A cattle feeder’s perspective on profitability

by Sally Colby

David Trowbridge, president elect of the Iowa Cattleman’s Association, says the two main aspects of cattle production — the cow/calf operation and the feeder — can influence one another’s profits.

“I always preach about not just selling calves, but being able to market your program,” said Trowbridge. “Past performance is the ultimate assessment of the value to a feeder. We’ve all heard, ‘the same guy buys my calves every year’. That buyer has assessed several things about your calves; directly or indirectly. He’s assessing the combination of inputs that create performance that you have done on your operation that create value in your calves.”

Trowbridge uses the retained ownership business model at Gregory Feedlot in Iowa as an example, noting that marketing feeder cattle involves the same thinking. “We’re trying to analyze several factors that affect the individual producer’s herd profitability,” he said. “We’re tearing down each of those operations into details from production of calves all the way to the packer. Then we analyze this data to define which practices will improve profitability within that individual producer’s herd.”

This data analysis is accomplished through the feedlot’s Gregory Performance Management Program, which looks at every aspect of production from birth through weaning, and considers data on individual animals.

“One important thing we look at is vaccination programs,” said Trowbridge. “Do they use killed or modified live vaccine? We look at whether that’s done by a vet or the producer, and we look at the timeliness of that program. We also look at nutrition — creep feeding and how that affects average daily gain and feed conversion in the feedlot, and how it affects marbling and carcass quality at the packer.”

Fetal programming is another important consideration, and includes the brood cow diet and supplementation throughout gestation. “We’ve done quite a bit of work with mineral programs as far as organic or inorganic trace mineral products,” said Trowbridge, “looking at how that affects performance within the feedlot and how the cattle grade. We’ve done some grass management as far as how grass is managed and nutrition of the cows, and calves while they’re on the cows.”

Weaning is also evaluated, from the ideal weaning time and how calves are fed during the weaning process to how and when they’re implanted. “All those things make a difference,” said Trowbridge. “We hope that can be measured in the feedlot if we know that information.”

Genetic selection is an important consideration, starting with sire EPDs and dam EPDs when those numbers are available. Trowbridge says he has seen a 75 percent correlation from EPDs to actual performance of calves. He added that cow-calf producers see a notable benefit to selecting bulls with good calving ease numbers, weaning weights and docility scores.

“In our operation, we see how EPDs affect growth, average daily gain, feed conversion and all the carcass traits,” said Trowbridge. “It adds a lot of value to cattle based on how they’re going to do on grids (grade and yield pricing).”

Another aspect of evaluation includes comparing A.I. to pasture bred cattle. The program examines various cross breeding programs across the country and how those programs affect feedlot performance. Sire summaries are used to evaluate sire performance and disposition, which Trowbridge says can make a big difference in the feedlot.

“I believe that marketing your genetic program is a huge factor in a feeder’s assessment of your product,” said Trowbridge. “To know what EPDs these calves are coming out of, we can determine how we’re going to market those cattle when they come to us.” Trowbridge noted that several breed programs are currently assisting producers in marketing cattle using sire EPDs.

A wide array of carcass data is collected and evaluated as part of the program. “We look at hot carcass weight and dressing percentage,” said Trowbridge. “Back fat thickness is a huge indicator of how much weight we can put on cattle and whether cattle are overfinished or underfinished. We look at yield grade and quality grade, ribeye size and ribeye size compared to body weight.” Trowbridge added that marbling scores are a major indicator of premiums based on grids, and that CAB (Certified Angus Beef®) and CHB (Certified Hereford Beef®) premiums are also important and worth consideration.

Trowbridge says individual carcass data along with individual performance is the ultimate assessment of a producer’s production model. “Having past performance to show to a buyer and how those cattle did is a great marketing tool to add value to your product,” he said. Trowbridge added that cow-calf producers should carefully analyze and document as many factors as possible to gain numbers that can prove to be useful as a marketing tool.

“We’ve all heard seedstock producers say ‘you aren’t buying a bull, you’re buying a program,’” said Trowbridge. “As a feeder, I’m not buying a 600-pound calf from you — I’m buying your program. Everything you’ve put into that calf in your program affects my bottom line. The details in your program make the difference. The marketing of your program adds value to your calves for yourself.”

When Trowbridge ran a set of numbers, he showed that the top 10 percent of calves’ value was $2.40/day more than the bottom 10 percent. The top 10 percent of calves were worth an average of $494.40 per head difference to the feedlot when fed. The top 10 percent of calves’ average daily gain was 1.54 pounds per day greater than the bottom 10 percent. “If you put that into numbers, the break-even for the feeder on a 700-pound calf, the top 10 percent were worth $1.70 per pound, which would be $1,190 per head,” said Trowbridge. “The top 60 percent were worth $1.38 per pound, or $968. The bottom 10 percent were worth $1 even, for $694 per head.”

Trowbridge reminds cow-calf producers and feeders that this is looking at just one aspect of a management program, but with technology and the ability to track numbers closely, it’s the future of the cattle industry. “We know where the cattle are coming from,” he said, “and how much we can pay for these calves.”

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