Saturday, April 26, 2014

Are you prepared for the “local” beef market premium?

The National Restaurant Association recently surveyed 1400 chefs.     The following are the three top trends for 2014:           Locally sourced meat  (and seafood, dependent on location)
                                    Locally grown produce  (the CSA concept is getting larger)
                                   Environmental sustainability  (how raised, how cooked, how served)
You will note nothing in here overtly says “certified organic”.    Clearly, beyond those consumers who are environmental activists, most are just interested in knowing their food has not traveled the world for weeks or months before landing on their plate, and it is not overtly irradiated or chemicalized as a result of its long distance origins.

Can we capitalize on these trends?

Those of you who came up in the 4H world know that the post-show livestock auction has proven to be a great way to demonstrate local support for local livestock production.    Beyond those agri business owners you see bidding at their local fair, you discover others who may remember hanging out at their grandfather’s farm and grew up with respect for the hard working local farmer.

There is a concept out there in the consumer world that farming has become the captive of international corporations who are gobbling up the land once owned by family farmers.    The truth is that most farm land remains in private family-unit ownerships, just not as many total farmers as before—farm sizes are larger than before, in part because planting and harvesting is more mechanized and has larger capacity than the equipment Grandpa used.

The key difference today is that the diversity of animal species you see at the county fair can no longer be found on most farms.   Outside of “organic” or “4H” or “CSA” (community supported agriculture) farms, most of us are pretty monocultural, at most two species of animals (eg, beef and poultry) are on the farm in economic numbers.

The auction market system exists because most of us do not believe the local community has the processing capacity and consumption demand to “swallow” our volume of yields.
In the case of beef, however, when as recently as 2005 the national cow herd only averaged 18 cows per farm (usually the second focus of the farm rather than the first), our perception does not fit reality.

Is the commercial market system for meat animals doing its job?
Americans are the world’s greatest carnivores.    Annual meat consumption is 270 pounds per person, only tiny Luxembourg in central Europe eats more meat than we do annually.     Cattle were integral to the economic expansion across the American continents, with first sheep, then dairy, then beef adding up to major industries alongside the more traditional hog and poultry production that came from those early European ancestors’ traditions and never developed volume farm production until after WW II. 

Cattle could use land that needed to stay in grass (land that row crops would-- and did-- erode into the mighty Mississippi and other rivers that drained the continent).    Thus our commercial scale ranching devolved into the south and the west, away from the cities, the areas where soils were deep and fertile enough to be desirable to the cash crop, vegetable and dairy industries who wanted more return per acre and had a more intensively managed production system than cattle ranching requires.

(Is the commercial market system doing its job?   Page two)

Then the commercial beef market grew into a major user and promoter of the uniquely American corn grain crop, and over time this moved momma cows off ranges and into drylots, and their feeder calves into feedlots, leading to higher cost commercial beef production.    Cattle grading (to establish premium price scales) developed on the basis of how a “corn finished carcass” looked.    If not for the “fast food” industry’s capitalization on ground beef and hot dogs, which brought the surplus dairy cow population into a significant share of the meat eater’s diet, today the quality cuts beef case in any meat market is a place that only restauranteurs and higher income people shop.    

Beef consumption plateaued for three reasons:   (1) changing consumer attitudes toward “fat” consumption;  (2) promotion of different meat species outside of their ethnic roots;  (3) rising prices for premium cuts, defined on the production rather than the consumption side of the table, reducing their frequency of consumption.    

This means a committed Beef producer must question whether the established patterns and channels in beef marketing may be working against us, for example, grading and pricing the leaner, breed specific beef that still has good flavor and eating character lower than the white fat laden corn-fed “prime” and “choice” cuts from feedlot Holsteins that require mechanical tenderization to be edible.

Let’s be clear on this.    It is the consumer that is deciding what beef it will buy – not the commercial packer and the industrial scale market chain, that has turned beef into a commodity based industry, in which there is more concern for carcass size (“I want the biggest steers hanging on our hooks”) than there is for food quality (“I want the steer who was fed in the way that makes the best beef, regardless of size or age”).

Integrate your farming and your beef production

The cattleman who is willing to analyze every step of his farm operation and evaluate how the product he produces will be received by a knowledgeable consumer (who knows, for example, that digestible fiber in grass produces a different fatty acid structure than digestible starch in grain, and one proves to be healthier than the other once the cattle feed product reaches the table as human food) will find the option of producing beef for a direct-purchase local market a potential income booster. 

