When purchasing bulls, one of the considerations for a cow-calf producer is how much emphasis to put on postweaning and carcass traits.
There are really two major considerations when weighing the value of these traits, with a major one being whether a producer’s marketed feeder cattle will maintain identity back to their ranch as they move through the feeding and processing segments of the industry. When identity is maintained, a producer’s calves will receive a premium or discount based on merit, but if the source is lost, the calves enter the commodity stream at average commodity prices.
The second major consideration is determining each producer’s responsibility in that the beef supplied to consumers will provide a high-quality eating experience. This comes down to the concept that a rising tide raises all boats.
To explore the amount of identity feeder cattle maintain through marketing, feeding and processing, WLJ contacted three people with widely varying experience in segments of the marketing and feeding part of the industry.
These individuals included: Craig Uden, who manages a 45,000-head capacity commercial feedyard in Cozad, NE, in addition to running 2,000 commercial cows; Frank Wedel, who runs a 2,500-head capacity backgrounding yard in Leoti, KS, as well as has 500 seedstock cows; and Clint Berry, who is a Superior Livestock Auction rep in Fort Worth, TX, who specializes in marketing reputation program feeder cattle located throughout the nation.
Darr Feedlot
Even though Darr Feedlot has by far the largest operation with 45,000-head capacity, Uden and his team do an excellent job maintaining source identity throughout the production and grid aspects of the feeding and marketing system. The example Uden used was a case where an order buyer sent him two loads. All cattle receive an EID (electronic identification) tag when processed, and in this example, one load was single source, so it was easy to keep their identity.
However, the second load was purchased by the order buyer from four different ranches, but they were able to maintain source by keeping them separated on the pot trailer transporting them. When processed, they can then be identified with an EID tag to designate which of the four sources on the load they came from.
To fill a pen, the two loads were comingled, but health, feedlot performance and how they gridded were known on all the cattle. Feedback was then sent to the order buyer the following year with instructions based on the previous year’s return on investment. These basically fell into three categories: Buy at the premium needed to be paid to own them; buy at a competitive price; or do not buy no matter how much they are discounted.
Frank Wedel
The second example is Frank Wedel’s backgrounding yard where he deals with cattle often owned by large finishing yards, which would generally be considered high-risk calves from a health perspective. He also weans and starts a certain percentage of larger sets of high-quality calves he either owns himself or are in excess of the finishing yard’s capacity.
He said health could be tracked fairly easily in groups of 20 head or more based on incoming ear tags or brands. Once it came to finishing, comingled cattle’s feedlot performance from a limited number of sources could be estimated with reasonable accuracy back to the sources, and that information could be used to help price ranchers’ cattle the next year.
This would not apply to carcass performance when gridded where identity would be lost. On comingled cattle from a large number of sources, little information could be gained on feedlot and grid performance based on ranch origin. Both Wedel and Uden are also seeing a rapid increase in third-party-verified program cattle, which typically command a premium.
In our industry, it can be a real possibility that the same order buyer who was buying for Darr could also be buying calves that would be going to Wedel. The yard the cattle would be headed to would not be information shared with the seller, so they would not know the level of financial feedback they would be getting from the previous year’s calves they marketed.
Clint Berry
As a Superior rep, Berry deals exclusively with marketing lots that were comprised of one or more loads. This means identity is maintained on most of the cattle he represents. This includes all factors impacting profitability—shrink, transportation, health, feedlot performance, grid pricing and value-added programs—which will all be reflected in the price of the cattle, particularly as their reputation gets better defined the more years they are marketed on Superior.
He also deals with a lot of program cattle (non-hormone treated cattle or “NHTC,” GAP, Natural, etc.), which have to maintain identity to enter the market they have been qualified for, for instance, USDA Process Verified Program (PVP) for NHTC lots for the European market. Not surprisingly, Berry felt most cattle not sold in a minimum of load lots through vehicles like Superior would lose identity. The one exception he noted was program cattle like the NHTC qualifying lots sold in sales which have enough similarly qualified cattle that they can be comingled into uniform loads.
There was a general sentiment that cattle tended to be fed in smaller pens than in the past, which assisted in maintaining source identification. There are also a number of feeder cattle that would purposely be marketed in a method to intentionally lose identity. These would include low genetic potential cattle for postweaning feedlot and grid performance that result from producers using bulls from breeds or breeders that are on feeders’ “no buy list” if identified.
Another example is very small producers who typically would have little health programs. These cattle typically go through a sale barn one at a time, and would then generally go to stocker operations where they would be straightened out, comingled, grown, and resold with no identity by design and often in very large, uniform drafts.
The industry’s responsibility
In addition, there was the general feeling the health of the industry by marketing a desirable product to consumers was the responsibility of everyone in the industry, no matter their situation. An unhealthy industry, like we had for the last three decades of the 20th century, hurt everyone. The result was declining per capita consumption, declining pastureland values, lower value for commercial cows when leaving the business, etc.
With the return of beef’s reputation as a quality product through branded beef programs like Certified Angus Beef, breeding systems with more inherent potential for marbling, and feeding cattle to higher finished endpoints have all resulted in the industry supplying consumers with a higher quality product.
The bottom line is identity is lost on fewer feeder cattle than people generally realize. With more people managing cattle like Darr, who identifies most cattle by source with EID tags, as well as many feeders moving to smaller pens, it allows for identity to be kept on more cattle. This will result in increasing financial feedback to cow-calf producers through either premiums or discounts.
One could anticipate that cattle marketed with no source identification will be destined for larger discounts in the future. Finally, everyone in the industry needs to take some responsibility for the product we are marketing to consumers as the very health of our industry depends on it. This means when buying bulls, genetics for postweaning performance and carcass characteristics should be on the radar of all producers. — Dr. Bob Hough, WLJ correspondent
