Profitable Beef Production

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1 Profitable Beef Production A Guide to Beef Production in New Zealand Published by the New Zealand Beef Council ISBN:

2 Published May Editor: D.C. Smeaton, AgResearch Ruakura Research Centre. Editorial Committee: S.T. Morris Associate Professor, Animal Science, Massey University. S.D. McIvor, R & D Programme Manager, Meat & Wool Innovation Ltd. R.G. Priest, Beef Genetics Co-ordinator, Meat & Wool Innovation Ltd. P.M. Packard, Past Chairman, New Zealand Beef Council. G.B. Gleeson, Sheep and Beef Farmer. Publishing Consultant: Dinniss & Associates. Typesetting: Unicorn Design Studio Ltd. Copyright NZ Beef Council. Free to Meat Levy Payers. Price: $35.00 incl. GST.

3 Acknowledgements This book was brought together with the help of an editorial committee comprising Graeme Gleeson, Steve Morris, Sam McIvor, Peter Packard and Russell Priest, under the supportive guidance of Meat New Zealand and the New Zealand Beef Council. Without their total support and guidance (and at times coercive pressure!) this book would never have happened. The contributions of all the above are greatly appreciated as also are those of the individuals cited as authors at the beginning of each chapter, namely: Nick Beeby, Graeme Gleeson, Steve Morris, Nigel Coddington, Russell Priest, Roger Purchas, Bruce Thorrold, Bob Thomson, Warren Parker and Nicola Shadbolt and many others who have provided technical support. Thanks are also expressed to the sponsors of the project: Ballance Agri- Nutrients Co-operative Ltd, Merial New Zealand Ltd, Richmond Ltd, MAF Sustainable Farming Fund, NZ Society of Animal Production. Lisa Julian from Massey University provided valuable editing and proofing support. Debbie Ross, Laura Sloan, Sonia Veelenturf and Sue Wood selflessly typed the manuscript. Duncan Smeaton (Editor) Special Technical Note Throughout the book, examples citing bull finishing systems are often used. In most cases, the examples could equally well apply to steer and heifer finishing systems. The only differences that will apply are the slower growth rates and lower finishing weights of steers and heifers and the different carcass grading systems that apply to different cattle types. iii

4 Preface The New Zealand Beef Council, funded by Meat New Zealand, is in the business of technology and information transfer to achieve its mission statement more profit from beef. Other functions are to assist in identifying any gaps in research knowledge and to participate in the overall coordination and prioritisation of beef research in New Zealand. Generally technology and information transfer is from research centres to beef producers who can then apply this knowledge for productivity gains. These increases in productivity are generally associated with improvements in profitability. Such increases, together with controls on production costs help to offset any short or long term decline of beef prices in the marketplace. In recent years over 5000 beef farmers per annum have been targeted by the New Zealand Beef Council at regional field days, seminars, on the internet or from beef hits on Meat New Zealand s 0800 phone number. The degree of uptake of the information and its application on-farm is of extreme importance to our beef industry and therefore to the economy of New Zealand. In 2001, Meat New Zealand commissioned an independent survey to measure the Council s effectiveness. The results indicated that on-farm application of knowledge gained from the Council s activities was between 56% and 79% depending on the topic, far above accepted figures. This book brings together a great deal of information on intensive beef production in New Zealand from many sources. It has evolved in the knowledge that major productivity and financial gains are possible. Leading farmers achieve performance levels four to five times greater than the national average in aspects such as total product per hectare. The Editorial Committee has brought together key information on beef finishing by well-known authors and presented it in a digestible and very accessible format for farmers, consultants, students and industry people. Duncan Smeaton from AgResearch has been the driving force heading this Editorial Committee as well as one of the key authors. The New Zealand Beef Council wishes to acknowledge Duncan s input along with the contributions by the respective authors and other members of the Editorial Committee. Various sponsors, described in the Acknowledgements, have assisted in the financing of this book. Without their valued support the publication of this book would not have been possible. Peter Packard Immediate Past Chairman, New Zealand Beef Council iv

5 Comments from the sponsors Merial As a principal sponsor of the New Zealand Beef Council, Merial saw this publication as a wonderful opportunity to add value to beef finishing operations by informing and educating farmers with the latest knowledge and techniques. Information transfer and education of farmers is a core value for Merial as evidenced by the number of Territory Managers we have in the field. They have the ability to add value to farm businesses and we would encourage farmers to contact their local Merial Territory Manager to discuss their individual animal health programmes. A huge amount of time and effort has gone into this publication by many people and Merial would like to thank and congratulate them. Balance Agri-Nitrients Ballance Agri-Nutrients are delighted to support the Profitable Beef Production book. We strongly endorse and identify with the philosophy it promotes, that through knowledge there is growth. Ballance spends around $2 million on research and development annually and can access the products and knowledge of Norsk Hydro, the world s largest fertiliser producer, who spend over $US30 annually on R & D. We congratulate the New Zealand Beef Council on the production of this book and encourage all farmers to use the information contained in its pages. Ballance s technical sales representatives are always available to advise on specific ways in which we can help lift farm production while at the same time, caring for the land. Richmond As New Zealand s largest exporter of beef products, Richmond is pleased to support the efforts of the New Zealand Beef Council in assisting farmers to increase the productivity and quality of the product that leaves the farm gate. Our business is a partnership between farmer suppliers, customers and ultimately the consumer who is looking for an outstanding food experience. It is only possible to achieve the great experience where we are constantly evaluating, benchmarking and improving quality throughout the process. This publication aims to provide farmer suppliers with a resource that assists them in that quest, and we recommend the information contained within these pages. Constantly taking a fresh look at the business of meat. v

