The hallway talk at this week’s American Angus Association (AAA) convention (excluding the political maneuvering and controversy that’s hovered over the association for months) was dominated by technology and genetic improvement. Even in today’s heady cattle market, the value of genetics has grown even more exponentially than prices. It’s also a very exciting time for seedstock producers, at least for those with genetics that are above average for the economically relevant traits of beef production.
It really appears that the level of competition from a genetic improvement standpoint is only going to increase, and it was starting at a pretty high level anyway. The new technologies are not only geared toward identifying hard-to-measure traits but, from a bigger-picture standpoint, these technologies are allowing producers to increase their selection pressure and increase generational intervals.
The seedstock industry has always rewarded the most progressive and competitively adaptive individuals, but that increasingly seems to be the case. The theme is to innovate and adapt or find yourself and your breeding program quickly becoming irrelevant.
What intrigued me was that with all the science and technology available, the concern or focus wasn’t so much about improving the traits we can measure and document effectively. It was simply assumed that the improvement in these areas would continue. Instead, the focus was on those things that I suppose would be classified as the art of animal breeding.
Feet and leg structure, dispositions, udder quality, etc. – almost all these areas are somewhat subjective, but objective methods of collecting and analyzing the data are being implemented. It will be a great plus in the effort to make significant progress in these areas.
Bull sale averages in the month of October, according to AAA data, were up more than $1,700 when compared to last year prices, and the spread between bull sale averages was larger than ever. It appears these new levels of price differentiation are truly justified.
We will see bull sales this year average $5,000, $7,500, even $10,000. This has created some uneasiness within the seedstock industry depending on where you sit from a competitive standpoint.
The commercial industry’s sophistication in assigning value is extraordinary. However, it’s a wakeup call to the seedstock industry when you can buy two bulls for the price of one, and the one-bull purchase may contribute more to the bottom line. It’s certainly a very interesting time in the seedstock business.
Another interesting point that has become clear is that there are more bulls than ever to choose from; the days of having one or two bulls that almost everyone in the industry is using may be a thing of the past. The tools are improving and they are allowing people to be very specific in hitting their goals rather than the more generalized approach that characterized breeding programs in the past.
Like all aspects of our business, this is an exciting time in the seedstock business. But with that excitement there is also more risk and uncertainty. The rules and business environment for each segment are changing nearly as rapidly as the pricing environment.
The opinions of Troy Marshall are not necessarily those of beefmagazine.com and the Penton Farm Progress Group.
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