Managing & Marketing High-Quality Cattle More Precisely
Feeding Quality Forum draws hundreds to Dodge City for learning, networking.
September 4, 2024
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CAB Director of Supply Management and Analysis Paul Dykstra pointed out premiums available to producers with only incremental changes in marbling score during the recent Feeding Quality Forum in Dodge City, Kan. [Photos by Miranda Reiman.]
The world has changed, cattle have changed, and those managing them must keep up. The 19th annual Certified Angus Beef (CAB) Feeding Quality Forum in Dodge City, Kan., gave 260 attendees tools and information to do just that.
For 17 years the United States’ top trading partner was China, taking in $37 billion of U.S. agriculture goods every year. That’s not the case today, and it has rippling effects, said Dan Basse, Ag Resource Co.
Farm revenue is down $69 billion, or 37%, since 2022.
Yet, the beef sector remains a bright spot. Cow-calf margins are estimated at more than $500 per head, and retail meat prices are at record highs. Since 2017, only 14 months have shown month-to-month declines.
“Talk about demand, what a change, but a testament to everything that Certified Angus Beef in the industry is doing to get the consumer to pay higher prices over time,” Basse said.
Those who pay attention to all the details could reap additional rewards, says Paul Dykstra, CAB director for supply management and analysis.
“We are truly offering our customers to consumer a much better-quality product today than we ever have before, and it’s responsible, I think, for that retail price increase trend,” he said.
Today, 22% of all fed cattle qualify for the Certified Angus Beef ® (CAB®) brand, but there’s still room for improvement. A full 10% of all Angus-type cattle entering the packing plants today fall just 30 degrees of marbling short of meeting the brand standards.
Shifting the grade makeup would add $46.94 per head to all cattle sold on a carcass basis vs. the industry average, Dykstra said. Taking it a step further, improving the average marbling by 70 points would move the average to 20% USDA Prime and the premiums for the entire group to $65.74 per head.
The genetic effect
Cattlemen often ask, “But if I select for that much marbling, what will it do to my cow herd?”
For Randall Spare, veterinarian with the Ashland (Kan.) Veterinary Center, it’s not an either/or choice.
“We can have it all, people,” said Spare, who said he enjoys consulting with clients on matters beyond treatment protocols to enhance profitability.
“I would encourage you to think about when we look at marbling,” he continued. Spare shared results from herds using genomic technology to help cut the bottom 20% and move the results of the whole population.
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Tom Fanning, Grant Morgan and Troy Marshall covered tools from genomic testing to the AngusLink Genetic Merit Scorecard that give feeders more information about the cattle coming into their yards.
“If they’ve got great genetics, then what we can do is we can leave them there or we can mess it up, and that last part gets really expensive,” Fanning said.
Marshall said the scorecard allows for that data flow without having to study pedigrees, making it more readily available to make decisions on.
“I think having the information to incorporate genetics into our management and marketing protocols is really the key to profitability,” he said.
Making use of data, technology
Yet, the key components of the profitability equation are different than they were decades ago.
Consulting nutritionist Pete Anderson of Midwest PMS told the audience to rethink the way they calculate when to sell cattle. Regardless of whether the cattle are sold live or on a carcass basis, that carcass cost of gain (COG) is an important number.
“Very simply, profitability increases until the incremental cost of gain exceeds the sale price,” he said. “Yield grade premiums are nice, but they don’t drive your grid results. It’s all about quality.”
Justin Gleghorn of Cactus Feeders and A.J. Tarpoff of Kansas State University talked technology — everything from growth to management types.
“We look for opportunities to utilize new technologies and put them into production as quick as we can,” Gleghorn said. The Texas-based cattle-feeding company does extensive research with its own internal team on anything it’s about to implement.
“We can go out there and find opportunities to increase margin or capitalize on efficiencies. That gives us what we believe is buying power out there in the feeder market,” he said.
Packer perspective
Being competitive within the marketplace is top of mind for Chad Barker, National Beef, as the packer looks to buy as many CAB and Prime-producing cattle as possible.
To solidify its commitment to quality, National recently announced a $5-per-head premium for all cattle that come into its plants with an AngusLink Genetic Merit Scorecard Beef Score of 100 or greater.
“We spend just as much time forecasting grade with our production scheduler as I do about anything, because he’s putting availability out to all of our sales guys and they’re trying to sell that product,” Barker says. Having more predictability in how those cattle will grade empowers those marketing it down the line.
Packers are also using more data in the evaluation side of the business, too.
A trio of experts — Abram Babcock, Adams Land & Cattle; Glen Dolezal, Cargill Protein; and Derek Vote, consultant — spoke on the evolutions in objective grading systems. They noted that all major packing plants in the United States are now using camera-based grading, with oversight by the USDA.
“It’s extremely important that we get accurate, consistent data back from that because we use that information to purchase external cattle,” Babcock said. The camera provides a “very consistent outcome” and “removes some of the subjectivity.”
Dale Woerner, Cargill Endowed Professor at Texas Tech University, explained the current yield grade (YG) equation and its limitations. Because it’s based on old data, today’s standard for predicting red meat yield misses the mark, he said.
“Ribeye area alone only explains 3% of the total variation in true red meat yield coming from these carcasses,” Woerner said. “We have to begin to transition our mindset.”
He shared options currently in development to get 3-D imaging on carcasses. New technology that does a better job accurately assessing red meat yield is important as breeders think about making genetic change, he said.
The beef industry has a history of letting research help steer its course.
Bob Smith, Veterinary Research Consulting Services LLC, closed the program with improvements that the National Beef Quality Audit (NBQA) and the Beef Quality Assurance (BQA) programs have stewarded through the decades.
“I view the Beef Quality Assurance program as not something that’s a single event,” Smith said, noting each audit has taken on issues that represented lost opportunities for the industry to address. Injection-site lesions are now almost a thing of the past and quality grade has skyrocketed to meet consumer demand. “It is an evolution, not necessarily a revolution, and it is a continual improvement through the years.”
Watch for continuing in-depth coverage on many of these presentations in the Angus Beef Bulletin or the Angus at Work podcast. To view presentations or for more information, visit www.FeedingQualityForum.com.
Angus Beef Bulletin EXTRA, Vol. 16, No. 9-A
Topics: Business , Events , Feedyard , Genetics , Industry News , Management , News
Publication: Angus Beef Bulletin