(A business management series discussing the most common efficiency challenges and the opportunities available by addressing them using an Integrated Business Management Plan.)
Feed costs are often among the highest expense categories in a cow-calf operation. In northern cattle operations, feed may comprise as much as 50% of total production costs. In the South, with its long growing seasons and opportunities for improved grazing management, any feed cost is too much.
Often, the challenge is not so much the cost of the feed, as much as the management of the animal for its environmental resource base.
The Potential Of Genetics In the beef cattle industry, improvement in genetics for feed efficiency holds the greatest potential for reducing feed costs on a production unit basis. Pork and poultry are at or below 3 lbs. and 1 lb. of feed/pound of gain, respectively. The cattle industry, however, seems willing to accept 7-8 lbs. of feed/pound of gain (feedlot).
To my knowledge, there's not a university or breed association currently working on EPDs (expected progeny differences) for feed efficiency. Much attention, however, is focused on carcass characteristics, which in the extreme may translate into a "premium" of $10/exposed female. Feed efficiency offers much more.
Let's look at feedlot conversion in one of my client herds. When we implemented a herd-wide AI (artificial insemination) program on their 3,800 cows, the operation was producing steers with feed conversions of nearly 9 lbs./lb. gain (dry matter basis).
Last summer, that same herd had a group of over 400 steers convert at 5.78 lbs./lb. of gain (in wt. of 725 lbs., out wt. of 1,248). That group converted 45.8% better than their predecessors, registering a cost of gain of $38.54/cwt., while prior groups had been around $60.01/cwt. Total savings per cwt. were $21.47, for a total feed savings per steer of $112.29. Converting that back to the cow herd on a per-exposed-female basis, it amounts to over $75/exposed female.
What's Responsible? Was AI the only contributing factor? No, but it was a major contributor. We had individual steers in this particular group that required less than 4.5 lbs. of feed/lb. of gain. But, the genetics are available to get below 4 lbs. We just have to select for it.
In this same operation, we have also been evaluating individual sires and dams on production efficiency. We have developed a Total Production Efficiency Evaluation Ratio (TPEER), which takes into account many different factors.
Using the TPEER form, we make adjustments for age. Through weighted averages we provide a comparative ratio for each herd member. Our goal is to use this form as the basis of EPDs for profitability and/or efficiency. By the way, anyone interested in receiving a copy of the TPEER form may call or e-mail the AGRI-PLAN office for a free copy. The numbers are listed at the end of this article.
One of the most heavily weighted measures in our TPEER is percent of dam. This measures the percentage of her body weight a cow weans. The cow weight is adjusted for dam age, and weaning weight is an adjusted 205-day weight. I feel that efficiency of production in the cow will translate into feedlot efficiency in the calf.
Which would you rather have: a 1,300-lb. cow that weans a calf with a 650-lb., adjusted 205 (50% of dam); or a 1,050-lb. cow that weans a 630-lb. calf (60% of dam)? The 1,300-lb. cow is 23.8% heavier than the 1,050-lb. cow, but if both had similar lactating abilities the bigger cow would logically require at least 23% more nutrition, more pasture space, etc.
If purchased feed costs for the larger cow were $100, then logically the feed cost for the lighter cow would be $77, a $23/head savings. The heavier cow only produced an extra 20 lbs., at $85/cwt. that's only $17/calf. So overall, the lighter cow produced an extra $6/head.
If you agree with the theory, then wouldn't it hold true that you should be able to run an additional 23% more cows on the same amount of pasture? If you had 100 cows and your net profit before taxes on a per-exposed-female basis was $75/head, the additional 23% (or 23 cows) would result in an additional $1,725 total profit.
Don't Go Overboard If you choose to use this as one of your cow selection criteria, don't go overboard. Set some minimums for cow size. After all, you don't really want a 900-lb. cow that produces a 540-lb. calf (60% of dam). The resulting steer may finish too small and have a small carcass.
Through genetic selection, efficiency selection pressure and better feed pricing, we have reduced feed costs in the herd mentioned above from $158/exposed female to a projected $106/exposed female for fiscal year 1998 and $97/exposed female in 1999.
Remember, no single selection criterion is the cure-all. And, no two herds or two ranches are alike. Multiple trait selection that matches your present level of production to that of your long-term goals is the only way to achieve total production efficiency and optimal profitability.
Tom Hogan co-owns and operates AGRI-PLAN Corp., an operational efficiency and financial managementconsulting firm. For more information or his 100+page manual, "Planning Your Way To Profit," which guides you through the development of an Integrated Business Management Plan (IBMP), call 800/793-1671 or e-mail: [email protected]