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BIF looks toward a more efficient and profitable beef industry

Cattle and Beef Industry News
Jun 24, 2016

Over 600 producers, industry personnel and academics recently met in Manhattan, KS, for the annual Beef Improvement Federation (BIF) Research Symposium and Convention. The theme for the convention focused on increasing the profitability and efficiency of the beef system starting with the consumer and working back to the cow/calf unit.

Dr. John Stika of Certified Angus Beef (CAB) made it clear that the only sustainable money from which to continue to build the beef business comes from the consumer. The goal of the industry must be to increase the supply and value (price) of beef, and that increased demand for beef was being seen primarily through premium Choice and Prime products like CAB.

According to Drs. Glynn Tonsor and Ted Schroeder of Kansas State University, the North American beef industry has some unique advantages to compete in the world market including feed, processing, genetics, quality, and food safety. It is clear that the world market is willing to pay a premium for U.S. beef. The disadvantages are that U.S. producers are not low cost producers and the U.S. beef industry is fragmented, thus the U.S. producer must compete on world market-based on the quality of U.S. beef and not the price.

Prosperity of the U.S. industry will depend on continuing to refine the domestic market while greatly expanding U.S. share of the global market. With the quality and high price of North American beef, the U.S.’ target global market is the wealthiest 10 percent of the people in the world. To accomplish this, trade agreements will be extremely important in the next 20 years.

When the conference moved to the production sector, it is clear that in the post-weaning phase of the industry, U.S. cattle continue to improve in growth potential and carcass weights. Carcasses are increasing at an astonishing rate of 9.4 pounds a year, and U.S. cattle now have a tremendous ability to marble.

Although slaughter weights are increasing, Dr. David Lalman of Oklahoma State University pointed out that feeder calf weights have not increased for many years as is demonstrated in four large commercial databases from different regions of the country. This is despite the genetic trends in the purebred industry linearly increasing for weaning weights. It is clear that environmental constraints will only allow so much weaning weight to be expressed in the commercial sector, and continued selection for increased weaning weight seems unwarranted.

Improved profitability in the cow/calf sector will be accomplished by improving the value of feeder cattle by supplying the feeding sector with improved post-weaning performance while decreasing the cost of production. Controlling cost will be accomplished through biological and management efficiency. Lalman indicated that calf prices have been increasing an average of $5.25/cwt. per year but the cost of production for these calves have been increasing at rate of $5.00 cwt. His thesis was cow/calf profitability will be improved onethird by increasing revenue and two-thirds by decreasing costs.

In terms of cow herd efficiency, Lalman noted that we are moving away from forage efficiency with the average cow eating 66 lbs. more hay per year over time. Weaning rate efficiency has also been flat since 1991 making cow feed efficiency, reproduction and survivability all areas where the industry can improve profitability. He emphatically said that further increasing milk was not a path the industry should pursue as it took 27 lbs. of feed to increase gain of calf by one pound through increased milk production.

When studying efficiency of the nation’s cow herd, Dr. Mark Enns of Colorado State University showed that 60-75 percent of total feed energy goes to maintenance. This means there is an opportunity to improve profitability through improved maintenance efficiency. Maintenance requirements are heritable, and the goal of the industry must be to find and produce outlier cattle with decreased cow maintenance and increased carcass weights.

This can be accomplished utilizing EPDs (expected progeny difference) and indexes. He also noted that the correlation for feed efficiency for cattle on concentrate rations and forage rations was .56, meaning we can as an industry improve post-weaning feed efficiency and cow herd feed efficiency simultaneously.

The indicator traits for cow maintenance genetic predictions are cow weight, body condition score and milk potential. Milk is an important component of cow maintenance because higher milk potential cattle have higher percentage of their body mass made up of high maintenance gut and organ tissue. It is critical to the industry that the seedstock sector improve the submission of mature weights and body condition scores to facilitate the production of cow maintenance EPDs and indexes.

Genomics will play an ever-increasing role in improving feed efficiency and cow herd maintenance. Dry matter intake and residual feed intake are moderately to highly heritable, so genetic progress can be made.

The research community is currently in the middle of a five-year, $5 million feed efficiency project much of which is centered on genomics. Dr. Holly Neiberg of Washington State University stated that a 10 percent increase in feed efficiency will increase profitability 43 percent. On the genomic side, Dr. Jerry Taylor of Missouri State University demonstrated that disease resistance is heritable, gene markers have been found for BRD (bovine respiratory disease), and gene markers for immunity have also been found to be associated with feed efficiency.

Dr. Clay Mathis of the King Ranch Institute told producers not to lose sight of the importance of environmental adaptability and sustained fertility and that crossbreeding was still an important tool for improving efficiency, especially for cow/ calf producers.

In summary, it important that all segments must first and foremost consider themselves in the food business, and the nation’s niche in the world market is high quality beef. In terms of production, commercial weaning weights are not increasing. This means increased profitability will be obtained by continuing to increase postweaning performance while lowering the cost of production in the cow/calf sector. — Dr. Bob Hough, WLJ Correspondent

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