Beyond average for quality, price

Health and history help one feeder surpass standards

by Laura Nelson

In the face of tough feeding margins and negative breakevens, cattlemen should still expect more from their feeders, says one of their own.

“It’s pretty tough margins at most feed yards,” said Dale Moore, owner and manager of Cattleman’s Choice Feedyard. But they all maintain strategies for profit, so before taking a step toward doing business with any feedlot, he suggested, “ask them to share their closeouts.”

Speaking at a recent field day in Chickasha, Okla., Moore reminded cattlemen that whether they retain ownership of cattle on feed or simply supply feeder cattle, everything comes back to the bottom line: “The feed yard and the customer both need to be profitable. It’s just that simple.”

For him, that means finding customers who care about the same cattle qualities, namely health, nutrition, data tracking and relationships. Moore shared performance and harvest data tracked in his Gage, Okla., yard on the value of those factors.

Cattle that never required treatment for health problems there averaged a 19% Certified AngusBeef®(CAB®)brand acceptance rate across all pens regardless of breed makeup. That compared to just 11% in animals that had to be treated twice.

“So in today’s market with a $5-per-hundredweight (cwt.) CAB spread, you lose almost half, and that’s a huge, huge loss of income,” he pointed out. But the more dramatic drop showed up in Choice grading cattle. Between zero and three-times-treated cattle, the share of Choice-grading cattle fell from 73% to 56%, accounting for a $25-$50-per-head decline in profitability.

He saw the same magnitude of effects on performance at the bunk. Healthy cattle gained an average of 568 pounds (lb.) during the feeding period versus 489 lb. on those triple-treated. Average daily gain suffered nearly a 0.75-lb. difference and, and carcass weights varied from 833 lb. to 780 lb. in those respective groups.

“Now, you take that on a $2/lb. carcass and you guys can figure that math pretty quick,” Moore noted.

To keep cattle in the profitably healthy group, he offered one critical piece of advice: “The worst thing you can do to yourself on the cow-calf side is take a calf that’s been weaned 12 to 15 days to a feed yard or sale barn, either one.”

This is one case where it makes the most sense to shoot for all or nothing.

“That time frame can be very detrimental to those cattle. In all the research we’ve done, we’ve found that either 45 days weaned or right off the cow is fine,” he said. “There are some challenges to coming in right off the cow, but you’re just hurting yourself if you try to do something in the middle, and you’re sure not going to build a relationship with whoever buys them.”

It’s not just about a given pen of cattle making money; it’s those relationships that develop overtime that reap the most rewards for both parties in cattle feeding.

“I love it when my customers make money, because then they’re going to continue to come back. They’re going to be happy about making a few changes in their cowherd,” Moore said. Those changes may include updating bull selection criteria or strategic heifer retention, areas where a little feedlot data can greatly inform the decisions.

He shared an example from a steer feedout Cattleman’s Choice hosted. One customer supplied detailed genetic information, including sire groups. The first year in the feedout, that customer’s cattle graded an average of 55% to 58% Choice. They tracked grade barriers back to two sire groups–one that averaged 42% Choice offspring, the other just 36%.

“Now, whether you’re a retained-ownership customer or whether you’re a supplier to a feedyard, if you have a set of cattle that are 55% Choice, you have average cattle, and you’re going to get paid an average price,” Moore said.

That wouldn’t do in his yard, of course, nor for that feedout customer, who removed those two bulls and their progeny. With all other variable constant, the next calf crop averaged 74% Choice and paid premiums more than $100 per head higher than the first year.

“It’s just amazing what a little bit of data tracking will do to increase profitability,” he said. Cattlemen must be able to show their herd’s performance history to potential feeders to cash in on that kind of improvement though.

“History, remember, is not ‘my cattle topped the sale last year.’ That’s not history,” Moore cautioned. “True history comes from feed yard data. If you’re profitable, the feed yard’s profitable, and that builds awfully good relationships.”

Of course, it all leads back to building those relationships in every aspect of a cattleman’s operation, from start to finish. There are a million ways to measure profitability and success in the beef industry, despite those narrow margins and tight breakevens.

“You measure your profits by performance, you measure your profits by quality, you measure profit by dollars—but all of those things come back to improving carcass quality,” Moore said, adding one ultimate goal should exceed all.

“The consumer is where we all need to go back to. Consumers are willing to pay for what they get, and in return they want a tremendous eating experience,” he said. “You’re going to get paid for quality if you continuously produce it.”

Market-toppers need proof

Without a history, premiums paid don’t mean profit made

by Miranda Reiman

In most investment situations, you get a chance to evaluate the risk and rewards, do some research and make an informed decision. But when cattle pass through the sale barn in 30-second intervals, it’s not always easy for buyers to base decisions on anything more than appearance.

