Cattle producers face backgrounding decision
Due to the high cost of feed prices and the wavering cattle market, cattle producers are deciding if backgrounding their cattle is the proper management decision for the herd this year.
With the cost of feed prices rising and the cattle market not being as dependable as it once was, cattle producers are faced with an important management decision: Should they background their calves?
Backgrounding is the time period between the weaning and finishing out period for calves. During the backgrounding phase, producers can keep a close eye on their livestock and see how their genetics perform on feed.
“Backgrounding is a time frame between weaning and finishing cattle. During this backgrounding phase we distinguish between stocker phase, which is where the cattle are grazed on grass during the winter time, in Texas or Oklahoma for example. Well here in the Northern Plains, all of our grasses turn brown, so we actually feed these cattle in the winter time, which allows us to identify different rates of gain,” explained Karl Hoppe, Area Extension Specialist for Livestock Systems at the North Dakota State University Carrington Research Extension Center.
This process has many benefits for the calves themselves. Specifically, the backgrounding phase helps with the calves’ herd immunity and initial weaning sickness.
“Backgrounding provides an opportunity for the calves to get over some post weaning sicknesses that can occur. It's kind of like when we send our kids to school, and a couple weeks into the school season, all the sudden everybody has a snotty nose, including mom and dad. Well, the kids share some viruses, bugs, bacteria and that type of thing. So, when the calves are in the backgrounding yards it provides us an opportunity to get those calves healthy. This will help them not run into health risks in the future,” Hoppe said.
However, due to the rising prices in feed, some cattle producers have decided to stray away from the backgrounding phase and sell their calves at weaning time.
“As feed prices go up, feeder calf prices usually go down and that is because the backgrounding and finishing production scenarios are all value-added businesses. So, when the cost of the animal input is higher, that means they have to pay less for the animal coming in sometimes,” Hoppe said.
However, the rising cost of feed prices is not the only contributing factor to the current state of the cattle market.
“There are a lot of things going on in the cattle market; corn cost is not the only thing to blame. Some of the other things that are impacting feeder cattle and may cause them to go down besides the corn is it is dry all over the western United States. Very dry. Therefore, there was an early movement of calves. Fed cattle prices have been struggling due to the COVID-19 pandemic and the lack of restaurant demand. But, since mid-October calf prices have sparked back up some and are on the increase,” said Tim Petry, Livestock Economist for NDSU Extension.
With the much needed rainfall received in the winter wheat belt, market prices were able to match what they were last year at this time — no small feat given all the obstacles the cattle market has had to overcome in 2020.
“It's kind of interesting at least in North Dakota, last week calf prices were the same as they were last year. Granted, producers were not happy with the prices last year, I suppose, but given COVID-19 and everything else going on, to have prices similar to last year’s may be better than what we expected in April or May, when we were in the height of COVID,” Petry said.
And while it may seem like an uphill battle, Petry is confident that the cattle market will make its way back to attractive prices.
“There are better times for cattle ahead,” Petry said.