Adding Value from Pasture to Plate a career in search of value Kevin Unger Resource Manager Lincoln County Feedyard Leachman Cattle Of Colorado Which dog do you want to be? 1
2
A Tradition of Innovation Calf Weaning Since 1980 Introduction of Ultrasound for Sorting 1987 Video Imaging 1992 NCA Strategic Alliance Pilot Project 1992-93 Cooperation between segments Significant Value difference between cattle Significant amount of variability to manage Many Learning Opportunities A Tradition of Innovation Implemented the MicroBeef Electronic Cattle Management System (ECM) 1994 Established the Decatur Beef Alliance 1994 Original Investor in Future Beef Operations 1997 Expanded Relationship with Cargill Meat Solutions o Most Value added minded packing company o Invested resources to track carcass information o Negotiated Grid and Source and Age program You cannot manage what you do not measure 3
Define Value? Merriam-Webster Definition: val ue noun \ˈval-(ˌ)yü\ : the amount of money that something is worth : the price or cost of something : something that can be bought for a low or fair price : usefulness or importance Seasonal Calf/Fed Prices 550-lb Calf Price ($/cwt) Choice Fed Steer Price ($/cwt) J F M A M J J A S O N D J F M A M J J A S O N D 4
How Does ECM Work? Identify the individual animal s growth curve & mature body weight Sorting is done objectively based on growth curve analysis & projection X Late Maturing Growth Units Birth X Early Maturing Time Units The Decatur Beef Alliance Established in 1994 No More Average Management No More Average Marketing No More Secrets 5
ACCU-TRAC Electronic Cattle Management Facility Measurement Stations with Automatic Cattle Movement Processing Chute Sequencing Automatic individual animal sequencing station Video Imaging Automatic measuring of external dimensions Weigh Station Automatic integrated electronic scales Ultrasound measurements of internal tissue characteristics Ultrasound Station Individual animal processing and sort selection Automatic Sort Gates & Pens Station 2 4 6 1 2 3 4 5 Alley to Sort Pens 1 3 5 7 Increased Profitability When Marketing Individuals ARRIVAL - DAY 1 DAY 80 DAY 140 DAY 200 $ 120 Day Shipping Window Sold at Target Finish - Not Over-finished $ $ $ Fed Long Enough to Achieve Quality Grade Sold at Target Weight - Not Over-weight Fed Long Enough to Reach Minimum Weight Fed Longer When ICOG is Lower Than Sales Price $ Sold When ICOG Meets Sales Price $ 6
Grid (example) Yield Grade 1 Yield Grade 2 Yield Grade 3 Yield Grade 4 Yield Grade 5 Prime $16.20 $13.70 $12.20 ($4.80) ($9.20) CAB $11.20 $8.70 $7.20 ($7.80) ($12.80) Choice $7.20 $4.70 $3.20 ($11.80) ($16.20) Select $0.80 ($3.30) ($4.80) ($19.80) ($24.20) Stand ($11.00) ($13.50) ($15.00) ($30.00) ($35.00) 550 Carcass Weight Range 1000 7
Cattle on feed At DCFY Where Do you Fit? AVERAGE Return to Ranch -$83 +$83 Net Return to the Ranch 8
Cattle on feed At DCFY Are You Here in the Top 1/3? AVERAGE Return to Ranch -$83 +$83 Net Return to the Ranch Cattle on feed At DCFY Or here in the bottom 2/3? AVERAGE Return to Ranch -$83 +$83 Net Return to the Ranch 9
Retain Ownership Capture Data Base Line Your Herd Get paid for Genetic and Management Inputs Improve Net Return to your Ranch Producers who make Data Based Decisions see Profit at the end You cannot manage what you do not measure Value Discovery and Feed Yard Profit Drivers Analysis of over 185,000 calves fed through Decatur County Feed Yard All of the cattle were in groups of over 50 head and of known origin The study was done by mathematically adjusting each lot to a 625 lb. steer on arrival Ration price was standardized using $6.00/Bushel Corn Fed market price was standardized using $120/CWT 10
WHAT ARE YOUR CALVES WORTH? How big are the value differences on a 650 lb. steer? Efficiency 43% Grid Value 39% Carcass weight 18% Animal health 17% Value can range from $550 to $1,175!! Decatur s Value Discovery and Feed Yard Profit Drivers 18% HCW 17% AH 30% QG & YG 35% DMC Dry Matter Conversion (Feed Efficiency) Carcass Traits (Quality and Yield Grade Carcass Weight Animal Health 11
Profit Drivers Feed Conversion o 1 pound difference in dry matter feed conversion on a 585 lb calf with $6.00/bu corn is $103 into or out of your pocket Carcass Weight o Maximum Hot Carcass Weight Target is 999 lbs. Carcass Traits o Yield Grades, 1, 2 and 3. Measurement of Ribeye is best indication of muscle. o Quality Grade: o Prime, CAB, Sterling Silver, AP, Choice Lincoln/Leachman Customers have discovered that: Just one thing Puts it all together. One number that predicts your bottom line and carries over to the feed yard and Ranch. $Profit 12
Thank You! What Drives Value Baseline Market Timing Sorting Data $Profit Best Management 13