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Leap of Faith

Depending on your perspective, building consumer-friendly carcasses with genetics is either an essential step toward industry survival, or it's merely an exercise in futility."If we want our industry to survive, we have to do our part for eating quality," says Burke Teichert, regional manager for Deseret Ranches of Wyoming at Cody, and the Rex Ranch at Ashby, NE.With that in mind, Teichert and his

Depending on your perspective, building consumer-friendly carcasses with genetics is either an essential step toward industry survival, or it's merely an exercise in futility.

"If we want our industry to survive, we have to do our part for eating quality," says Burke Teichert, regional manager for Deseret Ranches of Wyoming at Cody, and the Rex Ranch at Ashby, NE.

With that in mind, Teichert and his crew spent the last several years retaining lots of their calves, documenting feedlot and carcass performance, then selling them on a variety of value-based grids.

They've also begun progeny testing the composite sires they build for their program so they know the carcass potential. All this is an addition to the reproductive efficiency and growth already built into the herd.

They've made progress. Their cattle typically perform in the neighborhood of 60% Choice and Prime, 60% Yield Grade 1 and 2, with few "out" cattle - lightweights and heavies, Standards and dark cutters - that suck the premiums out of an entire pen.

Their objective is to be 70% Choice and Prime, 70% Yield Grade 1 and 2, says Teichert. "We've killed one or two bunches which have been there. That suggests we have the genetics in our herd to do that," he says.

For the bother, Teichert's cattle pick up the odd premium on grids. He's positioning the program for the day true value-based marketing arrives, if it does. He's convinced it's the right thing to do.

But, in a business of narrow margins, he doesn't believe current incentives pack enough punch. He echoes the sentiments of many producers when he says, "I think we could forget about all of that stuff, sell a commodity product in a commodity market, on average, forget about the expense, and actually be better off over the next 5-6 years. I keep hoping the industry wakes up."

Current Rewards Although premiums paid within value-based grids are the most noticeable producer incentives, carcass merit can pay dividends to those who don't retain ownership.

"Carcass performance is important to commercial producers to the degree they want their calves accepted by buyers," says Don Schiefelbein, director of commercial programs for the American Gelbvieh Association (AGA). He explains there is an informal structure of premiums paid for feeder calves, even when supplies are plentiful.

--- "First, is the breed composition of your calves right?" asks Schiefelbein. Sit at an auction for a short while and you'll see some breed types are in demand and others get hammered daily.

--- "Second, have the calves had their preconditioning shots and been managed appropriately for the feedlot?

--- "Finally, what is the reputation on the calves? All of those combined are currently worth $10-15/cwt. more, compared to calves without those factors working for them." Of that, he says reputation, both previous experience with a producer's cattle and documentation of previous feedlot and carcass performance, is worth $4-5/cwt.

"As a commercial breeder, if you can take a set of cattle to auction and give some information on the genetics, you can get a premium," says Ken Stielow. Stielow runs the Bar S Ranch at Paradise, KS. He started as a commercial producer, but progeny testing bulls for seedstock producers led him to enter that arena himself.

"After a set or two of carcass data, it blew our minds. The difference between sire groups was tremendous. We always thought cattle from the same breed killed the same," he explains. Today, the Bar S program includes a registered Angus herd, as well as a commercial enterprise.

Beyond feeder calf opportunity, Stielow says programs have evolved where people who retain ownership are able to sell on certain grids and get some premium, though arguably not enough.

"In the grids I've looked at, the groups of cattle that have done the best averaged a $30 per head premium. The best I've seen is $60," says Harlan Ritchie of Michigan State University. "The average is $10 per head."

Moreover, producers paying attention to carcass performance today are positioning themselves for future possibilities, or necessities. "If you think you want to be there 10 years from now, you'd better get started now," says Stielow. After all, a decade is a genetic snap of the fingers when you're talking about the generation interval of cattle.

"I think it's clear we're moving toward coordinated systems of production and marketing because the structure of agriculture is changing in all commodities," says Ritchie. "Beef is one of the last."

Whether these current incentives can push carcass change, two decades of declining beef demand leave little doubt the industry is suffering under the weight of too much mediocrity.

John Crouch, director of performance programs for the American Angus Association, says cattle have been in North America since 1521. But it took until the mid '80s for cattlemen to realize they were in the food business.

Commercial producers aren't the only ones with a vested interest in fine-tuning the product, however. Folks like Teichert are frustrated so few carcass questions are being answered with technology available in other segments. "We can make so much faster progress with at-harvest and post-harvest technology that there is no comparison to genetics," he says.

But, genetic selection is one thing producers can control.

"The struggle I see is this: People say, 'I want to build a good cow herd, a good factory. How can I build a herd with reproductive efficiency that works in my environment and still make good carcasses out of that factory?' " says Kent Andersen, director of research/education for the North American Limousin Foundation (NALF). The question must be answered by each producer and the resources at hand, but there are some interesting ways to approach the puzzle.

Using a Cattle-Fax study of cow/calf production costs and their own Gelbvieh Alliance database, Schiefelbein says, "If you do everything right, you can get $40 at the carcass level, $80 at the feedlot level and $173 at the cow/calf level." In that scenario, performance of the cow herd is worth four times more than carcass performance.

For perspective, AGA contrasted the top and bottom 25% of the pens in their alliance based on feedlot and grid performance (Table 1). Overall, the most profitable cattle netted $100 more than the least profitable, even though they actually earned less premium on the grid.

