Effect of health status upon arrival at a single milk-fed veal facility on breakeven purchase price of calves

Abstract

Male calves are purchased from the dairy industry in North America to produce red meat. The price paid for male calves varies widely, and it is unclear which variables influence the price paid for each calf. The objective of this study was to assess how the health traits of calves at the time of arrival and demographic variables affect the breakeven purchase price of a male calf entering the veal industry. A financial model was constructed using the prevalence of health abnormalities, weight at arrival, source of the calf, number of days in the barn, base carcass price, days to mortality, feed costs, season at arrival, interest rate, housing location, carcass dressing percentage, and costs associated with housing, labor, utilities, trucking, and health to calculate the breakeven purchase price and an estimate of profit. Sensitivity analysis was conducted using health variables measured at arrival and demographic variables, including season at arrival and housing location, to identify the factors with the largest impact on the predicted average daily gain, early and late mortality risk, breakeven purchase price, and profit. At the baseline inputs, the average calculated profit was -$5.36 per calf and it was most sensitive to the location of housing where calves were fed and the body weight of the arriving calf. The mortality risk in the first 21 d after arrival (early) was calculated to be 2.2%, whereas the risk of mortality after 21 d (late) was 3.7%. The risks of early and late mortality were most sensitive to the level of dehydration measured at arrival and the season at arrival for the purchased calves, respectively. The calculated average daily gain was 1.12 kg/d and it was most sensitive to housing location. The breakeven purchase price was calculated to be $242.49 per calf, which was most sensitive to the housing location where the calves were fed. The results of this analysis demonstrate that veal producers need to consider many variables before purchasing calves. In addition to overall market conditions, veal producers should factor health characteristics and the expected performance of the calves they purchase into what they are willing to pay for them.