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The Economic Viability of Preconditioning for Cow-Calf Producers¹

Iowa State University, Ames 50011

Abstract

A break-even analysis was used to determine whether preconditioning beef calves (i.e., weaning, vaccinating, treating for grubs, dehorning and castrating before sale as feeder calves) was a profitable practice for cow-calf producers. This paper used the results of a 2⁴ factorial experiment that measured the effects of creep feeding and the timing of weaning, vaccination and dehorning and castration on the weight gains of beef calves before and after sale to a feedlot. Break-even prices were estimated for preconditioned calves and calves not preconditioned, relative to calves in a control group, for cow-calf producers and cattle feeders. These break-even prices represented the required minimum sale price for cow-calf producers and the maximum affordable purchase price for cattle feeders that gave the same returns to cow-calf producers and cattle feeders as did animals in the control group. Preconditioned calves had higher required minimum sale prices of approximately $10/100 kg than calves not preconditioned. These larger break-even prices were due to the additional costs of weaning ($25.74/head to $58.00/head) the calves before sale to a feedlot. However, the feeder could afford to pay, on average, only $2.14/100 kg more for preconditioned calves in only 22 of 108 instances in a sensitivity analysis. Only for the preconditioned calves that were not creep fed could the feeder afford to pay a higher price. In general, preconditioning was not economically viable for cow-calf producers or producers retaining ownership through the feedlot. The cow-calf producer's required minimum sale price exceeded the maximum purchase price that the feeder could afford to pay for preconditioned calves by at least $10/100 kg.

¹ Journal Paper No. 11531 of the Iowa Agric. and Home Econ. Exp. Sta., Ames. Project No. 2369. Helpful comments from B. Wade Brorsen are gratefully acknowledged.

² Dept. of Agric. Econ., Purdue Univ., West Lafayette, IN.

³ Dept. of Anim. Sci.

⁴ Dept. of Econ.

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