Increased Marketing Flexibility Retained ownership increases marketing flexibility as to when, what, and where the cattle are sold. Calves can be sold as feeder cattle of different weights up to approximately 900 pounds or sold as fed cattle. While it is difficult to attract a packer buyer to the farm for a small pen of cattle, the producer can increase market access and competitive bids by feeding the cattle in a commercial feedyard that may be visited by several buyers. Selling some at weaning, some as feeders, and some as fed cattle spreads marketing and price risks over time. It is also easier to forward price fed cattle than feeder cattle.
Packers offer cash forward contracts on fed cattle, but they are less common on feeder cattle.
Feeding at Home or in a Commercial Feedyard Regardless of whether the calves are fed at home or in a commercial feedyard, retained ownership adds an enterprise to the farm or ranch, potentially increasing gross revenue and making the marketing plan more diversified. The cow owner must decide whether to feed the calves at home or in a feedyard. Feeding the calves at home adds value to farm resources such as the calf and excess feedstuffs. It is also a way to sell resources that may otherwise be difficult to market, i.e., labor, forages, facilities, and equipment. While feeding the cattle at home may not produce as efficient gains as those of a commercial feedyard, net farm income may increase by marketing available resources through a retained ownership program.