The quickest and cheapest way to add beef volume to your operation is to exploit heterosis and complimentary breed effects.
My entire life in breeding cattle has been spent gathering data and transferring information. As high school students, my brother Lee and I weighed our purebred Angus calves at weaning for a starting weight in determining the bulls' feedlot rate of gain.
Weaning weights ranged from 235 to 615 lbs. When we found that several of the flyweight calves were out of our “best” cows, the light went on and the race began. Through the years, we've kept abreast of the technology of the day. We progressed from recording weaning weights through a whole series of other measures that began with 140-day average daily gain to today's DNA markers.
It's been an exciting, wild ride. Getting information on your cattle is a lot like sex — it's hard to go back to holding hands once you've experienced it.
The Industry Has Changed
The beef industry is drastically changing the way it prices, procures, processes and promotes beef. Meanwhile, cow/calf producers are agonizing about selecting breeds and sires that will produce cattle that can grade, cut and hit the sweet spots on packer grids.
One thing that won't change is that the final value of a calf crop, pen of finished steers, box of beef or case-ready package will be based on “weight times the money.” And, the quickest and cheapest way to add beef volume to your operation is to exploit heterosis and complimentary breed effects.
Crop farmers and hog and poultry producers have used heterosis to increase yield and efficiency and build a higher quality end-product as a way to maximize profits. Meanwhile, many cow/calf producers have reverted to straightbred cattle, or they simply breed their cows to whatever breed or color the order buyer was bidding up the day they sold their calves.
Heterosis is free. Develop and adopt a breeding plan that will maximize your profit and minimize your problems. Composite bulls deliver heterosis, are easy to use and ensure your calf crop will be uniform and predictable.
It may sound old-fashioned to talk about gain, growth and performance, but these highly heritable traits come close to producing instant results. Select sires that will maximize the total tons of high-quality beef you can produce on your operation.
I've never heard a farmer complain about the extra costs of diesel or storage because his corn or soybeans yields were too big. Similarly, much of the talk about cow efficiency and adaptability is just talk.
It's usually limited to the topics of cow weight and perceived body type, and it always includes discussions about the higher costs of increased size in beef cows. It never, however, includes objective measures of feed efficiency for maintenance, milk and effect on end-product.
While everyone hates calving trouble, don't calving ease yourself out of business. The ideal birth weight of a calf is 1 lb. less than his mother can easily deliver. When you cash your cattle check, it always includes the calf's birth weight.
The money part (marketing) is where it gets complicated. This is a whole new ballgame. The percentage of profits made downstream continues to increase in the food business.
In 2000, food packaging costs averaged 12.5%, while the producer's share dropped to a little less than 12% of the final product's revenue. Even before you think about bulls, determine which consumer market you want to target. Last, but not least, think about who will buy your cattle and at what price.
Most Of Us Can't Do It Alone
Is your market target attainable? Is it viable? Is it growing, and will it still be there when it's time to sell your cattle?
Most beef producers aren't large enough to market cattle directly to consumers. You may have to give up some of your independence and flexibility. You'll likely have to join a marketing partnership with other producers, feeders, packers and retailers. It's the only way to get closer to the cash register and capture more of the added value for the beef you produce.
Genetic inputs will play an important role in which market you target. The days of cussing and discussing phenotypic attributes and the multiple EPDs of a bull and his dam are about at an end.
Now's the time to select your seedstock supplier based on their ability to deliver predictable genetics, sustainable breeding programs and sound marketing systems. Ask tough questions and analyze their ability and proven track record of adding real dollars to their customers' cattle.
Except for choosing your mate and schmoozing your banker, selecting the right seedstock supplier and value-added marketing program may be the most critical choice you'll make.
Dave Nichols is a partner in Nichols Farms, a family-owned seedstock operation in Bridgewater, IA. They sell more than 500 Angus, black Simmental and composite bulls/year, and they offer a number of other value-based service and information programs. For more information, visit their Web site at www.mddc.com/nicholsfarms, call 515/369-2829, or e-mail [email protected].