SUPPLY
W
CATTLE
By Michael Grahmann
here are the record calf prices of last year? What is
the market going to do in 2016? Where are cattle
numbers and replacements at this year? How can
I optimize my genetics to maximize my returns in
2016? These are some of the more popular discussion points in feed stores and coffee shops in rural America and in
board rooms across the United States. As a beef producer, the last
question is always the one that affords us the best opportunity to
continue the success of the cow/calf segment of the industry.
Without discussion, we are not in as vibrant of a market as we
enjoyed the last few years. Fall 2015 saw a correction in the feeder calf
market that brought the value of feeder cattle more in line with the live
cattle market. The feed yards and live cattle owners in much of 2015
experienced difficult market conditions that saw losses on cattle far
outweigh breakeven ventures in cattle feeding. As the calendar turns to
2016, stabilization has entered the feeder calf and live cattle market, and
hopefully, the wild swings of fall 2015 are things of the past. Even with
all those experiences of this past fall, the cow/calf segment is in a great
place, and 2016 should be another great year for the cow/calf segment of
the business. As cow/calf producers, the question we have to answer is:
How can we continue to add value to our cattle in the current markets?
From a cow/calf standpoint, genetics and nutrition are two ways that
a producer can continue to add value to the cow herd and calf crop.
Reproduction rate is still the number one driving factor to profitability
of the cow/calf segment. Producers that continue to focus on taking
the necessary steps to insure high reproductive rates in the herd always
position their operation for success.
Culling practices, bull selection and nutritional condition of the cow
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herd are three of the most important factors to ensure optimal reproductive rates. Culling unproductive/open cattle on an annual basis
ensures that there are no “freeloaders” in the herd. Consistently removing nonproductive females from the herd is one of the fastest ways to
improve overall herd productivity. I know this at times can be hard to
do; however, when you consider input costs of land, genetics, nutrition
and herd health, culling the non-performers becomes a necessity to
ensure profitability.
In today’s calf markets, bull selection becomes even more important.
Sourcing genetics that will calve easy, grow fast and produce a marketable calf and valuable carcass are of the utmost importance. Our
customer today, both in terms of the cattle feeding industry and the
end consumer, are more and more discerning on the product that we
produce. With the current market conditions, we are seeing a bigger
spread in pricing between cattle that fit the industry’s needs and those
cattle that do not fit what the industry is calling for. This fall, we saw
value differences in similar weight feeder cattle in excess of $100/head
depending on quality of the calf and the genetic power behind that calf.
The old adage that “quality always sells” was definitely evident. We are
seeing the same scenario in the replacement heifer market. The “good
ones” are still bringing top dollar, but the plainer, replacement cattle are
being subjected to larger discounts in the market. The bottom line from
a genetics standpoint is take the time to source high quality bulls that
will produce a desirable animal for your targeted market.
Now that we have briefly addressed the genetic side of the equation,
what can we do nutritionally to ensure that we are optimizing reproduction and maximizing weight at weaning? As important as genetics in the
cow herd & bull battery, they still account for only about 30 percent of
the result. Seventy percent of the result is affected by the environment
to which those animals are subjected. With nutrition, we can ensure
that the environmental effects are mitigated, and the cattle are set up to