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Are increased weaning weights always added value?
Are you always trying to increase your weaning weights?
Have you computed the value of thosed added pounds?
The decision to include a management practice that adds weaning weight to calves should be based on two parts of the business equation. 1) What is the value of the added weaning weight gain achieved from the new management practice? 2) How much did I spend on the practice to produce the added weaning weight available for sale?
The Value of Added Gain!
A commonly misunderstood principle in the cattle business is that of "value of added gain." There is a natural tendency to believe that when the calf prices are good that any extra weight put on calves will also have a very high price. Likewise, many producers cut back on management techniques that would add weight to calves when cattle prices are low. However, there are some financial principles during cattle cycles that make us constantly re-evaluate the current value of added gain.
When calves are selling for good prices ($1.20 per pound or more), there is usually a sizeable "price slide" or reduced selling price for heavier calves. On the other hand, when cattle prices are depressed, the "price slide" often lessens or (in a few rare instances) disappears entirely.
Let's look at a couple of examples
Assume that on your ranch, average weaning weight without creep feed is about 525 pounds. Research data through the years gives us the information that typical improved gains from self-fed high energy creep feeds are about 50 to 60 pounds. Therefore the creep fed calves would wean at about 575 pounds.
With good cattle prices the 525 pound calf could bring about $124.83 per hundredweight or $655.36 total. The 575 pound, fleshier calf would bring about $4.46 less per hundred weight at $120.37 per hundredweight or $692.13 total. Therefore the extra 50 pounds returned an extra $36.77. Consequently the value of each added pound was actually worth 73.5 cents. The added gain is not going to be worth the selling price of over $1.20 per pound.
With lower calf prices the 525 pound calf would bring about $68.00 per hundred pounds or $357.00 dollars. With the less severe price slide, the heavier 575 pound calf would go for about $66.50 per hundred or $382.75. The extra 50 pounds is worth $25.75 and the value of each pound of added gain is 51.5 cents.
Many times the value of added gain is between 50 cents and 75 cents per pound. Something to keep in mind as you make management decisions that are aimed at increasing calf weaning weights.
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Are increased weaning weights always added value?