The discounts can kill you. Cattle feeders have come to understand the truth of that statement as they market more of their cattle through value-based grid-pricing programs. Premiums for high-grading, high-yielding cattle can quickly melt away in the face of price penalties imposed on lightweight, heavyweight, Standard or Yield Grade 4 carcasses.

The solution sounds deceptively simple-just don't produce or market any outlier cattle that earn discounts at the packing plant.
Unfortunately for most feeders, every pen of cattle, even those that appear the most uniform, include animals with a wide range of genetic potential for growth, muscling and fat deposition. Managed as a group and marketed at the same time, they almost invariably incur some discounts. Ironically, the margin for error becomes narrower as feeders aim for grade-based premiums. Like a golfer hitting for a green surrounded by sand traps and water hazards, a feeder trying to improve grading percentage raises the risk of discounts for carcasses that become too fat or too heavy.

At Schramm Feedyard, Yuma, Colo., manager Tom Holtorf uses individualized management and sorting based on growth rates, frame types and ultrasound measurements of backfat and marbling to compensate for genetic variability. And the system works, as demonstrated by the cattle from Pen 112, which Drovers has followed in this series since they were pre-weaned calves on Greg and Lynn Gardner's G&G Ranch near Polson, Mont.