Increasingly abundant corn, growing global demand for beef and excess feedlot capacity ensure that cow-calf producers will see the highest calf prices in history over the next two to five years. Given such unprecedented calf prices, many cow-calf producers will have the luxury (or curse) of spending more on bulls. Bulls will likely cost more than ever before, with many bull sales averaging between $4,500 and $6,500 per bull.
If you are going to spend $5,000 or more on a bull, how should you select one?
You clearly want a good bull, but the definition of a good bull varies greatly. Today, there are several major “bull selection” philosophies available from which to choose. Here are three of the most common:
1. Increase your weaning weights.
2. Reduce your costs.
3. Earn carcass premiums.
The “increase your weaning weights” bull breeders are perhaps the most numerous. They offer a bull that has higher growth figures so that calf weaning weights will increase. These herds advertise that “you still sell your calves by the pound.” While this statement is true, it ignores several consequences that come along with producing higher-growth cattle. If you keep replacements, using high-growth bulls will lead to larger cow size. This, in turn, leads to higher per cow feed costs, potentially reduced fertility and, ultimately, less pounds of beef produced per acre you own (we will discuss cow size in more depth in a future column). You should also remember that heavier calves typically bring less per pound. Thus, the added pounds earn a lower marginal price. If your cow size goes up and fertility goes down, leading to lower pounds weaned per acre, you will likely end up less profitable even if you wean bigger calves.
The “reduce your costs” bull breeders offer a bull that will produce females that require less feed. Their idea is that the most important driver of ranch profitability is cost. You reduce cost by running more moderate-sized animals that require a minimal amount of supplemental feed. If your bull lasts longer, you spend less on bull replacement costs. The downside risk of this strategy is that you might give up more income potential than you get in cost savings. If the resulting calves weigh less, bring less per pound or underperform in the feedlot, you may end up less profitable even if you lower your costs.
The “earn carcass premiums” bull breeders offer a bull that excels on carcass merit. They argue that the consumer, not the feedlot, is your true customer. You see these vendors talking about the percentage of calves that grade CAB or Prime and the premiums they earn. They also emphasize carcass weight, as feeder calves that reach heavier finished weights are worth more to feedlots. Carcass traits can drive hundreds of dollars in value difference and are highly heritable. However, since most ranchers sell at weaning, it’s often hard to get paid for these traits. If you select for carcass traits and lose ground by increasing costs or decreasing weaning weights, then you may end up less profitable even if you produce premium carcass-merit cattle.
In the end, each of these bull selection strategies is less than ideal. None of these strategies will maximize your profitability as a cow-calf producer. In reality, you probably want to do all three of these strategies at once. It seems obvious, but if you could reduce costs, increase weaning weights and earn premiums, then you would almost be guaranteed of higher profits. But how can this be done?
The only way to make genetic improvement on multiple traits is through the use of an index. Indexes balance selection on multiple traits to ensure you are moving in the right direction on all of the areas emphasized by the index. An example of such an index is the All Purpose Index (API) calculated by the American Simmental Association. Their API will ensure that a herd reduces costs (cow size), improves weights and adds carcass merit. By selecting for this index, a producer can improve all three areas at the same time.
In the American Angus Association, there are a number of indexes available for use. The most common one is the $Beef (beef) index. This index selects for all post-weaning traits but does not reduce cow cost. In Angus, cow cost is estimated by the $EN (energy) index. Higher $EN means that the cows will require less feed and less cost. If you are buying Angus bulls, you could make a simple formula like:
$Beef + $EN = a custom selection index
Remember that if the $EN is a positive value, you should add it to the $Beef number (subtract it if it is negative).
You’ve worked hard to build your herd. Don’t be fooled into buying expensive bulls that take you in the wrong direction. Multi-trait indexes, if they measure all of the traits important to you, can help you make greater genetic improvement. In the future, breeders and breed associations will offer improved indexes that can help you make more progress on cow-calf profitability.