The trick in this chain of decisions is (a) can I produce cow-calf feed cheaper per acre than I do now, (b) will my reproduction be sounder if I change the mix of feeds away from all high-input sources, (c) is it possible that the right choices in boosting feed production will also boost beef harvest quality, (d) am I working with the right breed or bloodline genetics to optimize beef quality on the local market standard?

We have a national Cow-calf herd that is no larger than we had in 1954—sixty years ago.    Yet we are producing food for 100 million more Americans than lived here sixty years ago.     At the national level of meat consumption, this tells us there has been a great shift in favor of “white meat” and “ethnic link” meat species.     However, the corn dependency of the evolved white meat (pork and poultry) species is eliminating the price advantage these used to have against beef.     Thus it is time for beef producers to challenge the beef industry status quo and produce some new beef options for consumers that will also prove profitable to raise on the farm, and help maintain the fertility of our land while retaining the rural landscape in beef production that appeals to the consumer willing to pay a premium price for “local”. 

We sell beef genetics at both ends (what the cow eats) (what people want)

Not only do we provide access to the bulls that meet your cows’ fancy, we provide access to the forage seeds that are revolutionizing the variety and quality of beef that reaches the consumers’ table.   

The majority of beef breeds have genetic encoding for grazing.   Improving our pastures, lowering the acidity of our stored feeds (less dependency on grain silage or high moisture grain) all have an impact on reproduction as well as quality of beef.

Keeping it straight in our head that some of our matings need to produce “maternal line” replacements (not breeding 100% of the cows to steer maker bulls) can return some vigor to your reproduction and live calf production as well.

Mich Livestock Service Inc         “For the best in bulls”        “For the best in forages”

Phone TOLL FREE (800) 359-1693    or any of the representative listed inside with cell phone numbers

The Genetics of culling rates and cow turnover

Recently published USDA data from 2012 DHIA herd reports indicates that high culling rates continue to plague the dairy farmer’s income and equity statements.     While culling dairy cows when beef price is higher than normal is an aid to cash flow, the cost of raising heifers depends on feed costs (which are high enough to inhibit growth in the beef cow sector).     The simple math is, every time you turn a cow  into a cull and have to replace her, your equity takes a $1000 “hit” (the market difference between culls and replacements today).

Turns out that Holsteins have replaced Guernseys as the breed with the shortest “Productive Life”.   On 2012 data, this is how each major dairy breed “ranks”:

Breed            Cull rate                Breed             Cull rate               Breed              Cull rate                           

Holstein             32.7%                 Brown Swiss       29.8%               3x crossbred        26.9%                                                                                                                Red & White     32.0%                 M Shorthorn        28.6%               2x crossbred        26.1% 
Guernsey           30.8%                 Ayrshire              27.7%                Jersey                  24.9%
Is crossbreeding the answer to improving cow turnover?     The data seems to suggest it, IF you ignore the obvious:    (a)  Jerseys are still better for herdlife than crossbreds;   (b)   crossbreeding beyond three generations is usually accompanied by a loss in milk volume;   (c)   Heterosis response [hybrid vigor] is greatest in the first generation, but declines with each added generation in which the same trait index is used (regardless of breeds added).      Thus crossbreeding alone does not replace gene trait selection IF your goal is to improve herdlife while maintaining or gaining on per-cow production.

Does selection on “health and fitness traits” work?

According to a recent article in Holstein International the low point in Holstein fertility levels was hit in 2005.    Since then, the average DPR (“daughter pregnancy rate”) of AI preferred sires has risen.   But so far, on the 2012 data above, Holstein cows still leave herds 30+% faster than Jerseys.    

How much of the Holstein disadvantage is due to lower fertility rates?

Keep in mind the commercial breed average for crossbreds as well as purebreds in any breed still show the “average” cow and “average” herds only get three lactations per cow.    Dairy profit margin over the cost of replacements would increase by 25% just by getting one more lactation per cow.    Longevity is a heritable characteristic, thus a breeding program seeking longevity will pay dividends in profitability.

The most important trait in selecting for longevity is clearly fertility.    Cows that do not rebreed do not stay in our herds.     Biological research in many different species clearly shows that fertility and a will to live are strongly correlated.    Thus selecting for better fertility will contribute to lower stillbirth rates and is linked to general health qualities in your herd.

