There are at least three major points to consider as you analyze this decision. First, the type of animal you buy second, the cost of gain and finally, what can you pay for the animal. These points are all linked and must be considered together in making this decision.

What type of calf do I buy? There are numerous options available to the stocker operator. What sex should you buy? You can purchase heifers, steers, bulls or even "cull cows." What is the right weight class? You can buy light weight calves or the heavy weights. Is frame size important? I can buy large, medium or small framed calves. What grade of calf is the best buy? Grades No 1. and No 2. are available at most markets? Should the calf be preconditioned and fresh off the farm or can I put a good load of cattle together from the local auction barn?

There are many combinations of calf types available to cattlemen. Just about any of the combinations will work but, each one has its good points and weaknesses. For example, steers gain faster than heifers but less than bulls. So you need to implant steers with a growth hormone to compensate for weight loss. Bulls are cheaper than steers but, there can be handling problems and bulls will sell at a discount to steers at market time.

Light weight calves cost less per head than do the heavier calves and at sale time there are more buyers for light weight calves than the heavier feeder cattle (Figure 1). But, light weight calves can also spend more time in the sick pen and have a higher death loss than do heavier calves. This a function of age, stress and the ability to adapt to conditions.

The same can be said for frame size and grade. Size helps indicate the animals potential carcass size and feeding efficiency. Medium framed calves are the norm. Large and small frame calves are frequently cheaper to buy but, they are also discount when you sell them. Size can also denote breed type, the environment the calf grew up in and its ability to gain weight efficiently.

USDA feeder calf grades denote carcass quality and can suggest the yield potential of the calf. A No.1 designation suggests an animal with more muscling than a No.2 and a No.2 grade has more muscling than a No.3. The grading system is an attempt to project what the animal's carcass will "grade" after it has been fed and slaughtered. Grades other than No.1 are frequently heavily discounted in the market. Discounts between $5 and $15 per cwt. are common between No.1 and No.2 grades throughout the season (Figure 2). Cattlemen like to purchase No.2 grade calves expecting to turn around a mismanaged calf. The price break between No.1's and No.2's tells you why.

Which calf type should you buy? What is your objective in raising stockers? How many dollars do you have to spend? Does your farm have the facilities and physical resources necessary to run stocker calves? How much time and energy do you want to spend with these calves? Where is your market for these calves (buying and selling)? Buying a calf for most cattlemen is an "art" and not a "science." Remember in all cases, you get what you pay for. Money can be made by buying someone else's mistake. But the risks are also higher. These questions need to be asked and answered before you buy the first stocker calf not afterwards.

Production costs are probably the most important factor to consider before you buy any calves. Farmers can significantly minimize these costs if they take the time to plan ahead. It can really pay stocker operators to investigating forage and supplemental feed sources. There is a wide range in the cost of feeding stocker cattle. Feeding regimes that let the animal do its own harvesting generally are cheaper than when you take the feed to the calf; i.e., grazing is cheaper than feeding hay. Grain supplementation is frequently needed to achieve optimum weight gains. However, feeding grain can be quite expensive. Protein and energy requirements can also be obtained from winter forages, poultry litter and cottonseed -- and at a much lower cost.

There are as many alternative ways to feed these animals as there are animals to feed. The key is to know what they are in advance and line up the feed sources before you start. You will have enough problems with things you have less control over; like calf sickness and the weather, minimizing feed problems before they occur is just good management.

The last factor is probably the real starting point for your stocker analysis. Knowing what it is that you will have to sell at the end of the stockering process determines what you can afford to buy. If you have a market for a 900-pound feeder calf, what weight calf should you buy, a 200-300 or a 600-700 pounder? A calf can only eat so much. A 250-pound calf purchased in September, fed for 150 days at a reasonable gain of 2.5 to 3.0 pounds of gain a day will never reach your goal of 900 pounds by springtime. And, where would you sell this 900 pound animal? Carolina markets have difficulty handling this weight animal. You will probably find a packer buyer after you fed the calf out in a Midwestern feedlot. Marketing options are severely limited at these higher weights. On the other hand there are many marketing options available for animals under 750 pounds.

Now that we have considered the factors that are important in buying stocker calves how do I actually determine what I can pay for this calf? The easiest way to determine a maximum purchase price is first estimate your expected sale price for the calf and then subtract the cost of gain. The residual is the maximum purchase price you can pay for the stocker calf. This is the upper limit. A price above this limit means that at your cost of gain you will be losing money by buying the calf. So the first step is to analyze your selling opportunities. Review historical feeder calf prices and determine what weight and quality you can achieve with your cattle. (Information like that in Figure 1. can help here)

For example, we want to buy in October a 400-pound steer calf and stocker it through the winter for a March sale. We anticipate that the calf will gain 2.5 pounds per day on our 150-day feeding regime. What can we pay for the 400-pound calf? Assume we can sell this 775-pound steers for $75 per cwt. next March. This is a sales revenue of $581per head. Now subtract the cost of producing the stocker calf. Our budgets estimate that cost of gain under Carolina conditions ranges from about $25 to $50 per cwt. depending on the type of feeding regime utilized (Table 1). Assuming a $35 per cwt. cost of gain for our example then you can estimate a maximum buying price for the calf. The maximum we can pay for the calf is $450 ($581 - ($.35/lb/day x 2.5lbs/day x 150 days)) per head or $112.43 per cwt. If the cost of gain was $45 per cwt. the maximum purchase price for the calf would be $412 per head or $103 per cwt.

Stockering calves is a viable southern agricultural enterprise. The south has good year round foraging capabilities and many supplemental feed sources. Carolina calves are generally shipped out-of-state at weaning time and the value-added income from stockering is lost. With the future looking brighter for the cattle industry in the Carolina's it is a good time to evaluate how stockering calves might fit into your cattle operation.

Table 1. 400 Pound Calf Maximum Purchase Price Per Head at Selected Sale Prices and Cost of Gain.1.
Cost of Gain ($/Cwt.)	Sales Price ($/cwt.)
	$55	$65	$75	$85	$95
$25	332	410	489	565	642
$30	313	391	468	546	623
$35	295	373	450	528	605
$40	276	354	431	509	586
$45	257	335	412	490	567
$50	238	316	393	471	548
1. 150 day stockering period at 2.5 lbs. gain per day, convert per head figure to dollars per hundredweight by dividing by four hundredweight (400 lbs).

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updated 7/29/97