Justin Sexten
On Target
Insure for the future.
The cattle market jumps around, but at any one sale, you might not see much premium paid for better calves. That’s because there are so few calves to fill orders these days. As the herd grows, however, genetic and health investments offer more chances to add value at the ranch level, while setting yourself up for a more discriminating market with selective buyers.
Comprehensive herd health programs pay in many ways, but the greatest is the ranch-level rate of return. Vaccinated calves are worth more at weaning, after backgrounding or after finishing because of reduced sickness and cost throughout the system. Their consistently better health cuts treatment costs by minimizing both drug and labor needs.
How often do we even consider the cost of gathering and treating? Whether a single calf or group of calves, labor and shrink sometimes exceed drug costs. Being proactive is part of your insurance against having to treat a calf when it’s even less handy.
Herd benefits
A calf vaccination program leads to improved immunity in your replacement heifers and ultimately cows. They will have improved colostrum that will build more passive immunity to begin the cycle of good health at the calf level. Vaccinated replacements and cows are also less susceptible to the reproductive losses that health challenges bring. That alone should make development of a health program a top priority.
As more replacements have more calves, the increasing cattle inventory favors standout offerings. A documented health history is a proven way to differentiate calves as premium-worthy, while capitalizing on the ranch-level benefits to the cow herd. If you retain ownership, you simply pay yourself the premium more directly. As research says, you gain the benefits in calf growth, carcass merit and profitability with fewer health challenges.
Your calves are not worth much without their health; your proactive management on that front is continuous, but short-term, insurance.
For the long term, genetic improvement is the best production and market insurance product available. It’s slow and sometimes incrementally small, but there are few other investments that can positively influence the entire operation for generations.
Long-term payout
Genetic investments take at least nine months to pay, in the case of reduced calving difficulty. It takes 16 months to see the benefit in higher weaning weights; and cattle feeders may wait as long as two years for the ultimate performance and carcass dividends. Predicting markets a year in advance is challenging at best, but those who maintain a long-term vision can’t ignore the trends. The trends say you should look beyond the ranch goals of calving ease and growth, that improving quality grade is a key to making today’s genetic decisions pay off down the road.
Producing better-than-average cattle gets more difficult every year as the bar keeps rising. Average carcass quality in 2015 is better than last year and much better than just five years ago. Many lower-quality cows were culled due to the historic 2012 drought, leaving us with cows more capable of producing higher-quality calves. Genetic trends suggest continued improvement in prospective herd sires, as well.
Today average cattle grade 69% Choice and up to 5% Prime; whereas, in 2010, 61.5% graded Choice. Just a decade ago, average cattle were grading 52.9% Choice with less than 2% Prime. Selection of replacements and bulls with a focus beyond the ranch gate ensures future marketing options are available to maintain profitability.
Producers cannot predict the market or, in many cases, the segment where future profitability resides. The cattle cycle is built around the time required to change inventory, and that cycle is turning now. Developing a focused genetic and health program today is like buying insurance that your operation will be prepared for the future.
Editor’s Note: Justin Sexten is director of supply of development for Certified Angus Beef LLC.