In the world of cattle production, retained ownership has long been a strategic decision for producers seeking to maximize the value of their herds. By maintaining ownership of cattle through the cow-calf, stocker, and feedyard stages, producers gain greater control over their operations, enhance profitability, and collect valuable data to make informed decisions for the future. However, like any strategy, retained ownership comes with risks that require careful management to ensure success.
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Maximizing Profits with Retained Ownership in Cattle Production

One of the most compelling advantages of retained ownership is the ability to capture value across the entire production chain. Instead of selling calves at weaning, producers who retain ownership can benefit from the additional weight and quality added through backgrounding and finishing at the feedyard. This approach allows producers to market finished cattle at a higher value especially when they are targeting premium grades like USDA Prime and High Choice.

Retaining ownership also provides access to valuable data about the cattle. From feed conversion rates and average daily gain to carcass quality and yield grades, these insights are critical for making decisions about breeding, health protocols, and nutrition programs. By understanding what works and what doesn’t, producers can continuously improve their operations and create a more efficient and profitable system. The Pratt Group has moved into another area to help producers realize the optimum value for each animal with DNA analysis on each animal fed. The Feedback producers receive not only improved the cattle currently on feed but impacts the next several generations of cattle produced by selecting the optimum sires to produce the highest valued carcass and the most economical price possible. Improving the consistency of each carcass is especially valuable in today’s market, where consumers and packers are increasingly focused on quality and traceability.

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Overcoming Challenges in Retained Ownership: Risks and Solutions

Despite the benefits, retained ownership comes with its own set of challenges. The most notable are market volatility, increased financial risk, and the potential for health issues during backgrounding and feedyard phases. However, with proper management, these risks can be mitigated effectively.

1. Market Volatility: The cattle market is influenced by a host of unpredictable factors, from feed costs to global demand. To mitigate this risk, producers can employ risk management tools such as futures contracts, options, or forward pricing agreements. These strategies help lock in prices and protect against sudden market swings. We help producers manage their price risk every day by working through the market conditions and finding a strategy that fits their personality and risk tolerance.
2. Financial Investment: Retaining ownership requires extending the current capital investment for your cattle for a few more months. Delaying the marketing several months changes cash flow into your operation which requires a different level of management on operating funds for items such as feed, veterinary care, and other expenses. Producers can address this challenge by working with The Pratt Feeders Group. We offer custom cattle and feed financing programs, risk management financing options as well.  These tools help to provide you with the financial flexibility needed to navigate cash flow constraints.

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The Future of Cattle Production: Insights from Retained Ownership

Retained ownership is more than just a financial decision, it’s a commitment to excellence and long-term sustainability. By keeping cattle within their control, producers can create a more traceable and transparent supply chain, which is increasingly important in today’s consumer-driven market. Furthermore, the data and insights gained from retaining ownership empower producers to innovate, adapt, and remain competitive.

For producers in the cow-calf or stocker sectors considering retained ownership, the key is to work with trusted partners like the Pratt Feeders Group who understand the intricacies of each production phase. From custom feeding programs to risk management strategies, these partnerships are critical for navigating the challenges and reaping the rewards of retained ownership.

In the end, retained ownership offers a unique opportunity for producers to maximize their investment, improve their operations, and deliver a high-quality product to the market. With proper planning and management, it’s a strategy that can lead to significant advantages and pave the way for a more sustainable and profitable future in the cattle industry.

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~Tom Fanning

General Manager, Pratt Feeders Group

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