How Angus Breeders Add Value

(Bob Cervera) Commercial cattlemen paid record high prices for Angus bulls in 2015. Then calf values fell, and now they might be asking if they got a return on that investment. Some say good genetics are more valuable in this new scenario. Certified Angus Beef’s Justin Sexten shares this perspective. (Justin Sexten) As the market declines, the differentiation or the price points between good cattle and lower quality cattle gets wider because now with an abundant supply of calves. I can now be more discerning if I’m a buyer. I no longer am purchasing high-risk calves to keep the feedyard full. I can be more selective, pay a higher price for the good cattle, potentially discount the cattle that don’t meet my specifications for genetic potential and ultimately management as well. (Bob) Producers may document their management to get premiums, but Sexten says that value is amplified when those programs are applied to top cattle. (Sexten) As the number of calves that have value-added practices added to them—such as vaccination and feeding programs—increases, the need to have a solid genetic foundation under those calves only continues to grow as the number of calves that feeders have to choose from also increased. (Bob) Even when the payout isn’t direct, it’s important to keep end-product traits in mind, the animal scientist says. (Sexten) The average pen of cattle is going to grade 70% Choice and as high as 5% Prime. We are seeing Certified Angus Beef acceptance rates up around 30%. As ranchers develop breeding and feeding programs, we have to continue to keep in mind that average is a very high bar to achieve. Investing in genetics that are focused on end-product quality with acceptable marbling, ribeye area and carcass weight is going to position them, to not only achieve average but exceed it and continue to gain market premiums. (Bob) Breeding good cattle is only part of the equation. Many genetic suppliers aid in marketing the calves and Sexten says those are important partnerships. (Sexten) The challenge with genetic value is it’s not something that you can add overnight. To lay that foundation, continue to invest in quality genetics from a reputable seedstock producer that ultimately offers a program from a marketing perspective. That may be help from marketing the calves at weaning; that may be helped by purchasing those calves back at weaning or even retaining the ownership through the feedyard. But investing in genetics lays a foundation that regardless of how the market goes up and down gives you options to add and capture value later on down the road. (Bob) I’m Bob Cervera.

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