have my calves had a good vaccination program?
• Are my calves marketed so that they arrive at their final destination in as short a time as possible?
• Are my calves marketed in as stress-free a manner as possible?
• Is there exposure to conditions that might damage their lungs (ammonia or exhaust fumes, for example) as they are marketed?
• Are my calves marketed in a way that keeps their identity so that buyers can reward me for my superior calves?
• Am I willing to special steps such as preweaning calves, bunk and water trough breaking them?
• Is my nutrition program such that calves are free from deficiencies that could make them more susceptible to disease?

Whether calf markets are high or low there will be a difference in profitability of calves that are less likely to get sick. As the beef cattle industry changes to a more efficient, more accountable industry, producers who take steps to make calves stay healthy should be rewarded for their efforts.