Benefits of Preconditioning Beef Calves Compared to the Traditional Marketing Practice

Preconditioning is a management practice used by beef farmers on the farm for enhancing health and nutrition of beef calves. It has the potential to bring higher economic returns for cow-calf producers from feeder calves if preconditioning is cost-effective. The objective of this study was to find out the price differences between traditional marketing and value added marketing (preconditioning or board sales) of beef calves in the state of Alabama from 2012-2016. The sales data were collected from the USDA-AMS (Agricultural Marketing Service) field office at Montgomery, Alabama, for both traditional marketing (auctions) and value added marketing (board sales). There were 21 locations for traditional marketing while board sales data were collected from 3 locations. Of the total calf sales, only 23% calves were sold through board sales. Sales data were collected from 585 lots representing 118,125 head of calves sold between January 2012 and December of 2016 at different auctions and board sales. The data consisted of auction types, gender, muscle scores and average weight (range: 250-386 kg), however, the breeds of feeder calves were not considered. Data were analyzed using the general linear model procedures of SAS (SAS Inst., Cary, NC) to determine the price difference associated with sales type including all variables listed above. However, the economic values of preconditioning were not determined. The results showed that beef calf prices differed significantly (p<0.05) between market types (auction vs. board sales), years, gender, muscle scores and average weights. The overall yearly price averages were $2.64, $3.00, $4.62, $4.51 and $2.75 kg of live weight for years 2012, 2013, 2014, 2015 and 2016, respectively. When values for market types (auction and board sales) were combined, the average prices for Muscle Scores (MS) were $3.58, 3.67, 3.47 and 3.29 kg for MS 1, MS 1 and 2 combined, MS 2 and MS 3, respectively. The year 2014 was the best year for beef calf prices in Alabama regardless of auction types. The results of this study suggest that there are price differences between the traditional marketing and board sales (preconditioning) of calves. However, the net profits due to marketing strategies needs to be investigated further to demonstrate the economic benefits of preconditioning calves, especially to small producers.