Amazing times For years. Using the Missouri Recipe for Hitting the Quality Target. Today. Amazing times For years

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1 Using the Missouri Recipe for Hitting the Quality Target Amazing times For years We sold calves for $0.95-$1/lb Feedlot cost of gain was $0.45-$0.60 Fed cattle were $60-$75/cwt Larry R. Corah Vice President, Certified Angus Beef LLC Applied Reproductive Strategies in Beef Cattle August 31-September 1, 2011 Amazing times For years We sold calves for $0.95-$1/lb Feedlot cost of gain was $0.45-$0.60 Fed cattle were $60-$75/cwt and we were naïve enough to think a $1 swing in the calf market was volatility Today Unprecedented cattle prices Unprecedented input costs Volatility of a magnitude never before experienced Global impacts of great influence As this industry moves forward with today s prices, costs and volatility, what should we focus on? As this industry moves forward with today s prices, costs and volatility, what should we focus on? maybe what the beef consumer wants 2011/Joplin/newsroom.html 1

2 What is the consumer telling us? What is the consumer telling us? Undesirable Eating Experience % Undesirable Prime 1 in 26 4 Premium Choice (CAB ) 1 in 19 5 Choice 1 in 7 14 Select 1 in 5 20 Table 1. Eating Satisfaction Related to USDA s Figure 1. Effect of Marbling Degree on Probability of a Positive Sensory Experience Can I afford to focus on quality? Myth one There is no extra money made by producing a higher quality animal Added $/head as fed cattle Top 25% $80 Top 50% $67 Table 2. Example of Premiums Paid by One National Program Used by Many Producers in this Region Myth two You sacrifice growth and pounds to hit quality targets % Prime % Premium Choice % Low Choice % Select % Standard % CAB Acceptance Rate Myth two You sacrifice growth and pounds to hit quality targets Avg. Marbling Score ADG, lbs./day No. Times Treated Individual Treatment Cost, $ Table 3. Effect of Percentage Angus on Feedlot Performance and Table 3. Effect of Percentage Angus on Feedlot Performance and 2011/Joplin/newsroom.html 2

3 Myth three High quality cattle do not feed as well Profile Low Middle High All Groups % Choice or Higher % CAB or Upper 2/3 Choice Premium % YG 1 & % YG 4 & Calculated Profit/Loss Myth three High quality cattle do not feed as well Profile Low Middle High All Groups Feedlot Placement Weight Feedlot Finish Weight Live 1,276 1,291 1,305 1,290 Days on Feed Pounds Gained in the Feedlot Average Daily Gain Average Carcass Weight Table 4. Characteristics of Low, Middle and High Quality Pens Table 4. Characteristics of Low, Middle and High Quality Pens Myth four You cannot have functional cows and still focus on quality No relationship between cow function and quality Certification Rate (%) Fiscal Year 23.0% 23.0% CAB Acceptance Rate Today 22-24% Realistic Goal 35-40% Top Side (Missouri) Thompson Farm 86.7% Osborn Farms/Pete Mitts 100% Johnnie Hubach 85.0% Mike Kasten 76.3% Certified Angus Beef LLC s fiscal year is October through September 2011/Joplin/newsroom.html 3

4 1. Genetics are very important % Black Cattle of Total Population 70% 60% 50% 40% 30% 20% 10% 0% % Figure 4. Percentage of Black Cattle of Total Population % 61.0% 63.2%65.0% 47.0% 52.9% * Black Non-Black Avg. Marbling Score ADG, lbs/day No. Times Treated Individual Treatment Cost, $ % Prime % Premium Choice % Low Choice % Select % Standard Table 7. Effect of Hide Color on Feedlot Performance and Carcass Traits in beef Calves Avg. Marbling Score ADG, lbs./day No. Times Treated Individual Treatment Cost, $ % Prime % Premium Choice % Low Choice % Select % Standard % CAB Acceptance Rate Table 8. Effect of Percentage Angus on Feedlot Performance and Figure 4. Angus Genetic Trend for Marbling (Spring 2011) Average Marbling EPD by Birth Year Grade Top 10% Bottom 10% % Prime % CAB % Low Choice % Select % Standard Yield Grade Carcass Weight, lbs Table 9. Oklahoma State University Data Sire Group Maternal Grand Sire No of Steers % Choice or Higher Table 10. Performance Data for Steers from the University of Missouri Thompson Farm that were fed at Irsik & Doll Feed Yard % CAB and Prime High accuracy High accuracy % 84% High accuracy Low accuracy % 94% High accuracy Natural service % 74% Totals % 86% Natural service High accuracy 39 94% 69% Natural service Low accuracy % 67% Natural service Natural service 23 96% 35% Totals 74 96% 58% 2011/Joplin/newsroom.html 4

5 Generations Start % Prime % CAB % Low Choice % Select Avg. Premium, $ Table 11. Stacking Marbling Missouri Study 2. Sick cattle do not grade very well Effect of post-weaning disease on carcass traits, feedlot performance and mortality Number of Treatments Prime, % Premium Choice, % Low Choice, % Select, % Standard, % YG 1&2, % YG 4&5, % ADG, lbs Mortality Rate, % Source: Black Ink Basics Poor Calf is a Disease to Profitability 3. Nutrition Post-weaning and preconditioning Whole-herd nutrition Pre-weaning and weaning Creep feeding and early weaning Post-weaning and preconditioning 4. Reproductive management Quality grade by birth sequence within the spring calving season USDA Birth Sequence E ME LE L Chi-Square P value Prime 0.53% 0.78% 0.00% 0.00% CAB 28.60% 24.37% 16.28% 11.24% <.0001 All Choice 85.05% 83.63% 76.88% 77.89% Select 13.88% 14.81% 23.12% 21.05% Standard 0.53% 0078% 0.00% 1.05% E=early, first 21 days; ME=mid-early, days; LE=late-early, days; L=late, after 63 days Source: Iowa Tri-County Steer Carcass Futurity 5. Market quality Every day the market lets you sell quality calves for commodity prices Document value Weight Location and proximity of feedlot program Genetics Age range Summary Adding value beyond just pounds is a challenge, but improving quality grade sure can help achieve that goal allowing producers to take great pride in what they are achieving 2011/Joplin/newsroom.html 5