Retaining ownership has pros and cons
Retained ownership isn’t always easily defined, but generally retained ownership is when a producer holds on to all or any portion of their cattle through to slaughter. This can be anywhere from 25 to 100 percent of ownership rights, explained Andy McCorkill, livestock field specialist with the University of Missouri Extension.
If a producer chooses to retain ownership of their calves, they generally have two options – feed the calves out at home or partner with a feedlot.
Feeding the calves out on the farm has some pros. This strategy can add some value and purpose to excessive feedstuffs that may be produced on the farm (hay, grains, etc.), and will give the producer the chance to observe their genetic development firsthand. This option might also save some costs as the producer is essentially cutting out the middleman. On the cons side, the producer may not be as effective at developing a ration as feedlot nutrition specialists are, and if only a small pen of cattle are being retained, it can be difficult to attract a buyer when the producer is ready to sell.
Partnering with a feedlot can improve efficiency. Typically, there is a specialist on hand to formulate the appropriate rations. Retaining ownership through a feedlot partnership also gives the producer access to more buyers and can help keep feed costs low. By pooling calves from multiple farms, efficient sized pens of steers and heifers can be fed in a cost-effective manner.
Commercial feedlots can combine cattle from different owners in the same pen and can equally divide the feed bill according to the animal’s size and average daily gain using the net energy system.
Retaining ownership through the feedlot can also help producers gather precise individual data to help make future genetic decisions. Some feedlots have scales under their working chutes and can record individual weights when cattle are worked, and the organizations can also work with the packer and the National Cattlemen’s Association to gather individual carcass information and feed efficiency information to send to the producer.
McCorkill explained that typically the producer must have no less than 50 percent of ownership rights to have access to this data.
Some producers in the Ozarks do not have enough animals to consider retained ownership through a feedlot, but if a producer would like to obtain carcass quality and feed efficiency data to help them make sustainable management decisions for future breeding and marketing, McCorkill suggested researching the Missouri Steer Feedout Program. Participants can pool as few as five head with other producers’ cattle to make a large enough group to send to the feedlot for data collection.
Each operation will vary, even from year to year, and retaining ownership might be a viable strategy one season but not the next.
Keeping careful records and keeping communication open between business partners and buyers will help a producer make sustainable decisions when it comes to retaining ownership.