Food for thought on cattle breeding preferred by feedlots

[farmwriter]

These days fewer and fewer calves are seeing a salebarn in their entire lives. The packer is buying caves direct and paying the cow calf operator based at least partially on what the cattle get on the grid. This way the packer is in complete control of how and when the cattle are finished. The cow calf operator on this deal are happy with because they are paid relatively good prices and they do not have to pay an auctioneer. The big problem is when no cattle go through a sale barn how do you know what is a fair price...

I think we've got a while still before we have to worry about that.

 

[VLS_GUY]

Ok Farmwriter,

Go up to Alberta and less than 1% of the finished cattle go through a sale ring. The vast majority of fed cattle are either packer owned or sold by sealed bid. Packers have strategic alliances with some feedlots and that means you usually know where the cattle are going when finished and the time they are finished is determined by the forecasted needs of the packer. Many of these cattle have never seen a sales ring. It saves on auctioneers and trucking since only one trip has to be made.
By the way some packers are backgrounding calves. They supply the feed and hire a guy to feed and care for the calves with his own buildings and chutes etc. This is very similar to how the chicken business is ran. Basically the feeder is selling his labor and renting his buildings out.
For a guy feeding a few hundred head in such a market environment how does he know that market price is?

 

[Angus Cowman]

These days fewer and fewer calves are seeing a salebarn in their entire lives. The packer is buying caves direct and paying the cow calf operator based at least partially on what the cattle get on the grid. This way the packer is in complete control of how and when the cattle are finished. The cow calf operator on this deal are happy with because they are paid relatively good prices and they do not have to pay an auctioneer. The big problem is when no cattle go through a sale barn how do you know what is a fair price...

I think we've got a while still before we have to worry about that.

I agree with FW here at least in most of the U.S. because there are more small time or hobby guys (not trying to hurt anyones feelings) that run from 5 to 50 hd taht don't have any other avenue to sell cattle unless the form a coop(marketing group) such as Dun is in but to do that they need to raise like types of cattle and use same management practices which is very unlikely to happen because like on these boards no one can agree with what type to raise or how to raise them
I sell calves thru a salebarn albeit very few mainly just what doesn't fit in as with the group or what won't fit on the pots so I cannot foresee salebarns going out of Business in the U.S.anytime soon

 

[Angus Cowman]

I always have a problem with people that say age/source varifing/retained ownership/parterning with a feedlot, doesn't pay. If you are not raising the kind of cattle that will pay, how can you expect someone at a salebarn to give you a premium for your calves? gs

I agree with this 100%
I sold 40 hd of hfrs that didn't fit in with the group(they were about 20lbs light) that I sold off of the farm and they also wouldn't fit on the trucks anyway

I took these hfrs to a local salebarn and they topped the market and the closest priced hfrs in the same weight and color category were $5 less than these hfrs brought so raising the kind the buyer wants and managing them properly does pay

 

[Jeanne - Simme Valley]

I also agree. Raise quality calves, age/source verified, preconditioned and MARKET your cattle.

 

[dun]

Doesn;t hurt to start with a few registered cows. At least you know whre you'll know where you starting from. You can use them as a base for a good crossbreeding program or for producing your own replacments.It may cost a little more to get started with them (or it may not). If you decide to sell registered cattle join your state breed association. Most of them have an annual sale and sometimes multiple sales in different parts of the states. You can still sell any you don;t think are good enough to register as feeder/slaughter calves. At the registered sales you may not get the very top dollar the first few years, but eventully if you have quality cattle you'll be up there with the majority of the producers. I wouldn;t even mess with trying to market bulls that way until you have started getting the good prices for your females.

 

[Busterz]

In regard to the article
5 Rivers used to be associated with something called 5 Star, which was associated with Magness Cattle in Colorado. They produced Limi, angus and Lim Flex Bulls and had some type of marketing agreement where they would buy back the calves. But they were trying to get a supply a of feeder cattle for their feed yards and packing plants that met the description in the article. They would sell you a limi or angus bull or if you had a cross bred or other breed cow herd they would sell you the limiflex bulls and it would guarantee that the calves would be at least 25% Limi and 25% angus. (I believe this is the theory behind most of these composite bulls within breeds like Balancers, Mainetainers, Limflex, etc.).

