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Follow The Facts | 2007 National Stocker Award

“I never felt so sick in my entire life because I realized how far behind we were,” says Tom Gallery of the Gallery Ranch at Dewey, OK. He's remembering the winter of 2002 and a demonstration of management software that opened his eyes to what was possible when cattle data were collected and analyzed in a systematic way.

At the time, the Gallerys recorded information on note cards. “It wasn't until after the cattle were gone that we could tally up what had happened. We didn't have any real-time information,” explains Tom, who operates the stocker phase of the ranch with his brother Bill. Their father Dan moved the operation away from cows to stockers in the mid-1980s.

Also at the time, the Gallerys — winners of the drylot/backgrounding division in this year's National Stocker Award competition — owned every head walking through their stocker operation, chasing grass deals from South Texas to South Dakota.

The Gallerys' consulting veterinarian, Shaun Sweiger, led them to dramatic cost cutting: winnowing their medicine cabinet, implementing consistent treatment protocols — not switching products mid-treatment — and treating cattle only as many as three times.

“He broke us of medication overload,” Tom says. “Hands-off for a certain period of time after treatment was the biggest eye-opener; to realize they weren't going to die if we didn't give them another shot that day.”

Along the way, they also learned how devastating even a few calves persistently infected (PI) with bovine viral diarrhea (BVD) could be. They've tested every head on arrival for the past two years. By weeding out the BVD-PI calves, they figure they've cut mortality in half, sliced treatment cost by 40% and increased average daily gain by 0.25-0.75 lbs.

Soon after starting to work with Sweiger, the Gallerys began conducting commercial research trials that have paid for an extraordinary pen and alley renovation at their backgrounding facility. It was through this research that the Gallerys first worked with Bill Roser, manager of Wheeler Brothers Feedyard at Watonga, OK. Ultimately this led to discussions about how different segments of the industry might work together for the benefit of each.

“We were tired of risking everything we had every year by owning all of them,” Tom says.

These days, the Gallerys own a percentage of every head they backgound in a unique partnership with Joplin Regional Stockyards at Joplin, MO, and Wheeler Brothers Feedyard. Within the alliance, each entity is the other's customer. Along the way, they leverage their individual expertise, sharing risk and information, and ratcheting up efficiencies.

Now, the Gallerys concentrate on backgrounding calves that will be shipped straight to Wheeler Brothers or for additional growth on forage along the way. About nine months of the year, the Gallerys receive and ship two or three loads each week. Cattle will spend the first 28 days here in separate home groups — 20- to 60-acre traps — and then another three weeks or so in commingled groups and larger pastures.

“We still participate in the ownership, but we're not having to risk everything every day,” emphasizes Tom.

As for that software, the Gallerys began using it in 2003 to collect every nugget of data you can think of on every individual calf that runs through here.

“When we became computerized and started using that software, we could finally pay attention to the results we were getting because we had captured all this data in a systematic way,” explains Tom.

In short, if there's a question about how any one cattle or management variable is affecting another, they have the wherewithal to ferret out the information. Plus, they can compare their performance with that of other operations using the same data-management system.

“We're proud of where we are, who we've aligned ourselves with, and that we've been able to move forward,” says Tom. “We're excited about where we are and where we're positioned to go.”

 

Training Stock to Power Fence

Training Stock to Power Fence

October Tip of the Month
Sponsored Content by Gallagher Animal Management Systems

All animals need time and space to discover that electrified fences are “hot”. This education period must occur under conditions of minimal stress. Select a small, well fenced, holding paddock and place offset wires on the perimeter about two-thirds the height of the animals to be trained.

Ground the remainder of the fence to the Energizer ground and electrify the offset wires with the strongest possible pulse to help make the eduction more effective.

If necessary, the remainder of the farm can be dis-connected to ensure the strongest possible shock during the training period. The minimum time required for training is 12 hours and most animals will be fully trained within 48 hours. The aim is to have stock approaching the fences with caution.

Stock will be controlled during power failures because they will still respect the fence even if it’s off for any reason. Animals which have grown up with power fence systems have remained in paddocks with the power off for several weeks.

Graziers have found electric fencing a highly efficient and low cost method of controlling wildlife and unwanted vermin which can reduce farm income. Electric fencing to control wildlife has been developed where new technology and knowledge is constantly being applied.

