KITTITAS, Wash. — The International Genetic Solutions Feeder Profit Calculator is a new tool available at no cost to beef producers to help them establish the true value of calves sold to feedlots.
Live online since mid-July, the calculator takes a producer’s data and renders a management value, relative genetic value and total relative value so the producer and the feedlot buying the calves have an independent, third-party assessment, Chip Kemp, director of membership and industry relations of the American Simmental Association, told beef producers at Trinity Farms Cattlemen’s Gathering on Oct. 7.
Between 1976 and 2015, U.S. per capita consumption of chicken and beef have flipped, with beef going from 100 pounds per capita to 50 and chicken increasing, Kemp said.
“Your kids and grandkids can’t do things the same way and stay competitive,” he told more than 100 ranchers at the gathering.
“Sadly, when you go to sell your cattle, for most major feedlot folks their awareness of genetics is pretty slim. Ears and color is all they look at. So this is a tool for pull through on genetics,” Kemp said. “It can reflect improvements you’ve made in traits over time.”
In an early example in July, one producer received $3.45 per hundredweight for relative management and $6.38 for genetics for a total relative value of $9.83 per hundredweight, Kemp said, adding that $11 is the high end on the scale.
“This is a brand new launch of a new software that people have been waiting for a long time. It will be a two- to three-year lift to give it traction. If a buyer knows the true value, he might be willing to pay more,” Kemp said.
The management value accounts for weaning period, health and vaccination for BRD (bovine respiratory disease), he said.
IGS has done management valuations for years but the Feeder Profit Calculator is a new tool to give genetic and management value in dollars and cents, he said.
Marty Ropp, founder and executive of Allied Genetic Resources in Normal, Ill., said genetics is the beginning of value creation.
“You can make low-end product with great genetics but you can’t make a great product from poor genetics,” he said. “It doesn’t matter if it’s sweet corn or cattle.”
He said his company wants to be part of greater coordination among different segments of the beef industry to increase efficiency and consistency to generate more dollars for everyone in the supply chain.
“Traditionally, genetics has been an uncoordinated effort and because of that we’re left with legacies that have to be improved upon,” Ropp said.
Genetic decisions have been random to make cattle bigger, smaller, fatter or leaner with the industry only recently honing in on important targets like safe, flavorful and tender beef that all consumers want, he said.
“Some want a more highly marbled premium product and some prefer leaner grass fed with slightly different flavor and production story,” he said.
The beef market is fairly flat but still at one of its higher levels historically at about 30 percent less than its peak in 2015, he said.
Beef is a $150 billion industry at 30 million steers annually and as the economy improves so does demand, he said.
“The protein in the beef amino acid profile is more complete for human nutrition than plant proteins. The make up of beef is more similar to the tissues in our bodies than green beans,” he said.
The future is bright, he said, as the industry focuses on long-term genetics, 10 to 15 years out.
Mike and Paulette Forman began Trinity Farms more than 30 years ago and operate it with their son, Robb, and his wife, Debbie, and their four adult children. They specialize in Angus, Simmental and SimAngus cattle.
Midway through the day, they had sold 30 of 50 private treaty bulls at $3,000 to $4,500 apiece and were selling 70 bred females at $1,950 to $3,500 starting bids through a silent auction, Robb Forman said.
Bull prices at their spring auction are higher so this was a great opportunity for people to buy in a lower-stress setting, he said. And interact with some very influential people in the beef industry, his father said.
A panel of feedlot buyers, including AgriBeef and H3 Feeders, said animal health is the key thing they look for in buying calves and that vaccines, minerals and parasite control are important. They voiced no problem with country of origin labeling and said there’s too much political uncertainty to see much growth in the Chinese market in the year ahead.