Thursday, June 16, 2016

BIF 2016: In Search of Beef Production Nirvana, Things a cow-calf producer learns when you own a feedyard, what drives profit?

Chip Ramsay
Rex Ranch

"I'm humbled to be in front of you." Ramsay said, "You all represent the most passionate and educated group of producers."

Nirvana, what does that mean?
In the Buddhist tradition, nirvana is described as the extinguishing of the fires that cause suffering and rebirth. These fires are typically identified as the fires of attachment, aversion, and ignorance.

Rex Ranches and their feed yard face weather volatility. In 2012, calf cost was $635, in 2013 it increased to $876.

They also face price volatility, there were swings in $241 of calf price over five years.

There has to be trust between segments. Weighing conditions, changed to do what is best for the cattle instead of worry about who gets the advantage. Because of the integration of the cow-calf and feed yard, they can streamline vaccination protocol and reduce redundancy. This also requires sharing added value. Is it a zero sum game or can we add value? We need to have an abundance mentality and make the pie bigger. Be can't spend ourselves to oblivion, but there are opportunities to increase value.

"If we can't speak in the same language, we can't accomplish anything." says Ramsay.
Perhaps we need to look at contribution margin, revenue minus variable costs.We need a system-wide analysis to find additive value.

Correct use of EPDs can significantly change cattle performance within a generation interval. By focusing on calving ease and marbling, dystocia moved from 25% to 8%.
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