Calf prices seem to be in a freefall here lately. If we look at what CattleFax has for their summary of five and six-weight calves this week compared to last year, we see a fifty dollar per CWT decline, with 15 dollars in the last week. Certainly the market is adjusting to all the red ink in the feeding industry.
As profitability in the cow-calf sector declines, it is only human nature to make changes in purchasing decisions. The purchase of supplements, equipment and genetics may all be re-evaluated in the next year. Unfortunately, some of these decisions would be more akin to gambling on an outcome, versus scrutinizing an investment. I’m not here to argue that you should not put off the purchase of a new tractor or baler until next year. But, I would point out that your herd’s requirement for nutrition does not change with the calf market. It will however, change with the level of stress they are subjected to, like the weather at weaning, and who can predict that? Nutritional deficiencies and sickness will make your herd even less efficient at converting your pasture and forages to saleable pounds regardless of the calf sale price. The magnitude of returns on a supplement will certainly change with calf prices. But even with $2 calves, there is still a large amount of profitability in the cow-calf business.
Many of you are nearing weaning time, and using CRYSTALYX® Brigade® in your weaning pens still makes cents. We do know from trials, demonstrations and customer testimonials, that using Brigade® will decrease calf mortality and morbidity (calves treated and re-treated). It will also increase feed intake and feed efficiency. If you wean 300 calves and you use Brigade® for the first 28 days of weaning (@ ¼ lb./hd/d), and it saves you just one $1,200 calf, you have about broke even. More than likely, you may have saved 2 or 3 calves, which would double or triple your investment in a month. Those are still big numbers, and big returns. When you look at the impact of Brigade® across the entire 300 calves, fewer calves to treat, and increased feed intake and feed efficiency will add significantly to the return on your investment, even when calves are under $2 a pound.
Cattlemen, Farmers and Ranchers are some of the biggest gamblers in the country. I do not believe that is necessarily by choice. Hedging commodities can often times be used to remove some of that risk. Brigade® is like a hedge on sick calves. We know that Brigade® works when calves get sick, and its return is proportional to how sick the calves get. Many times the weather is a contributing factor for sick calves at weaning time. “If” you feel you can wean calves without any stress or sickness, you may not need Brigade®. But why gamble, hedge your calves with Brigade®.