Lynsey McAnally (00:04):

Angus at Work, a podcast for the profit-minded cattleman. Brought to you by the Angus Beef Bulletin, we have news and information on health, nutrition, marketing, genetics and management. So let's get to work, shall we?

Hello and welcome back to Angus at Work! We are smack dab in the middle of a season of celebration, and the beef industry certainly has its fair share to be thankful for. I'm Lynsey McAnally and on today's episode - as part of a new quarterly market update feature - we chatted with Troy Marshall, director of commercial industry relations at the American Angus Association about current trends in the cattle market, how Angus feeder-calf sales in several states got their start as well as an update on recent feeder calf sales held in December, and where we see the cattle market heading as we celebrate the new year and head into 2025. But before we get started, we wanted to take a moment to thank Purina Mills for their sponsorship of this episode.

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Lynsey McAnally (02:18):

They really got the Oklahomans in the house for this one today! So welcome to Angus at Work. I'm Lynsey McAnally and today we've got a great podcast in store for you. We're here with Troy Marshall, director of commercial industry Relations at the American Angus Association. First of all: welcome, Troy!

Troy Marshall (02:38):

Thank you. Glad to be here.

Lynsey McAnally (02:39):

Glad to have you. I'm going to kind of open the floor to you and let you give us a little background on yourself and your experience here at Angus thus far.

Troy Marshall (02:49):

Yeah, my background, I've always been in the cattle business. My family and I ranched and raised registered Angus for about 25 or 30 years. I've worked at CattleFax prior to that, so I've always been involved in the markets. And then, as you mentioned, I've been with AngusLink program and the Commercial Programs here at American Angus for the last three and a half years or so. I've got to see that program really grow and take off and it's been a lot of fun.

Lynsey McAnally (03:15):

There's a lot of exciting things going on for commercial Angus producers here in particular. And we've got a couple of those we're going to talk about today, but I think a good place for us to start would be, do you mind just giving us a current market update of where we're at?

Troy Marshall (03:29):

Yeah, no, this is a great market update to give because we have historically high prices pretty much across every class of cattle. We've seen feeder cattle - four weights - bringing over $4. Five weights, pushing that. We've had a lot of these cattle that are bringing over $2,000 per head on an individual basis. And some of the yearling cattle, even early in the spring, we saw it over $2,500 on these feeder cattle. So all-time record highs for just pure dollar run. And like I said, it's every class of cattle across the board.

Lynsey McAnally (04:03):

What our listeners couldn't see was me shaking my head when you were talking about some of those prices because it is exciting to see that and we see some of these - what may be considered - outlier prices coming across. And do you mind telling us a little bit about that?

Troy Marshall (04:18):

Yeah, as you mentioned, we're seeing the market differentiate more than it ever has. So on any given day, it's not uncommon to see $20 to $25 difference within a weight class of cattle, which never used to happen. And I think that's justified just with the value of genetics and how much an extra 50 pounds (lb.) of carcass weight is worth a lot more than it's ever been before. An increase in feed efficiencies worth a whole lot more. And then we see the premiums for quality grade and Prime here in November. We had the all-time high in terms of the difference between Prime and Choice cattle at over $96 per hundred weight. So on a 1,000 lb. carcass, that's $960 and that's not compared to Select, that's from Choice to Prime. So we've just seen these values escalate and at the same time the market is I think recognizing quality like it never has in the past.

Lynsey McAnally (05:15):

So that goes into when we're talking about, and we'll talk a little bit here in just a minute about Angus feeder-calf sales in particular, but when you're talking about that difference in quality and how a buyer can justify paying that premium ... Do you mind speaking a little bit to that?

Troy Marshall (05:31):

Well, I was sitting in the Oklahoma City sale barn a couple weeks ago. You have a run of 10,000 head, 80% of them are black-hided. You sit there and, honestly, they have all had their shots and they're all out of really good bulls. And so it's hard for a buyer there to differentiate, know what kind of management, what kind of genetics are truly in those cattle. And I think we've seen with this AngusLink and the Scorecard and those kind of things, but just having an objective, reliable way for those customers to truly know what the genetics are in those cattle and how they've been managed creates a lot of value for them. And as you mentioned, it gives them the confidence to be able to buy those cattle and differentiate the price and do so with, I guess, a certain degree of predictability.

