Feed Lot Magazine Online, Program Aids in Retaining Ownership

Retaining ownership of calves can be a scarry thought if a rancher is not accustomed to dealing with feedyards. However, not retaining ownership may leave a sizeable profit on the table.

In fact, most cattlemen see an improved net return when they retain ownership of their calves when compared to selling the calves at weaning. According to statistics from Cattle-Fax, it is profitable to sell calves at weaning 56 percent of the time. However, it is more profitable to own calves through the feedyard 88 percent of the time.

To assist more ranchers in retaining ownership in order to capitalize on additional profits, Purina Mills has developed Purina Cattle Management Services, or PCMS. It is a retained ownership program that aids cattlemen in finding grass, preconditioning, cattle supervision, nutritional programs, financing and finding a suitable feedyard for their cattle.

According to Joe Crum, director of financing and administration for PCMS, "We piece together the puzzle of the different segments of the industry to meet the producer's needs." For example, if a rancher needs grass to grow his calves, PCMS can source grass and preconditioning services. If grass is already available, Purina's Grass Stretcher Software can determine maximum stocking rates and if there is a need for supplemental feed.

PCMS can also develop a profitability analysis to determine when is the best time to sell the cattle. "If our analysis says it's best to sell the cattle on grass and not at the feedyard, the cattleman is free to do so. By using our services, a rancher is not obligated to own the calves through the feedyard phase," says Crum.

If the rancher chooses to feed the cattle through the feedyard phase, PCMS can locate a yard that excels at that particular type of cattle. "We have relationships established with several feedyards," he says. "Those relationships can make a smoother transaction into the feedyard."

Lane County Feeders in Dighton, Kansas, feeds cattle in the PCMS program. "It's a positive deal," says Jim Meetz, manager. "It brings us business and provides a way for a rancher to retain ownership." Meetz says they also offer partnerships on retained ownership cattle. "Partnering gets the cattleman a little money in the bank and reduces his risk, yet he still retains some ownership of the cattle. We consider a lot of partnership deals, and could handle them through PCMS. It is a good fit for all parties involved."

PCMS can provide financing. "We offer a very competitive package," Crum says. Working with Texas Ag Finance, part of the Farm Credit System, PCMS customers can receive financing at prime, plus one-quarter percent. "Additionally, the Farm Credit System offers year-end patronage refunds," Crum explains. "Last year, our customers received a 21c refund for every dollar paid in interest."

Customers can be approved in as little as 24 hours using the Fast Track system. Fast Track financing is available for customers with no more than 150 head or for a maximum of $100,000. For additional financing, a full financial analysis is needed, and the process takes about three weeks. "The customer must keep either 30 percent or $110 per head in equity, depending on the financing package," says Crum.

Costs for the program are minimal. "Purina's stake in the program is related to a fee matrix for services rendered and, of course, any resulting feed sales.," Crum says. The program is designed to help the customer make money. "If he doesn't make money, he won't come back. But if we can add value to his calves, he'll be a repeat customer."

For more information, call PCMS at (830) 379-5004.