With all business ventures, in order to survive, a firm must adapt and adjust to different situations. To the commercial cow-calf man, these changes often include things that he has no control over or that a market report may not fully explain. Today's commercial cowman is faced with many difficult decisions, but a sound bottom line separates the winners from the losers.
Phil, Perry and Pal Neal operate Neal Farms, which was recognized as the 2002 Charolais Commercial Producer of the Year. The Lebanon, Tenn. firm operates on about 3,000 acres of owned and leased land, maintaining about 750 head of cows. The brothers were introduced to the Charolais breed about 20 years ago, and have been using Charolais bulls for most of the last decade.
“Dad always had one or two Charolais bulls he used with the other herd bulls,” Phil says. “We changed to all Charolais bulls eight or nine years ago.”
Many reasons were behind the change, but what the Neals liked the most was the product the white bulls could produce when they were crossed with their mixed cowherd.
“Charolais bulls gave us a solid color pattern and uniform calves. We really liked the cross on our mixed cows and the calves weighed up good,” Phil says.
When the Neal brothers go to find the next set of bulls to use in the cowherd, they have defined birth weight as the number one identifier of potential herd sires.
“We look at birth weight first when we go to select bulls, then price and then weaning weight, we don't care about maternal traits because we don't save heifers,” Phil says. “Our cows are kind of average, so we need good bulls, but we're still a little concerned when we buy a new set of bulls until we get calves on the ground.”
Even though birth weight is the number one trait that identifies herd bulls, the Neals praise the Charolais breed for producing a product that will cause little or no calving problems, and think the overall quality of the bulls has gotten better since they started using Charolais bulls.
“We don't have any calving problems and the bulls have gotten better over the years. When we started using Charolais bulls, we didn't have the records to use to help us make purchase decisions,” Phil says. “We are very satisfied selling a six-weight calf.”
“For ten years we haven't found anything better or that makes more money on our cows,” Perry says.
The climate in central Tennessee suits beef production. Fescue grass, known to the area, is a cool season forage, when managed right, it provides a stable supply of nutrients to the herd in the spring and fall. At different times of the year, other improved forages are relied on to help support the cowherd. Since the climate allows them to grow a variety of forage species, a rotational grazing system was developed to maximize the number of cow-calf units per acre.
“We can grow a lot of different forages which allows us to rotational graze our pastures. We add clover to the fescue pastures every year for summer grazing and we have access to a limited amount of bermuda and orchard grass,” Perry says. “We always want to run as many cows as we can on a given farm or acreage. We fertilize heavy and rotational grazing has also helped us eliminate some of the undesirable forages in our pastures.”
Because of their ability to manage forages, Neal Farms was named 2001 Tennessee Forage Producer of the Year.
With adequate forage resources in place and a cooperative climate, a 90-day spring calving season and 75-day fall calving season are employed to help provide uniformity to the calf crop.
“We had cows calving all year round so we split them up to spring and fall calving groups,” Phil says. “This helped us make our calves more uniform.”
Having a double calving season impacts the bottom line significantly every year, with two calf crops to sell, but more importantly, two different market situations.
“It seems like we'll usually hit a little better market with our fall calves and we can use the same set of bulls twice a year,” Perry says.
Rather than keep replacement heifers, the cowherd is replaced with groups of cows from select auction markets. The dual calving season allows them to take advantage of quality cattle when they become available.
“When you replace cows at the sale barn you can always buy the good cattle because they'll fit into either the spring or fall calving herd,” Phil says. “Replacing cows at the sale barn works for us, but it may not for everybody. You can get into a lot of problems if you don't know what you're buying.”
Even though the cowherd is replaced primarily with groups of mixed females, Neal Farms maintains a herd of commercial Charolais females. Neither Phil nor Perry can understand the industry bias against Char-cross females.
“A Charolais female is as good a cow as you can get. Last year, the heaviest calves we had came off our commercial Charolais cows,” Phil says. “The cows will stay in a little better condition than the other cows, and we seem to have fewer udder problems with these females.”
One of the major claims against using Charolais bulls is their progeny are not eligible for Certified Angus Beef premiums. With six breeds being able to transmit the gene for a black hide, the Neal brothers like the fact their calf crop is readily identified as Char-cross by potential buyers. The Neals feel there is a premium built in their calves because they push down the scale.
“If I can gain 50 to 75 pounds and only get docked a couple cents because of hide color, I'll take it every time,” Perry says. “Black bulls seem to be the thing right now, but they just didn't work on our cows.”
Cattlemen in the 21st century beef business are forced to identify ways to add value to their bottom line. Niche markets, video sales, load lots and many other industry buzzwords have become part of their vocabulary to make the right choice.
“We market four loads in the fall and two loads in the spring,” Phil says. “The calves are vaccinated and boosted while they're still on the cow, our buyers seem to like that and it benefits us both.”
One of the loads of cattle that are marketed in the spring has been sent to Laura's Lean Beef in the past. These calves have to be weaned and antibiotic and hormone free to qualify for the program.
“Outside of the calves that go to Laura's Lean Beef, everything else is sold at 630 to 640 pounds right off the cow,” Perry says. “We're not getting paid enough yet to go through the trouble and expense to wean calves.”
Even though the calves are not weaned and pre-conditioned, the Neal brothers do take the time to castrate, dehorn and give the calves two shots before marketing.
“We feel these management practices are justified and we reap the benefits from practical management,” Perry says.
At Neal Farms, being able to put together load lots of uniform calves draws the buyer's attention. Perry says the volume draws the buyers, but there are a lot of advantages to this system of marketing.
“Selling cattle the way we do, we get a better weight, less commission and the buyer will pay the top-end of the market price for a load of calves. We get the top price for the whole load rather than a premium for the top 10 percent of our calf crop,” Perry says. “We offer 50,000 pound load lots, with a 200 pound difference from light to heavy, and 90 percent of our calves are likely to be within 100 pounds.”
Building trust is part of any sound relationship. Over the years Neal Farms has built a solid reputation with area buyers, and takes pride in the fact when it comes time to market their calves, they are in demand.
“The buyers used to come look, now they know what they're going to get and they buy the calves off the video,” Phil says. “We have a lot of repeat buyers.”
Marketing at weaning may seem traditional in today's arena of beef production, but this system works at Neal Farms. The Neal brothers believe some of the management practices being preached are good for the overall health of the beef industry, but until it will add value on a consistent basis, it is business as usual.
“We haven't retained ownership, we're not risk takers,” Perry says. “If we had all the data how much more would we get paid for our 600 pound calves?”
“A lot of the management practices that are being preached are probably good for the beef business, but until we get paid we can't afford to do it,” Phil says.
Management practices can be argued in any business, but in any given situation, the bottom line speaks volumes to what works and what does not. Maintaining an adequate customer base is the goal of any successful firm. To the Neal brothers, this is obviously their lifeblood. A solid customer base is a pride factor that brings a smile to the brothers' face when they talk about the expectations of their calves for the next person in the production chain.
“We want our cattle to be healthy and grow and perform,” Perry says. “Most importantly, if the buyer makes money, he'll be back.”