Submitted to: Trade Journal Publication
Publication Type: Trade Journal
Publication Acceptance Date: September 30, 2008
Publication Date: December 1, 2008
Citation: Williams, C.B. 2008. Veal marketing could return more than traditional weaning. Bottom Line 10(4):4-5. Technical Abstract: How profitable is a system of marketing early-weaned calves for veal production versus a traditional system based on more traditional weaning and marketing feeder calves? In an attempt to answer this question, decision support software (Decision Evaluator for the Cattle Industry, DECI) developed at the U.S. Meat Animal Research Center (USMARC) near Clay Center, NE, was used to evaluate different breeding and calf weaning and marketing systems. The following three breeding systems were evaluated: 1. Straight breeding using purebred Angus cows and bulls. 2. Straight breeding using a composite breed of 50% Angus and 50% Limousin. 3. Crossbreeding using Angus cows and Limousin bulls. This system was run as a terminal sire system in which 40% of the Angus cows were bred to Angus bulls to generate female replacements for the cow herd and the remaining 60% of the Angus cows were bred to Limousin bulls. All calves sired by Limousin bulls were marketed. For each of the three breeding systems, the following three calf marketing systems were evaluated: 1. Normal Weaning Traditional: Male calves were castrated at birth and all calves were weaned at an average age of 210 days. Calves other than replacement heifers were marketed as feeder calves at $1.15 per lb live weight for steers and $1.03 per lb live weight for heifers. 2. Early Weaning Traditional: Male calves were castrated at birth and all calves were weaned at an average of 170 days of age. Calves other than replacement heifers were marketed as feeder calves at $1.20 per lb live weight for steers and $1.10 per lb live weight for heifers. 3. Early Weaning Veal: Male calves were not castrated, and all calves except replacement heifers were marketed in groups of 100 at approximately 150 to 170 days of age at live weights of approximately 425 to 500 lb. Calves were priced on a live weight basis at $1.30 per lb for both heifers and bulls, and estimated carcass weights were used to determine a premium of $50 per carcass for carcasses between 220 and 280 lb. A composite (50% Angus and 50% Limousin) herd of 600 cows was used in the composite straight breeding system, and a purebred herd of 600 Angus cows was used in the Angus straight breeding system and the crossbreeding terminal sire system with Limousin bulls. Average length of the breeding season was 75 days starting during the third week in May for heifers and the first week in June for cows. The replacement rate for all breeding systems was 20%. Each breeding system by calf marketing scenario was run for 10 years and at the end of each run, data were recorded on calf value, culled breeding stock value, and megacalories (Mcal) of metabolizeable energy (ME) consumed by the cow herd, bulls and calves on an annual basis. Profitability was determined for each breeding system by calf marketing combination in terms of income over feed costs and costs associated with traditional calf marketing systems. Income was the sum of revenue obtained from the sale of calves and culled breeding stock. Feed costs were calculated from the total Mcal of ME consumed, using a price of $0.03 per Mcal. Costs associated with traditional marketing of feeder calves (preconditioning shots ($8.00), castration ($2.00), dehorning ($2.50), implant ($1.25), and commission and trucking ($15.00)), were subtracted from the calf value for the traditional normal weaning and traditional early weaning systems. These costs do not apply to the veal production system. Least square means for number of calves sold, revenue, feed cost, and income over feed cost, annually, for each breeding by calf marketing system <p>Breeding System Marketing system/Item <p>Angus Composite Terminal Sire Traditional normal weaning Number of calves sold 441 444 442 Calf value $248,216 $262,379 264,079 Culled breeding stock value $ 91,209 $ 92,656 $ 91,303 Feed cost $220,269 $221,152 $221,428 Income over feed costs $119,157 $133,883 $133,954 Traditional early weaning Number of calves sold 445 441 443 Calf value $216,814 $228,025 $227,085 Culled breeding stock value$ 98,075 $ 96,632 $ 96,757 Feed cost $213,295 $213,849 $214,409 Income over feed costs $101,594 $110,807 $109,433 Veal Number of calves sold 442 438 439 Calf value $284,859 $295,388 $293,990 Culled breeding stock value$ 97,180 $ 94,031 $ 91,600 Feed cost $215,787 $215,748 $215,784 Income over feed costs $166,253 $173,671 $169,806 Feed cost was significantly lower for the early weaning and veal marketing systems compared to the traditional normal weaning system, but early weaning was significantly less profitable than normal weaning as shown by lower income over feed cost. This was mainly due to lower sale weights in the early weaning system, resulting in significantly lower calf value. In addition, no cost was charged to the normal weaning system for the extra days calves are managed and fed compared to the early weaning system. The sum of extra days each animal was kept in the normal weaning system was about 18,000 days, and the cost per day may be as high as $2.00. This cost would make the normal weaning system less profitable than the early weaning system. Marketing early-weaned calves for veal was significantly more profitable than normal or early weaning with traditional marketing of feeder calves. The composite and terminal sire breeding systems were significantly more profitable than the purebred Angus breeding system. This was mainly due to effects of heterosis in the two crossbreeding systems. On a per calf marketed basis and based on the prices used in this study, the veal marketing system showed a $95.00 and a $144.00 advantage over the traditional normal and early weaning marketing systems, respectively.