When is the last time you thought about your cow herd and how you got to where you are? On many cattle operations, we find that the set of cows that comprise the herd, be it 10 head or 10,000, in many cases just kind of “came to be.” When we sit back and look at how a given group of cattle was collected, grouped, built, evolved or any other number of colloquialisms, we find that in many cases not nearly as much time and planning was put into the process as should have been.
I've had the privilege over the years to work with some truly great cow herds. What I found is that the good herds were developed over years of planning, patience and hard decisions. Over the next few issues we'll take a look at what it takes to develop a good cow herd and some of the factors that a producer must consider in the process. We'll start by examining some industry perspectives and move into practical issues that must be addressed.
Whatta Ya Wanna Do??
In many situations, when I begin working with a new client, one of the first questions I ask them is: “what do you want to accomplish?” This same question is valid when you look at the building of a cow herd. Whether you are interested in going into the purebred cattle business or into the commercial end of the industry, it is still necessary to define a goal or goals that you wish to accomplish. Some producers look at is as a lifestyle. This is simply what they have always done and will always do. It's what their daddy and granddad did before them. They may or may not have ever truly evaluated the nuts and bolts of how they got to where they are. Others are in it for the “glamour” of being a cowman. From this perspective, I think being in the cow business is a lot like childbirth. Just like a lot of women might not have more children if they dwelt upon the pain of the birthing process, a lot of people wouldn't stay in the cattle industry if they dwelt on the last time they had to pull a calf in the middle of a cold, rainy night out in the middle of the pasture with no help or took a financial bath when fat cattle when to $55 and corn went to $3 a bushel. Lots of us have watched a good many John Wayne movies and just know that this is what we want to be. Others have given serious consideration to the program and see it as a potentially profitable enterprise. All this goes to say that there are a lot of reasons for anyone to be in the cow business.
I've yet to meet anyone that did not want to make a profit or at least break even with their cow operation. One of the biggest criticisms cow herd owners receive by other segments of the industry, especially the cattle feeding and packing segments is that there is too much variability in the cattle that come out of our herds and ultimately end up in the marketing pipeline and in the food-supply chain. And they are right. With over 75 breeds of cattle readily available to us in the United States we have countless variations that can and have been out together. Many cattle are so “mongrelized” it's hard to determine what breed type they really are and even more difficult to determine how they are going to perform during feeding and once they reach the packing house. As we rocket forward in this industry producers will find that they will be forced to reevaluate their cow herds and what they are made up of in order to produce the type of cattle that the system considers valuable.
I had a feedyard manager tell me once that the concept of receiving premiums for producing a specific type of animal is probably faulty. The cattle industry, he said, is one long series of deductions. The dollars that are paid for cattle are subject to penalty if the cattle are too fat, too thin, too framy, not framy enough, been preconditioned, not been preconditioned, wrong breed type, wrong color, too old, too young, you name it. The goal therefore is to produce an animal that will be subject to minimal deductions and also understanding how cattle are valued in the marketplace.
We have to remember that a cow herd is simply the initial production unit, the “Point A” in the supply chain of beef which ends up on the consumers plate. We are beginning to see more and more accountability directed at the cow/calf producers and even on back to the seedstock or purebred producer to generate the type of cattle and genetics which results in the optimal animal for production of red meat.
I think this is probably one of the most significant areas where the cow/calf producer drops the ball. Many producers do not focus on the fact that they are in the meat business. Once we realize that we are in business to produce the best quality beef we can in the most efficient manner possible then we can begin to make a change. So, for most producers, this becomes the answer to the question of “what do you want to do?” In order to be profitable we have to produce beef that will meet the consumers expectations in the most cost-effective manner we can.
A Learning Process
Not a day goes by when I don't learn something new about this industry and how things should or should not be done. Recently it has become a regular topic of conversation that the beef industry is changing so fast that it's pretty hard to keep up with current trends and directions. Managing a cow herd is an ever-changing, dynamic process. The phrase we often hear “that's the way we've always done it” really has no place in our vocabularies. In the day and time we live in, as a producer you had better be working hard to be as informed as you can, especially in areas of producing the product the market demands, marketing your animals and sound management. These three areas will keep you pretty busy.
