By Kit Pharo
Over the years, I have probably had over 200 people say, “I know PCC genetics work great on the ranch – but how do they work in the feedlot?” I don’t get asked that question nearly as often as I did just five years ago – but often enough that I feel the need to publicly answer it.
Let me begin by saying, nearly all of a ranch’s profit or loss is a result of what happens within the ranch’s fences (on the ranch). That is the primary reason we don’t spend much time discussing what happens beyond the ranch. Ranchers who have increased their production and profit per acre by 50 to over 200 percent may not have exactly what the sale barn guy, the feedlot guy or the packer guy say they want – but they are much more profitable than 99.9% of their neighbors will ever be.
What do custom feedlots get paid for? They sell feed and days. Therefore, they want to fill their pens with lean, late-maturing, high-maintenance cattle that eat a lot of feed and take a long time to finish. They do not want low-maintenance, PCC-type cattle that can finish with much less feed and days. As soon as a pen of low-maintenance steers is sent to the packing plant, the feedlot guy has to go to work to fill the vacancy. This is why he prefers status quo, high-maintenance cattle that take much longer to finish.
Studies conducted by Iowa State University livestock economist John Lawrence show that low-maintenance cows produce calves that can be more profitable in the feedlot. He said, “The most profitable steers in the feedlot in a grid marketing situation came from lower maintenance, moderate-sized, lower-cost cows. It’s not a conflict. The ones that are cheaper to feed at home produce more money on the other end. The opposite is also true. The higher-cost cows tended to produce less profitable steers in the feedlot.”
To look for correlations between cow traits, steer performance and carcass traits, Lawrence looked at the cow feed costs for producers consigning steers to Iowa’s Tri-County Steer Carcass Futurity. The steers were divided into two groups, based on the feed costs (maintenance requirements) of their dams. The average cow costs for the two groups differed by $20 per cow. “Interestingly, the low-cost cow group had the higher feedlot return,” reports Lawrence. “The average feedlot returns for steers from these cow groups differed by $6.50 to nearly $9 per head, depending on the Choice-Select spread.” The greater the Choice-Select spread, the more profitable the low-maintenance steers will be.
NOTE: The Choice-Select spread has been nearly $30/cwt for several months. That is a difference of $180 to $250 per animal! WOW! If you are getting paid a premium for marbling, our low-maintenance genetics should give you the biggest bang for your buck.
Low-maintenance cattle do not need to eat as much as high-maintenance cattle to meet their energy requirements – both on the range and in the feedlot. Keep in mind that absolutely no weight gain can take place until maintenance requirements have been met. Once maintenance requirements have been met, the animal is able to grow, marble and finish. It’s all about the bottom line! Nothing else matters. Many PCC customers are finishing their low-maintenance cattle to USDA Choice on grass. While the demand for conventional beef has been struggling, the demand for grassfed beef has been increasing by leaps and bounds.
We still believe… most cow-calf producers have the ability to double their profit on a sustainable basis – once they stop focusing on the wrong things. Many PCC customers have proven this to be true. The opportunity to double your profit, however, has nothing to do with what happens in the feedlot. It has everything to do with what kind of cows you have and how you manage your forage resources.