For the benefit of calf producers, here follows a description of factors that calf-buyers (predominantly, but not exclusively, feeders) consider when purchasing calves. Calves that do not meet these criteria are by no means unmarketable, but the below aspects should be taken into account when considering what the market is prepared to pay for your calves. The principle buyers for weaner calves in South Africa are feeders, who finish calves in feedlots, and restockers or backgrounders, who run calves on veld or pasture to grow them out (either buying in light weaners to add weight onto and then sell on to feeders, or to finish off as veld-raised beef). Some feedlots manage their own backgrounding operations.
Recognised beef breed calves are desired by both feeders and backgrounders. Quality cross-bred beef calves are particularly sought-after due to the improved rate of growth that they offer as a result of heterosis (basterkrag). Most feedlots do not buy pure Nguni or Afrikaner calves due to their early-maturing type. Some feedlots will buy quality crossbred calves from Nguni or Afrikander cows put to beef breed bulls (e.g. Angus, Brangus, Charolais, Limousin etc.). A limited number of feedlots offer a market for pure Nguni calves, at a discounted price. Some buyers may discriminate against pure Indicus breed (Brahman) calves, as their large thoracic hump may negatively affect the hide value. Dairy and dairy-cross breed calves are avoided by almost all feedlots. Generally-speaking, the specific beef breed is not as important as the uniformity, frame type, depth of muscling and conformation that the parcel of calves presents. Remember that the variance within a breed is greater than the variance between the mean of breeds. All told, calves with a medium to large frame type, and displaying good muscling are desirable for beef production.
Male calves are proven to grow better than heifers. Heifers are usually earlier-maturing and may begin depositing fat before reaching optimum slaughter weight. A maximum 60/40 male/female ratio is thus desired. Parcels containing a higher proportion (> 40%) of female calves will almost always receive a discounted offer. It has been suggested that intact bull calves grow better in feedlots, but as they mature, their bullish behaviour (fighting, riding etc.) increases the risk of injury, bruising and hide damage, as well as damage to feedlot facilities. For this reason feedlots will usually prefer to buy castrated tollies rather than intact bull calves, though young intact males are not discriminated against. Backgrounders who buy in light weaners to grow out on veld or pasture will almost always prefer to buy castrated male animals, as it may take longer for these animals to finish for slaughter. A bullock calf has very little increase in testosterone production (compared to a castrated tollie) up until weaning (at about seven months of age), so the perceived “testosterone advantage” is minimal up to that point. The stress-effects of post-weaning castration would negate any possible advantage that could be gained. Bull calves should ideally be castrated before 3 months of age (or earlier, if possible).
Calves aged 7 – 10 months are preferred by feeders. Backgrounders who buy calves to run on pasture or veld prefer lighter (and often younger) calves. It is thus advisable to sell your calves no later than 10 -12 months in age (calculated from the middle of your calving season).
Feedlots rely on an efficient feed conversion ratio (FCR) from calves, in order to remain profitable. In other words, the calf that produces the most daily gain in mass for the least amount of feed intake, is the most profitable. Obviously, not all calves are equal in this respect, but most feeders will aim to grow 100 – 150 kg of mass onto a calf over 90 – 120 days, resulting in a live slaughter-ready calf of 380 – 400 kg delivering a carcass of 220 – 240 kg (60% dressing). In order to achieve this, an average daily gain (ADG) of 1.5 – 1.8 kg per day is required. As a calf’s body weight increases its’ conversion ratio decreases, and the ADG tapers off towards the end of the feeding process. The last kilograms gained before attaining slaughter weight are thus the most expensive, and for this reason it is less profitable to buy in and feed calves heavier than 280 kg. Calves weighing 180 – 280 kg are desirable for purchase by feedlots, with 220 – 240 kg being ideal. Light weaner calves weighing from 140 – 180 kg are sought after by backgrounders who run these on pasture or veld until they reach a mass desired by the feedlots, or grow out to slaughter weight.
Weaning “onto the truck” (in other words loading away un-weaned calves directly from their mothers) makes life much easier for producers, as they do not have to separate cows from calves and deal with the complication of cows and calves breaking through fences to get to each other. However, calf buyers would prefer to buy calves that are at least three weeks weaned and have thus recovered from their weaning shock.
Calves are preferred to come off extensive veld conditions, as those that have run under intensive conditions may carry a high parasite load. Most feedlots would rather not buy calves out of other feedlots due to this posing a higher biosecurity risk. Whilst it is expensive to do so, producers could consider providing a creep feed for calves. Creep-feeding of calves is not common practice is South Africa, but can improve re-conception in cows (due to a reduced burden in terms of producing milk for calves), and produce a heavier calf. Calves that are trained to feed from bunkers or troughs may adapt easier in a feedlot environment and could attract a premium from feedlot buyers. Suckling calves should not be given any creep feed before 50 days of age (ideally not before 90 days). Because a young calf’s rumen is not yet developed enough to digest large quantities of grains and roughage, a creep feed formulated with high levels of natural protein with a small grain and roughage component should be given.
Horns on calves can cause injury and bruising to other calves, and may make handling difficult. Polled or dehorned calves are thus preferred. Calves with horns longer than 10 cm (roughly the width of a man’s clenched fist) are undesirable. Calves should be de-horned before the age of 3 months (or earlier, if possible).
Incorrect branding of calves will damage the hide and reduce its value. Brands should be placed in such a way as to cause the least amount of damage to the hide (e.g. low on the rear leg, on or below the bottom or belly line). South African law requires that all calves older than 1 month of age must be marked, but it is only compulsory that cattle at 2-tooth or older age must be branded. Calves should thus be tattooed in the ear. Tattooing is the suggested method of marking weaner calves destined to be sold on to backgrounders or feedlots.
