Last year I mentioned in my welcome that the cattle industry is right on the edge of being “Really, Really Good!”
I really believed that because all the fundamentals of the cattle industry were pointing towards a cattle inventory that would continue to decrease because we are still culling the cow herd. We have killed too much of the factory, “The Cow!!” So that is the supply fundamental.
For the demand fundamental, our exports markets have rebounded to almost record levels and have exceeded record levels with some countries. However, we have to remember that 90% of the US Beef is consumed right here at home. We export 10% but that is a growing market of the very high value cuts because of the economic growth of China, Japan, Korea and yes, India. These populations want “Beef and they want GOOD Beef!!” You have to come to the US for the best beef because of our Genetic Advancement and our ability to finish our cattle right.
OK, I have been bullish for a few years now but I am really Bullish today because of the above information.
We now feed to finish everything on our Ranch from our cull cows and yearlings to calves. Here are some recent results:
- Finished Cows- Average wt. 1,771lbs. @ .69/cwt = $1,227.51/head
- Finished Open Yearling Heifers- 1,550 lbs.@.99/cwt= $1,534.50/head
- Finished Steers- Average wt. 1,350lbs. @ 1.05/cwt = $1,417.50/head
Now, let’s look at some different ways to evaluate the opportunity in front of us:
Cows – When you make genetic choices for your calves, you are also making genetic choices for your cows if you are retaining heifers for your own replacements. It is so important to keep this cow in your herd because of the costs of developing this cow. You have to find the right balance between the desired performance, the desired feed efficiency and the factors of stayability that keeps this cow in your herd. This is very important but when she goes to town she will also have great value because of your performance selection as well. If she is bringing $1,200 as a cull, what will be the cost of replacements?
Heifers and Steers – In the history of the cattle business, we have never had a better opportunity in front of us than we have right now. It is very important that we are generating the right kind of pounds in our calves so whether we are finishing our calves ourselves or selling our calves to someone else to add this finished value, our calves represent what the feeder and the market wants. “To Much Angus” is out and “Cross Breeding” is in. I understand the positive impact of crossbreeding and the negative impact of a Yield Grade 4 discount because the carcass carried to much fat. This has been our story for the last several years. What I am learning is the impact on the cattle feeder and to what extent they are going to in order to manage too much English (Angus) Breeding in a calf. They are experimenting with implants to try and reduce fat on the carcass to reduce discounts!!
As our calf supplies continue to tighten, your crossbred Gelbvieh or Balancer calves will bring more and more dollars in your pocket for two reasons:
- You are meeting the needs of the cattle feeders so he can maximize his feedlot efficiency.
- With Gelbvieh influence calves, you will wean more pounds at Weaning than any other cross!!! Marc Data has proven this in test after test! Your gain at weaning is the feedlots gain at finish!
I have listened to experts that are saying that our Fat Cattle Market has the potential to reach the High$1.20/cwt in the future. That would mean that a Finished Steer of 1,350lbs. would bring $1,620. Make sure you are purchasing the highest performance genetics possible so YOU can maximize you’re opportunity that is right in front of you. IT IS WELL DESERVED.