Seedstock and commercial producers share their firsthand experience with ASA’s new and innovative feeder calf value prediction.
By Emme Troendle and Lilly Platts
What is it?
Historically, the primary limitation of valuing feeder calves has been accurately gauging the profit potential of the largest genetic group within the industry — the crossbred calf. International Genetic Solutions (IGS), a collaborative effort of numerous breed associations, has developed a tool to assist in determining feeder calf value, called the Feeder Profit CalculatorTM (FPC).
“The FPC offers an objective way of describing the genetic merit on a set of calves,” comments John Irvine of Irvine Ranch, owner and manager of a 225-head operation of registered Simmental located outside of Manhattan, Kansas. “To date, there has not been a more accurate way to quantify calf value. Many producers try to do the right things in terms of management such as weaning and using sound vaccination practices, to prepare calves for the challenges they will face in the feedlot. The FPC offers a common language to bridge communication between those selling and purchasing feeder cattle.”
The FPC incorporates genetic knowledge of mainstream sires, regardless of breed, preconditioning and vaccination information, and weaning management and responsible health programs to evaluate the value on a set of calves. “As this tool gains traction and becomes commonplace for cattle buyers to use, producers will be better rewarded for their efforts, in respect to their investments in better genetics as well as improved efforts in preconditioning calves to offer a better product for the next link in the industry chain,” says Mike Forman, owner and operator of Trinity Farms, a 700-head ranch of registered SimAngusTM cows in Ellensburg, WA.
The finished product is a certificate that highlights the genetic and management predictions on calves along with certain carcass and growth traits. All producer-provided information is highlighted on the official certificate, and an additional page is included, indicating all the genetic information provided. “Our hope is that with a certificate in hand, our customers who are already making investments in quality genetics, making further commitments to provide better health and management of their calves, will be rewarded,” Forman continues.
As seedstock producers, Irvine and Forman share their insight on the FPC:
Q: Why is having this information valuable to those supplying feeder calves?
Forman: FPC is a well-designed third-party validation that helps to provide structured reasoning to establish value relative to the average feeder calf price dependent upon the producer inputs in regard to genetic selection, health and management. It helps to reinforce what our position has been for years – producers have three things to sell – genetics, health and the management the cattle are under.
Irvine: The FPC provides a great metric to gauge value for producers that have routinely invested in quality genetics as well as practice good management. Additionally, by scoring their calves, FPC provides the cow-calf producer a benchmark to make measurable progress moving forward, whether it be on the management or genetics side.
Q: What would you say to someone hesitant about using the Feeder Profit Calculator?
Forman: What do you have to lose? It is currently provided at no cost to the producer. I guess if the results happen to not be favorable, they can choose not to share them with their prospective buyers, but most importantly, this is a chance to find out specifically how your calves should be valued in relation to the average.
Information is power and what gets measured can get done – so even if you are not receiving the premium that you think you should, we feel this can be an extremely informative tool to the producer to be sure that they are adding as much value as possible to their calves for the next owner in the process. Buyers are directed to get the cattle that have worked for the lot and/or processor – even if you are not seeing a direct premium today, avoiding reverse discrimination by not knowing if your calves are average or below, will pay dividends in the future as the new generation of buyers look for tools such as this to help them procure the more profitable cattle.
Irvine: In talking with many producers about FPC, everyone I have encountered is excited about the FPC. There are clear, tangible benefits to both those selling and buying calves. Considering the FPC is a free service provided by IGS, this tool provides a great opportunity for both cow-calf producers and feeders.
Q: How can you, as a seedstock provider, use the FPC as a customer service tool?
Forman: Last October, we offered a “Cattlemen’s Gathering.” Speakers from all across the country led an active discussion on the most pertinent issues facing the commercial cattle industry today. Focused on the value of genetic selection, the latest advancements in herd health and pre-conditioning protocols, the use and benefits of low-stress livestock handling, financial planning through the use of Cowman Benchmarking Metrics, and the introduction of the IGS Feeder Profit Calculator.
We have seen this to be an educational opportunity for producers to show them the value of adding health and management component since many calves are weaned on a truck.
Irvine: As a seedstock provider what is it we are really selling? First and foremost, a seedstock provider’s customers buy bulls with the expectation that they are investing in the genetic progress of their herd. The FPC offers a way for these producers to document the genetic value of the calves they produce, and to hopefully realize a greater return on their investment in genetics. By helping customers get the calves scored, and promoting the FPC certificates to potential buyers, seedstock producers are endeavoring to enhance their customer’s success and profitability.
Commercial producers, who have used FPC, offered these remarks:
Kent Anderson, A3 Land & Cattle LLC
A3 Land & Cattle, LLC and Plus Bar Inc., is a partnership operation located in the northern edge of the Platte Valley of Central Nebraska. They run 700 cows, 300 are SimAngus seedstock and the remainder are predominantly commercial Angus. The ranch raises seedstock for bull and bred heifer customers, as well as fed cattle (and carcasses) through retained ownership. Darr Feedlot Inc. has partnered since 1990 to custom feed their cattle, with individual animal carcass data collected and submitted to ASA.
