How can records improve profits?
Montana Beef Network data collection update
When pasture is still plentiful but the quality has declined, the following suggestions should be considered:
Ingredient lbs/day
Alfalfa hay 3.00
Barley straw 16.00
Barley grain 3.00
Wheat middlings 5.00
Mineral supplement +
If you have questions about winter feeding, please contact your local
county Extension agent or beef Extension specialist (John Paterson, 994-5562
or Rick Funston, 232-8223).
In our last issue, we began to address the changes in carcass performance at a ranch that participated in a research project with MSU. By using the knowledge of post-weaning management and past performance of calves in the feedyard and on the rail, the number of "out cattle" for carcass weight, quality grade and yield grade was dramatically reduced in the second year of the project. When marketing these cattle on a grid system, profitability can be greatly affected by understanding how the cattle's carcass performance affects specific grid premiums and discounts.
For this discussion, we will use a generic grid (see below) to compare individual carcass value and group carcass value.
Yield Grade 2.0 to 2.9 +$1.00/cwt
Yield Grade 3.0 to 3.9 $0.00/cwt
Yield Grade 4.0 to 4.9 -$17.67/cwt
Yield Grade 5.0 to >5.9 -$22.67/cwt
Certified Programs:
Choice Average or Higher +$1.75/cwt
Choice Minus $ 0.00/cwt
Select -$4.92/cwt
Standard -$17.42/cwt
Bullock/Stag -$25.20/cwt
Hardbone -$21.83/cwt
Dark Cutter -$30.17/cwt
Carcass Weight Premiums and Discounts
400 - 500 lbs. -$22.33/cwt
500 - 550 lbs. -$17.83/cwt
550 - 950 lbs. $0.00/cwt
950 - 1000 lbs. -$15.17/cwt
Over 1000 lbs. -$22.67/cwt
The example grid uses four pricing factors. First is the base or starting carcass price, similar to the price received for the carcass if the animal were sold on the rail based on carcass weight. Discounts or premiums are then subtracted or added to this starting price.
The second pricing factor is the premium and discount associated with yield grade. The third factor is the premium and discount associated with quality grade. Finally, discounts for heavy and lightweight carcasses are figured into the individual carcass price.
The base price for this example will be $101.00/cwt for Choice minus, yield grade 3 carcasses on the rail.
The following example demonstrates the range in carcass value for three
individual steers.
Final Sale Price $101.00/cwt
Total Dollars returned $772.65
Final Sale Price $51.74/cwt
Total dollars returned $500.33
545 lb. Carcass -$17.83/cwt
Prime +$6.50/cwt
Yield grade 4 -$17.67/cwt
Final Sale Price $72.00/cwt
Total Dollars returned $392.40
This is a generic grid, used for demonstration purposes. Before selling your cattle, it is important to know the plant's grid or program grid. Further, it is important to know what base price and how it is determined before merchandising your cattle.
Grids can be a valuable tool to help you earn more money for the quality
of cattle you produce. However, you must have records on how the cattle
perform on the rail, and be sure that your cattle will hit the targets
set out in the grid, thus minimizing the number of "out cattle."
The vast majority of information has been gathered on steers (Figure 3).
So far, data has been collected on less than 1,000 heifers (Figure 4).
This disparity is because some producers chose only to tag steers. Also, many feedlots harvested steers in the spring, but have not yet sent heifers to slaughter.
To compare this data to a summary of USDA graded beef from the Livestock Marketing Information Center, the outs are disregarded. And, the total pounds graded figure is used rather than the number of animals.
From April to July, the national percentage for USDA Choice was 57 percent. In contrast, Montana Beef Network totals were 61 percent Choice (Figure 5).
By combining the Yield Grade and Quality Grade, we get a more accurate picture of the cattle in a group. With the various branded beef programs growing throughout the U.S., the market for low-marbling, high-yielding cattle can be just as good as the market for well-marbled beef. But the cattle that are going to be less profitable in either type of system are the cattle that don't necessarily belong in either group. In the last graph (Figure 6), the cattle that may need to be evaluated carefully are the Select, Yield Grade 3 cattle.
Note that this is one year's data. With the varying feeding, marketing
and weather conditions, a complete evaluation should include data collected
over several years.
Marketing workshops
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