It's not exactly a raging blizzard in Hell yet, but the frosty flakes of irrevocable change are beginning to stick to turf once deemed unassailable.
“We all know that breeds are a thing of the past,” said Paul Gehno, president and general manager of the King Ranch as he addressed participants at the recent annual Beef Improvement Federation (BIF) meeting.
Keep in mind, the King Ranch has developed two breeds during its storied century-plus history. And, while breeds still have a place, Gehno explained it's as carefully chosen and matched genetic components within a coordinated production and marketing system. That as opposed to the traditional place breeds have held as stanchions for “my breed is better than your breed rhetoric.”
“There never was a breed that answered everyone's problems and never will be,” said Gehno.
Instead, Ronnie Green, who directs the genetic traffic for Future Beef Operations—a nascent but promising coordinated system that owns its own packinghouse and is aligned with mega food retailer, Safeway—explained breeds and breed associations that have a shot at seeing many more tomorrows will be those that understand no single breed can do all things and also understand what particular piece of the consumer puzzle their genetics solve.
For some perspective, thumb through the carcass specifications for about any mainstream alliance today and you're hard-pressed to find any vying for large volume that are looking for straightbred British, Continental or Bos Indicus animals. Instead, most are looking for a genetic mix comprised of at least 50 percent British, no more than 50 percent Continental and no more than 25 percent Bos Indicus. It's a specific combination they have proven to themselves offers the best shot at consistently hitting specific consumer targets.
Furthermore, if breeds and breeders want to survive over the long haul, Green believes they will be completely focused on the commercial industry. “There will be no time for the party trading mentality,” he said.
Of course, the growing consent of supply chains and the producers serving them to search out genetic combinations rather than breeds has been a slow-burning fuse for at least two decades as breed consolidation has blossomed slowly but steadily.
Richard Spader who heads up the American Angus Association (AAA) shared some of that historic perspective at the same BIF meeting. Based on annual breed registrations reported to the National Pedigreed Livestock Council, Spader reported about 15 breeds currently account for approximately 98 percent of all registrations. Looking at those same 15 breeds, back in 1970, British breeds accounted for 80 percent of the registrations, followed by Continental with 14 percent and Bos Indicus with 5 percent. By 1990, 49 percent of the registrations came from British breeds, 35 percent from Continental and 14 percent from Bos Indicus. Today, as breeds slug it out for position, 58 percent of the registrations are British, 27 percent Continental and 13 percent are Bos Indicus.
All told, 985,000 head of cattle were registered in 1970 compared to 696,000 last year. Even though the national cowherd shrunk 26 percent over the same period of time, this 29 percent reduction in the number of cattle registered, in tandem with the fact that a fair percentage of seedstock go unregistered each year means that breed use has declined even more significantly.
When British breed numbers were taking such a hit in the late 70's and 80's Spader says the breed he represents did plenty of soul-searching. “The real question asked at that time was how do we add value to a pedigree? How do we make it more useful to the industry,” he explained.
Even though the Angus breed's ultimate answer to those questions—including creation of Certified Angus Beef, the so-far unparalleled champion of the branded beef war—led to remarkable recovery and breed expansion—according to independent studies around 60 percent of all commercial producers describe their cowherds as predominately Angus—Spader says AAA continues to ask the same questions about their relevance in the name of survival.
Speaking of frost settling in Hades, Spader mentioned that one of AAA's new responses might include registering and evaluating Angus-derivative cattle (composites with Angus in them). Anyone who has followed the Angus breed's unbending straightbred philosophy and promotion will find this news more stunning than if Bill Clinton received honorary induction into the Spouse Hall of Fame.
Bottom line, even the hands-down—as in everyone else has been playing for second—breed leader is taking serious the knowledge that folks like the King Ranch and Future Beef will either get what they need from breeds and breeders, or they'll figure out a way to go it on their own.
“I truly believe that breed associations will play a significant role in the future genetic structure of the industry,” said Spader. “Providing that they continue to characterize their breeds for economically important traits…and continue to embrace the tools to help move us along.”
Emerging needs for genetic tools mentioned at this BIF meeting included moving away from EPDs for indicator traits (like scrotal circumference) to EPDs for Economically Relative Traits—ERTs—such as heifer pregnancy, which scrotal circumference is an indicator trait for.
At the same time, several folks mentioned the growing need for selection indices that would allow producers to more easily exploit the value of what has become an overwhelming number of unique EPDs and performance data; data by the way that still cannot be easily and accurately compared between breeds.
In fact, Green said, “Selection index methodology needs to happen, whether the industry provides it or we are forced to do it as corporate entities.” Which, incidentally, is also one reason Green said, “If the breed won't embrace whole-herd reporting, that's a problem because that's what allows us to get at ERTs.” Currently, only two breeds record and evaluate cattle via a whole-herd system. Others have tried but breeder unrest, even law suits in some cases, has put a stop to it.
“The challenge is to bring some kind of genetic sense to such a fragmented industry,” said Gehno, pointing to producer consolidation that sees the mid-sized operator losing ground to larger, expanding operations on one side of the fence who are taking advantage of scales of economy, and to smaller producers on the other side who often own cattle for motives other than profit.
Even at the larger operations like King Ranch, Gehno explained, “I think what is happening to a great degree to commercial producers is that pressures (compliance to environmental regulations, risk management and the like) to the point that they are giving more of their attention to the things that have an immediate payback, and less to genetics.
“I'm not saying genetics aren't important, but I think we're facing a fragmented industry with all of these challenges where commercial producers aren't paying as much attention to genetics as they were 30 or 40 years ago.”
Certainly, no one has a crystal ball, and it does seem unthinkable that the beef industry could quickly be defined by centralized genetics companies rather than the plethora, albeit dwindling, of Mom and Pop seedstock suppliers. Of course, that's exactly what some hog breeders thought not very long ago.
Harlan Ritchie, a distinguished professor of animal science at Michigan State University explained that the commercial use of artificial insemination in the swine industry has increased from 15 percent six years ago to 75 percent currently, in large part because of genetic consolidation. Today, he says about two-thirds of all commercial genetics are churned out of a handful of full-service genetic companies. The other third come from approximately 100 independent producers. As for swine breed associations, there are four—Duroc, Hampshire, Landrace and Yorkshire—which exist as a single entity called the National Swine Registry.
“There will be more of these large, vertically coordinated companies (like Future Beef) in our future and they will have sizable data bases to identify superior genetics,” explained Ritchie. But, he added, “Breeds are uniquely positioned because control of the supply chain lies at both ends of the chain.” Consumers are on one end and genetics are on the other.
Consequently, by virtue of the genetic data bases amassed by breed associations, they still have a step on genetics companies and vertically coordinated systems entering the seedstock business. However, the sheer volume some of these systems are starting to pump through the line could leave fence-sitting breed organizations in the dust. That means, according to Green, that associations that want to survive are going to have to become information rich rather than data poor. “They will provide customizable information and know how to work with all of the corporate entities and not be a captive to any one of them, said Green.
Unfortunately, if the past is even a murky peephole to the future, the new roles that evolution is demanding of breeds and their organizations means some of those producers are familiar with today will be fading memories tomorrow.
“The course we are on today, there will be far fewer breed organizations in the future,” said Green. “And, the reason will be that they won't be able to look beyond their own self-interest.