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A new era in valuing calves, feeder cattle

Cattle and Beef Industry News
Oct 7, 2016

Heifer calves do their job in sight of the mountains near Willow Creek, MT, on the 2016 Montana Hereford Tour.
Devin Murnin

The objective evaluation of seedstock cattle through things like EPDs (expected progeny differences), indexes and genomics has been implemented for many years, but taking these same tools to help value feeder cattle is just starting to gain steam. It is now common to look at video auction catalogs to see the seedstock genetics listed that produced the feeder cattle being marketed, with some listings even having sire lines. This is quickly becoming the norm rather than the exception. However, how this information translates into the value of the feeder cattle being marketed is still in its infancy.

Programs like Reputation Feeder Cattle, Angus Source, and Top Dollar Angus all take it a step further in determining the genetic value of the seedstock inputs to the objective potential and price discovery of feeder cattle. New programs like Feeder Profit Calculator will go a step farther than just genetics, combining genetic potential with management practices to best value feeder cattle. All the companies have listing services and help market cattle in their programs to feeders and stockers to help these buyers source cattle based on true potential.

Reputation Feeder Cattle is one of the more established of the companies marketing feeder calves. It takes the last 10 years of a customer’s bull purchases to arrive at the relative breakeven price differences of the feeder cattle being marketed. If a 10-year history is not available, genomics on the heifer mates are used to fill in the gaps. The assumption is that the older sires on the inventory represent the genetics of the cows, and the more recent purchases are the actual sires of the calves.

Objective genetic potential for traits like average daily gain, carcass weight, feed-to-gain ratio, ribeye area, yield grade, and percent Choice all go into the calculation. The end product of these calculations compares relative value per hundredweight for the feeder cattle.

For instance, compare a lot with a $10 base value cwt. and another lot with a value of $28.94 cwt. The objective value of the second lot to the feeder buyer is $18.94 more on the same breakeven. When Reputation Feeder Cattle helps market cattle, they also give the buyer all the other pertinent information including health practices, weaning status, nutrition and weighing conditions.

Top Dollar Angus takes a more straight-forward approach to valuing and marketing feeder cattle. To earn a “Top Dollar Angus” designation, the feeder cattle must be sired by bulls in the top 25 percent of the terminal indexes $Beef for black Angus or Gridmaster for Red Angus. When complete information isn’t available on the bull battery, genomics on the heifer mates can be substituted. Like Reputation Feeder Cattle, the company then helps actively market the calves, providing all other pertinent information on them.

According to Top Dollar Angus founder Tom Brink, “More and more cattle will need some source of genetic verification, which is logical, and there will be a day when undocumented calves will be discount cattle. It is my observation that breeders with top genetics also have the top health programs, all of which add value to their feeder calves.”

Angus Source is a USDA Process Verified Program assuring that the cattle are a minimum of 50 percent Angus genetics as well as age- and source-verified. In this respect, it is similar to Red Angus’ Feeder Calf Certification Program, which is the oldest in the country starting in 1995. Where Angus Source takes it to the next level is you can enter a tag number into their system to find the active bull battery that was used to sire that lot of calves. This includes the EPDs and indexes such as $Beef and $Weaning. Not all Angus are created equal and with Angus Source, feeders can then make objective decisions on the value of enrolled Angus-influenced feeder cattle.

Perhaps one of the more exciting programs currently being tested is the International Genetic Solutions’ Feeder Profit Calculator. It will take all the objective genetic information on the feeder cattle including a bull battery’s EPDs and terminal indexes and combine it with non genetic factors such as vaccination programs and length weaned to predict the relative value of feeder cattle. Like the other programs, when bull battery information is not available, genomics on the heifer mates can fill in the missing information. With all the data inputted, the Feeder Profit Calculator will then give a relative value per hundredweight to compare lots similar to how Reputation Feeder Cattle compares cattle.

Dr. Wade Schafer, Executive Vice President of the American Simmental Association, explains, “The value of genetics is well understood but underutilized when valuing feeder cattle. The Feeder Profit Calculator is not breed specific and benefits greatly when it draws on International Genetic Solutions’ multibreed genetic evaluation, and the 12 breed associations that participate, in valuing the genetic side of the equation. This is a major step forward for the industry. The research also exists to put dollar values on the various management practices a producer implements such as vaccinations. For instance, we can quantify that long-weaned calves with two rounds of complete vaccinations will have less BRD (bovine respiratory disease) and death loss. This along with the genetics can be combined to compare the relative value of lots of feeder cattle.”

According to Dr. Kent Andersen of Zoetis, “We have been flying blind for far too long when it comes to valuing feeder cattle. Assumptions are made based on hide color, body condition, and frame that don’t always hold true in terms of performance in the feed yard and on the rail. However, this is changing quickly as we take what we have learned on the seedstock side and apply it to commercial cattle.”

The industry is entering a new and exciting time in objectively valuing feeder cattle. Hide color and other indicators of value will not be good enough in the future. Feeders will have hard data upon which to make informed decisions when purchasing lots of feeder cattle. This objective information should add value throughout the production stream. — Dr. Bob Hough

(Dr. Bob Hough is the retired Executive Vice President of the Red Angus Association of America and a freelance writer.)

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