The interesting thing with that, too, is a lot of the feeders are using the term 'genetic hedge' now, but when you look at the amount of risks that we have in the marketplace - and we always have that market risk and all that - managing risk has become very, very important and genetics are probably the best way to manage this risk right now in the industry. If you've got a $100 premium on the grid, if you've got an additional $50 in terms of feed conversion and average daily gain and some of those things performance-wise that you can calculate in on that breakeven. That's probably the best risk management you can have today. And so we're just seeing a lot of intrigue I think from that standpoint. And the one thing I think's changed, too, is these cattle feeders have seen the value differences and the value of uniformity. So if you have a real consistent breeding program and a uniform set of calves, even if they're industry average or well above industry average, you can manage them appropriately. And that's been really valuable for those guys as well.

Lynsey McAnally (07:34):

And so one of those programs producers can use to kind of capitalize on that already ahead of the game management would be AngusLink. I would love to hear you talk a little bit for those people that may not be familiar with AngusLink. And for anyone out there listening, we do this every episode. We talk about AngusLink to give you guys a little bit of background on what it is. Do you mind explaining a little bit about AngusLink and then how that plays into this marketing?

Troy Marshall (07:58):

Yeah, no, I love the opportunity to do the commercial for AngusLink because I truly believe it is transforming the way we trade feeder cattle. As I mentioned, it's about having an objective, reliable way of describing the genetic merit. And it's really a simple program. We have two programs, one is Angus Verified. To qualify for that, those cattle have to be out of 100% registered Angus bulls and that lets that buyer know that they truly are Angus genetics. We've seen a very good premium for those cattle over time. And then with that, the next step in that program is the Genetic Merit Scorecard. That's for Angus cattle, Angus-sired cattle or other breed of cattle as well. And we actually just take a look at that herd bull battery, the makeup of that cow herd, and we're essentially calculating an EPD for that pen of feeder cattle. So it gives those buyers an idea of those cattle will perform in the feed yard, how they will do on the rail and the beef scores course combined score with that. And that, as you mentioned earlier, it's all about just giving them the confidence to know what they're buying and so they can pay for it accordingly.

Lynsey McAnally (09:10):

As with any industry buyers have options. And so it's proving why Angus is a viable option and an option that they can make a profit from.

Troy Marshall (09:20):

Very well said. I think you have to do two things: you have to put the right cattle in front of the right people at the right time and the other part of that is if you can have as much market flexibility as you can. So if you have access to Certified Angus Beef (CAB), if you have access to these other programs and NHTC, All Natural. But the more markets that you can do and the more flexibility you can give that buyer, the more opportunity you give him to make money. And so those programs have been really pretty consistent in creating value and that's why we're seeing the premiums we are for those cattle today.

Lynsey McAnally (10:00):

And so we talked a little bit about the Angus feeder-calf sales just a second ago. You had the opportunity to attend one in Oklahoma City. I attended one in Amarillo. Very, very cool to see those breeders and producers come out and be at those events. But can you give us a little bit of background on how those came about, how many of those are an option for producers in the U.S. and then just tell us a little bit more about how that works?

Troy Marshall (10:25):

I'll start with the Oklahoma City one for example. That was really started by the Oklahoma Angus Association and their breeders. They had a group of breeders that really just wanted to do something for their customers to help them leverage the value of those genetics and to get rewarded for it. And so they put together a special feeder-calf sale, worked with their customers and that sort of thing. And it's really taken off. It's a program that started 4 or 5 years ago. I don't know exact dates for when it started, but each and every year they've seen it grow. They've seen the premiums grow, the quality of the cattle increase as well. And just at this recent sale here in December, they had a over 4,500 head in the Special Angus section sold at a very good premium to the rest of the cattle that day.

The cattle in the AngusLink program had an additional $20 head over those that sold otherwise. And so we've seen really good premiums and really get a response to those programs. And the neat thing I love about the sale barns is it gives that small to medium-sized producer - that's doing everything right, but maybe they only have 5, 10, 15, 20 head of calves - by coming to a special feeder-calf sale and being grouped there, they give those buyers an opportunity to put together load lots and allow them to sell on a competitive basis with some of these larger load lots.

Lynsey McAnally (11:49):

I love that so much because I really do think it gives the little guy, it gives them an opportunity to compete on the same level as some of our larger producers. And I just think that's a great opportunity out there for every size of commercial producer.

Troy Marshall (12:03):

To your point, if you have load lots, there's people lining up to own them. It's actually a pretty simple process, but those smaller guys are the heart and soul of our industry. They're the vast majority of the people and they're doing a great job.

