Turn Outliers Into A Profit Opportunity, Not A Loss Equation

This article was developed By J.P. Pollreisz, DVM, Beef Technical Services, Zoetis

No one wants sick cattle. From well-being concerns to unexpected costs, it can be a lose-lose situation. But when cattle do get sick, intentionally managing bovine respiratory disease (BRD) chronics and other outliers can help you improve animal well-being and help stop economic losses you might not even know exist.

While outliers — those animals that are chronically ill or need surgical care — are an expected occurrence, especially on a feedlot, they might be undermining the profit opportunity of the whole pen or group of cattle if they aren’t managed intentionally.

What are the real costs?

By my calculations, mismanaging just two out of 100 animals could be the difference between profit and loss. Consider that selling an animal as a realizer or railer is only going to provide about 40% of the forecasted sale price. That’s a lost opportunity cost of about $900 based on current fat cattle prices(1).

Outlier napkin math:

*    $600 salvage price/animal
*    $1,500 average market price/animal - $600 salvage price = $900 saved/animal
*    $900 x 2 outliers = $1,800
*    $1,800 divided by a group of 100 head = $18/head gain just from better managing two out of 100

Add in the cost of space, labor and treatment that you put into keeping a chronically ill animal in the sick pen and you can start to picture the true losses. Don’t forget that shipping an animal at the wrong time — resulting in a violative residue — carries repercussions for the feedyard. A follow-up inspection by state or federal authorities often occurs, and increased scrutiny when cattle are marketed may be instituted if multiple violative residues are detected.

But in reality, you don’t want to just realize or salvage these animals, you want to get them back on the fat truck. And that may be possible in some outlier situations with intentional management. Intentionally managing these animals can set your business apart from others that might be just absorbing the losses.

The path to intentional management

So where can you start? Start by asking yourself a few key questions:

        1. How do you manage outliers?

        2. How well and how often do you train employees on identifying and treating these animals?

        3. What is the condemnation rate of your clients’ realizers?  

A colleague of mine, Kynan Sturgess, DVM, co-owner of Hereford Veterinary Clinic in Hereford, Texas, has been talking with his customers about this topic. He says while the economic conversation makes sense, it all comes down to constant communication and training with employees. He suggests starting by:

*    Identifying the specific issue facing each animal and then treating it individually
*    Working to set up specific care plans for each condition
*    Training employees on surgical procedures, or setting up a plan of care
*    Focusing on follow-up care for the animals — this could include nutrition, pain mitigation, specific environmental needs and keeping them separate from their original pen
While not every outlier case will be able to get back to optimum performance, intentionally treating and managing these animals can help recover losses you might be overlooking.

The bottom line

At the end of the day, it’s about considering how you are currently managing these animals and evaluating where you have unexpected losses. Once you clearly see the impact, work to develop standard operating procedures so that management becomes turnkey, and you can get these animals back on the right track.  

Want to get started? Zoetis is here to help. Reach out for a discussion with your Zoetis representative, and we’ll suggest processes to help you manage outliers intentionally.



Latest News

Spring has Sprung and Show Season is Just Around the Corner. Are You Ready?

For your showing clients, now is a good time to discuss a Certificate of Veterinary Inspection. Many livestock shows will require a CVI -- even if the animal doesn’t have to cross state lines to get to the show.

Mastitis in Beef Cows: What You Need to Know

Although mastitis, an infection of the udder, is often considered a dairy cow problem, the disease may also impact beef producers. Here's what you need to know and look for and how to help protect your herd.

We Need More Answers, Veterinarian Says About Biosecurity Research

As a veterinarian, Jeremy Pittman, senior director of U.S. veterinary services for Smithfield Foods, says he is constantly tasked with, asked about and challenged on biosecurity processes or protocols. 

Mineral and Vitamin Considerations When Drylotting Cows

Managing cows in a drylot can be a way to maintain the herd when forage production is reduced. However, it's important to make sure cows are getting the vitamins and minerals they need.

Animal Activist and Former Baywatch Star Found Not Guilty in ‘Open Rescue’

Former “Baywatch” star Alexandra Paul and activist Alicia Santurio were found not guilty of misdemeanor theft after “rescuing” two chickens in 2021. Although they faced jail time, Paul says it was worth the risk.

7 Tips for More Effective Vaccination Programs in Calves

Ask 10 dairy producers what they believe is an effective vaccination program for calves, and you’ll likely get 10 unique answers. That’s OK, because there is no effective one-size-fits-all strategy.