When getting into a venture such as backgrounding calves, producers need to look before they leap, advises Shane Dobson, an agricultural representative with Manitoba Agriculture.
Cow-calf producers were forced by market uncertainty in the past two years to think more about holding back calves on their farms.
Dobson cautioned that backgrounding calves is more complicated than people might think and there could be alternatives worth considering.
During Manitoba Ag Days in Brandon last week he offered a checklist of things for producers to consider before and during a backgrounding venture.
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“When you’re faced with making a tough decision É it really becomes slow down, analyze your situation and think through it.”
One of the main things to consider, said Dobson, are the resources available on the farm such as feed, bedding and water supplies.
That assessment should include not only the quantity of feed available but also the quality. As well, thought should be given to what kind of feeding program will be used to achieve the desired rate of gain during backgrounding, and whether that gain is realistic.
“It’s just not as easy as saying ‘I’ve got lots of feed, I’ve got these calves, I’m going to feed them.’ “
Before jumping into a backgrounding endeavour, review the handling equipment, pens and machinery that will be used. Do the facilities need repairs? Will more machinery be needed?
Think also about whether additional labour and expertise may be necessary to accommodate more animals on the farm.
“Those are all things you need to answer before you make decisions to keep calves, whether it’s fall or whether it’s now,” Dobson said.
“In my experience, I’ve seen people try to feed calves who don’t know what they’re doing. All it does is cost them money.”
Another thing to keep in mind is the farm’s finances. Consider how the delayed sale of calves and the increased costs of keeping them on the farm will affect cash flow.
“Is the operating loan limit high enough to cash flow feeding the calves? Does your equity position allow you to take that risk?”
On top of that, there are tax and marketing implications to think about, he said.
For example, what will be the farm’s tax position if it sells two calf crops in the same year instead of one? Is there any way to establish what the potential price will be at the time the backgrounded animals will go to market?
“Can the calves be marketed when required? Can you access the market when the calves are ready to sell? Do you have the quantity and quality of calves to get at least average market price?”
The producer needs to ask whether the farm can withstand a loss that might result from backgrounding calves. Another question is whether the risk is worth the profit hoped for, Dobson said.
A review of the merits and drawbacks of backgrounding calves might reveal better alternatives.
“Maybe some of these other options have to be thought about,” suggested Dobson, noting that if the farm has surplus feed, one alternative might be to board cows for other producers rather than background calves.
Deciding on a goal, establishing a plan to achieve it and then measuring the results are all important, he said. Within that is a need to keep accurate records to help gauge results.
“Did I make any money? That’s your results part of this.”