It just is a little more of a challenge to do that and to get the premiums for those cattle. And that's what these feeder-calf sales are doing. And in the case of Texas and some of these other states, we're seeing that kind of grow nationwide. It's more and more these states say we can do something for our commercial cattlemen, help them get rewarded for those cattle. It also does a really nice job of promoting Angus cattle, too. There's a side benefit there. If you've been at those sales, like you mentioned, it's pretty obvious that there's a pretty stout premium for black-hided cattle, especially Angus-sired cattle. And then if you can take it the next step and really describe the genetics, there's even more premium after that.

Lynsey McAnally (12:59):

Yeah, it was a very neat event to see having never been to one of those feeder-calf sales before. To go sit at the event in Amarillo. And I think the other cool thing for me to witness at that particular sale was the amount of breeders and seedstock providers who were there, who were networking with those buyers of those feeder calves and other genetics that were available on that day. And so I think it's a two-part benefit to our producers and our members and our commercial sector, just having the opportunity to be in one room and have those conversations.

Troy Marshall (13:32):

Yeah, you said it. Well, I just, the commercial cattleman is the heart and soul of the Angus business. And seedstock producers, they're our primary customer obviously, but if we can build those relationships and those opportunities and create that information feedback, it's just a great opportunity not just to promote your program and the breed, but to build those relationships that create value over the long-term.

Lynsey McAnally (13:54):

So I am kind of curious, what feedback have you heard from the barns themselves on these Angus feeder-calf sales? I mean, obviously, there's been a lot of positive word from our breeders that are a part of these sales as well as commercial producers and buyers at the sale. But from the barns themselves, what's been the word?

Troy Marshall (14:14):

Well, neat thing about that is much like the seedstock guys, the sale barns are trying to create as much value as they can and help build those relationships. And so it's been a great opportunity to help get premiums on those cattle. It's a great opportunity to bring in additional buyers to that barn that typically maybe aren't there, which just adds to that as well. And it helps them to be competitive too. In this ultra competitive business that we're in, the more you can do for your customers, the better served you are. So it's a benefit to the sale barn and it's a benefit to the cow-calf producer. It's a benefit to the seedstock producer and, maybe most importantly, it's a benefit to the buyer and the cattle feeder that are purchasing those calves. And that's the neat thing. By creating value, we create value for all segments here. And that's been the neat thing: these groups working together and create more value for the cow calf producer in the process.

Lynsey McAnally (15:09):

Awesome. You talked about creating value. I am curious, we've talked a little bit before about the premium with National Beef. Do you mind talking a little bit about that and some of the new word on the street?

Troy Marshall (15:25):

As many of you're aware, National really made a big step in the industry by adding the Genetic Merit Scorecard to their grid. That started in August. At this point, we've had quite a few cattle go through that. And then here in December, they added an additional $5 premium for the cattle who went 150 or more on the Scorecard. And what we've seen is there is not only an increased interest in the Scorecard and pull through the system with what National did. But also it's validated, again, the value of the Scorecard and just how accurate it is. We've seen a lot of these cattle go through with really exceptional scores of 150 or higher and the results have justified that we've seen a lot of these cattle at 50% Prime and higher in some of these special groups of cattle going through. And what's been really exciting is the feedyards have seen the scores and compared to results, they've seen the value of the Scorecard and there's just been a lot more interest. And I think we'll continue to see that knowledge of the program and the pull through that's been created as a result.

Lynsey McAnally (16:36):

Just the fact that we have the Scorecard out there and that these producers are being rewarded for being a part of that program. And really, we talk so much about how the majority of our cattlemen out there are such good stewards of their resources, such good managers of their programs, but this is just another opportunity for them to capitalize on that.

Troy Marshall (16:57):

I've always been frustrated with our commodity system. In the one respect, the better cattle subsidize the poor cattle in our system. I love the fact that we get to actually reward those people that are doing things right. And the other thing, we're all pretty competitive in this business and it does set a target at such a standard and we've just seen the overall quality of the cattle improve dramatically over the last 10 to 15 years. And they did that not because they were getting paid more, but because they knew it was the right thing to do. Now, hopefully with the Scorecard, we get them a few dollars and reward them for making that effort. And we've seen that translate not only into higher prices and better overall beef demand, but in a healthier industry as a result. And when you talk to consumers and stuff today ... I'm aging myself, I don't want to talk about it. But when I first got started in the cattle business, we were losing market share to pork and poultry every single year. That's no longer the case. And the first quality audit, 1-in-4 steaks had a poor eating experience. We've so vastly improved the quality of product and the consumer experience.They're voting with their dollars and we're seeing those flow back into the industry. So that's neat.

