Today’s rapidly-changing sector for beef calves is still most favorable to cow/calf operators who industry calves in truckload lots. Not surprisingly, calf buyers like to purchase and transport calves in groups large enough to to fill a commercial cattle truck (also recognized as a cattle “pot” or “pot belly”) to save on freight.
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Importance the Truckload Lots In many states, a cattle truck is legally enabled to haul around 48,000-50,000 lbs that cattle, with some states enabling 60,000 lbs or more. Therefore, in addition to the pressures of supply and demand, expense of freight has actually a substantial impact on calf price, especially when diesel is $3 or much more per gallon!
In order for one owner to sector 50,000 lbs of livestock (commonly well-known as a “load lot”), the would require to have at least 80 calves weighing 600 lbs each. This needs a cowherd of virtually 200 cows (or more, if the lot of is uniform and also all the very same sex). Under cows may be required if calves space heavier, sold later on (and space heavier), and not uniform in size, age, breed, or sex.
Despite the fact that many marketing options cater to huge operators, almost two-thirds the U.S. Cow/calf producers carry out not have sufficient weaned steers to sector them as a truck-load many (65.9% own less than 200 cows). Together a result, most cow/calf producers market their calves in tiny groups v auction markets.
Video and also Internet Auctions Historically, around 85% of producer marketed your steer calves v livestock auction markets. In 2003, a higher percentage of cattle were being sold via video clip and internet cattle auctions (11% and also 5%, respectively) and private sales (23%). This adjust has primarily benefited bigger producers, due to the fact that these methods require that cattle be in fill lots together a service to their buyers. A survey of North and also South Dakota producers indicated that as herd size increased, a producer was an ext likely to market calves via one of two people a exclusive party or video clip auction compared to one auction market. In addition, as herd size increased cost per head connected with selling via private party or video clip auction decreased.
Since small- and medium-sized cow/calf producers are facing a palliation in marketing alternatives at weaning time, they room exposed to under buyers. This forces these producers to it is in “price takers,” rather than “price makers.” Ultimately, under buyers will result in less interest in your cattle, and also oftentimes a reduced price.
Livestock auction markets have actually done a an excellent job developing a marketplace because that these producers to offer their calves. They are basically providing a chance for their buyers to swimming pool your calves along with others’ calves to do truck-load lots. In addition, niche marketing (including freezer beef and organic beef production) has provided producers v some additional, yet limited, options for marketing smaller teams of calves.
Calf Marketing Pools To overcome the pack lot ‘requirement’ that most video clip auctions, web sites, and order buyers have, some cow/calf producers have arisen “Calf Marketing Pools” to increase the demand and also price for their calves. These little ‘alliances’ have actually been officially (including by-laws, elected officials, etc.) and informal. However, their main objective is the exact same – to boost the variety of prospective buyers bidding on their calves.
A Calf Marketing Pool will only work-related if participating operations have comparable programs. Ideally, the each other makeup and also quality the the cowherd, date of calving and also weaning, and vaccination programs have to be almost identical. In addition, producers should have comparable marketing philosophies, know and trust every other, and commit to making a participating marketing effort work.
Producers interested in initiating a Calf Marketing pool should think about these vital steps:begin the pool: Identify possible operations for sure member ranches form a legal partnership (is it necessary?) Determine livestock characteristics (breed, sex, age, size, etc.) determine sale method (decide early): local auction market video clip auction net sale stimulate buyer/private treaty offering the cattle: timing of sale and delivery identify base load Decide ~ above an acceptable price livestock management before sale (off-the-cow, backgrounded, etc.) delivery of cattle: central location to haul to Sorting of calves Weighing problems (shrink/slide) handling of money
Success Stories producers who have participated in Calf Marketing Pools show that their key to success was in the to know of producers who were trustworthy, simple to job-related with, and willing to compromise. In addition, decisions were made early and regular meetings to be held.
A team of 7 producers in central Idaho has collectively marketed their calves for virtually 10 years. The calves have been sold via video clip auction in so late summer, for autumn delivery. In general, calves reverted upwards of $2-10/cwt an ext than calves marketed at the local auction market approximately the time of autumn delivery.
A Utah pool, which groups as few as 10 calves per owner, offers some baseline rule of operation. As would be expected, cattle that to the right pre-set specifications (breed, sex, weight, etc.) room committed by every owner, video-taped, and sold via video several month in breakthrough of delivery. At shipment time, producer haul their livestock to a central location where they are sorted, weighed, recorded, pooled, and also shipped. The pool receives payment indigenous the video clip auction company, and also distributes funds to each participant.
Even producers who don’t fairly have enough calves to successfully pool with others and sell together a load lot can advantage from pooling. Oklahoma State university data accumulated during 2001-2003 suggests that offering a group of 10-15 head (vs. Simply one head), deserve to lead come a $2.50/cwt premium (Figure 1). Added research done in Oklahoma and also by Kansas State University indicates that the optimum dimension for a set of livestock to be marketed at one auction industry was about 45-55 head.
Figure 1. Price premiums paid by buyers based upon lot size, 2001-2003 mean (adapted from Ward et al., 2003)
The Bottom Line The bulk of U.S. Cow/calf producers room unable to use the multitude of new marketing options accessible in the industry. As a result, these small- and also medium-sized producers space receiving less earnings for their calves. Producers should consider working with next-door neighbors or other regional producers come decrease cost and increase revenue by creating a Calf Marketing swimming pool to gather and also sell pack lots of cattle.
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If cumulative marketing of her calves is a success, the following step could involve the formation of a maintained ownership alliance. Through commingling groups of cattle from various owners, the collection of performance data (both feedlot and carcass) necessary to help make informed an option and culling decisions would certainly be possible.