Talking the game vs. living it

I've attended some educational meetings where I learned that by instituting some changes in our grazing strategy I was sure we could consistently reduce cow costs by $50/year. Or that by utilizing a herd bull costing $2,000 more, I could generate $50-$100/calf. The list goes on.

Yet, for some inexplicable reason, those ideas have all gone into “the good ideas that I need to implement some day” file. If I'm going to be honest with myself, I have to start asking the question: “Do I really want to improve the financial performance of my business? Or do I just want to make more money doing things the same way I've been doing them?”

That latter question comes pretty close to the definition of insanity we've all heard many times. That is, “doing the same thing over and over and expecting different results.” But I believe it's a fairly common ailment among agricultural managers.

Time, prioritization and a few other things are partially to blame, but one of the biggest impediments to managing for profitability is truly embracing the concept that we are CEOs of our operations and not merely managers executing a strategic plan. The obvious question is: “Whose strategic plan are we implementing if not our own?” While that may sound trivial, it's an important question.

Does your operation truly have a strategic plan designed around the strengths of your management and resources? Does it have a clear vision that embraces what you love, what your strengths are? And does it provide a product your customers truly love? Or have you merely adapted and implemented an industry model of what you “should” do?

Recently it dawned on me that well more than half of all we do aren't really our ideas or in line with our plans, but merely some industry standard. I'm not saying one shouldn't steal every good idea they can from wherever they can. I'm merely saying that, for many of us, we're not running our own businesses, but acting like franchisees whose job is implementing a proven business model.

The problem is, it's pretty difficult to break away from a commodity mindset or financial statement if everyone is using the same playbook.

If you can't answer this next question almost instantaneously, it should raise a red flag: “What was the last radical departure you made from the mainstream management dogma?” If you can answer that question, the only question that remains is: “Was it radical enough?”

Troy Marshall is editor of Seedstock Digest, and a weekly contributor to BEEF Cow-Calf Weekly, a free weekly newsletter delivered by e-mail every Friday afternoon. To subscribe to BEEF Cow-Calf Weekly, which provides timely news, opinion and analysis of events and trends of particular importance to the cow-calf production segment, visit www.beefmagazine.com.

The correct advice

In regard to veterinarian Dave Sjeklocha's September issue column, “ ‘Optimize’ is the word,” (p. 16) there is no question. This includes optimizing performance levels, which means optimizing genetic size and, therefore, sale weight. What should be maximized is profit, not the inputs to profit.

Profit in the cow/calf business is:

(No. of head sold X average weight X average price) (cost)

Rarely does highest profit result from maximizing any of the first three or minimizing the last.

A great article.
Stephen P. Hammack
Professor and Extension Beef Cattle
Specialist Emeritus
Texas A&M Center at Stephenville

Tapered-cone feeders

September's “Research Roundup” item, “Reduce hay-feeding cost” (p. 82), sparked some reader interest. The lead item detailed how research showed the tapered-cone feeder reduced winter-feeding costs when compared to shredding large bales with a bale processor.

Published both in North Dakota State University's (NDSU) “Beef Cattle & Range Research Report” and the Professional Animal Scientist journal, the researchers examined various bale-feeding methods' effect on economics and animal performance. They found tapered-cone feeders significantly increased cow weight gain, greater positive rib fat gain, reduced hay consumption and hay waste.

Doug Landblom, lead researcher on the project from NDSU's Dickinson Research Extension Center, sent along this photo of the hay feeder, taken during the research study. Landblom informed BEEF that the feeder was from Weldy Manufacturing.

Contact the manufacturer at www.weldyenterprises.com or 800-628-4728.

2007's calf-marketing opportunities

Biofuels are impacting today's marketing decisions. As 2006 corn prices escalated in response to ethanol demand, it became clear that relative prices for feeder calves (500-600 lbs.), feeder cattle (750-850 lbs.) and slaughter cattle had to change if all sectors were to be profitable.

As corn prices rose in late 2006, I commented that the best cure for $4 corn is $100 slaughter cattle. The futures market made it to $100 live cattle in April 2007, and we could see $100 again this fall; $100 cattle is something I didn't envision last year.