Ritchie summarized a study conducted by Bryan Melton, a former visiting professor at Iowa State University (Table 2). It also indicates production (growth) traits and carcass traits are gaining ground on reproduction in selection importance. Whether calves are sold at weaning or channeled through an integrated value-based system, Ritchie says, "The greatest opportunity for profit is still at the cow/calf level."

Call it old-fashioned, but Andersen says, "When commercial producers ask me, I suggest, while carcass traits merit attention, that they hedge their bets on reproduction and calving ease because the carcass doesn't matter if you have open cows or dead calves at birth."

The Genetic Tool Box "If we're going to regain our share of the protein market, we are going to have to offer a consistently good product," says Crouch. "The only thing a cow/calf producer can do to ensure a high-quality product is manage it the best way possible from birth to harvest, and to interject genetics in the process that ensure a quality eating experience."

Once producers decide how much to tip the selection scale with carcass, there are only two areas to consider. "Yield and carcass quality are the areas a producer needs to address," says Larry Corah, assistant executive director of Certified Angus Beef (CAB). In fact, dressing percent, yield and quality are the primary value drivers today when cattle are sold live or on the rail.

The good news is producers do have options for combining meat quality and quantity in the same package.

"You can do a lot by capitalizing on breed differences and the overall complementarity that exists between breeds," says Andersen. "Start with the design of the mating system, using breeds that complement one another." As an example, he suggests looking to combine a breed noted for lean yield with a breed that has acceptable marbling.

"If replacements are retained, the breed inputs should also be complementary from the standpoint of matching the genetics of the resulting hybrid females to the available feed resources, with attention given to building efficient cows," he says.

Then, Expected Progeny Differences (EPDs) can be used to polish within-breed selections. At least five breeds offer carcass EPDs today, established with actual carcass data. Two more offer carcass EPDs built with ultrasound data. Next fall, at least two breeds plan to make ultrasound EPD information available, in addition to those they currently calculate using progeny data.

Crouch explains, "Carcass EPDs are really the only tool available to a commercial producer. They're a genetic prediction of an animal's carcass merit, value as a parent, what he can pass on to the next generation to improve the eating experience. You can't do it any other way."

The Virtues Of Carcass EPDs Besides predicting potential, EPDs are a viable tool because carcass traits are moderately heritable. Depending on the breed and the trait, heritability is 30-40%.

Given the heritability and the accuracy of carcass EPDs in some breeds, Stielow says producers using bulls stacked for carcass should see an observable difference with the first calf crop.

"If I was serious about this business, I wouldn't consider using a bull that didn't have carcass EPDs unless I was just going to produce generic beef and didn't think it would ever end up in a branded program," says Stielow.

But Andersen cautions, "It's not like birth weight where less is almost always better, or like growth where more is almost always better. It depends on the market you want." As an example, marbling is the brass ring in some programs, while red meat yield is the bullseye in others.

"Right now, for both commercial and seedstock producers, our general suggestion is to use carcass EPDs to actively avoid the use of sires or families in breeds that have major problems," says Andersen.

"You have to sort the traits most economically important to you. Once you make that selection, why would you use a bull negative for marbling or negative for ribeye?" wonders Stielow.

For that matter, why would anyone consider charting a course without knowing where they are today?

You Are Here Although benchmarking a herd for feeding and carcass performance is not a prerequisite of selection, it can add bang to the buck, if kept in perspective.

First, the bang. "Whether a producer retains ownership or not, I would get a group of calves into the hands of a feeder and get a read on them," says Ritchie. "Looking 10 years ahead, unless you have documentation on feedlot and carcass performance, it will be tough to market them. Starting to collect some information will pay off. Either way it goes, it will open up so many more markets," Ritchie adds.

Now for the perspective. You get what you pay for. Sending just a few calves through a special program one year won't yield the same snapshot as following a large percentage of the calf crop year after year.

For one thing, there are plenty of variables - weather, days on feed, health, implant protocol, etc. These can significantly alter the feeding and carcass performance of the same set of calves fed at the same feedlot each year, let alone calves of varying genetics fed in multiple feedyards.

"What frustrates me is that from one packing plant to the next, from one kill to the next, you can have huge differences in the same set of cattle," says Teichert. "One calf out of a cow with a poor carcass, it might be the dam, or an aberration. To cull your herd based on carcass data doesn't make sense when we ask these cows to do so many other things."

Positioning For The Future Unless a commercial producer is building his own bulls, Teichert questions the investment in tracking individual carcass and feeding performance. "The commercial producer needs to rely on the seedstock producer to ensure the genetics they buy will move their carcasses in the right direction," says Teichert.

But tracking herd performance does offer a leg-up for participating in current value-based marketing. And it provides data that can be used with new and emerging decision making tools.

As an example, the National Cattlemen's Beef Association unveiled the Decision Evaluator for the Cattle Industry (DECI) last February. It's a sophisticated simulation model using the best information regarding the biological processes that occur in the dynamics of a cow herd, says Tom Jenkins, research animal scientist at the Meat Animal Research Center in Clay Center, NE.

The free software allows producers to make breed and management changes to their herd via simulation and see what the results would be. More information is available by e-mailing Jenkins at:

Of course, tracking all of the data in the world is meaningless without action. "You can buy the sires, and you can market on a grid, but if you don't market the information, you can't expect the world to beat a path to your ranch to pay a premium," says Corah.

Really, making a commitment to product development instead of generic beef production is still a matter of faith - in the beef industry and where it needs to head.

"I'm not sure it (carcass performance) has any value today at the ranch level," says Teichert. "I do it because I have faith someday we'll have true value-based marketing. When that happens, there will be a difference in price."