Better Beef Genetics Bring Price Premiums

US - Herd owners repeated a theme at each of four farms on the 2010 Missouri Beef Tour: Use superior genetics, retain ownership of calves and collect the price premiums.
calendar icon 1 September 2010
clock icon 6 minute read

Missouri

Each farm raises and sells calves differently, but basics stay the same. "You don't have to be big to retain ownership and receive premiums for superior genetics," Roger Eakins, University of Missouri Extension livestock specialist, Jackson, told participants. "You can sell one or a few calves at a time."

Mike Kasten, Millersville, told at the first stop how the base of his operation is raising replacement heifers under rules of the Show-Me-Select Replacement Heifer Programme (SMS).

To learn the value of better management and improved beef reproduction, Mr Kasten keeps detailed records. His herd database goes back 36 years.

From records, he measures progress, knowing each calf from birth weight to carcase cutout-and value. A recent load of calves sold to the processing plant in Kansas brought $100 per head in premiums above market price.

The calves graded 100 per cent USDA Choice and 30 per cent Prime. Also, 90 per cent qualified for Certified Angus Beef (CAB) premiums.

Of his farm in Bollinger County, Mr Kasten said, "We convert grass into beef. It's not a show place."

His progress improved when he switched to artificial insemination, allowing use of the best sire traits needed to improve his herd.

Mr Kasten was one of the first herds in the state to adopt cow synchronization and timed artificial insemination (TAI). In that protocol, all cows can be bred by appointment in one day. That eliminates labor of heat detection.

Added value comes from calf crops uniform in age and genetics.

To expand, Mr Kasten formed alliances with neighbors. He provides genetic selection, breeding services, development of heifers and herd management advice. Alliances allow Mr Kasten to expand without buying cows or land.

Mr Kasten buys the calves from the alliance herds at a premium, based on top prices at an area livestock auction.

In a third expansion phase, Mr Kasten custom develops and breeds heifers for other farmers. Some want the better heifers but don't want the labor and management. Last breeding season he time-bred 800 cows and heifers.

At Eggers Stock Farm, Cape Girardeau, owner Richard Eggers said his 75 mama cows trace back to five original cows brought to the farm. "Basically, the herd grew from a heifer project started by my brother, Ben."

Now, the seedstock producer's breeding is heavily influenced by Sydenstricker Genetics, Mexico. "Their sires work with our cows, so I keep using them."

He keeps five to 10 bulls a year to sell for herd sires. Most bull calves are banded and fed out as steers sold on the grid at US Premium Beef. Most effort goes into producing high genetic females for the local Show-Me-Select Replacement Heifer sale.

Freezer beef sold by the quarter or half became a new sideline. "It is strictly a word-of-mouth business," Mr Eggers said. "Neighbors tell neighbours and we gain customers." The meat is processed at a plant in Pocahontas, Montana, which developed the "Eggers Package." That includes as many steaks as possible, with few roasts and the rest ground into hamburger.

At the third stop at Masters Farm, Cape Girardeau, co-owner Bill Masters said, "You have to continue to adjust and change with trends in the beef business. We used to send fat cattle to the St. Louis Stockyards. That's not there anymore."

Now heifers are sold through the SMS sale at Fruitland, Mo. Steers are fed on the farm and shipped through Performance Blenders to US Premium Beef in Kansas.

Mr Masters grows crops in addition to cattle on the farm that's been in the family since 1859. "The farm is not for sale," he added.

His mother, Mary, and sister Martha help care for the cattle every day, as he holds a full-time off-farm job. Martha keeps the records. Those show that over time, they averaged $88 per head in premiums above market price on the fed cattle. "There is value in knowing the genetics," Mr Masters said.

He gave credit for the breeding protocols from David Patterson, MU Extension beef reproduction specialist, Columbia, and local extension specialists. They now use timed AI on both spring and fall herds.

The heifers in the spring herd are time-bred once. However, the fall heifers are time-bred three times. "It's cooler and it is easier to breed in the fall." If a heifer is not bred on the third try, the calf goes to the feedlot, not turned out to a bull to be bred.

At the farm, Roger Eakins gave highlights from the Masters' farm records. They have sold more value in the Fruitland SMS heifer sale than any other consignor. In 2006, they sold 32 heifers for an average price of $1,832. "Buyers came to the sale specifically to buy those heifers," Mr Eakins said. That demand supports the value of Tier Two heifers, which are AI calves out of AI cows bred back to high-accuracy proven sires.

High-accuracy breeding improves the probability of growing high-value calves, in the heifer sale or feedlot. Of 992 calves sold on the US Premium Beef grid, the added value totaled $90,000 over 10 years. "Those premiums would have gone to someone else if they had not retained ownership," Mr Eakins said.

The calves are worth more because they grade higher percentage Choice and Prime and gain CAB premiums as well. Calves sold so far this year have been 100 percent Choice or better with no dockage for overweight cattle.

At the last stop, Rick Aufdenberg, Jackson, told why he is doubling the size of his feedlot. He's finding more quality cattle locally that meet his standards. "I look for cattle that have been managed well and have good genetic background."

He wants calves from area producers in the SMS heifer programme who use the proven sires.

This summer he built a covered structure with a concrete floor under his self feeders. He will get 80 head under cover out of rain in cold weather. The concrete solves a mud problem. Construction costs were kept low by do-it-yourself family labor.

By shopping for quality, his fed cattle have averaged 27 percent USDA Prime grade. "To put that in perspective," Mr Aufdenberg said, "just two per cent of cattle nationally grade Prime. In addition, we get lots of calves that receive CAB premiums as well."

Their plan, Mr Aufdenberg said, is "Buy good cattle and push them to town." All calves are sold to his neighbor Gerry Shinn of Performance Blenders.

Shinn, who spoke at the last stop, owns shares in U.S. Premium Beef and can deliver cattle to the Kansas processing plant every couple of weeks. He has had 132 participants in the program, mostly locals.

Mr Shinn asked, "Does anyone know the premium for Prime cattle today?" No one volunteered an answer. "It's $20 per hundredweight. On an 800-pound carcase that adds $160 to the price of a calf. If the calf is age- and source-verified, add another $35 premium." That totals $195 per head above market.

His next question received no answer either. "Why do people say that they can't afford to do age and source verification? The cost of an ear tag is $3."

About every herd owner has birth dates for verification in a tattered book in their pickup. "If they knew the value of that information, they would protect it."

The SEMO Cattlemen's Association served prime-beef ribeye sandwiches to more than 200 participants at tour's end.

Sponsors were Missouri Corn Growers Association, Missouri Beef Industry Council, Missouri Cattlemen's Association, FCS Financial, Missouri Department of Conservation and MU Extension Commercial Agriculture Programme.

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