Researchers at Kansas State University continue their ongoing studies on the value of various programs and breed types on feeder cattle lots sold through Superior Livestock Auction, the world’s largest video auction company.
The team of researchers’ latest study is an analysis of this past summer’s auctions, and perhaps of the most interest was the inclusion of beef-dairy crosses and straight dairy lots with the traditional beef breed types. There was also some of the first analysis released on the GAP (Global Animal Partnership) programs, as well as non-hormone treated cattle (NHTC) and Verified Natural programs.
English, English crosses, English-Continental crosses and Brahman-influenced lots continued to market at significantly different prices in descending order (Table 1). However, the biggest news was the performance of the beef-dairy crosses compared to straight dairy calves. With the onset of sexed semen and genomics, the beef-on-dairy cross is a rapidly growing part of the beef supply.
Table 1. Effect of breed description on the sale price of weaned steer calves originating in either the Rocky Mountain/North Central or South Central regions that sold through six Superior Livestock Auction video sales in the summer of 2020.
[inline_image file=”6f7fa821f5974c6b137a6c8ecb0736fc.jpg” caption=”Table 1.”]
What dairy producers are doing is identifying their top cows from which to produce replacements, and then breeding them with sexed semen to produce heifer calves. This leaves the rest of the herd available to value-add their production of feeder cattle by breeding them to beef bulls. The 59 lots of beef-dairy crosses in the study brought a significant premium of $39.86/cwt over the 78 lots of straight dairy calves ($153.07/cwt vs. $113.21 for beef-dairy and dairy, respectively). This is big news and should accelerate the use of beef semen in dairy herds.
It is estimated there already is more beef semen used in dairy herds than beef herds. Although beef cow numbers dwarf the number of dairy cattle, dairies use almost exclusively artificial insemination, and due to fertility issues have more services per conception. This has a lot of entities scrambling to develop systems to best serve this market.
Two of the primary issues that must be addressed when breeding dairy cows are improving conformation to get the carcasses out of the dairy discount, and keeping a check on carcass length. In terms of Holsteins, the cattle are large framed, so the length of carcass can result in them hitting the floor at typical rail height. To address these two problems, muscularity and moderation of frame from the beef sires is highly desirable.
Because many dairy producers are very price conscious when buying semen, it has been reported that the beef industry has cleaned out the bottom of a lot of semen tanks with little regard as to whether they were marketing the right kind of bulls. Luckily, this is being rectified. Examples of some of the programs being implemented include the American Angus Association and American Simmental Association both coming out with indexes to assist dairy producers with selecting the right bulls.
The genomic company Zoetis has also come up with indexes for Angus, Red Angus, Charolais, Limousin, Simmental and SimAngus that integrates with their Clarifide marker-assisted dairy decision support system. Other entities include a Limousin breeder working with large dairies, which appears to be a particularly good fit for Jerseys. A large operation in the Northwest is utilizing Charolais, and a large amount of semen from the Stabilizer composite is being marketed to dairy operations. One bull stud is sourcing SimAngus bulls to produce semen for the dairy trade. It has also been reported that large dairies have been buying many of the top-priced Angus bulls at auction for utilization within their dairy herds.
Other news out of the Kansas State University study was the premium being paid for NHTC and Verified Natural lots versus conventional calves (Table 2). For the first time, they deemed there was enough data to report on the value of the GAP programs, which are primarily geared towards qualifying to supply Whole Foods stores.
Table 2. Factors affecting the sale price of beef calves sold through seven Superior Livestock Auction video sales in the summer of 2020.
[inline_image file=”404b6d3e5244fcb87ee44412a188a84b.jpg” caption=”Table 2.”]
Basically, they are programs to certify animal welfare practices including age at weaning, age of castration, amount of time on pasture, and maximum transport time. One of the biggest differences between GAP 1 and GAP 4 is GAP 4 cattle are not finished in a feedlot. Both programs brought a significant premium of similar magnitude over conventional calves. However, there were considerably more GAP 4 lots compared to GAP 1. It is unclear if the GAP 4 cattle remain at the level after purchase or fall to the lower level of certification by entering a feedlot.
Kansas State University continues to analyze and inform the industry of the value differentiators of feeder cattle. In this new study, one of the most eye-opening results of their work is the significant premium paid for beef-on-dairy crosses compared to straight dairy feeder cattle. Because of the size and growth potential of the dairy market, it behooves the beef industry to service them with the proper type of sires. The other take-home message is the certified GAP, NHTC, and Verified Natural markets also appear to be areas of opportunity to significantly improve the value of feeder cattle lots. — Dr. Bob Hough, WLJ correspondent