The industry's saving grace has been the upward trend in slaughter-cattle prices over the last year, but that's not enough to generate simultaneous profits in all sectors. The relative prices of feeder calves, feeder cattle and slaughter cattle have to also change in response to the increased costs of feedlot gains.

As a result, I believe the relative prices for feeder calves, feeder cattle and slaughter cattle will change over the next few years in two phases. The first phase deals with the marketing of 2007 calves and the second phase will deal with the marketings of 2008 and 2009 calves.

Let's summarize the economics of 2006 calves before discussing Phase I price adjustments (the marketing of 2007 calves), as I now perceive them.

Marketing 2006 calves

North Dakota's 2006 Farm Business Management Summary indicates Northern Plains ranchers made $116/cow in 2006 through weaning, based on 553-lb. average weaning weights — down from 2005's record-high $218 profits. Accompanying 2006's slight drop in gross revenue per cow was an increase in production costs per cow relative to the high-profit 2005 year.

My simulations suggest those who backgrounded their 2006 calves from 553 to 800 lbs. with $2.70 corn and $120 hay generated another $12/head profit (Figure 1). Any time a rancher can market his ranch-raised feeds at the going market price (opportunity cost) through backgrounding calves and still make a small profit, he's executed a profitable marketing venture.

Meanwhile, the feedlot that finished those 800-lb. calves in June 2007 lost $48/head. In general, cattle feeders continued to consume equity capital in 2006, and breakeven prices suggest more of the same through most of 2007. March, April and May 2007 were exceptions.

My simulations suggest ranchers who retained ownership in a commercial feedlot (553 to 1,175 lbs) and hit the strong May 2007 market, netted $35/head. The key was hitting that May market. (USDA shows a $41/head profit for Southern Plains feeders who sold slaughter cattle in May 2007.)

The buy/sell margin for such backgrounded calves was -$13/cwt., while the cattle feeder finishing those calves also faced a -$13/cwt. buy/sell margin. Those retaining ownership and marketing in May faced a -$21 buy/sell margin.

Cost of gain (COG) increased with the marketing of 2006 calves. My calculated COG was $98/cwt. of calf produced by the rancher, 69¢/lb. of gain for the backgrounder and 78¢/lb. for the cattle feeder finishing the backgrounded cattle. The retained ownership option had a COG of 71¢/lb. of gain. All these COGs were higher than in 2005.

These same costs for 2005 calves were $93/cwt. for ranchers, 48¢/lb. for backgrounders and 55¢/lb. for cattle feeders. Retained ownership for 2005 calves was executed at 49¢/lb.

This suggests two things. First, ranchers who sold 2006 calves at weaning did reasonably well last year. Those who backgrounded their calves received full market price (albeit somewhat inflated) for ranch-raised feeds plus a little profit. This suggests feeder-calf prices vs. feeder-cattle prices made the needed price adjustments in a reasonable manner with respect to calves born in 2006.

Feeder-cattle prices vs. slaughter-cattle prices didn't make the needed price adjustments to return profitability to the cattle-feeding sector with 2006 calves. Over-capacity in the cattle-feeding sector prevented this price adjustment.

In general, cattle feeders simply bid too much for cattle, which was preferable to closing the feedlot. The price adjustment needed to return profits to the cattle-feeding sector is projected to occur in Phase II of the biofuel era (the production and marketing of 2008 and 2009 calves).

Marketing 2007 calves

Let's take a look at marketing 2007 calves as volatile corn prices continue. My current cattle price projections (Figure 3) for fall 2007 feeder calves and 2008 feeder cattle suggest higher prices than 2006. Even with these projected higher calf prices, I project a 11% increase in beef cow costs (opportunity costs) due to much higher wintering feed costs (fall 2006/winter 2007) and higher summer grazing costs. These higher beef-cow production costs reduce the projected rancher profit in 2007 to $49/cow (from $106/cow in 2006).

Backgrounding these 2007 weaned calves with ranch-raised feeds (again high-priced) is projected to generate a $9/head profit. Ranchers are projected to receive market price-plus (albeit inflated market prices) for 2007 ranch-raised feeds if they background their calves.