Data from Oklahoma-based Professional Cattle Consultants (PCC) shows that challenge could make the difference in whether feeders make or lose money on individual sets of cattle.

“You’d think premiums in the marketplace are being based on factors that will ultimately pay off when you’re going to sell those cattle,” says Dillon Feuz, ag economist with Utah State University.

This analysis, taken from five years of closeout data on millions of cattle from across the feeding belt, shows otherwise.

To get at the answers, actual purchase price was subtracted from the USDA Cash Feeder Price Index. All weights were standardized to a 750-pound (lb.) average using a 5 cent slide, and then sorted into four quartiles: heavy discount, light discount, light premium and heavy premium price.

The main finding? “Just because cattle look pretty doesn’t mean they are going to perform,” says Ron Hale, PCC analyst.

The top profit-getters were those with the heaviest discount, at -$20.90 per head, followed by those in the light discount (-$9.39) group. They earned $86.92 and $27.44 per head, respectively.

“If you pay a premium just because they look good or they have the hide color that you think is best, there’s enough variation in those groups that you’re going to come out short on those premiums,” Feuz says.

The PCC numbers illustrate that point. The quartile with a light “premium,” so slight the average came in barely negative at -$0.79, lost $17.15. The most expensive calves—purchased for $12.37-per-head above the market—lost $101.83 on feed.

Does this mean cattle are never worth a premium? Hardly; but it takes information to make them pay.

“If we could correctly identify the cattle that make the most money in the feedlot and grade the best, if we could identify those as feeders in the auction market,” Feuz says, “then the premiums aren’t big enough.”

The most expensive cattle in the analysis had the worst feed conversion at 6.56 lb. of feed/gain, compared to 6.38 lb. for the most efficient group. They ranked third for average daily gain.

Although grade wasn’t part of the dataset, previous PCC work pointed out a highly favorable correlation between gain and grade, so chances are those cattle with the highest premiums didn’t live up to quality expectations either.

Danny Herrmann, Ford County Feeders, says he’s willing to pay more for cattle that stay healthy, gain and convert, and grade. The best chance at those is recruiting repeat suppliers into his Kansas feedlot.

“If I have a pretty good history, I’ll try to buy those cattle again,” he says. In the long run, partnership pays off for ranchers, too. “Those people probably get more of a premium than the person who is just taking the highest price every year from a different person.”

Hale says producers who want to ensure cattle top the market year after year should make certain they deserve to.

“For a cow-calf man to do the best at marketing his cattle, he needs to know how his calves have performed and graded in the feedyard and how their health has been,” he says. “Then he can make changes and improve his cattle and develop a history.”

Communication is the key, says Herrmann—that and an extra dose of concern for the entire industry.

“If you do all the vaccinations and everything you can to give it 100%, I’ll be more interested,” he says. “But if you’re complaining about a 50-cent shot, then you’re telling me you don’t care about me. You need to be concerned about how the cattle perform for the next guy.”

Paying more for high-grading or source-and-age verified cattle, but selling them on the average live or dressed price is a flawed business model.

“If you’re paying a premium for cattle that you think are going to grade above average, but you’re not selling in a market that rewards that,” Feuz says, “then you’re just wasting money on a [calf] premium.”

At the ranch level, lack of knowledge on how cattle gain and grade after weaning makes it hard to know if its worth paying a premium for breeding stock, he adds.

Through the years, premium levels in the feeder-calf market have remained fairly consistent, but what they’re paid on has evolved.

“Feedlots are paying premiums based on perceived feedlot performance or end-carcass merit,” Feuz says. “What we’ve thought would deliver that over time has changed.”

Black-hided, Angus influence animals used to fetch a discount, for example.

“The biggest impact on feedlot profitability is how much you pay for those cattle,” Hale says. “There are times that discounts and premiums are worth it, but it all comes down to some kind of history.”

Crucible for quality

The Taylors win CAB honors

by Steve Suther

September 22, 2011

In this decade, Jimmy and Tracy Taylor’s data-driven herd south of Cheyenne, Okla., expanded to its practical capacity of 600 Angus cows on 12,000 acres in 38 pastures. Last year, 315 steers and heifers hit the mark with 58.4% Certified Angus Beef^® brand (CAB^®) and CAB Prime.

But months went by without rain while the sun baked the withered roots on the plateau bordering Black Kettle National Grasslands west of Elk City, where the Taylors live.

Heavily supplemented and strategically culled, the top 95% of their spring cows weaned creep-fed calves a month early as the smaller fall herd began making the best of a bad situation.

For all the challenges, the Taylors love it. Having to feed cows on summer grass each day? Great opportunity to check on water, health and head counts while calves get used to a grain ration.

Pastures cut up by old gas-well access roads? Great infrastructure for ranch access. Drought of the century? Brings individual cow evaluation to the forefront as the profit makers get even better.

