Small changs, big returns
The 5% effect compounds in your bottom line
Wednesday, November 28, 2012 6:25 AM
Change doesn't have to be dramatic and sweeping to make an impact.
Bill Rishel, a registered Angus breeder from North Platte, Neb., says little gains in efficiency, functionality and carcass merit all add up.
For easy math, he uses a 100-head example.
"As a cow-calf producer, the number one traits for profitability are fertility, reproduction and herd health," he says.
If an average herd has 90 head survive to weaning, what would five more mean?
"Five additional head, because you had a little more fertility, you had a little better health or management-that's about a $3,000 bump," Rishel says.
Calving ease is one easy place to make that gain: "Years ago the only tool we had was phenotype," he says.
"Today, when you add the genomics into the EPDs [expected progeny difference], we're a lot further along than ever before in my life."
Tools are available to pick the "right" sires and drive improvements in other areas, he says.
Those 95 calves move on to the industry average 205-day weaning, at 2.5 pounds (lb.) of weight per day of age (WDA). At just over $1.48 per hundredweight (cwt.), that's $757.
But what if they gained more?
"That 5% increase, along with the five more calves-now you're talking about some really big money," Rishel says.
Such a percentage gain in weaning weights means WDA moves from 2.5 to 2.63 lb. That may not seem like much, he says, but figuring in all multipliers moves total calf price to more than $797, and $7,585 to the herd's bottom line.
A boost in gain and efficiency could show up in the feedyard, too.
Increasing average daily gain (ADG) by that 5% would turn 3.4 lb./day into 3.57. On a 600-lb. total gain, that changes the per-head value by just $4.53, but measured on that 95 head it adds up to more than $430.
Feed efficiency can have much more effect, as improving from 6.2 lb. to 5.89 lb. of feed to gain a pound of beef, just 5%, creates a $35/head value difference. That's $3,357 on the entire herd.
Efficiency and quality can be achieved in tandem, Rishel says, noting one last place to make an improvement: the cooler.
"Using genetic tools to make changes with highly heritable traits, now we can do something that impacts the entire industry," he says.
Citing an Oklahoma State University sire evaluation study, he says 16 bulls with superior carcass traits added an average of $3.27/cwt. to the carcass value.
"I took that number and applied it to an 850-lb. average carcass weight," Rishel says. "The added value per carcass was $27.80."
That's another $2,641.
"So let's add this up," he says. The greater value from 5% improvements at every stop comes to $14,013.65.
"If you calculate that by the number of cows, that's actually about $140 per cow gained on that operation," he says. "As a percent of the total carrying cost, that's a big deal. A very big deal."
It's not just an on-paper exercise, Rishel says, noting many top customers who have proven the better-at-every-turn philosophy works.
"They just nail this every time out, due to genetics and their good management. They do everything right."
Their reward is obvious. With loads that are more than 60% Certified Angus Beef ® (CAB®) and Prime, they consistently reap premiums of more than $100 above average.
"For those of us in the seedstock industry, it's a balancing act to put all of these traits together in one package," he says, but history shows an ability to move the needle in all areas. Some of today's balanced sires are proof of that, he adds.
"We selected those cattle for function and soundness and reproduction, and then when we got in the sire evaluation work, we selected for carcass traits from that population," Rishel says.
Careful selection of available genetics, tools and management by commercial cattlemen could put the 5% factor to work on their bottom lines.