I haven't seen anything on the 5 Star stuff lately, it may have gane away.

Maybe someone else knows more about this than i do.

I guess they still have a website:
http://www.5starcattle.com

 

[Stocker Steve]

I sat next to a feedlot buyer a while back. His preference was simi/angus steers. I asked about hereford crosses - - he said he would buy them if they did not have "too much" hereford. His concern was grade.

 

[kenny thomas]

At 10,000 head a week don't tell the guys in Oklahoma City that not many calves go to the stockyard nowdays.
I do agree that selling potloads works better but doing that is a problem for many of the smaller cattle operations. The coops work great but as said it sure is hard to get everyone to grow like calves.

 

[giftedcowboy]

Hmmmmm...you can talk all you want about different breeds or crosses etc, I think feedlots prefer "Cattle that will make money"

 

[AudieWyoming]

I have to say, whether because of the branded beef programs, CAB, more retained ownership or whatever, there is much better information transfer between the beef production segments today.

30 years ago when we were trying to educate ourselves about the kind of beef we were producing, and what type of animal the packers wanted, the only way to find out feedlot performance was to feed them yourself, and the kill data was the packing house's trade secret. You just couldn't get any kind of feedback from the packer buyers with a gun or bushel of cash.

Everyone thinks they are producing all top performing, high choice carcasses and their neighbors, or some other state is producing all the junk cattle. I can tell you there are far more cases of people who "have been producing the right kind of cattle forever" that decided to retain ownership to capture some of that value, and come back with their tail between their legs than ever confirmed that their calves were making money for everybody but the guy who owned the cow.

The packing houses have always known how many loads of high grading cattle they need each week or month,
they just sorted them off the chain. If their cattle buyers had to give another $.50 or $1.00 to get enough high percentage loads they could make it up with less sorting. The rest of the cattle are just to keep the chain moving.

The problem is beef is still a commodity based on the average. If the grid qualifiers are getting a premium the discounts are losing it and the average carcass price for the week is still the same. The higher end Restaurant Trade is still getting the same better cuts they have always gotten, and the majority is still commodity beef.
@

 

[Brandonm22]

But that "high end" restaurant trade is still just the tenderloin, the ribeye, the T-bone, maybe the NY strip, and sometimes the sirloin. The rest of the carcass is a commodity just like burger from a Select carcass. And recently the volume of the "high end" restaurant trade has been in decline. There is no shortage of beef for that upper 5-15% of steakhouses.

 

[BIZIN]

That article is right, to a point. We have sent cattle to Five River for years and feed cattle their ourselves and as long as they are GOOD cattle, with good hair, they will take them. We send alot of one iron sets down their and the seem to be more willing to take some more exotic if they are from one ranch. We dont buy in auction barns anymore, just off the farm, and alot more feedlots are going towards buying cattle direct instead of put together sets out of auction barns.

Haha I wish we had those kind of close outs they listed for 2006, for last year. No money in feeding cattle last year thats for sure!

 

[3waycross]

But that "high end" restaurant trade is still just the tenderloin, the ribeye, the T-bone, maybe the NY strip, and sometimes the sirloin. The rest of the carcass is a commodity just like burger from a Select carcass. And recently the volume of the "high end" restaurant trade has been in decline. There is no shortage of beef for that upper 5-15% of steakhouses.

Brandon you are correct in your statement but not complete. The high end places are getting the premium beef they need but don't discount how much branded or upscaled beef is being sold to the restuarants in the "middle" of the pack. On any given week I sell a very large amount of "Angus chuck" either in bulk or patty, a significant amount of Flatirons(chuck steaks), and even some "Kobe" burger.