6 Table of Contents LIST OF ABBREVIATIONS AND TERMS USED... xv CHAPTER 1 THE WORLD OF BEEF AND ITS MARKETS...1 Summary...1 Introduction...1 The New Zealand beef industry and drivers of returns an overview...2 The US beef cycle...4 Trends in the New Zealand beef industry... 5 Composition of New Zealand s beef exports... 7 Destination of New Zealand beef exports... 7 Size of the International Market... 8 New Zealand s place in the world market Grass-fed Producers...10 Domestic beef consumption...11 Beef consumption relative to other proteins: recent trends Major factors driving consumers during the present 10 year period Further reading:...13 CHAPTER 2 SYSTEMS OF BEEF PRODUCTION Summary...14 Introduction...14 Beef product types...15 Alternative systems...16 Steer finishing...16 Bull finishing Heifer finishing...17 Cattle age at buying and selling Examples of different bull systems based on age at purchase or sale...19 Weaner (3 months) finished at months age vi

7 Weaner to age months month to 2 year old bulls Systems for finishing older bulls Compensatory growth...21 Typical liveweight targets for different finishing beef systems Once-bred heifers...22 Cull boner dairy cows...24 Making it work on the farm an example Further reading...25 CHAPTER 3 NUTRITIONAL REQUIREMENTS FOR BEEF CATTLE Summary...26 Introduction...26 Feed digestion in cattle...27 Description of the digestive tract Rumen microbes...28 Products of rumen digestion Details of digestion...29 Microbial growth...30 Lipid digestion...30 Metabolisable energy...30 A description of the value of feed Pasture quality...32 Effects of quality on animal performance Sward composition, maturity, season Animal diet selection and nutritive value Other factors affecting pasture quality Controlling and sustaining pasture quality Further reading...36 CHAPTER 4 REQUIREMENTS OF ARTIFICIALLY REARED BEEF CALVES TO AGE 6 MONTHS Summary...38 Introduction...38 Requirements of the artificially reared calf from birth to weaning...39 The newly born calf and colostrum vii

8 The rumen of the new calf Calf rearing systems, rumen development Essential nutrients for calf growth Restricted milk feeding regimes for calves A cost effective calf rearing system Calf health Common causes of scours General comments about artificially rearing claves Target weights for artificially reared bull calves Requirements of artificially reared weaner calves up to 6 months of age...48 General comments...48 Nutrition and pasture quality Further reading...50 CHAPTER 5 FEED REQUIREMENTS OF BEEF CALVES FROM AGE 6 MONTHS TO SLAUGHTER Summary...51 Introduction...51 Feed requirements and rate of liveweight gain Factors affecting targeted feed intake and performance Feed Conversion Efficiency (FCE) or Ratio (FCR) Target liveweight and sward criteria Conclusion...59 Further reading...60 CHAPTER 6 OPTIMISING BEEF PRODUCTION FROM PASTURE Summary...61 Introduction...62 Some general principals...62 Pasture growth and production...64 Effects of animal management on pasture performance, competition and growth Impacts of grazing on pasture growth...66 Pasture growth and utilisation...68 Feed budgeting and assessment of pasture mass and quality viii

9 Maintaining a supply of high nutritive value feed for growing cattle...70 Optimum stocking rate...75 Use of supplements to maintain animal performance during pasture deficit periods...77 Wastage Substitution Risks of supplementation Available supplements...79 Further reading...79 CHAPTER 7 CATTLE ANIMAL HEALTH Summary...81 Introduction...81 Animal health plans...82 Monitoring...82 Internal parasites ( Worms ) and their control...83 Liver fluke Worm challenge and pasture quality Worm challenge and mixed animal species or age class grazing Cooperia Facial eczema...90 Spore counting...90 Prevention Trace element deficiencies...93 Copper Selenium Cobalt Other diseases...95 Bovine Tuberculosis...95 Animal status declarations National identification (ID) of cattle Bovine viral diarrhoea (BVD) Clostridial disease...98 Coccidiosis Rotavirus Bloat ix