One of the biggest problems we face in our industry is the segmentation that is prevalent. In other words, as a whole, a relatively small number of cow/calf producers have ever retained their calf crop past weaning. Very typically, the average producer, calves out his herd, raises the calves to what he perceives to be optimal weaning weight and sells these calves, more often than not through the local auction. He has no further contact with this set of cattle and has no idea of how they perform from there on out. He never sees what his cow herd produces in terms of performance of these cattle on grass or in a grow yard, in a finishing yard or in the packing house. Admittedly, it is difficult for the average small producer to accomplish a lot more than this. Our industry isn't well designed to accommodate the marketing needs of someone with small herds of cattle. It's difficult but not impossible. It simply takes a change in our mindset.
The industry is further segmented as we see producers who purchase these freshly weaned cattle and put them out on grass or in a preconditioning/backgrounding/growing yard and then sell these cattle to someone who places them in a feedyard for finishing. Finally these cattle may then be sold live in the pen and sent to the packing house. You see from this scenario that a given animal may ultimately have four owners and no way for any performance information to make it's way back to the point of origination. In other words there is simply no way for this cow/calf producer to ever know if he or she is on the right track or even has a clue where it is. In many cases the producer simply sees the check he receives for that animal at the sale barn. His potential profit or loss on that animal is dictated primarily by what a given buyer will give him for this calf on a given day in a given market, not by what that animal is ultimately worth from a meat production standpoint. We hear a lot of complaints from producers that they don't receive what they think their cattle are worth, or that the market is lousy or that they were taken advantage of by the sale barn. All of these things may or may not be true. But this is the key: the cow/calf producer will never realize the value of what he is producing until he becomes accountable for what he produces and makes the necessary changes accordingly. He has to be able to see past the point of weaning and initial sale to the point were that animal is hung on the rail and we can tell what type of meat production unit it really is. It comes down to the need for producers to look at the entire production process and provide the initial animal that works the best all the way through. For many producers, this will take some study time.
So What are We Trying to Produce?
For many cow herds this is the critical question. What do we need to produce to gain the optimum value for our calf crop. To answer this question we have to understand a little bit about beef production past the cow/calf segment. We also have to recognize that this is another point of variability in the meat production line and that it has an effect on the end product.
As stated earlier from the point of leaving the cow/calf unit, most cattle go on to the growing segment, be it grass, a growing operation, etc. Many cattle, when they come off the cow, are not ready to go into a finishing phase. They are simply too small, too light and will fatten too early with a carcass that is too small if we attempt to finish them at this time. These cattle need to increase in structural size and overall body weight before going into the feedyard. So for a time these cattle are in a growing phase. While a lot of variable do come into play, these cattle probably need to gain about 2 lbs or so per day until they reach a weight somewhere between 650 and 750 lbs. A lot of this depends on the type of animal they are. Heavily English influenced cattle (Angus, Hereford) need to be grown to the higher end of the scale. Exotic influences (Charolais, Limousin, Simmental, etc.) need to enter the finishing yard at the lower end of the scale. The time it takes to get these cattle from the start of the growing phase to the point in which they go into the finishing yard can vary.
After growing for a period of time and getting to an appropriate weight, these cattle are ready to go into a finishing yard where there are placed on a high energy ration that is designed to continue to grow the animal and also deposit fat both inside and outside the muscle structure of the animal. The finishing period takes anywhere from 120 to 180 days on the average, once again depending on a lot of variables.
At this point cattle are sold by the feedyard to the packer in one of two ways. The traditional method in a lot of areas has simply been to sell cattle to a packer buyer who evaluates the cattle while they are alive out in the pen. He examines the cattle and based on what he sees, what the markets are and what the needs of the packing house are, provides a bid to the feedyard manager who either accepts or declines the bid. This is a pretty subjective form of marketing.
A second method which is growing rapidly is the sale of cattle on the “Formula” or “Grid.” Each packer has a series of equations that it uses for valuing a carcass based on it's size, meat yield, grade, fat content, etc. These formulas are based on what the packer needs to meet his contracts with wholesalers and retailers and the willingness to pay more for the meat components that are more valuable to them.
As cow/calf producers, we will find more and more pressure to produce the type of cattle that will meet this need. In the next issue we'll get down to the nuts and bolts of designing a herd that will accomplish this task and go through the factors that the producer needs to consider.
Dr. Steve Blezinger is a nutritional and management consultant with an office in Sulphur Springs, TX. He can be reached at P. O. Box 653, Sulphur Springs, TX 75483, by phone at (903) 885-7992 or by e-mail at firstname.lastname@example.org.