Back in 2005, the Abingdon, Virginia, area already had an established feeder cattle association, and “producers were dealing with the dissolution of the federal tobacco program and looking for ways to supplement or generate additional income,” according to Scott Jessee of Virginia Cooperative Extension.
A similar situation is unfolding in central New York where dairy, once the No. 1 industry, has gone by the wayside.
Eight central New York counties — Oneida, Herkimer, Montgomery, Schoharie, Delaware, Chenango, Madison and Otsego — are included in a newly formed feeder cattle pool, spear-headed by Cornell Cooperative Extension.
Many of those farms were former dairy operations that have shifted into beef.
“A lot of that cattle is dairy beef mixed genetics with herd sizes of 50 to 75 head,” said Bill Gibson, Extension agent in Schoharie and Otsego counties.
Last year, when the group first met, some 50 producers were interested in pooling. A year later, only 10 have committed.
“It’s a challenge for sure, but we’ve got a significant program started here,” said Gibson, who is working closely with those 10 producers as part of a quality assurance program that will help them market their cattle this fall.
Mike Baker, Cornell Extension beef specialist, said he understands why there is resistance on the part of producers to particpate in a quality performance pool.
“Market options for feeder cattle in New York have been limited. This is due, in part, because there are not a lot of beef cows in the state, therefore not many buyers for feeder cattle,” Baker said. “As such, prices have been lower when compared to neighboring states with larger cattle numbers. To survive, beef producers have developed their own market channels. Changing to something totally different where they don’t feel that (they) have as much control is a risky endeavor.”
Still, people interested in creating a more robust beef market in New York have looked to the South, mainly Virginia, for some inspiration. Feeder cattle pools are nothing new in Virginia.
“Many of the producers participating in the Virginia Quality Assurance program were accustomed to working together to market state-graded, unweaned feeder calves. Weaning is the greatest change,” Scott said.
Virginia Cooperative Extension has worked with producers on best management practices for weaning, rations and health management with the objective of improving the producers’ bottom line.
“The Abingdon Feeder Cattle Association began the VQA sales in the fall of 2005. Since then, the group has marketed over 500 tractor trailer loads, 37,934 head, of preconditioned feeder calves and increased the gross revenues of the animals sold by $3.3 million compared to state-graded M&L #1 feeder cattle sold in Virginia in the same week,” Scott said.
The central New York group is focused on pooling 500-pound calves this fall for the stocker market and putting together another group of 800-pounders for buyers looking for cattle to finish.
“We won’t get to a pot load of graded feeders this year but lots of 20 or greater are a good start,” Gibson said. “We’ve gone from dairy to more beef, and it’s quite the evolution. The whole network and infrastructure is new to them.”
Cornell Cooperative Extension is gearing up a series of producer meetings on genetics, nutrition, artificial insemination and natural breeding as part of their quality assurance educational objectives.
“We’d like to see them tighten up the calving window a little more,” said Gibson, who pointed out that many producers are spring-calving but some are still spread out year-round. “Buyers want bigger backgrounded calves, but not everyone is ready to wean in October and we want to change that.”
Scott said he is encouraged by New York’s approach.
“I would encourage these producers to partner with their local Cooperative Extension, local and state cattlemen’s associations, and department of agriculture,” he said. “It takes a lot of effort to get everyone coordinated and working in the same direction. The logistics of vaccinating, evaluating, advertising, selling, delivering and loading is a monumental task. They are much more likely to be successful working together. Everyone has an important role in getting the most for the cattle at sale time.”
People involved with Virginia’s Quality Assurance Program recognized the issue of lower prices for small lots early on.
“It’s difficult to get premium on 10 to 20 calves of varying sizes and sexes. With the ups and downs of the commodity markets … it’s difficult to go head to head with an experienced order buyer and come out on top,” Scott said.
By pooling and sorting calves by grade, sex and health programs, buyers were more willing to offer a premium.
Tel-o-auction bidding has also become popular in Virginia, a method many producers in New York have likely never heard of or taken part in.
At least 9,000 head of Virginia Quality Assurance feeder cattle were sold via tel-o-auction last year.
“The August VQA sale realized a $110.79 per head premium when compared to the state graded medium and large # 1 unweaned cattle sold the same week,” Scott said.
Here is how it works:
If you had sat in on the Virginia tel-o-auction on Aug. 22 as an observer or bidder, you would have heard the lingo of the auctioneer selling the first few lots of 50 to 74 head of 540- to 640-pound steers or heifers, with an average weight of 590 pounds, that were weaned on pasture in flesh scores of 5’s and 4’s. Delivery dates were given with no price slide for shrink for an approximated 30-mile haul from producer to the sorting pen.
At the beginning of the Virginia sale, four buyers were consistently starting bids at $1.47 a pound with a closing bid of $1.64 a pound for the first lot of 83 steers; 65 grading L&M1 and 18 grading L&M2.
The next lot sold for $1.61 a pound for 74 head, mostly black, with 54 grading L&M1 and another 20 grading L&M2. Details on the sale can be found at http://vacattlemen.org/pdfuploads/517PDFA.pdf.
“The potential to have this volume and quality of sale on an annual basis in New York is there,” Baker said.
When asked of the potential volume of feeder cattle coming from these eight central New York counties, Baker said, “My scientific wild asses guess is 3,750 head.” He came up with that preliminary figure by reviewing the ag census data of 14,000 head of bred cows, then deducting 15 percent for calving mortality. Assuming a 50-50 ratio of bulls to heifers and retention of heifers at 20 percent, Baker said around 10,710 head of feeders are available a year from the central New York region.
But not all of them are what buyers would be willing to pay a premium for. He deducts freezer trade lots from the total and ones he calls “outs.”
“Those are the calves that are the wrong weight, too small frame, light muscled or not the breed type buyers are looking for,” he said.
To find out more about the Central New York Beef Producers upcoming tel-o-auction, call Cornell Cooperative Extension at 607-547-2536 to register to bid.