Value Added Dairy Beef
John Yost, Agriculture and Natural Resources Educator, Wayne County, The Ohio State University
I may be showing my age, but about 20 years ago, the office supply company Staples launched a marketing campaign titled “That was easy”. It referenced their opinion that ordering supplies through them was in fact easy. They even sold toy easy buttons that when you pushed them, they would say “That was easy”. As a side note, my parents still have one of these buttons. Some would say that live cattle marketing is as easy as it has ever been. You can take just about anything to the auction and get a great price. Who would have ever dreamed that a 3-day-old calf would bring in excess of $1,500?
Although the current calf shortage has led to buyers lowering their standards, the beef industry needs preconditioned calves. Decades of feedlot research has proven that precondition calves have lower morbidity and mortality rates, higher average daily gains, and have a greater chance of grading choice or better at harvest. In the beef industry, a standard conditioning program consists of castration and dehorning, weaned for a minimum of 45 days, creep fed and/or grain supplemented during the backgrounding period, and a 2 dose vaccination program that targets Clostridial and respiratory illnesses. You will also hear these preconditioning programs referred to as value added.
In September of 2023 a team of researchers, led by Drs. Darrel Peel and Kellie Rapier from Oklahoma State University, published a research report titled “Value Indicators in Feeder Cattle: An Analysis of Multi-State Auction Data”. The project evaluated the relationship of animal characteristics and producer management practices on the cash value of feeder cattle. You can read the full paper at https://www.ams.usda.gov/sites/default/files/media/ValueIndicatorsinFeederCattleAuctionData.pdf.
In their analysis of auction market prices, the team found that cattle buyers were paying premiums for cattle that had been preconditioned. Specifically, they identified that bull calves were valued $7.39/cwt lower, on average, than steers. Calves weaned 30 days or more ($4.48/cwt), vaccinated ($1.97/cwt), and dehorned or polled ($8.47/cwt) were all valued higher than their contemporaries that had not been managed the same. As we look back over the last 12 years, the added value of pre-conditioning has fluctuated between an average premium of $8.68 to $23.36/cwt (Figure 1).
History has shown that buyers have rewarded producers for preconditioning calves, regardless of market performance. In a recent (September 2025) Drovers Newsletter article, Kellie Raper revisited this very issue. Kellie referenced the same chart (Figure 1) with yearly premium values reported. She pointed out that during the same 12-year period, that premium values moved with market price. She pointed out that producers in the Southern Plains had been dealing with drought conditions from 2012 to 2015. In 2014, market prices increased substantially, and premium values followed suit. It is Dr. Raper’s opinion that there will be premiums to be found for preconditioned cattle currently and certainly into the near future.
It may not be feasible for most dairy producers to implement a full value-added preconditioning program that mirrors their beef colleagues. You may not have the facilities, or the means to invest in new facilities, that will allow you to keep calves on farm until they are 100 to 150 days old. However, there are practices that you could implement that will add value to your calves. Producers could consider castration and dehorning of calves with time for them to heal prior to sale, fully wean calves and transition to a hay diet with grain supplementation, and group calves as soon as possible to allow them to adjust to a different social structure. It is also pointed out in Dr. Peel’s report that groups of any size brought a premium over a single calf.
Regardless of what practices you could possibility implement, the most important thing you can do is to provide your bull and beef on dairy calves with high quality colostrum at birth. Treat these calves as you would your heifers. The goal should be to get 4 to 6 quarts of 100 g IgG colostrum in them during the first 6 hours of life. Also, because the immune system of most calves will not respond to vaccines until they about 4 months old, you should consult with your veterinarian to see if administering and intranasal respiratory vaccine is appropriate for your operation.
Another area that would warrant more attention is the marketing of our cull cows. The price producers see at the stock sale are dependent on two main factors: body condition score (BCS) and mobility/health. The USDA grades culls into breakers, boners, leans, and lights. Using the beef cattle body condition scoring system of 1 to 9 (1 being emaciated and 9 morbidly obese), we would classify breakers as a BCS 7 or greater, boners as a 5 to 7, leans a 1 to 4, and lights being those small framed cows with low carcass weight.
The marketing “sweet spot” is for those cows that grade out into the boner category. These are the cows that have a BCS of 5 to 7, or a 3 to 4 using the dairy scoring system. If we use the most recent USDA National Weekly Direct Cow and Bull Report, there is potentially a $11 to $39/cwt premium for this grade. Most of the reasons you would choose to cull a cow will also result in her being on the thin side. On average, there is about 120 lb of body weight between body condition scores. Producers need to determine if the higher sale price potential is worth keeping these cows around for another 50 to 75 days. You will need to know your feed costs, as well as having the space to hold them. The other benefit will be to dry them off when you pull them out of the milking string. Drying them off will dramatically lower their feed requirements and help them put on weight a little faster. It will also help in the eyes of the buyer and our consumers. Cows with a full udder are slightly discounted due to the buyer not wanting to pay for the extra weight. There is also the welfare component that these cows will be stressed from their milk production between the time of last milking and their arrival at the harvest floor.
In conclusion, producers have been rewarded for adding value to their cows and calves prior to marketing. Although we have unprecedented live cattle prices, there is nothing to tell us that producers will not be able to capture premiums for their added expense and labor. I will say that it will not fit every operation. You need to know your current cost of production, especially feeding costs, accurately estimate the added cost of implementing these programs, and the market potential in your area before making the decision to keep these cows and calves on the farm longer. Producers will also need to consider the advantage this can be to their reputation as cattle suppliers. Those in the beef industry that have consistently, and successfully, added value to their cattle have been rewarded by becoming the preferred supplier for some buyers. This will be an advantage when markets tighten up.
This article has been reposted from the Buckeye Dairy Newsletter. To view the original article, click HERE.