The cattle feeder who finishes the backgrounded calves in June 2008 with $3.54 corn is projected to lose $66/head. My 2007 marketing alternative simulations suggest the cow-calf sector should remain somewhat profitable through 2007, but the cattle-feeding sector will continue to consume equity capital.

My simulations project that the buy/sell margin for feeder calves vs. feeder cattle will be a -$14, and the buy/sell margin for the cattle feeder is projected to be -$20/cwt. (Figure 3). This -$20 buy/sell margin for feeder cattle to slaughter cattle isn't sustainable with the new level of projected corn prices in the emerging biofuels era. The economic pressure will be for either slaughter-cattle prices to rise or feeder-cattle prices to decrease relative to each other.

Phase II market adjustments

Phase II market adjustments are projected to focus on returning profitability to the cattle-feeding sector and will take place with 2008 and 2009 calf crops. The question is: “Can beef exports increase enough to drive slaughter cattle price up sufficiently?”

With corn prices projected to move up in 2008 and 2009, feeder-cattle prices relative to slaughter-cattle prices are projected to reduce the buy/sell margins (Figure 4). If export markets don't increase the “sell” portion of the buy/sell margin, the “buy” portion will be lowered by the downward adjustment of feeder-cattle and feeder-calf prices as 2008 and 2009 calves are marketed.

In a previous “Market Advisor” column, I predicted U.S. beef exports to Japan would reach pre-BSE levels around 2010. If this happens, we could see the price adjustment on the “sell” side of the buy/sell margins. Let's hope the export markets do their job.

Harlan Hughes is a North Dakota State University professor emeritus. He lives in Laramie, WY. Reach him at 701-238-9607 or [email protected].

Figure 1. Traditional marketing alternatives for 2006 calves
Marketing strategy Buy/sell margin Cost of gain (COG) Profit/head
Spring calving 2006 ND-FBM-06

Sell at weaning xxxxxxx $98 $106
Backgrounded high ADG -$13 $0.69 $12
Finish backgrounded steers -$13 $0.78 -$48
Grow & finish -$21 $0.71 $35
May/June calving '06 Oct weaned $110 $84
Winter grow feeder into '07 -$5 $1.05 $11
'06 steers on grass in '07 -$5 $0.48 $97
Finish '07 grass steers -$16 $53 $16
Figure 2. Projected planning prices
Lbs. Jan. '06 Mar. '06 Spring 'O6 Fall '06 Jan. '07 Mar. '07 Spring 'O7 Fall '07 Jan. '08 Week of 24 Aug '07 Prices
425 $174 $174 $144 $129 $124 $141 $144 $135 $133 $134
500 $154 $154 $138 $123 $118 $120 $136 $132 $129 $131
550


$119


$130
$129
600 $116 $133 $130 $116 $112 $114 $127 $128 $125 $127
700 $116 $116 $123 $110 $107 $109 $117 $123 $121 $122
800 $104 $104 $117 $105 $103 $105 $108 $119 $116 $118
900 $96 $96 $111 $102 $101 $103 $98 $115 $112 $114
Slaughter $92 $83 $85 $88 $88 $97 $104 $99 $97 $101
Figure 3. Projected traditional marketing alternatives for 2007 calves
Marketing strategy Buy/sell margin Cost of gain (COG) Profit/head
Spring calving ND-FBM-06

Sell at weaning xxxxxxx $121 $49
Backgrounded high ADG -$14 $0.80 $9
Finish backgrounded steers -$20 $0.74 -$66
Grow & finish -$32 $0.68 $4
Figure 4. Projected traditional marketing alternatives for 2008 calves
Marketing strategy Buy/sell margin Cost of gain (COG) Profit/head
Spring calving ND-FBM-06

Sell at weaning xxxxxxx $117 $12
Backgrounded high ADG -$9 $0.64 $60
Finish backgrounded steers -$20 $0.73 -$85
Grow & finish -$27 $0.66 $4

Certified Angus Beef debuts new Ads, Posts record shipments

Buoyed by record volume gains, Certified Angus Beef unveiled a new consumer brand advertising campaign to its members this fall. The campaign includes print, outdoor and radio ads that heavily emphasize a quality message, under the tagline “The brand experts trust.” Each of three ad creatives features a chef, rancher or retail meat cutter as a brand spokesperson representing expertise in raising, preparing and/or cooking the product.

