Feed Lot

SEP-OCT 2017

Feedlots and cow/calf operations in the beef industry who feed 500 or more has annually on grains and concentrates; maintain 500 or more beef cows; backgrounder, stocker/grower, preconditioner; veterinarian, nutritionist, consultant

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Some think a dramatic increase in Prime grading beef spells oversup- ply. When will packers have enough? "I can tell you, we haven't reached that point today," says Steve Williams, head of procurement for JBS USA. "I don't see a time in my lifetime when Prime's not a big premium. I just don't see it." Supply of the uppermost tier of beef has doubled in recent years, with up to 6% of the nation's fed cattle harvest grading Prime. That has opened new doors, says Mark McCully, vice president of supply for the Certified Angus Beef ® (CAB ® ) brand. "In a lot of cases, supply has fu- eled the demand, which in turn has given producers incentive to pro- duce more," he says. For the last decade, the average annual spread between Select and Prime ranged from $25 to $50/cwt., and about $35 for 2016. "The last five years our percent Prime has doubled, and those spreads have stayed the same…the demand is there," Williams says, fending off myths that it might be simply a factor of cattle numbers: "Weights are up, beef production hasn't tailed off." Bringing in his colleague in sales helps explain. "In years past, consistency of supply has been hit or miss," says Chris Ross, program director for JBS USA. "Whether cost of gain is up or market factors due to weath- er—it's been a tough deal to get a consistent supply of Prime. Now, we're seeing that turn around and it's an upward trend, which really helps us from the sales side." In the last five years, weekly Prime production on a carcass- weight basis rose 8.9 million pounds, from 13.7 million per week in 2012 to 22.6 million in 2016. "It's given us a great opportunity to expand our customer base and re- ally supply that demand," Ross says. Cattlemen like Jerry Kusser, of Highmore, S.D., are seeing years of focus pay off. "We wanted to know if we were going in the right direction and which ones made the most money," the rancher says of carcass data collection that goes back to the 1980s. He credits that, heavy use of artificial insemination and strict genetic selection for cowherd func- tion and end-product merit for stel- lar grading ability. Last year, 88% of his 458 steers qualified for CAB and CAB Prime, including 68% of that highest grade. The average hot carcass weight was 925 pounds. "Prime cattle were once consid- ered almost outliers that you could- n't predict," McCully says. "But the data we have and the progress we've made on genetics and under- standing marbling deposition today has really proven that's not true." In the Angus breed, there is a clear upward trend in the average expected progeny difference (EPD) for marbling. From 1972 to 2014, that EPD increased from -0.20 to 0.60, or 80% of a quality grade. "Genetics would be the most im- portant thing, and then environ- ment goes on top. If genetics are the building blocks, the environ- ment would be the next step," Williams says. Drought-inspired culling has "amplified" the quality trend, Mc- Cully says. "The oldest genetics were eliminated, then replaced with young, current genetics that have far more Angus influence and carcass merit." Wider use of DNA testing in both the seedstock and commercial sec- tors helps speed progress. "We have a lot of selection tools w i t h o u r g e n e t i c s t o d a y t h a t weren't available even five years ago," says Kansas cattleman Berry Bortz, who feeds calves from his own herd in a home feedyard near Preston, Kan.. "We can make prog - ress today faster than we've ever been able to make it before." Producers can make that direc- tional change, while also improving 12 FEED•LOT  September/October 2017 FEEDLOT FOCUS Prime: Profitable and Possible By MIRANDA REIMAN u

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