Calves should be immunised at 6 months of age against the following diseases: Anthrax Botulism Blackleg No buyer will accept a sickly, injured or deformed calf, or one that has had its growth stunted due to malnutrition. At the time of sale, calves should be healthy and in good condition, with a body condition score (BCS) of A1 or A2. Calves that are overfat (BCS A4/5/6) are also undesirable to buyers.
Have weaner calves to sell?
StockFair markets calves to most feedlots throughout South Africa Please contact one of the StockFair Livestock marketers to arrange a viewing and quotation.
There is a current shortage of livestock here in The Karoo. I believe that this is generally the case across the country, well certainly South of the Gariep it is. Slaughter prices on C2/3 mutton are at a near all-time high at R 64/kg cwt (carcass weight) for short-to-medium skins while Dorper skins and pelts are at R 62/kg cwt (prices peaked at R 69/R 67 during August 2018). A2/3 lamb prices have floundered from R 83-R 81/kg cwt in August, down to around R 77-R 75/kg cwt at the moment. This may put downward pressure on the mutton price. I don’t believe these prices are due to new-found disposable income in the consumer’s pocket, but rather due to a general scarcity of stock. Demand is low, but so is supply. Should we see a spike in production, prices may come under pressure but current weather patterns seem to make this an unlikely scenario in the near future.
Current prices put the slaughter value of a ewe unit of 23-25 kg cwt at between R 1426 and R 1600, which is good money. This base value obviously will raise the bar in terms of breeding sheep stock value. As with fat stock, breeding units are also currently in short supply, and this combined with some really excellent prices achieved by breeding ewes at recent auctions, has sent prices through the roof! Of course the very good wool prices currently being achieved also add to the value of Merino and Merino-wool breed ewes. I was recently offered a parcel of Dohne Merino ewes; ewes with lambs at R 4400/head and dry ewes at R 3000/head. This gave me reason to pause and wonder, what can be considered “fair value” for breeding ewes at the moment, and are these high prices reasonable and justified?
As a rule of thumb, one determines the base value of an animal equal to its slaughter value. You then append a premium to this value, taking into consideration various factors such as quality, breed or type, age, pregnancy status and (if applicable) length and quality of wool. This premium is then tempered by supply and demand, and can vary from 0% (in times of severe drought) to 15% or more (in times of low supply, and fait-to-good grazing conditions, such as we have at the moment). Lets run those numbers:
Slaughter value: A mature (6T/FM) Merino ewe adapted to Karoo conditions will probably average out about 55 kg lwt (live weight) in body condition score 2 and carrying for arguments’ sake four months of 20 micron wool (about 1.5 kg greasy). If one takes the wool weight off, and uses the rough guideline of a 42% dressing weight, you are looking at a base value of (55 – 1.5)kg lwt x 42% = 22.5 kg cwt x R62/kg = R 1395/unit. Let us round it up to R 1400. Wool value: A 55 kg Merino ewe should shear around 7-9% of her body weight at 12 months, so let’s say 8% of 55 kg = 4.5 kg per year, or 375 g per month. In our example we suggested 4 months of wool, so that is where I get my figure of 1.5 kg (greasy) above. The Cape Wools market indicator for 20 micron wool is currently at R234/kg (clean). Assuming a clean yield of 70%, this 1.5 kg of wool could be valued at (1.5 kg x 70%) x R234 = R 245 — call it R 250.
Add the two above values together, and you have a base value of R 1650/head for a mature 6T/FM Merino ewe carrying four months of good, clean fine-to-medium wool and in good body condition. Premium values: Now it gets interesting. What premium do we allocate to this animal for its breeding value? Factors such as type and perceived quality are subjective, others such as wool quality, age and pregnancy status are more objective. If we add a premium of 20% to our calculated base price, it brings us to the R 2000 mark. Then what values can one attach to a pregnancy status?
A crude way to calculate this would be to say, “Well, buying in pregnant ewes is saving me five months of time to getting them lambing”. This will get you a return on your investment five months sooner. Interest on your R 2000 dry ewe at 15% per annum, is R 300 or R 25 per month. Five months saves you R 125 of interest. But of course we know that you do not pay R 150 more for a pregnant ewe than a similar dry ewe. It seems to be more in the region of R 500. A higher twin component in the parcel will of course push this value up further, possibly up to R 750 per unit.
So, my evaluation of our example ewe would be R 2500 – R 2750 per head. And in practice I have found that similar ewes currently priced dearer than this do not easily off the farm.
From a ROI (return on investment) perspective, the buyer can look at within the first year from purchase, weaning a 30 kg lamb at an estimated value of R 1200 (30 kg lwt x R 40/kg) and shearing 4.5 kg of wool off her at an estimated value of R 720. A return of R 1920 (77%) on R 2500 before costs, which looks very attractive but of course this assumes zero mortality or loss to vermin or stock theft. Factoring in a 80% weaning rate, and a 5% mortality rate on the ewes themselves, this figure is more likely to be in the region of R 1600 per unit purchased (64%), before costs.
At the end of the day, market forces will determine what breeding stock will sell for. If a buyer is prepared to pay R 3000 for your breeding ewes, then that is what they are worth. Hopefully the above provides some insight into how one might go about starting to determine what your expectations may be when it comes to marketing your breeding stock.
Please do contact StockFair when you are looking to market breeding stock. We have expertise in this field, and can advise and assist in marketing.