There are many Angus programs other than CAB that are being marketed in the wholesale meat business and they are not all confined to the middle meats. I probably sell 50 to 75 cases of burgers a week that are a premium product of some kind.

It's not just about the top 5-15%, I have sold a lot of prime and top choice beef to middle of the road restuarants over my career, and still do. There's a larger market for premium middle meats then just the top 5-15%, or White table cloth as they are refered to in the industry.

 

[Brandonm22]

All you did was prove my point. If your price point for the top tier beef is low enough that it is attractive for John Doe's Country Steak House and we have enough supply that we can sell it to John they we have oversupply and thus explains the often recently puny Choice/Select spread. And don't be completely assured that those Prime steaks were actually on the menu. Most restaurants (above the burger/taco chains) live and die off of the catering business. I have friends that don't even have steak (of any grade) on their menu of their burgers, barbecue, catfish, and breakfast diner; but they do steaks, lobsters, italian, whole turkeys, whole hams, roasts, etc as part of the catering biz.

 

[greengrasscattle]

Why are some people so dead set against prime grade? Is there distain for it a product of the inability of their cattle to grade prime?

 

[alacattleman]

Why are some people so dead set against prime grade? Is there distain for it a product of the inability of their cattle to grade prime?

the latter

 

[Brandonm22]

Why are some people so dead set against prime grade? Is there distain for it a product of the inability of their cattle to grade prime?

Prime is really NOT desirable from a production standpoint: cattle have to stay in the feedlot longer, they have to eat more, it takes triple the feed to lay on a pound of fat as it does a pound of lean beef, they are fatter which increases backfat and lowers yield grade. The Prime bonus really has to be strong to make up for the likely bad yield grade and higher grain and yard costs. To make Prime steaks appeal to consumers in the grocery counter you have to trim a lot of fat product off and the high marbling stil LOOKS fat and scares off a lot of house wives who buy the family's meat. It is NOT very heart healthy. There is more fat and more cholesterol in a prime steak typically than in a Choice steak. A lot of the Prime beef is produced by that toadie little straight Angus heifer that was smaller framed than every other calf in the pen so she stopped growing and started laying on fat. By the time the pen was ready for harvest, she was too darned fat and had been wasting feed standing around for weeks. She graded prime but her conversion was 9 pound to 1. I am not knocking Prime. It is a niche market like grass fed, organic, Wagyu, high lean, etc. I am not saying not to improve your marbling numbers; but I don't think anybody in the industry thinks a 100% Prime across the board calf crop would be beneficial either.

 

[BC]

buyer dictates is fine but they gotta pay premiums for premium animals..and they dont wanna

gary

There are no premiums, just discounts for producing calves that don't meet their specs. The lower price you received for unweaned, unvaccinated and unhandled cattle is reflected in the bids offered at sale barns. Just look at the price differences at sales where the calves are backgrounded and preconditioned.

Cattle like you produce are called "high risk" cattle for a reason.

 

[El_Putzo]

I always have a problem with people that say age/source varifing/retained ownership/parterning with a feedlot, doesn't pay. If you are not raising the kind of cattle that will pay, how can you expect someone at a salebarn to give you a premium for your calves? gs

I agree with this 100%
I sold 40 hd of hfrs that didn't fit in with the group(they were about 20lbs light) that I sold off of the farm and they also wouldn't fit on the trucks anyway

I took these hfrs to a local salebarn and they topped the market and the closest priced hfrs in the same weight and color category were $5 less than these hfrs brought so raising the kind the buyer wants and managing them properly does pay

I can agree with you to an extent on this. It does pay to raise the right kind, but it didn't hurt you any that you sold 40 head in probably the same pen. If you have 40 head of anything uniform, you are going to get near or at the top of the market. I can probably even guess where you sold them and tell you that at that salebarn, a small group (5-10 hd) of age and source verified (heck lets even call them high % angus) will not outsell a group of 40 head in a single pen of the same makeup that are not age and source verified. Been there, done that, bought the T-shirt.