It’s been talked about for 60 years. It’s better for animals, preferred by most cattle feeders and could provide a 169% return on investment. “2014 was the biggest ‘no brainer’ year in history to precondition your calves,” says Purdue University veterinarian W. Mark Hilton. “2015 could be even better.” Crunching the numbers, Hilton first turns to an 11-year analysis of Indiana beef herds that showed weight alone added $50.84 average profit on preconditioned calves.
It’s hard to stay at the top. But the “coaches” at Performance Blenders of Jackson, Mo., found ways to work with their team of 130 or more cattle producers to keep a traveling trophy. That’s the Certified Angus Beef LLC (CAB) Quality Focus Award for feeding partners with up to 15,000-head capacity. Last year’s drought and resulting high corn prices forced the team to modify a few strategies, but those challenges did not overcome efforts to raise cattle that hit the CAB and Prime target.
In a roomful of cattle feeders, an Oklahoma State University (OSU) livestock marketing specialist had everyone’s full attention as he said there is no way around it: In the next two to three years, the already short supply of feeder cattle will only get tighter. OSU Breedlove Professor Derrell Peel described the current feeder cattle situation and the circumstances leading to it at the eighth annual Feeding Quality Forum in Omaha, Neb., and Garden City, Kan., last month.
Everyone in the beef chain seems to agree we need more of it. That’s the simple explanation for a trend that shows hot carcass weights (HCW) have increased 200 pounds (lb.) in four decades. But for all the opportunities that presents, there are many challenges. John Stika, president of Certified Angus Beef LLC (CAB), talked about both at last month’s Harlan Ritchie Beef Symposium during Midwest American Society of Animal Science meetings in Des Moines, Iowa. “The production side is looking for something bigger to cover their increased costs,” he said, “but the retail and foodservice sides are looking for [more units of] something much smaller that’s easier to manage from a portion-control standpoint and a unit-cost standpoint.”
John Simons ranches with his family near Enning, S.D., where they’ve focused on reducing variability in their Angus-based cowherd for the last 20 years.“If your calves all look the same, they’re just a pretty package,” he says. “And pretty sells.” Sticking with one breed and bloodline for several years lets Simons produce calves that not only have the same phenotype but also perform similarly in the feedlot and on the rail.
Selling fed cattle on a live basis is no longer standard practice, and some day it could end up as no more than historical reference. “The old selling-them-live method has given way to formula sales,” says Mark McCully, assistant vice president for Certified Angus Beef LLC (CAB). Data from Cattle-Fax and the U.S. Department of Agriculture shows a sharp decline in cash sales in the past seven years, from 52.1% in 2005 to just 26% in 2012. The inverse of that is the steep gain in negotiated sales, like grid marketing and other arrangements, which moved up from less than half of sales to more than three-quarters during those years.
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