Lynsey McAnally (18:18):

I also think that it gives producers more confidence to talk to those consumers, getting that data back and having that solid ground to stand on with where they're at in their own operation and where their cattle are standing in the marketplace. Consumers are more, I think, apt to ask questions these days than they may have been in the past. And so it's pretty neat to have that data and have that foundation to stand on as a member of the cattle industry to be able to have those conversations.

Troy Marshall (18:48):

Everyone always wanted to produce a good product and we've taken care of the land, we've taken care of the animals and this just demonstrates we want to take care of the consumer as well. And I think it's a neat time in the industry and I'm proud to be a small part of what we're doing here and all that. The cow-calf guy is my hero in a lot of respects. And if we can help them be more sustainable, be more profitable, it's a pretty neat thing.

Lynsey McAnally (19:17):

They've got one of the hardest jobs on Earth and oftentimes I think one of the most thankless in my opinion. And so it's a real blessing to be a part of an organization that can play a small part in helping provide some success.

Troy Marshall (19:30):

I agree a 100%, it's one of the hardest jobs. It's also one of the most rewarding.That's one of the things about our business; it is a lifestyle choice too. And it is a neat tradition. Most of those guys do it because it's who they are. And irrespective of the dollars, sometimes I feel guilty ... I'm kind of an economist by background and I want to talk profit and dollars and cents again. For the most part, these guys, they are committed to a lifestyle and a calling and the land and the animals and doing things right. The dollars, I don't want to say it's a side benefit, but it's probably not the number one driver either. That's what makes this business special. And even when you're talking about these feeder-calf sales, million dollar deals on a handshake, there's no other business that does that.

Lynsey McAnally (20:27):

No, it's hard to explain the livestock industry - in particular the beef industry - to people who maybe haven't had the opportunity to be a part of it because it is just such a standalone, one-of-a-kind industry to be a part of. And I think that the conversation we just had about the Scorecard and providing more opportunities for commercial producers to make use of that data really lends itself to my next question. Let's talk a little bit about $Maternal and how that plays into the Scorecard, how that plays into purchasing females, how commercial producers can use that to make better decision on their replacements. If you were going to explain to someone what $Maternal is, what would be your elevator speech?

Troy Marshall (21:10):

First off, on $Maternal, unlike with other scorecards, it is right now pretty much restricted to Angus Verified or 100% Angus females. We just don't have the ability to utilize the data from all the other breeds and do it accurately at this point. But essentially all we're trying to do is to give you the tools to understand what those genetics are that affect the maternal side of it. The maternal index that we utilize has almost 17 different traits in it, but it's driven by things like calving ease and maternal calving ease. And of course weaning weight is a big part of that fertility, that's functional longevity, heifer pregnancy, feet and legs, teat and udder scores ... All those things go into that. And so there's a lot of things that make a good cow. That's always been the challenge when we talk maternal is there's a lot of attributes that make up and then we have to fit that cow in the environment.

And so there's mature weight and milk production in some of those too. And the challenges there with some of those traits is that higher is not necessarily better. Yeah, marbling's easy and carcass weight, it's more dollars and it's pretty easy to calculate those others. You have to find the proper balance, and that's what the maternal does is give you an overall score, takes all those traits into account and gives those producers confidence to kind of know how good of females they're going to make. And we had seen a lot of producers utilizing the Scorecard to market their replacement females or bred heifers, but it was looking at the terminal side of it, just those kind of traits. And so with $Maternal, it gives those producers confidence to know how those cattle are going to perform as cows. And so it's been kind of neat. We added that in August. We've seen the first cattle starting to sell, obviously it's on replacement females or heifers, but through the video sales and other opportunities there. And I think we've seen with the Scorecard that's just going to grow and as we go into this expansion phase, a lot of these people can utilize the genetic merit scorecard to demonstrate the value of their maternal-oriented genetics as well.

Lynsey McAnally (23:27):

It's giving both our terminal-trait producers the opportunity to market cattle in a way that gets them a premium, but it's also providing an opportunity for those guys that are producing those solid replacement females to capitalize on their programs as well.

