Angus steer in a feedyard

Is genetic testing viable for cattle feeders?

The age of DNA marketing is upon us and its potential is huge. Only time will tell, however, if that potential can be fully realized, especially in the volatile world of the fed cattle market.

DNA testing for genetic traits has become common practice in the seedstock business and its potential to help commercial cow-calf producers, especially in heifer selection, is promising. But what about cattle feeders? Can genetic tests help them sort cattle better, thus hitting grid specs more accurately?

Perhaps. The Beef Cattle Institute at Kansas State University reports on research that looked at the possibility and found that it could be beneficial.

The study, published in the Journal of Agricultural and Resource Economics, assessed the value of using genetic information for evaluating seven traits in fed cattle—yield grade, marbling, average daily gain, hot carcass weight, ribeye area area, tenderness and days on feed. The study, done by folks at Oklahoma State University and Purdue University, evaluated 10,209 cattle fed in six feedyards in Kansas and Iowa in 2007 and 2008.

Grid marketing has become the go-to method for many cattle feeders. Cash was once king, but the cash trade has become very thin in recent years, much to the consternation of just about everyone. Then there’s selling fed cattle on the rail, either on dressed weight or with a formula.

The study found that the value of using genetic information to predict yield grade and marbling, then using that information to sort cattle into marketing groups, ranged from $1 to $13 per head. The greatest improvement in net return and the greatest reduction in variability accrued to cattle marketed on a grid.

That makes sense, since grids allow packers and feeders to target cattle at specific marketing endpoints, whether it be lean, Choice or anything else. Formulas can do the same, but weren’t evaluated in this study. And, of course, targeting cattle or carcasses at specific marketing endpoints is very much a form of value-added marketing.

A further advantage to sorting fed cattle with DNA information is that it reduces the risk of selling the wrong cattle on a grid that discounts the carcasses those cattle produce. Ask a cattle feeder what kind of discount gets slapped on a carcass that doesn’t meet grid specs and expect to hear a tale of woe.

So perhaps the biggest advantage of DNA testing for cattle feeders is not the $1 to $13 per head advantage, but in avoiding the significant discounts for non-conforming carcasses.

However, based on the cost of DNA testing, is the return sufficient enough to encourage cattle feeders to do so? Not on every animal in the pen.

But if the testing cost was competitive and cattle feeders could test a representative sample to calculate a pen average, it might be workable. People much smarter than I would have to figure out how many randomly-selected animals from a 100-head pen would need to be tested, which will figure into the overall cost-return calculation.

The age of DNA marketing is upon us and its potential is huge. Only time will tell, however, if that potential can be fully realized, especially in the volatile world of the fed cattle market.

 

TAGS: Cow-Calf
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