“I have long thought that authenticated genetic and health information should be more readily available to help inform feeder cattle price discovery. We were anxious to put the Feeder Profit Calculator to the test by comparing predicted-to-expressed performance of our retained ownership cattle. If performance and health risks associated with feeder cattle purchase price or decisions to retain ownership can be better mitigated through the Calculator, it’s a win-win for bull customers as well as feeder and fed cattle buyers.
“We experienced a very nice alignment between predicted and actual feedlot and carcass performance, providing first-hand confidence that the FPC effectively predicts pen-based performance. The Calculator also serves as an informative benchmarking tool to help cow-calf producers understand connections between bull purchase decisions and resulting relative impact across predicted feedlot and carcass traits. In cases where evaluated post-weaning genetic merit may have been neglected, the Calculator also helps inform areas of needed emphasis for future bull buying decisions.”
“The value to commercial bull customers is that the Calculator can be used to help them become better price-makers, as opposed to historically being price-takers at the mercy of the market. It also enables bull customers to more effectively get paid for the investment they’ve made in superior genetics for post-weaning / carcass performance, without necessarily having to assume the risk of retained ownership.”
“Beyond genetics, the Calculator indirectly underscores the economic importance of continuously consulting with your veterinarian to execute the most bullet-proof overall health program possible for the cow and replacement heifer inventory, as well as feeder cattle mates. It’s free and results are confidential — all that’s needed are registration numbers for your current and historic bull battery. As the Spring bull sale season unfolds, ask your seedstock supplier to transfer ownership of bulls to help make it easy to use the Calculator.”
Dennis Ankeny, Ankeny Ranch, Arlington, Washington
Ankeny Ranch, located in western Washington, is a 38-head commercial operation that has been in business since the 1980s. In 2009, Dennis Ankney, owner and manager purchased his first SimAngus bull.
“My objective with cattle, like any other business, is to meet or exceed my customers’ needs by producing the best quality product genetically as well as proper preconditioning.
“I attended the Cattlemen’s Gathering at Trinity Farms in hope of getting an answer to a key question: How can you quantify genetic value — I can provide preconditioning data and treatment history, as well as specific feeder calf information. But how can genetic value be quantified so potential buyers can understand how they would benefit when purchasing my calves?
“My question was answered by Chip Kemp, Director of Commercial and Industry Relations for the ASA. The answer is the IGS Feeder Profit Calculator. Over the years I can see what adding great genetics has done for my calves, but I would get a sinking feeling at sale time when my calves sell for the same price or less than the average calf.
“Now, Cattle producers can get a certificate for their calves that quantifies genetics,
giving them a distinct advantage over the average calf at sale time. From my perspective, the FPC is the missing tool that gives feedlot owners a better understanding of how genetically superior calves perform in the feedlot, while giving the cattle rancher a feeling of reassurance that feedlot owners have a greater understanding and appreciation of genetics, contributing to the bottom line of both the buyer and seller.”
Enos Grauerholz, Beloit, Kansas
Enos Grauerholz and his sons run a 500-head commercial Simmental operation in north-central Kansas. “John Irvine introduced me to the Feeder Profit Calculator, and their Simmental composite bulls have proven themselves by delivering moderate birth weight and fast growth.
“The Calculator was easy to use and drew positive attention at our last auction. We sold calves after weaning at Farmers and Ranchers Livestock Commission Co, in Salina. The auction displayed our IGS FPC certificate on the video screens during the auction. When the certificate was displayed, it seemed very quiet. This was the first time many people had seen this. The bidding was rapid and at least 8 to 11 dollars/cwt premium–I was pleasantly surprised.
“I know we add value through improved genetics and backgrounding. The calculator is a simple tool to quantify and promote genetic awareness and our management. The Feeder Profit Calculator gives us another leg of credibility and helps prove our investment in genetics.”
Austin Olma, Olma Cattle Company, Tonasket, WA
Olma Cattle Company is a 1,200-head commercial Simmental ranch located in north-central Washington, 20 miles from the Canadian border. The operation weans and backgrounds calves between 700 and 900 pounds, and is focused on retaining moderate framed females that can handle the northern climate and terrain.
“I became familiar with the FPC this last fall. Curiosity was my main driver for using the FPC. I always wanted to know how our cattle stack up, and I wanted to know what our cattle are lacking so I can improve our herd.
“We don’t have the ability to utilize AI, so being able to see how my calves score by calculating all my bulls EPDs, helped me shift the direction of my bull selection.
“The FPC provided more information and confirmed our suspicions. We have really focused on growth, selecting bulls that rank in the top 25% for YW and WW. We didn’t pay a lot of attention to carcass EPDs, with the mindset of we don’t finish our own calves, and there hadn’t been any incentives from our buyers to really focus on carcass traits. We need cattle to perform for us in pounds gained.
“FPC gave me an idea of where my cattle stand as feeders compared to others across the nation. This year when buying bulls I am focusing a little more on carcass EPDs to help improve our future calf crops. FPC takes only a little time. It doesn’t cost you anything — it is great information that you can use. I’ll keep trying different bull
groups I own, also run bulls that I am considering buying to see how they will impact my herd.
“I really enjoy seeing the American Simmental Association putting time and money into creating a tool for commercial ranchers. Technology is only going to become a bigger part of what we do. It’s great to have an association working to help us create the best products for our consumers.”
Editor’s Note: This article was originally published in the 2018 March Issue of the SimTalk magazine.