Childhood dot-to-dots are simple and straightforward with an easy plan for getting from the starting point to the end and complete picture. In the beef industry, connecting those dots among segments is not always so clear.
“As input costs have spiraled, cow-calf producers continue looking for ways to add value to their calf crops,” said Larry Corah, Certified Angus Beef LLC (CAB) vice president, at the Northern States Beef Conference in Watertown, S.D., in January.
He said cattle buyers are looking at three main profit drivers: growth, grade and health.
During a 150-day feeding period, every tenth of a pound (lb.) increase in average daily gain (ADG) equates to 15 lb. more total weight. For example, adding .3 lb. per day would increase final weight by 45 lb., adding nearly $60 to the harvest value.
“Keep in mind that growth is very heritable and easy to change in your calf crop,” Corah said, suggesting the use of yearling expected progeny differences (EPDs) and the Angus $B value index.
“Producer do put pressure on growth, since they get some of the benefit in added pounds at weaning,” he said. “Unfortunately grade is often overlooked as folks think, ‘It’s not my problem.’”
More than 70% of today’s cattle are sold on a grid or formula where quality is a key component.
Cattle that do well in such market channels routinely earn $100 to $150 per head above their “average” counterparts, and the “genetically superior” cattle can net more than $200. Buyers keep track of sources and pay more for those that hit the target.
Corah shared examples from real cattlemen who have gone far beyond today’s average 22% to 24% Certified Angus Beef ® (CAB®) brand acceptance. Missouri producer Johnnie Hubach hits 85% CAB routinely, for example.
“The key to quality grade is marbling, which is highly heritable,” Corah said. “As the genetic engineers of that calf, today’s cow-calf producers can create a great eating experience and get paid for it.”
Many cattlemen are concerned that they must choose growth or grade, but the CAB vice president said they don’t have to.
Feedyard data on more than 800,000 pens analyzed by Professional Cattle Consultants shows cattle in the highest profit group had the best grades and highest gains, 592 lb., compared to 536 lb. in the lowest group. The top money-getters were 58.2% Choice or higher, with 13.8% premium Choice, while the bottom third made 52% Choice and 10.9% premium Choice.