Agriculture Economics- Monthly Article
By: Dr. Andrew Griffith, Assistant Professor, Department of Agricultural and Resource Economics
There are good cattle producers and there are bad cattle producers. However, there is one producer in the business that has no room for being a bad producer and that is the stocker producer. There have been bad stocker producers, but bad stocker producers go out of business extremely quickly because the money disappears even quicker.
What makes a good stocker producer? A good stocker producer is someone who knows their resources and understands their limitations. With such a vague answer, it may be beneficial to consider the types of stocker producers and the characteristics that make them successful.
There are seasonal stocker producers and there are year round stocker producers. There are stocker producers who strictly provide nutrients through grazing. There are others who graze and supplement with commercial feeds. There are stocker producers who feed in confinement, and the list could continue. However, the point has been made that stocker producers walk different paths to achieve the goal of cattle that are healthy, grow, and return a profit.
Even though stocker producers approach production practices in different manners, there are several characteristics stocker producers have in common.
- Understanding their best method to source cattle: Cattle can be purchased off the farm, in the auction barn, or from a special sale. Regardless, it takes a good eye and some experience to identify and attempt to purchase a certain grade and weight class of calves that will grow at similar rates. This is not to mention trying to avoid purchasing the highest risk calves that get sick and never perform. It was once said, ‘A calf bought right is half sold!’ (I heard it from Dr. Emmit Rawls.)
- Patience in observation: Once calves are on a stocker producer’s farm, the first step for the stocker producer is to get the animals eating, drinking and acclimated to the new surroundings. Most calves are freshly weaned high risk calves that have never received any sort of health management which means they are prone to sickness. At the same time, the calves are trying their best to disguise any type of weakness. Thus, to identify cattle that will need treatment, producers must be patient and spend time observing the cattle. While being patient and observing, the cattle oftentimes relax a little and reveal their symptoms.
- Flexibility in health management protocol: Some producers have a regimented health protocol for receiving stocker cattle which may include deworming, vaccinating, and an antibiotic of some form. However, many producers are keenly aware that calf response to these protocols is not always the same due to the stresses endured prior to arriving on farm and environment. Thus, stocker producers remain flexible and provide the additional health management as necessary.
- Methodical structure: Methodical structure simply means providing the animals some consistency. Stocker cattle are highly stressed and high risk for sickness. Providing cattle with familiar feed which is normally hay and a clean source of water is the starting point. The methodical structure continues with a routine of feeding the cattle about the same time every day and performing the observation aspect about the same time.
- Ability to take risk: Stocker producers are risk takers. This is probably the most common attribute of all stocker producers. Persons with a low tolerance for risk generally avoid the stocker cattle business. There are three things that will happen to stocker producers if they stay in business long enough and they include some cattle getting sick, some cattle dying, and sometimes losing money.
There is money to be made in the stocker cattle business, but it can be a tough business if not well managed. There are definitely stocker producers who are more successful than others when it comes to profitability. The majority of this success is due to marketing. The highly profitable stocker producers possess the ability to stay current with marketing opportunities and marketing windows. This may be the toughest chore, because it requires taking the time to do a few calculations. It is time to begin running breakeven prices on potential purchases. If anyone needs help with putting the pencil to paper then give me holler, and I will try my best to help.