Troy Marshall (23:42):

Yeah, that cow is still the factory of industry and makes a lot of difference to the bottom line. And so it's neat to be able to take both sides of that equation. And we have the tools now today. That's probably the most exciting thing for me too, is that I always get hesitant when somebody says, you can have your cake and eat it too, because there's always trade offs. But we do have the tools where we can make cows that work and calves that work in the feed yard and ultimately for the consumer as well.

Lynsey McAnally (24:12):

Awesome. So we're coming to the end of our conversation. I have a couple more questions for you. You've been here for a handful of years and been a part of these marketing programs. What do you see in the future for marketing Angus genetics?

Troy Marshall (24:27):

I think we'll continue to see that verification/documentation side of things continue to grow. I do think that one of the things we don't talk about enough is consistency and uniformity of those cattle. I think we'll probably come up with some type of measure that gives buyers an idea of how much variation is in these pendant of cattle too from a genetic standpoint. I think there's just a lot of value there, and that would be the one thing I think that we can do to really help improve value of the cattle to those buyers. And so I think we'll continue to see the value of genetics increase, and I think we'll see these targets get more and more defined as we go forward. The neat thing is I think that creates more opportunities for producers that are doing a good job, and that's probably the biggest things I see looking out ahead.

Lynsey McAnally (25:21):

One of the things I heard somebody here recently say, and it's really stuck with me ... The minute I say it, if they're listening to this episode, they're going to know exactly who I'm talking about. But in a conversation recently, I was told reduce it to writing. And I think that that's something that really comes back to me when we are looking at the data that's available through the association. When we're looking at the data that's available to our commercial producers. It's one thing to speculate, but when you have the sheer amount of information that the Association and our producers - both commercial and seedstock - are providing back to us, it really does allow you to put it to paper and reduce that down and really distill to what you are specifically trying to accomplish, unlike probably anywhere else.

Troy Marshall (26:08):

I think having those detailed plan objectives, the goals, understanding where you're heading, is just absolutely critical. And today we have the tools, too. We might be able to find some of that 20 years ago, but we didn't really know how to get there. And today we have the tools to do that and genomics and our national genetic evaluation program and the opportunity to make progress, something we've never had before. So that makes it a lot more fun.

Lynsey McAnally (26:33):

And I think that a big thanks is due to commercial producers and seedstock producers who have taken the initiative to return that back and also to make use of it. So I don't want to leave out just thanking the people that are definitely due thanks for that.

Troy Marshall (26:53):

We always joke about none of this matters without data. And data in itself, without analysis and utilizing it becomes kind of worthless as well too. And we're now getting to the point to where we have an integrated system where the pricing signals and all that is flowing with the cattle and up and down the system where we really have a chance now, I think, to look at our business from a total systems approach and really improve the quality of our product while increasing the efficiency of production.

Lynsey McAnally (27:27):

It's incredible, incredible to look at all of it from the outside looking in. It's amazing to see that at work. Okay, so we're down to our last question. I think it's always your favorite question. I hear the sarcasm in my voice, but what is one good thing that's going on in your personal life or in the industry that you'd like to share? It's kind of how we always wrap up these episodes.

Troy Marshall (27:50):

Well, obviously with my personal life, we're blessed with a healthy family, three wonderful kids, and they're all going to be home for Christmas. From an industry perspective, we've talked about it, but I do think we'll be telling our grandkids about the next three to five years, very good time from a profitability and price standpoint. And then as we talked about, I think too, we're just getting to the critical mass with a lot of these things that we're seeing changes in the industry that are going to be very, very positive. 20 years ago, if you'd asked me, do I want my kids or a young person, would I recommend them to get in the business? And I might've been a little hesitant today, I think we have more opportunity than we've ever had.

Lynsey McAnally (28:31):

That's a great note to end on. So thank you so much, Troy, for sitting down with us and for the great conversation.

Troy Marshall (28:38):

Thank you. Appreciate it.

Lynsey McAnally (28:45):

Listeners, for more information on making Angus work for you, check out the Angus Beef Bulletin and the Angus Beef Bulletin EXTRA. You can subscribe to both publications in the show notes. If you have questions or comments, let us know at abbeditorial@angus.org and we would appreciate it if you would leave us a review on Apple Podcast and share this episode with any other profit-minded cattlemen. Thanks for listening, this has been Angus at Work!