The ads were a recently completed, nine-month consumer research project that identified the impact of high-credibility spokespeople in aiding brand recall, awareness and confidence. The chef, for example, was popular with consumers because of his role in preparing meals; the rancher was considered credible because of his connection with the cattle; the retail meat cutter was well-regarded because of his overall product knowledge.

Ad copy emphasizes three key marketing points for the brand: Certified Angus is "a cut above" USDA grades, based on its 10 brand-certification standards; that CAB's standards ensure consistent flavor and tenderness for the consumer; and that only 8 percent of beef meets CAB's standards.

CAB also introduced a new trade advertising campaign that will target producers and foodservice operators. With a series of taglines, such as "Start to finish, delivering exceptional quality," and "Rancher to restaurateur," the ads focus on quality consistency throughout the food chain—from producer to retailers to chefs.

The new ads were unveiled amid a celebratory atmosphere, with the brand posting its single-biggest month in history with 56 million pounds shipped in June, followed by nearly the same poundage in July and August.

CAB President John Stika said international sales this year will grow 40 percent and that foodservice sales will exceed 200 million pounds for the third consecutive year.

Vaccination Vitals: Proper handling essential

Have you ever heard someone complain that they vaccinated their calves and the animals still got sick? Or maybe it’s happened in your herd. What’s the reason?

The leading factor causing vaccines to be ineffective is mismanagement in handling and administering the product. Fortunately, with attention to detail, these management errors can be corrected to achieve optimal effectiveness of the vaccine. Dr. Vic Cortese is an associate director of cattle immunology with Pfizer Animal Health and a diplomate of the American Board of Veterinary Practitioners. Here, he shares the protocol for proper vaccine usage and administration.

Directions & Dosage

To start, reading the instructions provided by the manufacturer is critical for proper usage of the vaccine. The product infill includes information about dosage, route of administration, mixing instructions (if applicable), storage requirements and the need for booster doses. Specific requirements and/or restrictions regarding use of the vaccine are also provided.

For instance, without reading the instructions, vaccines may be improperly administered by a route not indicated on the label. This can result in the vaccine being given at the wrong site or via the wrong injection technique—and vaccines only can reach their optimal effectiveness when given by way of the label-recommended route of administration.

Another example of improper vaccine usage is administration to animals of a species, age or sex that is out of compliance with label specifications. Following the label recommendations is important because some pathogens and virulence factors are species specific and using a vaccine in an inappropriate species may not produce the desired protection. Moreover, age restrictions are the result of vaccine research and are in place to minimize maternal antibody interference.

Additionally, reading the vaccine instructions can help prevent administering antibiotics that might be contradictory with the vaccine. This is primarily a concern when antibiotics and modified live bacterial vaccines are used together. This situation can be avoided simply by checking the vaccine label.

Two other management mistakes with dosage are partial dosing and failing to administer the second dose of a two-dose regimen.

Partial dosing may be done as a cost-cutting measure, because the user believes the recommended dose is too high for the size and age of the animal, or because the vaccine instruction sheet was not read. However, partial dosing not only decreases the immune response, but also increases the risk of future adverse reactions, such as an allergic reaction. Keep in mind that vaccine doses are set at a level that has been confirmed to stimulate an immune response in the species for which the vaccine has been developed. The dose level generally is not size dependent.

Failing to administer the second dose of a two-dose regimen undermines product effectiveness because many vaccines require a booster dose to achieve peak levels of immunity. For the vaccine to work properly, two doses must be administered and, equally important, timing of administration must be in compliance with the label-recommended schedule. If the booster dose is given too soon after the first dose, the immune response is lost in the initial response. If the booster dose is given too late after the first dose, the population of memory cells from the primary dose decreases significantly, diminishing the immune response.

Handle With Care

Cortese says vaccine effectiveness also depends largely on proper handling procedures prior to administration. While handling guidelines are often simple, they are frequently overlooked or ignored.

Foremost, vaccines must be stored according to label directions and should not be used if they become frozen or are exposed to high temperatures. Freezing or overheating disrupts the integrity of vaccine antigens and may degrade vaccine adjuvants. Thawing or recooling does not ensure that vaccine integrity will be restored. Thus, if there is any doubt about how the vaccine was stored, the product should not be used.

