Beef Magazine is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

More On The Question Of Profit vs. Production

Thankfully the seedstock industry has realized that more is not always better. But, given our desire to be anywhere but the middle of the bell curve, we’re now seeing those who argue that less is always better.

Thankfully the seedstock industry has realized that more is not always better. But, given our desire to be anywhere but the middle of the bell curve, we’re now seeing those who argue that less is always better.

From a marketing standpoint, being on the extreme is always easier to sell; anyone who has even a casual knowledge of genetic selection in the cattle industry understands the swinging of the pendulum. Like a lot of people, I like the concept of easy, black-and-white answers, but I understand that the inevitable tradeoffs, the genetic, management, environmental and economic antagonisms are real. And the bothersome law of unintended consequences has a way of reaching up and biting us on the backside from time to time.

Last week, I read in two different publications that more numbers of smaller cows will always produce more pounds than fewer larger cows. Despite the scientific data that shows essentially no difference in biological efficiency based on mature size, they quote single data sets that defy conventional wisdom and claim that smaller cows actually wean off bigger calves.

Essentially, they’re asking us to forget for a moment that the basic premise that led to increases in mature size was our selection for growth, and that weaning weights and carcass weights have increased along with mature size. We’re producing as much beef as ever with far fewer cows, but that comes at a cost.

One newsletter argued that one could run 120, 1,100-lb. cows on the same land base as 100, 1,400-lb. cows. That seems reasonable enough. Certainly, economics change dramatically if one stops at the weaning gate or retains ownership of a given calf crop, but let’s just assume that we’re going to continue to sell into a system that doesn’t recognize those differences and that a commodity-pricing system will enable producers to hide those values by selling on averages.

Let's also assume that the additional variable costs associated with additional cows is roughly offset by the increased price experienced by lighter weight calves relative to heavier calves, and that the focus is simply pounds produced off a given enterprise. I also assumed that since the adjustment in stocking rate should result in nutritional requirements being met appropriately, that fertility rates wouldn’t significantly differ, either.

I arbitrarily multiplied the two numbers (100 and 120) by a weaned calf percentage of 90%. I then said a 1,400-lb. cow will probably not wean as high a percentage of her bodyweight as a 1,100-lb. cow and just said let’s assume the 120 cows produced 500-lb. weaning weights, and the 1,400-lb. cows produced 600-lb. weaning weights. Amazingly, without even trying, the two numbers were exactly the same! Perhaps the scientific literature is right – biological efficiency is roughly the same.

Admittedly, economic efficiency and biological efficiency aren’t the same trait. We also need to look at the goals of an operation and its marketing program. An individual retaining ownership might be more profitable by running bigger cows with less milk, taking advantage of the increased compensatory gain. But, a producer selling at weaning and who can avoid being discounted for value differences further up the chain might find a smaller cow with lots of milk a more attractive option.

An average cow with moderate milk bred to a terminal bull might be the best route for producer A. Meanwhile, producer B, who lives in a very arid environment, might have a different optimum. A producer with 3,000 cows might be able to implement a sophisticated breeding program that produces maternal and terminal lines, while a producer with 100 cows and no access to a good source of adaptable replacements might be forced to accept sacrifices on both the maternal and terminal sides to find his optimum.

Each producer must find the appropriate combination of maternal and terminal traits, of efficiency and value for his given resources and management plan. While those combinations are seemingly endless, I’ll venture to say that rarely will his optimum lie in being solely terminal, solely maternal, or in producing the biggest or smallest cow possible.

When I was first getting started in the business, I was telling a fellow seedstock producer about a heifer that had performed extremely well and was very marketable. He said, “Sell the best, cull the worst, and keep the middle and you’ll always be pretty close.” Simplicity in a complex world is attractive but usually ineffective.

I appreciate the many comments provided to my first article on this subject – “Pondering The Question Of Profit vs. Production”. They ranged from astonishment to encouragement. I have to admit our own program is maternally focused, and our environment and personal opinions have dictated a pretty darn moderate cow, and those who labeled me as a heretic of sorts weren’t totally without cause.

To this day, our experience indicates that getting cows too large is far more of a concern than getting them too small. Yet, I’d also argue that we’ve seen the concept of curve bending work, and mature size decrease while actually increasing growth.

Efficiency is a tricky thing to measure because it is a ratio; that means one must work on both the denominator and the numerator. I’ve no doubts we’ll continue to make significant strides in efficiency. And, I also regretfully understand that those increases in efficiency ultimately will result in an industry that continues to consolidate and concentrate, and that all gains are temporary and only enjoyed by the early adopters, for soon they become the norm as the bar grows higher.

Profitability and industry growth in the short term will be driven by efficiency, but let's also stay focused on the concept that, in the long term, profitability will only improve through increased demand and value creation.

Top Viewed Articles for 2009

1. BEEF Cartoons: Earl by Wally Badgett
2. Improving fertility rates in cows through feed
3. Purdue Survey has Findings on Financially Successful Farmers
4. Texas drought worsens, cattle dying
5. Livestock's Shrinking U.S. Shadow
6. Feed Composition Tables
7. Will the IRS view your ranch as a hobby?
8. Government Land-Grab Moves Forward
9. Temple Grandin Talks About Her Upcoming HBO Biopic
10. Barack Obama Blames Health Care Costs On Farmers