Understanding ‘value added’ terminology and it’s importance

The month of May is now history and we are already looking at the middle of June. Cattle prices have surprisingly been creeping forward for the past couple of months and there is some good money to be made in value added weaned calves. If we could get some price stability in the market where we are now, cow/calf producers could make an honest living. We’ll see.

You may have noticed in my previous paragraph I referred to these calves as “value added”. What does it mean for a regular calf to become value added? Is this something every producer has the option to do?

First off for those of you that follow the weekly cattle reports (of which there are many online) I’m sure you have noticed that value added calves always bring much more than regular calves of the same weight. It is not uncommon to see prices as much as 10-15 cents higher per pound. These calves are high priority to buyers and they will pay you MORE MONEY.

Value added calves for the most part, have been weaned, been given at least one round of vaccination shots, preferably dewormed, and backgrounded for at least 30 days. Value added calves are not weaned in the trailer going to the sale barn.

Although the vaccinations and deworming are considered a big plus to the buyers, the main issue to support the buyers paying more money for these calves is the fact they are weaned and have learned to be bunk broke for food and water on their own.

Remember when the kids finally left the roost on their own and started paying their own rent, bills, and feeding themselves? Managing the whole situation got a whole lot easier and more productive didn’t it! Not much different raising cows and calves, same principals.

As a cow/calf producer it is important to develop the facilities to be able to wean and background your calves for a short period of time. To be honest it is the final phase of raising calves that defines a true cow/calf producer in today’s market. It may be a long time before we see 2014 prices for lightweights again. To say that was a once in a lifetime oddity is a very true statement.

Economist’s and cattle market experts have a tendency to get too involved in market factors, cycles, and trends when predicting the future for cattle prices. The bottom line is there are more people being born and eating on this planet every day. Beef will always be a major food source for these people and the demand will never stop growing. Our job as producers is to keep the beef on the bun and in the plate. We will be paid accordingly if we are willing to do what the buyer wants.

Till next time, keep putting on the pounds!

Steve