LEXINGTON, VA – A crowd of over three dozen attendees gathered for a chili dinner at the Virginia Horse Center to take in reflections provided by local Extension agents and Virginia Cattlemen’s Association’s (VCA) Executive Director Brandon Reeves and long-time field manager Butch Foster.
This March, Foster will celebrate 24 years of being part of VCA.
“Every year you think there’s nothing which could happen which you hadn’t seen before,” Foster remarked, “and every year you learn something new.”
There has been an evolution over the past quarter century in the way cattle from the Mid-Atlantic are marketed, Foster observed.
“There used to be about five main buyers in Pennsylvania,” Foster said. “They would send cattle to farmer feeders. Now farmer feeders more and more are buying their own cattle.”
Also today, more Virginia cattle are being sold to Canada as well as out west, Foster said.
Regardless of where cattle are marketed, Foster encouraged Virginia cattle producers to consider participating the Virginia Quality Assurance (VQA) program. VQA is an indication the cattle were raised with best practices, providing assurance to buyers – and additional profit to producers.
Tom Stanley, Rockingham County Extension Agent, was on hand at the event and reviewed data relating to prices realized for cattle which go through the VQA program. “The bottom line is VQA cattle consistently garner a premium in the range of $40 to $80 a head,” he said. “Sometimes more, sometime less.”
For cow/calf producers, Foster advised holding light calves to at least 600 lbs., as they will typically be more profitable at the sale barn than calves at a lower weight.
When you’re selling open heifers, if you sell them as singletons or in small lots, Foster said, you’ll get paid as if the animal were a cow. To gain more value for open heifers, he advised smaller cow/calf producers to consider banding together to sell tractor trailer load lots.
Regardless of what you are selling, Foster said, “make sure you have a marketing plan” for the animals you’ll be raising.
Attendees at the meeting enjoyed fellowship, a good meal and a presentation from the Virginia Cattlemen’s Association. Photo by Karl H. Kazaks
VCA Executive Director Brandon Reeves announced that the VCA will host another annual meeting this year at the Beef Expo in April. He also said VCA and Virginia Tech will be partnering in July to have a Beef Cattle University, a learning event for producers and other industry members.
On the policy side, Reeves reported that the VCA is pushing to modify what kind of beef products can be labeled as a product of the USA. At present, only one step in the process of raising animals has to occur in the U.S. “That hurts cow/calf producers the most,” he said.
Livestock Risk Protection (LRP) is an insurance program which VCA has developed to help producers hedge the risk of variability in cattle futures. The product is available on the Virginia Cattle app, and is available to cattle producers in any state, not just Virginia. So far producers in eight states have bought LRP from the VCA.
LRP is insurance for producers who forward hedge with futures. The coverage is to protect you if prices at the time of sale are higher than what you hedged with the futures price. For purposes of the insurance contract, price at the time of sale is determined by a five-day average of CME prices.
If your hedged price is higher than that average, your hedge paid off and you are only out the cost of the premium. If the average market price is higher than your hedged price, you get paid the difference between the hedged price and the market price, less the cost of the premium.
You can use LRP to price protect unborn calves, and you can use it on as few as one head. The premium is due one month after contract end day. To be eligible, you have to own cattle when you buy the insurance, as well as within 60 days of the end date of the contract.
Reeves recommended underinsuring by at least a couple of head, in case you have any mortality prior to the expiration of the contract.
For more information about LRP or marketing cattle, check with your local Extension office.
by Karl H. Kazaks
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