Silver linings abound, even without a cloud in the sky.

Recipients of the 2011 Commercial Commitment to Excellence Award at the CAB Annual Conference in Sunriver, Ore., Sept. 20-22, they make the best of just about anything. Tracy puts her husband in the starring role, but Jimmy says he couldn’t do it without her support.

Dale Moore, Cattleman’s Choice Feedyard, Gage, Okla., nominated his customers for three consecutive years. “They base their program on the CAB and Prime goal, and have made some of the most dramatic and positive changes among all of our customers,” he says.

The ranch was started in 1914 by Jimmy’s great-grandfather, but his father, Jim, was the first to actually manage the place, beginning in 1953. He pioneered intensive rotational grazing with long resting periods for the land.

Hereford cattle were the mainstay, later crossed with Simmentals when Jimmy formed a father-son partnership in 1980. Newlyweds then, the young Taylors learned every rock, ridge and creek before buying sole interest in 1993.

2019_feature_breaking-if-question_2019_06_AB_BelvinAngus-7745

“Our goal was simply to sell the most pounds of beef at weaning,” Jimmy says. “Over time, we began to see there is more security for our ranch and for the whole industry if we reoriented to give the consumer a better eating experience. We changed with the incorporation of registered Angus bulls to a goal of producing the best steak we can possibly make.”

Those first Angus-cross calves arrived in 2006.

As low-stress handling, a rising plane of nutrition through weaning, selection indexes and artificial insemination (AI) became the rule, the www.cabcattle.com website became a favorite.

That’s how they found Moore and began retaining ownership. “I found out real quick that our goals were very similar,” Jimmy says. “We’ve been with him ever since.”

They’ve used the AngusSource® program for genetic and source verification since 2007 and won the regional AngusSource Carcass Challenge with those calves the next year.

Because of the data they have on each animal, purchased females no longer enter the herd.

Information from Cattleman’s Choice and CAB, combined with Jimmy’s observations and ultrasound scans for intramuscular fat (% IMF) are all organized in Tracy’s spreadsheet.

Her report on the 18 herd bulls starts with year purchased, tag number, registered name, maternal and carcass EPDs (expected progeny differences), ultrasound data and $ Values. The cow report/field-data sheet lists cows in ranch-tag order with source, calf tag, Bangs number, sire, progeny carcass history, % IMF since ’08, due date, calved date, location, calf tag, sex, sire, pasture bull and turn-in date, plus a few comments columns.

“Over the years we sit down together and keep adapting the program, tweak it until it gives us exactly what he wants to see,” Tracy says.

Small pastures let Jimmy match certain cows with the bulls that best complete their genetics.

“We look at them one at a time,” Jimmy says. “We’re just now getting to the point where data factors in enough to eliminate those weaker in carcass value.” They can sort by sire groups, too, and consider sire effect on progeny from each cow.

“Jimmy calls off a number and I read out to him what she has done,” Tracy says. “It’s kind of tedious, but he’s building up a good herd this way. Good genetics that we know we want to keep. That’s why he’s supplementing instead of selling.” Winter pasture was secured in Nebraska as well.

Creep feeding was an innovation last year, a necessity in 2011. For weaning, the herds come into corrals adjacent to the trap rotation for what seems like just another supplement session, but the calves get shots to booster the May round of vaccines and cows go back out to the rotation.

“We watch the calves for four or five days and then they are turned out on the traps, too,” Jimmy says. “It has worked well for us.”

Part-time help fills in for big jobs like working calves, weaning and AI, but otherwise, the Taylors run a “ma and pa” ranch, where they’re in it together. Just another way they show that commitment.

$100,000 Up for Grabs with 2024 Colvin Scholarships

by Courtney Weekley | Mar 20, 2024

Certified Angus Beef is offering $100,000 in scholarships for agricultural college students through the 2024 Colvin Scholarship Fund. Aspiring students passionate about agriculture and innovation, who live in the U.S. or Canada, are encouraged to apply before the April 30 deadline. With the Colvin Scholarship Fund honoring Louis M. “Mick” Colvin’s legacy, Certified Angus Beef continues its commitment to cultivating future leaders in the beef industry.

Raised with Respect™ Cattle Care Campaign Launched This Fall

by Lindsay Runft | Dec 20, 2023

Raised with Respect™ was developed as part of a strategic cattle care partnership between Sysco and CAB. The collaboration focuses on supporting farmers and ranchers, equipping them with continuing education to stay current on best management practices and helping to increase consumer confidence in beef production.

Drought Impact and Cattle Industry Dynamics

by Courtney Weekley | Nov 8, 2023

« Older Entries

Pre-grass stocker health management pays

April 19, 2011

Cattle health matters at every segment, but it could be the single biggest profit determinant for the stocker phase.

