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Bullish Returns

Getting the most value from genetics. An in-depth look at buying bulls.

So, while the neighbor is satisfied buying bulls of questionable origin because they're cheap and close, you take your breeding program seriously. You have goals; you understand the baseline performance in your herd and what you want it to be (see “Bullish Returns,” page 30, February BEEF).

You also understand breed complementarity and the need to manage heterosis in your cow herd. As such, you've identified which breed or composite you need to use, and you think you understand the genetic evaluation tools as well as any molecular biologist with three slide rules.

Now what?

Keep it simple

It's easy to become overwhelmed by data when shopping for genetics. There are 15 or more different expected progeny differences (EPDs) in some breeds. There used to be only four. The sheer volume of data available on any given bull makes it tempting to ignore the most accurate genetic evaluation tools and resort to considering barometers of the past, such as actual performance and performance ratios.

Consequently, Dan Moser, Kansas State University associate professor of animal science, points out the growing number of multiple-trait selection indexes offered by breeds that make sifting potential performance a lot easier.

In simple terms, indexes account for a number of different EPDs with a single number, and a growing assortment of them are tied to dollars. For instance, the Angus breed offers value indexes for everything from weaned-calf value to carcass-grid value.

By way of example, the weaned-calf value index is expressed in dollars per head. It's the expected average difference in future progeny performance for pre-weaning merit. It accounts for both revenue and cost adjustments associated with differences in birth weight, weaning direct growth, maternal milk and mature cow size.

So, Moser says, if you're using an index, less emphasis should be placed in the individual EPDs that comprise it, just as there's little reason to consider actual performance when EPDs are available.

Bob Weaber, University of Missouri beef specialist, emphasizes, “If you use an index, minimize the use of individual EPDs. As an example, if you're using a weaning index, don't also select on weaning weight and milk — which go into the index — unless there's some critical threshold that requires an independent culling level.”

Start with the index as the first screen, then look at the EPDs to make sure they're within your acceptable range, Weaber says. It comes down to the traits of importance to you.

Moser adds, “What are the minimum and maximum levels for your program? There are some traits you may not need to push very hard or some you may need to actually pull back. Keep it simple.”

Sorting suppliers

Next, identify seedstock suppliers with the genetics you need who are more concerned about helping you get what you're after than selling you what they have.

“Look at the herd of the seedstock supplier you're considering in terms of functional traits, how the cows are managed, how that management fits into your own environment,” Weaber suggests. “What are the program's breeding goals? Have those goals been achieved? Is there documentation of the performance and progress toward those goals? What genetics have they used to get there and why? Under what conditions is that performance achieved? Do their breeding objectives and management match up with your own?”

Besides getting answers to your questions, this process offers a first glimpse at how seedstock suppliers interact with their customers in general, and how your personality meshes with theirs.

“Call them and visit. See how you're treated. Are they selling you what they have, or trying to identify what you need and then helping you find it?” suggests Donnell Brown of the R.A. Brown Ranch, Throckmorton, TX. “Then, ask for some references, current customers who are using their bulls in an environment and management scheme similar to your own.”

If all this sounds more like a grilling than a friendly chat, it should. The fact is, since the genetics exist to bend the curves every way imaginable, there isn't much excuse for settling for less.

“With the genetics in today's sire summaries, there's very little seedstock suppliers can't accomplish. It's the same for commercial producers. They need to know the performance and EPD index levels that work for them,” says Mark Gardiner, Gardiner Angus Ranch, Ashland, KS. “Some buyers make it too complicated. Familiarize yourself with the program you're considering, their genetic trend and the breed's sire summary. If you're buying from a program, it's their job to know. That's the difference between going to a program vs. going to a consignment sale.”

Incidentally, John Burbank, CEO of Seedstock Plus, St. Catharine, MO, believes an easy first sort is simply looking at whether seedstock suppliers offer more than a single breed.

“In most situations, reality and science are on the side of sensibly crossbreeding cows. It goes back to a single breed not being the total answer most times,” Burbank says. “Plus, as a seedstock supplier offering more than one breed, I don't enter the situation with a bias when I'm trying to help customers fit their needs.”

Before straight-bred folks get their knickers in a bunch, notice Burbank says a single breed isn't the complete answer “most” times.

As Gardiner explains, “Heterosis is often more important in marginally managed herds or in tougher environments.” The Gardiners have buyers who increased performance by tying into their program of predictable genetics rather than relying on their own crossbreeding to attain heterosis alone.

The point being, there's more than one way to skin the cat if you understand what cat it is you're trying to take the hide off. Another factor is dealing with suppliers who understand the trade-offs and challenges.

Match service to need

“We sell to guys who buy a lot of bulls in one whack, and to those who buy one head. In every case, we're trying to build relationships where we can be part of their team,” Burbank says. Unfortunately, he adds, too few producers are willing to work closely with seedstock suppliers.

There are reasons for that — namely mistrust. Some won't seek advice from seedstock suppliers because they think, rightly in some cases, the supplier is just trying to sell them a bull, any bull, for as much as possible.

That's why Gardiner emphasizes the difference between buying a program and buying bulls.

“Find out what service there is after the sale. You need to ask potential suppliers how they'll enhance your profitability and sustainability,” Brown says. “Watch how they go about learning about your program in order to provide guidance. Do they visit their customers to look at their herds? Do they sort through performance records with you? Those kinds of things.”

Determine what exactly you consider service, too. For instance, is it free delivery that's important to you, or merely the option of having the supplier arrange shipment? Do you want help in marketing calves from the supplier's genetics? What kind of warranties and guarantees come with the purchase?

For instance, Burbank says a growing number of Seedstock Plus transactions represent sight-unseen purchases. Basically, the firm selects bulls based on the buyer's needs at a price at or below what the buyer specifies. If the buyer doesn't like the bulls when they arrive, he can return them at no cost.

Such a service offers convenience, to be sure, Burbank says. But the trend has as much to do with buyers recognizing that when the onus is on the supplier to pick bulls, buyers often wind up with more bull for the money than if they'd bought them on their own.

Brown is seeing the same thing. He has one customer who's purchased 65 bulls over the past three years, and has never set foot on the R.A. Brown Ranch. You can bet the Browns have been to that customer's ranch though, identifying needs, learning and forging a relationship.

“It doesn't matter the price range, as suppliers we must service the customer. Whatever price they pay, we must provide all customers excellent service,” Brown says. “We're in the people business and I want to buy from people I trust, people I know will take care of me. So we treat our customers the way we want to be treated.”

Determining value

“Just like buying a new pickup, it's easy to get confused by all the sales techniques,” Brown says. He traded pickups recently and says, as complex as it was to compare his choices directly, once he lined up his needs relative to the price of each candidate, he could determine the value and benefits received for the money paid.

When it comes to bulls, Brown explains, “What we get for that money is where the value comes in. What options I get and what those options will make for me down the road determine what I should pay and what I get in return.”

There are probably as many different equations for calculating a bull's worth as folks buying bulls. The Browns have settled on a rule of thumb that's held up across three decades of their bull sale data. All said and done, Brown says, a bull's base price should be equivalent to 4-5 weaned calves or 2.5-3 fed steers.

“It's still too price-driven,” Burbank says. “Among guys who buy volume, it's still 90% price-driven. Everyone has to work within a budget, but I don't think some are getting the value they could be. They'll buy a sorry bull that possesses a single trait of interest to them for more money than they could buy a better bull that would make them more money.”

TAGS: Genetics