Along with vaccine storage, be sure to watch product expiration dates. If vaccine is outdated, it will likely be ineffective and should not be used. Here’s why: When a vaccine is developed, efficacy studies are performed with product produced at an established minimum immunizing dose (MID) level. The MID represents the least amount of antigen that is required to initiate desired levels of immunity when the vaccine is administered properly. The MID also stands for the amount of antigen that is guaranteed to be present in a vaccine dose at the product’s expiration date. After that date the vaccine’s antigenic level continues to decrease and, ultimately, may be inadequate for establishing protection.

Mixing Mistakes

Mismanagement when the vaccine is being administered not only can decrease vaccine effectiveness, but also may lead to unwanted adverse reactions and injection-site problems. Cortese offers these details to consider chuteside:

Continued on next page...

Equipment used for mixing and drawing vaccines out of a bottle must be sterile. Even small amounts of disinfectant can inactivate modified live vaccines and harsh disinfectants may break down the antigens in inactivated vaccines. Thus, syringes must be new or clean and free of disinfectant residue. If a disinfectant is used at the end of a vaccination session, thorough rinsing with sterile water is required to remove all traces of the disinfecting agent.

Following reconstitution (mixing of the vaccine), modified live vaccines require special care because they are extremely sensitive to sunlight and heat. These vaccines should be kept cool and used as soon as possible after mixing.

When multiple vaccines are administered simultaneously, the syringes for each vaccine should be identified and kept separate. Pulling vaccine into a syringe previously used for another vaccine can lead to problems of mixing incompatible vaccines.

Also, avoid the unapproved mixing of vaccines. Many killed-antigen vaccines kill live viruses, either because of their adjuvants or because of disinfectants used for inactivation and storage of these products. The unapproved mixing of these vaccines with modified live antigens inactivates the attenuated viruses and renders them ineffective. It also may create an increased potential for injection-site lesions. Thus, only approved vaccines and diluents should be combined. Combination vaccines are tested to ensure that the various components work together and that there is little to no interference between the components.

Lastly, all vaccine labels advise immediate product use once the vaccine is opened. Storing opened product increases the risk that contaminants will grow inside the bottle and that vaccine degradation will occur. Without question, all modified live vaccines must be used immediately, and this is a good rule of thumb to follow for all vaccines.

Following these guidelines can help ensure your vaccination program is optimally effective. It may take a little extra time to do things right, but the performance payoff is worth the effort.

Needle Knowledge

As you prepare to administer vaccinations, be knowledgeable about needle usage as well. New needles are recommended for every animal to decrease the likelihood of disease transmission and postvaccination abscesses.

For large herds, a new needle for every animal may not be practical, but to meet Beef Quality Assurance guidelines, a minimum standard of needle replacement after every ten animals is required.

Transfer needles are recommended for mixing vaccines that require rehydration. Vaccine should always be drawn out of a bottle with a new sterile needle, never with the needle used for vaccinating animals.

Next Tip: September good time to control Sericea Lespedeza >

Industry loses two legends

A pair of industry legends passed away recently. W.D. Farr, 97, patriarch of an internationally known family cattle-feeding enterprise recognized for many years as one of the most technically advanced in the world, died Aug. 13. And, Fred H. Johnson Jr., 91, founder of Summitcrest Farms in Summitville, OH, passed away Sept. 6. Both were cited among BEEF magazine's “Top 40” in 2004 (see beefmagazine.com/mag/beef_beef_top_2/index.html).

Farr was known for helping bring commercial cattle feeding to the state of Colorado. He pioneered year-round cattle feeding, the feeding of high-moisture corn and many other feeding innovations. But he was likewise considered a giant in the water area, being a leading driver behind water-development projects in the West, understanding early on that water was the region's lifeblood.

Johnson died in his home from complications of cancer. He established Summitcrest Farms in 1949. With cattle breeding operations in Ohio, Iowa and Nebraska and a genetics company in Montana, Summitcrest's champion breeding cattle developed into a brand recognized around the world.

Johnson was a past director of the American Angus Association and a past president of the Ohio Angus Association. In 1978, he helped found Certified Angus Beef® (CAB) and was chairman of CAB for its first six years.

