Feed efficiency is being called the next holy grail of animal breeding, and rightly so, as few things promise as big of an impact on profitability. Yet the industry has not fully wrapped its arms and brains around how to capture that potential.
The genetic trends for most of the economically relevant traits in beef production are a tremendous success story. The last 20-30 years in animal breeding probably could be described as a historic revolution by any outside analyst.
The progression has been interesting; we began with the easy-to-measure traits, primarily growth traits like birth weight, weaning weight and mature size. In more recent times, we have moved away from indicator traits like birth weight into the economically relevant traits like calving ease. We then began to measure and make improvement in carcass traits. We have had economic indexes added and now we are incorporating DNA into our national genetic evaluation programs.
The results have been phenomenal and have spurred even more advancement. We are starting to make progress in the traits that are not so easy to measure, such as fertility, longevity, reproduction and feed efficiency.
Not surprisingly, the traits that are harder to measure for the seedstock industry are extremely difficult to account for in the financials of commercial operations. That is the case even when the economic impact is significant.
Not only are these traits difficult and expensive to measure, they are difficult to get paid for. As a result, the progress in these traits has been slower. There have been a few forward-thinking seedstock operators who have invested heavily in their ability to collect this hard-to-measure data. Ultimately they should be rewarded because the economic incentives are real and the majority of these traits are moderate to highly heritable.
The value is real, especially with higher feed costs and higher prices. One of these operations that has invested heavily in collecting feed efficiency information has a graph that shows that their herd average compared with the industry average could generate as much as $1,000 in savings/cow over a cow’s lifetime! That doesn’t even account for the economic benefit of the improved feed efficiency of her offspring.
Yet, for most operations, feed efficiency is a “black box” type of number. I don’t know of any commercial operation that can track the consumption of its cowherd over time. Economists and animal breeders are right about the economic impact of feed efficiency, but ironically, it still is not a top five concern for most purebred or commercial producers.
The economic drivers in our business are complex, and thus simplistic conclusions are usually wrong. But I have heard it said that the ultimate goal for most producers is to produce the most pounds of compositionally right product as cost efficiently as possible.
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Ultimately, one of the biggest genetic traits affecting that goal is feed efficiency. When we get to the point that we are seeing the rate of genetic improvement for feed efficiency that we are seeing in the other traits, it will revolutionize our business.
I know a producer who believes he can increase his current stocking rate by nearly 50% over time by increasing feed efficiency and improving his grass. If he’s right, the impact on the profitability of his operation would be much larger than 50%. I’m not betting against him.
The sad reality, however, is that these amazing efficiency gains, while improving profitability for individuals and the industry, also equate to a need for fewer cows and fewer producers. The time to be truly excited in this industry is the time where demand growth can exceed our improvement in efficiency. Sadly, growing exports, population growth, and efficiency gains so far have had a tendency to negate the effects of “true” domestic beef demand.
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