Preconditioning Works Well,
But Payoff Can Prove Elusive

SAN ANGELO — Preconditioning cattle is not a new concept; it’s been around for many years. Considerable research data exists to prove that preconditioned calves have fewer health problems and a lower death loss in the stocker or feeder phase.

Just as evident in current data, however, is that the producer who foots the bill for preconditioning more often than not comes out on the short end of the stick.

The carrot that entices many producers to at least try a preconditioning program is the belief that their calves will bring more money. That is not always the case, as it turns out, and even when they do, the cost of preconditioning tends to exceed the premium received. The buyer gets the benefits and the seller gets a lot of experience.

That was the message presented by Amarillo-based Extension livestock specialist Dr. Ted McCollum at a recent West Texas Ranchers Conference here.

"If you’re preconditioning to try and add value to calves, you’d better put a pencil to it," McCollum advised listeners.

"You have to do more in the way of marketing than just haul them to the local auction barn. You’re going to have to hunt to find a buyer willing to pay you what they’re worth," he insisted.

Currently, producers who are not retaining ownership but rather sell their calves through the local auction are not likely to get paid for the added costs and value of preconditioned calves, he said. That means successful preconditioning not only involves vaccination and nutrition, but also a marketing program.

Preconditioning, McCollum pointed out, is different from backgrounding in the time that calves are retained at the ranch. In a preconditioning program, calves are generally weaned and retained for 30 to 45 days at most, whereas backgrounding programs retain calves for a much longer period to grow the cattle.

He reviewed an article printed in the September issue of Beef magazine which discussed a study developed by Colorado State University to compare the price difference of calves on various preconditioning programs. The calves used in the study were marketed through the Superior video auction from June to September 1995.

Calves that weren’t on any kind of preconditioning program averaged $64.20, McCollum said. Vaccinated calves brought an extra 70 cents a hundred, while those on the VAC 24 program paid $64.35, VAC 34 $65.55 and VAC 45 $66.67, for a $2.47 premium over calves not preconditioned.

"The question you have to ask is, ‘Can I vaccinate, feed and care for a five to six-weight calf for 45 days for $12.35-14.68 a head?’"

Current premiums for "preconditioned" calves range anywhere from nothing to $8 cwt., which would mean a 500 pound calf would net up to an additional $40 per head at delivery. The $8 maximum premium, McCollum said, is associated with some prearranged contractual agreements.

"I haven’t seen any videos and auctions where buyers will pay an $8 premium for preconditioned calves. A buyer might be willing to pay $2.47 cwt. extra because he’s getting something that’s probably worth $40 for $12.50."

Producers considering a preconditioning program need to ask themselves why they want to precondition. The primary purpose of preconditioning, McCollum said, is to improve the ability of calves to cope with stress by strengthening their immune system, and to get them adapted to a new environment so they can adapt socially without their mother by becoming part of the crowd, drinking water, coming to feed and eating from a bunk.

"With a preconditioning program, you’re not trying to adapt the calves to a feedyard concentrate diet and you’re not necessarily trying to achieve high rates of gain," McCollum told listeners. "If you’re going to retain ownership in the feedyard, it’s usually better to get them straightened out and then let the feedlot put the gain on them."

McCollum used current feed prices to estimate the basic costs associated with a 45-day preconditioning program. Interest at 10 percent to hold a 525 pound calf valued at $60 cwt. costs $3.88, he said, while labor and care at $2 per month for a month and a half comes to $3; the chute charge for running them through twice at $1 per head comes to $2; vaccines $5.10 and mineral supplement $2, for a grand total of about $16 a head.

He then penciled out several different preconditioning options showing the current cost of the program and the premium needed to break even.

The first option, which he termed "absurd," involved putting calves on full feed at a weaner/starter ration for 45 days. Figuring feed at $190 per ton — at the feedmill, not delivered to the — ranch adds up to a total feed cost of $59.85. "Miscellaneous" costs at $14 a head bring the total to $73.85.

Assuming a 525 pound calf gains two pounds per head per day during preconditioning, the payweight would be 615 pounds, making a breakeven sale price of $63.23 per cwt. However, the actual sale price, figuring a $4 cwt. premium, comes out to about $56.40 cwt.

"That means you need almost a $6.83 premium just to break even," he stressed. "This isn’t one we recommend. If you’ve done it before, you know it’s not the way to precondition calves."

Another option is providing a full-feed weaner/starter ration for 10 days and then haying and cubing for 35 days with 38 percent protein cubes at two pounds per head per day. That option, he noted, still requires a $6.64 premium to break even. The figure is based on a starter ration cost of $190 a ton and cubes at $260 per ton.

Doing away with the preconditioning ration and going strictly to hay and cubes for 45 days reduces the premium needed to break even to $5.79. That figure is based on feeding two pounds per head per day of 38 percent protein and assuming a pound a day gain.

Grazing and cubing, McCollum said, appears to be the best option because it requires a lower premium, about $3 to $4. That’s based on a pasture cost of $6 a month for a month and a half and two pounds of 38 percent protein cubes for a total feed cost of $20.70.

Though this option appears to be the most economical, he warned that a producer still has to search to find someone willing to pay a $4 premium.

A good nutrition program, McCollum added, also means providing a complete mineral supplement pre- and post-weaning. A complete supplement includes macro and trace minerals like calcium, phosphorus, copper, zinc, selenium and potassium in adequate amounts. Copper and zinc are generally the trace elements deficient in Texas. Though the deficiency may not impact performance of mature cows, it can compromise the immune system of calves, he noted.

A good rule of thumb, McCollum said, is to provide at least half of the daily trace mineral requirement with supplement delivered either free-choice or hand fed.

He also noted that supplemental Vitamin E is beneficial, but he said it’s more effective if incorporated into the feed rather than injected.

For the feed supplement he suggested minimizing the use of milled feed, using good quality forage, supplying adequate amounts of protein, and feeding in troughs. Antibiotics should be provided at a therapeutic level or not at all, as opposed to the practice of feeding subtherapeutic dosages.

Ranch to Rail data from the 1995-96 study showed that most consignors did not feed adequate levels of protein during the preconditioning period, McCollum said. Most used a low quality hay and fed three to four pounds per head per day of 12 to 14 percent crude protein supplement.

"Calves need 10 to 12 percent protein in their overall diet. If you’re putting five percent hay out and 12 percent protein cubes, that’s only about a six percent protein ration," he noted. "If you’re shorting them on protein, they can’t develop their immune system."

Some Ranch to Rail consignors also fed inadequate mineral. Copper, zinc and selenium, he said, are important for the immune system, and calves need to receive the proper amount of trace elements. Calves that had access to a complete mineral supplement preweaning had a lower pull rate in the feedlot.

He also noted that half of the consignors fed a medicated feed, but they weren’t feeding it at adequate levels to do any good.

In closing, McCollum stressed again to listeners that they need to remember the "rest of the story" when considering a preconditioning program.

It can pay and it does pay from a health standpoint, he said, but finding someone willing to pay enough for the benefits to cover the added costs is the real challenge.