How much of the Jersey advantage over all other Breeds is due to inbreeding?

What you really want to know is, “will this computer mating program that adjusts for inbreeding save me from shorter Holstein herdlife?” – and the answer is clearly NO.     In fact, the Jersey breed is the most “pedigree inbred” of all major dairy breeds, yet it remains the longest productive life breed.
Holsteins as a whole are 25% lower in average pedigree inbreeding (ibc%) than purebred Jerseys.  
(continued—how much is due to inbreeding?)

No computer sorting program leading you to the lowest “efi%” matings has ever been proven by any University study to work.    “Avoiding Inbreeding” when all AI sires in every Genomic breed are fast becoming closer related than ever before is a marketing ploy rather than an aid to herd improvement.  

This is why we continue to urge you to give the “aAa” Breeding Guide a try.    The proven solution to avoiding “inbreeding effects” is to recognize that a stronger, well-balanced physique avoids expressing “inbreeding depression”.     Trait selection on health and fertility traits associated with the problems of inbreeding will then synergize with the “aAa” mating to avoid producing “inbred” animals.

How much of Holstein herdlife is due to size?

Not as much as all the dialogue criticizing registered Holsteins would suggest.    Holstein USA studies are showing that the purebred Holstein has been gaining size at the rate of 25 pounds per generation.
If your facilities were built in the 1970s and you have not changed anything, today’s cow is likely 240 pounds bigger than the assumptions of your cow facilities (10 generations x 24 pounds/ generation).   
But if you built fairly recently, your building design would handle the larger cows of modern breeding.

USA type data is hampered in that it only measures “stature”.    Canadian type data measures both size (weight) and stature (height) and their trend lines may reveal the real problem:

1991 to 2001 birth dates:  average stature of first calf cows gained 5 cm (approx 2 inches)        
                                           average weight of first calf cows lost 7 kg (approx 15 pounds)
1996 to 2001 birth dates:  average stature of first calf cows was virtually unchanged; however
                                           average weight of first calf cows lost 21 kg (approx 46 pounds)

Basically, the near-universal preference in classification for a more angular frame (more tall than wide, more lean than fleshy) is producing new cows that are actually lighter in mass, are less sturdy on their front legs, have less muscle control over rear legs, have softer feet, than the sort of physique that gave their maternal ancestors a full productive lifetime.     

Again, the real causative problem is a lack of “balance” in genetic selection.   On the trait selection side, AI studs always preferred milk volume over component density, alongside earlier maturity of the production capability, with the result bigger heifers make the most milk.    Selection sets these trends.
It is disingenuous to blame breed type classifiers for problems that started from index rank selections.
The system they are using (linear trait scoring) was a product of the 1970s University view of “type” based on what sort of first-lactation cow produced the most milk volume.    This was a radical change from the breeder-developed type descriptions that were focused on cow longevity under forage feeding.    

Tell me how to rise from “average” to “exceptional”

If you wish to produce cows that have balance between “tall” enough and “wide” enough, use “aAa”.
If you wish to produce cows that have balance between “strength” and “dairyness”, also use “aAa”.
If you have herd issues with SCCs, fertility or component% levels, the PTA trait data is there to help.
Keep in mind that PTAs for Productive Life contain assumptions that may not fit your environment.
Thus while “PL” may help you avoid short herdlife cows, you need more information to gain herdlife.
Look for evidence of longevity in the maternal lines behind bulls you are considering.

It seems like every “expert” today is picking on the Holstein.

However, it remains true that 88% of the dairy cows in North America are “Holsteins”.
Only 5% are crossbreds, 5% are Jerseys, and 2% represent other traditional breeds.

Thus the productivity and profitability of the Holstein cow remains essential to dairy industry survival.     Holstein breeding must provide the genes to turn around negative trends that have led the Holstein to the shortest average herdlife in breed history.

Inside this newsletter you will find some recent facts and figures that we hope will add to your perspective of your opportunities and exposures in Holstein breeding.    

You might also ponder this idea:  you can create “outcross” hybrid vigor within any breed if in the next generation you pick your sires in a different way.    Different trait patterns require different DNA genotypes—and crossing different genotypes is how we stimulate a “heterosis” response to improve all “vigor” traits.

Mich Livestock Service, Inc  ** For the Best in Bulls ** ph “toll free” 1 (800) 359-1693