By: Henry Hilscher, Ph.D., Michael Hearne, MBA Livestock Nutrition Center, Superior Livestock Auction shared and analyzed by Merck Animal Health
As trusted advisors for our customers, we get asked every day about a lot more than nutrition. Customers often want to understand the success factors we see across the thousands of commercial cattle producers we serve. Whether it’s management practices, health programs, or nutrition, the end goal is to understand which choices will give the producer the best return.
Superior Livestock Auction data
The best data to understand the value of different management choices on the purchase price is from Merck Animal Health, Superior Livestock Auction, and Kansas State University. Merck’s Animal Health experts worked with Superior Livestock Auction to analyze all of the lots of cattle sold in 2020 comprising more than 800,000 head.
What factors significantly impacted value?
Merck found that following factors impacted the sale price:
In addition to the factors above, buyers did not pay differently based on the days until delivery, implant status, Bangs vaccination, or PI free status. It’s important to look at your actual costs, but there are a lot of opportunities to improve margins by implementing practices that consistently add value.
Do vaccine programs have a positive return on investment?
Getting higher prices is just one part of the return-on-investment equation. The additional costs to implement these changes must be considered. Using the KSU-Merck Calf Vaccination Program Assessment Tool, Merck found that VAC24 and VAC34 programs had a negative return on investment as measured by net margin difference. The VAC 60 and VAC Precon programs had the best returns.
As we start to think about next season, consider what do your buyers value? How are you are going to adjust your marketing and management to continue to improve your margins, reduce risk, and increase consistency?