LESSONS Hard Learned

Used to be, if you wanted to make significant genetic improvement in your herd, you needed to focus on identifying and culling the bottom 20% of your cows based on the profitability (read weaning weight) of their calves. “The best way to improve averages is to keep getting rid of the bottom 10, 15, 20%,” opines James Henderson, the newest third of the highly successful Bradley 3 Ranch (B3R) at Memphis, TX.

But, adds Mary Lou Bradley-Henderson, James' wife, ranch partner and one-time employer, as well as daughter of industry icon Minnie Lou Bradley, the industry is on the cusp of changing that.

“With all our new technology, we're seeing more cattle in people's herds that are absolutely outstanding,” she says. “They're so advanced, they have all the meat qualities and they're so efficient I think we're just now beginning to understand how to identify them.”

We all want to identify the bottom end, she says, “but if you're talking about how ranchers are going to survive in the future, it seems like there are a lot of cattle that are very futuristic that we're not identifying.”

For the cow-calf producer willing and able to step into this new world of opportunity, the outlook is bright, they say. And they know of what they speak, for Minnie Lou and Mary Lou, along with then-B3R plant manager James Henderson, pioneered many of the “new” trends currently grabbing headlines in the business.

How it started

Mary Lou describes herself, back in 1986 when the Bradleys established the B3R packing plant in Childress, TX, as “another typical angry rancher.” Prices were low, profitability was scarce and cash flow tough to come by.

But shortly after joining the dark side and becoming a packer, she had a dilemma — she no longer knew who to be angry at.

“When you've walked in those shoes of having a seedstock operation, gone through the management of how to feed them and then you slaughter them, it's an eye-opening experience. Because until then, you can always blame somebody else. Once there's nobody else to blame, it's eye opening.”

B3R hung its hat on natural beef, which back in the late '80s and early '90s was looked upon with more than a little suspicion by most ranchers. B3R bought cattle on a value-based grid instead of the cash market, and sold a branded product with a consumer guarantee of quality. Participating ranchers had to individually ID each calf, and participating feedyards had to modify their practices to accommodate the changes in management. The learning curve was steep and the road had more than a few rough spots.

In 2002, they sold the plant to Coleman Natural Meats, taking their accumulated and hard-won knowledge back to their long-standing purebred Angus ranch. But make no mistake, their perspective is different and they're putting that to work to help the industry produce calves that will hit the mark at every stop along the marketing continuum.

What they learned

“At the end of the day, as a packer, I can turn that animal into protein,” Mary Lou says. “But I can't really change it. I can affect it a little bit, but I can't change it.”

So one of the first changes came early in their tenure as packers, and it happened on their own ranch.

“Our cattle were a certain way until the mid-80s,” Mary Lou says. But then they started processing them and attempting to sell the meat to a highly discerning consumer. “We were the seedstock and those cattle changed. They're (now) real long and thick because that's what we needed. That was ultimately what paid its way.”

A genetic reaction to marketplace realities. But the calves sired by Bradley 3 bulls still had to be fed. So what's more important in moving the needle toward consumer acceptability — genetics or management?

“We went round and round about how one affects the other,” she says. The outcome, after individually analyzing thousands and thousands of cattle and returning that analysis back to the feedyard and the rancher, is they're almost equally important. “You can have the best management and not have the genetic makeup, or you can have great genetics and mess it up by management and never get the benefit. But if you have the two together, you can get there.”

And getting there, defined as producing an eating experience that will encourage a consumer to buy it again, means genetics and management must be tightly linked. “When we first opened the plant,” Minnie Lou says, “it was my job to call a guy and tell him how the carcasses were. I'd have rather told him his kid was sorry than that his calves weren't up to par because he took that really personally. His cows weren't as good as he thought.”

Once the rancher got over that shock, James says, “he was ready to sell them all and start over. And you had to say, ‘Stop, wait a minute. You can't afford to do that.’”

But you can take some steps to improve your cows. “Even if it's just getting individual weaning weights on those calves and tying it back to a cow, that's a place to start. If you just load them up in a trailer and haul them to the sale barn and get a group weight on those calves, that doesn't tell you much about the performance of that cow.”

James says the key is to analyze multiple traits. “That's one thing we learned in the meat business — how much true variation in value there was in a calf crop, let alone across breeds and management techniques.”