Mitch Blanding, senior veterinarian with Pfizer Animal Health, and rancher Mike Collinge shared tips for managing health at last month’s “Backgrounding for Quality” field day on the ranch near Hamilton, Kan.

The first weeks of ownership are some of the most critical, so Collinge keeps that top of mind when he procures 450- to 500-pound (lb.) calves to graze on his native grass Flint Hills range.

Within 24 hours of arrival, the calves move through processing facilities for a first round of vaccines and initial temperature readings. “I’ve yet to find anything as effective as temperature to really measure a calf’s health,” Collinge said.

In the following week, calves run through the processing facilities again, temperatures are checked and antibiotics administered as needed. The process is repeated four to five days later.

“We like to play offense, not defense on animal health. You can never catch up if you’re playing defense,” Collinge explained. “Monitoring and recording temperatures indicate health issues long before they start showing physical signs.”

Blanding said there are three ways to intervene with respiratory disease: prevention, control (mass treatment) and therapy (individual treatment). Prevention offers the highest return on investment, but that doesn’t mean just making sure they get their shots.

“What are our realistic expectations of vaccinations?” Blanding asked. “There are some groups with less than 40% of the animals capable of responding to vaccines. There are even some groups that we’d be lucky to get 30% responding. What causes that? Stress.”

“The only thing we’ve guaranteed is that the animal is exposed to it,” he said. “The next step is that they have to respond. Then we have to get protection, immunity. That still leaves a lot of room for error.”

The take-home point is that prevention also includes reducing stress, Blanding said.

At the Collinge Ranch, daily handling and movement helps. Load lots are kept in separate grass traps and brought in one at a time once a day. That first two or three weeks is a critical time to get the calves proper nutrition that gets them ready to be on their own for grazing.

“Copper, zinc and selenium are incredibly important parts of a starter ration when it comes to the health of these calves,” the rancher said.

After feeding, a group is kicked back out to pasture and the next group is brought in. The feeding crew monitors calves as they come into the feed pen. If they spot a calf that looks sick at the end of the group, they’ll separate the tail end and bring five to 10 calves in to have their temperatures checked and monitored. Not only is this less stressful on the calves, Collinge explained, but it’s also a good indication of the health of the rest of the herd.

Calves that are slow to the feedbunk and hanging around others already showing physical signs of illness are the most likely candidates. “You might find one or two in that group that are running a temperature besides the one that looked sick,” he noted. “You can get ahead of that illness and treat them before it becomes a problem.”

Another “must” to prepare cattle for the feedlot is deworming. In fact, an Iowa State University study says it’s worth about $24 per head.

“The immune system is a finite thing,” Blanding says. “If the immune system is being occupied by parasites, it’s less capable of dealing with the organisms that cause respiratory disease.”

Of course, all of Collinge’s procedures are geared toward reducing labor, stress and costs for the ranch, but there’s a greater reason: “We hope that these things are having an impact on carcass quality and performance. The goal is to create cattle that will do better down the line,” he said.

Research confirms that’s the right approach. Gary Fike, beef cattle specialist with the Certified Angus Beef^® (CAB^®) brand, shared Iowa data that shows calves that had to be treated twice have a lower average daily gain (2.93 lb. vs. 3.22 lb.) and poorer feed conversions.

“Those healthy cattle lay on intramuscular fat more easily, too, thanks to that added gain,” Fike says. That shows up in higher marbling scores and increased CAB acceptance for the calves that were never treated, 18.7% compared to 11.1% for their twice-treated counterparts.

“We know these stress-free, healthy cattle can really bring home the carcass quality,” Fike said.

For more information on the meeting, search “Backgrounding for Quality” on the Black Ink Blog, www.blackinkwithcab.com.

Tag: Show Me the Money

Beyond average for quality, price

by Laura Nelson

You may also like

Drought Impact and Cattle Industry Dynamics

Nebraska Ranch Receives Certified Angus Beef Commercial Award

Magnum Feedyard Earns Certified Angus Beef Award

Market-toppers need proof

by Miranda Reiman

You may also like

Drought Impact and Cattle Industry Dynamics

Nebraska Ranch Receives Certified Angus Beef Commercial Award

Magnum Feedyard Earns Certified Angus Beef Award

Crucible for quality

The Taylors win CAB honors

by Steve Suther

You may also like

$100,000 Up for Grabs with 2024 Colvin Scholarships

Raised with Respect™ Cattle Care Campaign Launched This Fall

Drought Impact and Cattle Industry Dynamics

Pre-grass stocker health management pays

You may also like

$100,000 Up for Grabs with 2024 Colvin Scholarships

Raised with Respect™ Cattle Care Campaign Launched This Fall

Drought Impact and Cattle Industry Dynamics