To say the last two years in the cattle
business have been interesting is an understatement. We have gone from record
losses to record profits. Last fall, everywhere I went, people said “There is
no way to make money feeding cattle at these prices.” The prevailing thought
was “SELL THEM. Don’t pass go, take the money, don’t hesitate, SELL THEM
NOW!” Conventional coffee shop, off-the-cuff wisdom is seldom based on
fact. As I write this update, we have data on three pens of QB cattle.
Below is a summary of some important
numbers from those pens.
|
PEN 1
|
PEN 2
|
PEN 3
|
|
Mixed
|
Steers
|
Mixed
|
Average per head profit
|
$215.89
|
$332.62
|
$272.69
|
Average per head profit on Prime
cattle
|
$436.00
|
$479.75
|
$489.28
|
|
|
|
|
Profit per head TOP
|
$465.33
|
$730.35
|
$651.90
|
Profit per head BOTTOM
|
$6.08
|
-$58.39
|
$49.81
|
DIFFERENCE
|
$459.25
|
$788.74
|
$602.09
|
Number of animals that lost money
|
0
|
2
|
0
|
|
|
|
|
Sale value per head TOP
|
$2,372.76
|
$2,678.16
|
$2,185.87
|
BOTTOM
|
$1,366.96
|
$1,625.85
|
$1,583.16
|
DIFFERENCE
|
$1,005.80
|
$1,052.31
|
$602.71
|
AVERAGE
|
$1,907.68
|
$2,029.51
|
$1,878.64
|
|
|
|
|
Percentage of cattle above average
profit
|
61%
|
44.6%
|
74%
|
|
|
|
|
Harvest weight TOP
|
1595
|
1648
|
1415
|
BOTTOM
|
919
|
1063
|
1016
|
DIFFERENCE
|
676
|
585
|
399
|
AVERAGE
|
1309
|
1339
|
1195
|
|
PEN 1
|
PEN 2
|
PEN 3
|
Weight into feed-yard TOP
|
1000
|
962
|
690
|
BOTTOM
|
636
|
656
|
502
|
DIFFERENCE
|
364
|
306
|
188
|
AVERAGE
|
748
|
753
|
588
|
|
|
|
|
Average Daily
Gain TOP
|
4.4
|
4.78
|
4.36
|
BOTTOM
|
1.5
|
2.11
|
2.09
|
DIFFERENCE
|
2.9
|
2.67
|
2.27
|
AVERAGE
|
3.3
|
3.60
|
3.26
|
As I analyze
the data, several things jump out at me.
First, in all pens the most profitable
cattle graded prime. Quality grade was the main profit driver for all three
pens.
Second, the variation within the pens
was very significant. There are gross sale differences of $1,052.31, $1,005.80
and $602.71. There are profit differences top to bottom of $788.74, $602.09
and $459.25 in their respective pens.
Knowing and having
the data to make good decisions has value. Identifying the cattle in the top
third and the bottom third of both of these pens has tremendous potential.
Implementing this information into your genetic selection process means more
long term profits for your operation. Tying this data to individual cows and
sires becomes a must do task. Taking the time to gather the cattle records to
do this will be the biggest financial return on your time you will ever
receive.
I have visited all
the QB participant operations. The one thing I will state without reservation
is that everyone’s cattle are already at or near the top in the industry. I
cannot think of a better time to find out how your cattle will perform in the
feed-yard and in the packing plant.
We have seen record
profits the last five years in the row crop industry. What have the producers
done with the profits? If you are in this category, what have you done with
your profits? It has been my observation; row crop producers have invested the
profits in new equipment, new technologies and better management practices.
Certainly a good decision, so they are prepared when prices aren't so good. I
will submit to you that now is the time for beef producers to do the same. We
have several good years ahead of us. Discovering how your cattle perform and
grade should be a top priority. Determining which cows are paying the bills
and which ones are sending you a bill should be a top priority. This knowledge
will serve you well now, when prices are high and even more when prices go down
or costs go up.
To those in the “no way you can make money” crowd, please
study the data above. Look at the value differences within these groups of
cattle. It’s an easy conclusion to come to, that your target should be fast
efficient gaining cattle that grade prime. First, you have to find out how many
cattle you have that are already hitting that target and the correlating sires
and dams. Second, determine the ones that are not performing and let someone
else own them. You will be rewarded for the effort.
We currently have 14,000 cows enrolled in the QB program. We
have harvested three pens of cattle and as of this writing there are seven more
pens in the feed-yard. Everyone with fall calves should be thinking about
placing those cattle this summer or early fall.
Breeding season is a good time to compile your cow list. Calving is over for some and some are just starting. Now is the time to
compile calving lists and calving data. Email me for a copy of all the data
collection forms QB offers. I suggest duplicating the forms. If you do not
have the resources to duplicate, I’m happy to mail you more copies.
On a closing note, I want to propose something for you to
think about - If the same person keeps coming back to buy your cattle every
year, DO THEY KNOW
MORE ABOUT YOUR CATTLE THAN YOU DO?
Mike Kasten
QB Program Director
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