In fact, there was so much variation that James says the plant learned early on that it didn't want to buy a ranch's entire calf crop. “That was one of the key things I learned in analyzing literally hundreds of thousands of cattle and 35-40 traits. There were certainly higher-value cattle in there, but you couldn't afford to pay higher value for the whole calf crop.”

The lesson learned is that to optimize the value potential of every calf in your herd, know its market potential. “We paid for everything on an individual animal basis, so if you sent me cattle that were of less value, you got paid less for them,” he says. Those cattle that couldn't compete on the rail would have returned more money at the sale barn where the cash market averages out value differences, he says. “It was those kinds of things that helped us to understand how that value variance makes a huge difference.”

Analyzing traits

So which traits to analyze? From a cow-calf perspective, James says, you still have to start at the ranch.

“Nothing makes a commercial cowman more money than a live calf and fertility,” he says. “Then, once you've got a live calf from a cow that can stay in the herd for a long time, how do you improve? How do you begin to hone in on things such as growth, energy or feed efficiency in the cow and then down to the quality parameters we have to have for the consumer to buy our product? All of that has to be in a package for a cow-calf man to make money.”

To that end, James encourages commercial producers to decide which traits are important to them, and then develop a genetic plan. “We see so many cow herds that have what I call ‘one for everybody.’ They'll have numerous different kinds of bulls and multi-colored cows and all kinds of variation within that cow herd.” You can work with your bull supplier, he says, to develop that plan and get started in emphasizing the traits that will pay you the most.

That's easier to do now that more comprehensive EPDs are becoming available for traits that go beyond simple performance. But true genetic analysis for a wide range of traits is still hard to get for most.

That's changing, James says. Cattlemen have talked for a number of years about tracking and tracing and looking at multiple traits. But outside of niche programs, the industry doesn't have the infrastructure in place to do it, “We're now, slowly, developing that infrastructure.”

Two big pieces still need to fall into place, he says, before widespread genetic information will be available to a large part of the commercial industry. “One of those is to understand all the markers that affect the things we've talked about from a genetic standpoint. We're still a ways from having that infrastructure in place where you can come to us and say, ‘here's the genetics I need, can you build those for me?’ But it's coming, and we're going to see that happen very quickly.”

The other piece is much more mechanical, he says, in that the industry has never had a way to track cattle in the packing plant and get that information back to producers. “And that's going to have to be accomplished in the next few years. We're going to have to get the structure inside a packinghouse where we can collect a radio-frequency ID tag, attach it to a carcass and get carcass data back.”

Once the industry breaks those two hurdles, the rest of the infrastructure is in place, he says, and the industry will have the widespread ability to make some real genetic progress.

In the meantime, however, there's still room for improvement. “One factor we use here is whether a cow weans in excess of 50% of her body weight. If she doesn't, she doesn't have a home,” James says. “And production and productivity will continue to increase because it still has room to. Standardized Performance Analysis data will tell you that we're still weaning about 82-83% of calves to cow exposed. That's a long way from really being good at what we do.”

Premiums vs. value

And then there's the breeding season. Even in a 60-day breeding season, Minnie Lou says, there's a big difference in dollars. “If you figure about 2 lbs./day from the time that calf's dropped until he's weaned. In a 60-day period, the last calf is going to be at least 120 lbs. lighter. That's close to $180. There's not a premium program out there that will pay that.”

James agrees, but cautions that chasing premiums may be like trying to rope the wind. “I don't think there is such a thing as a premium in this business,” he says. “I think there are differences in value in cattle and those are reflected by different programs. What you get paid for your cattle, is the value that's established for those cattle. And I think the concept of premiums and discounts in this business doesn't tell us where we need to be concentrating. If we look at those as being values, we can decide how much effort we want to put into reaping those rewards.”

James says we're going to see a much broader spectrum of values across the industry. In fact, it's already being seen in the sale-barn cash market, where properly managed cattle with the right genetics that are age- and source-verified are returning more value compared with calves that were weaned in the trailer on their way to the auction.

Indeed, James says, we're at a crossroads in the industry, “probably like we've not ever seen in our lifetime. There are a lot of factors coming together at one time that will decide the future.”

Question is, whose future will it be? That, he says, is up to you.