Stocker operators can benefit by participating in traceability systems that add value across the beef supply chain. That message came through in several presentations at last month’s Animal ID Info Expo in
Bill Helming, owner of Bill Helming Consulting, outlined how industry and market trends are driving a need for more documentation as cattle move through the production chain.
Higher production costs in feedyards due to high grain prices will increase demand for pasture and grass to add weight to steers and heifers before sending them to feedyards. In addition, the cattle cycle has shifted toward flat to declining beef cattle inventory numbers. With excess capacity, feedyards and packers increasingly will want to line up supplies of cattle with predictable value.
Feedyards will require better data and information on their cattle relative to source verification, genetic makeup, animal health history, cattle feeding performance and carcass quality characteristics. These feedyards, Helming says, will increasingly partner with selected cow-calf and stocker cattle producers to jointly add value and consistently produce what their customer, the packer, wants each week.
Chuck Fries, from AzTx Cattle Company, one of the country’s largest cattle feeding companies, described how traceability can become a tool to identify value opportunities across the supply chain.
Fries outlined the characteristics that contribute to cattle value at each production stage, such as genetics and herd health at the cow-calf stage, and average daily gains, cost of gain, treatment cost and death loss at the stocker stage.
An effective herd-health program at the ranch relates to cost of gain, treatment costs and death loss at the stocker level, then to treatment, ADG, feed efficiency and death loss at the feedyard. Those then affect quality grade, dressing percentage and percent retail product at the packer
Genetic selection at the ranch affects ADG at the stocker level, ADG, feed efficiency and marketing options for the feedyard, and quality grade, yield grade, dressing percentage, retail product and marketing options for the packer. At retail, genetic selection will affect beef consistency, quality, marketing options and marketability.
Based on these relationships, Fries stressed that by using animal identification and a traceability system, along with communications between sectors, producers can increase revenue, reduce cost of production and avoid future costs, primarily by identifying the source of problems.
He used an example to illustrate how traceability helped prevent future costs in a grazing operation. The operation received 1,100 calves of mixed origin during poor weather, and a significant number soon became sick and some died. Because all the animals were individually identified, the buyer was able to determine that of 12 sources for the cattle, all of the death loss and sickness came from one operation representing 15 percent of the total group.
Although the buyer had strict requirements for vaccination protocols, this group had slipped through without being vaccinated back at the ranch. The buyer went back to work with the supplier to assure the mistake would not be repeated, and the problem was solved.
Fries adds that 20 percent of any group of calves usually is responsible for 80 percent of the problems or red ink. Traceability allows the stocker operator or feeder to work with suppliers year after year to eliminate unprofitable sources of calves and replicate the profitable experiences.
At the bottom line, Helming says, the commodity approach does not require a lot of cattle ID data, but the value-added and branded-beef approach does. Value-added beef production is where the beef industry is going, he says. This is where the real future is for the beef industry. For the entire proceedings of the Animal ID Info Expo, follow this link.