10 Management measures to reduce the risk of bloat Anti-bloating treatments or products Ryegrass staggers Ticks Monitoring meat company slaughter sheets Further reading CHAPTER 8 GENETICS Summary Introduction Estimated Breeding Values What is an Estimated Breeding Value (EBV) and how is it calculated? How does an EBV relate to profitability? Mature Liveweights Feed conversion ratio or efficiency Definitions of terms Growth versus maintenance and FCR or FCE Genetic factors affecting growth and FCE Breeds and crossbreeding Hybrid vigour or heterosis Terminal breeds Maternal breeds Dual purpose breeds Composite breeds Performance of different breeds The environment in which the animals are to perform The requirements of the processor customer Traits that are going to be financially rewarded Carrying capacity Comparisons of different breeds and their crosses Producer options Summary of breeds and crosses Sex Age Technologies to meet industry requirements Dairy industryintegration Sourcing calves for finishing Further reading x

11 CHAPTER 9 FACTORS AFFECTING CARCASS COMPOSITION AND BEEF QUALITY Summary Introduction Saleable meat yield Meat quality Factors affecting saleable beef yield Breed and breed-cross effects on composition Within-breed genetic effects on composition Composition differences between the sex/castration classes Nutritional effects on beef cattle composition at a set weight Effects of growth promotants on beef cattle composition Composition changes during pre-slaughter handling Factors affecting beef quality characteristics Changes in quality characteristics with increasing age and weight Breed and breed-cross effects on beef quality Within-breed genetic effects on beef quality Beef quality differences between sex/castration classes Nutritional effects on beef quality Effects of growth promotants on beef quality Pre-Slaughter handling effects on beef quality References CHAPTER 10 MANAGEMENT TO MINIMISE ENVIRONMENTAL DAMAGE Summary How To maintain a sustainable beef cattle farm Soils Soil fertility Water General Soil nutrients and water Water borne pathogens Sediment Habitat modification Links to farm management Bio-diversity xi

12 Greenhouse gases A cautionary note Managing the farm s natural resources for intensification A process for intensification whilst managing the natural resources Environmental issues associated with intensification Possible future direction of environmental management Farm planning and planning of development Further reading Chapter 11 MARKET INFORMATION, OTHER DATA COLLECTION Summary Marketing and associated information for decision making Working with marketing uncertainty The cost or price of risk Know your market Know precisely what stock the farm is selling Where can market information be sourced? Analysing meat processing company kill sheets Advanced information What meat characteristics to analyse and for what benefit? Weighing cattle working out LWG correctly Animal identification/traceability Animal health monitoring Soils/water quality/environmental health Further reading CHAPTER 12 MANAGEMENT, PRINCIPLES, PROCESSES AND TECHNIQUES Summary Introduction Management framework Strategic planning The functions of management Levels of planning Monitoring The management context for monitoring Making formal monitoring work in practice xii

13 Benchmarking Practice change and learning Path breaking Risk management Analysing options Supplementary feeding decisions Two examples of calculating the benefits of supplementation Be$tFeed Gross margin or enterprise budgets for comparing enterprises Full farm financial analysis Conclusion Further reading CHAPTER 13 MEASURING FARM PROFITABILITY Summary Introduction Determining profit Income and inventory changes Expenses Operating costs Funding costs Sources of capital Cost of capital Profitability Profitability measures Return on equity & family labour Operating profit or economic farm surplus Return on capital (RoC) Return on assets (RoA) Return on equity (RoE) Economic value added (EVA ) Key performance indicators (KPIs) Costs of production Costs per unit of output Sheep and beef cattle farm Costs per unit of input Conclusions Further reading xiii

14 APPENDIX I The feeding value of various feeds commonly available for feeding livestock in New Zealand APPENDIX II Assessment of pasture mass and pasture quality APPENDIX III The wash method for facial eczema spore counting on pasture Appendix IV The faecal method for spore counting to assess facial eczema risk xiv

15 GLOSSARY ABC BSE CWT DM DO% EBIT EBV EFS EMA EVA FCE or FCR FMD FWE GFR HxF IRD kg KPI LMY m M:B MJ ME MWI P:E RoA RoC RoE SMY Meat NZ US(A) Activity Based Costing Bovine spongiform encephalopathy Carcass weight Dry matter Dressing out percentage Earnings before Interest and Tax Estimated Breeding Value Economic Farm Surplus Eye Muscle Area Economic Value Added Feed conversion efficiency, feed conversion ratio Foot and mouth disease Farm Working Expenses Gross Farm Revenue Hereford x Friesian cross Inland Revenue Department Kilogram Key Performance Indicator Lean meat yield Million Muscle: bone ratio in a beef carcass Megajoules of metabolisable energy Meat and Wool Innovation Ltd Protein to energy ratio Return on Assets Return on Capital Return on Equity Saleable meat yield Meat New Zealand United States of America xv

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