HUNTIN' DAYLIGHT -- TRADING UP IN HERD REVENUE

by: Wes Ishmael

Although still discounted relative to fed cattle, resurgent calf and feeder cattle prices continued to lift hopes through March.

“It is possible that current market strength is more than just a seasonal first-quarter price rally,” says Derrell Peel, Extension livestock marketing specialist at Oklahoma State University, in recent market comments.

Supply is part of the story with harvest-ready cattle through early spring likely the snuggest they will be for the year. For that matter, harvest supply will likely be the tightest for the next several years, considering the current trajectory of the cattle cycle.

Demand is playing a starring role, too.

“Domestic beef demand appears to be continuing stronger, though March data are not yet available,” Peel says. “However, February retail beef prices were stronger with both retail Choice and all-fresh beef prices higher. The ratio of retail all-fresh beef price to poultry price increased in February despite a slight increase in poultry prices as well. Retail pork prices were also higher in February.

U.S. beef exports continue to gain steam, despite the higher value of the U.S. dollar.

“The latest trade data from January showed that beef exports were up 20.9 percent and beef imports were down 24.7 percent,” Peel says. “It appears that both domestic demand and international trade has continued to support beef wholesale markets through the first quarter.”

Wholesale beef values continued to grow through the third week of March—the highest levels since last June—underpinning cattle prices.

Cash fed cattle prices increased 7.7 percent from the February low to $128.64 (5-Area Weekly Weighted Average) the third week of March.

Along the way, cattle feeders grew more current in their marketing, finally wrenching some leverage back from the packer. However, the steep discount in deferred Live Cattle futures continued to hold back cash prices for calves and feeders.

Peel notes recent price gains are even more impressive when considering the fact that cattle slaughter is 4.5 percent higher year over year and beef production is 3.7 percent higher year to date.

That's the rub, though.

Although markets are proving surprisingly resilient through late winter, the cattle cycle says beef production will continue to increase and prices will continue to decrease for the next several years.

Increasing Long-term Potential

In any market, one of the most straightforward means of increasing herd productivity and revenue might be one too easily taken for granted: selecting heifers that breed early in the breeding season.

“Heifers that become pregnant early in their first breeding season remain in the herd longer and are more productive,” Cliff Lamb, head of the animal science department at Texas A&M University, explained at this year's Cattlemen's College. “The number one reason we cull animals early in the herd is because they fail to breed during the breeding season,”

In fact, using data from the U.S. Meat Animal Research Center—some 25,000 heifers—Lamb explained heifers that became pregnant within the first 21 days of their first breeding season weaned the equivalent of three-quarters of another calf during their production lifetime, compared to heifers that didn't conceive until after 21 days.

“Age at puberty is a major factor that influences reproductive success of beef heifers,” Lamb explains in, Prebreeding Management for Successful Development of Beef Replacement Heifers. “Ideally, heifers should reach puberty approximately 60 days before the beginning of their first breeding season, increasing their chances of becoming pregnant and allowing them to conceive earlier in the season. The timing of first conception is also important to the overall productivity of a heifer.” He adds that mature cows that calve at the beginning of the calving season also wean heavier calves.

Weight and age are two primary drivers of age at puberty in heifers; adequate nutrition is key.

“It is important to consider that Bos taurus (European) beef heifers generally reach puberty at 55–60 percent of their expected mature body weight. With that in mind, the use of a target average daily gain (ADG) is a common and effective way to prepare heifers for breeding,” Lamb says. “It is recommended that Bos Indicus (Brahman) influenced heifers achieve 60–65 percent of their mature body weight before the breeding season starts. A nutritional program should be capable of providing sufficient energy and protein to heifers so they can attain this final target weight before the beginning of the breeding season.”

Proving It

During his tenure as assistant director of the University of Florida's North Florida Research and Education Center at Marianna, Lamb and fellow researchers verified the real-world benefits of getting heifers bred earlier in the season.

Lamb inherited management of the research herd nine years ago. This is a 300-head cow-calf operation. About half the mamas are Angus or Sim-Angus; the other half are Brangus or Braford. Management was loose and the calving season long.

“We decided that from a production standpoint, the number one thing we needed to select for was pregnancy,” Lamb says. He adds that reproduction has four times the economic impact on herd economics than any other trait.

Specifically, Lamb and his crew developed a set of non-negotiable rules for cows to enter and remain in the herd. Every female must:

• Calve by the time she's 2 years old.

• Calve every year.

• Calve without assistance—that includes replacement heifers and any amount of assistance. Lamb explains that data indicates pregnancy rates are 10% less in cows that require assistance of any kind.

• Provide sufficient resources for her calf to reach its genetic potential.

• Raise a calf genetically capable of performing to expectations. If a heifer has a calf that doesn't perform, the heifer is culled.

• Maintain the Body Condition Score for their conditions. That keeps them away from having to manage more than one group of heifers and cows in terms of nutrition.

• Be calm.

From a management standpoint, they follow these rules:

• Only heifers that become pregnant within the first 25 days of the breeding season are considered as replacements.

• The breeding season will be tightened as much as possible.

• Every female is exposed to synchronization and artificial insemination (AI). Rather than think of synchronization as way to get semen in the cow or heifer, Lamb encourages producers to think of it as reproductive technology that stimulates cycling.

With heifer selection and these rules in mind, Lamb emphasizes their first criteria is breeding within the first 25 days. Rather than select heifers and then hope enough of them get bred on time, they synchronize and breed 90 heifers. Typically, 70-80 heifers will breed on time. That leaves them 10-20 to cull based on other criteria in order to arrive at the 60 needed replacements.

The results are stunning.

A higher percentage of cows and heifers calve within the first 30 days each succeeding year. Calves from the 2014 season were worth $169 per head (price constant basis) more than those produced six years earlier, much of it due simply to a higher percentage of calves being born earlier in the season.







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