Date of this Version
This subject is steeped with opinion, prejudice and fact in a recipe similar to politics. Some issues are understood, definable and reflected in market prices. We all are aware of body weight, fill, frame, and flesh influences on price and value. Unfortunately, these four factors are inadequate for identifying as much of the profit potential differences between feeder cattle as we would like. As the industry pushes to find sources of profitable cattle, a much broader range of issues is being addressed. The motives and rationales behind these promotions deserve serious scrutiny. We need to distinguish between opinion, prejudice and fact. Ranchers, growers and feedlot operators all need to recognize the factors that improve the total biologic and economic efficiency of producing beef. Then, they need to identify realistic, complimentary management strategies between each segment of beef production.
The first step in analyzing the system is to recognize everyone's primary business objective. Ranchers are trying to generate cash from grass and fodder resources. Feedlots are trying to increase the cash value of grains. Custom feedlots are trying to sell a unique service. Stocker-growers are trying to generate cash from forages and/or may be offering services by upgrading "quality" in feeder cattle. Packers are offering another unique service.
Since the primary business objective differs between each segment of the industry, the marginal value of various factors changes. Feed cost/gain has little influence on the value of the packer service. Reproductive efficiency is of no direct concern when feedlots are increasing the value of corn. Even so, we are all highly dependent upon the economic viability of each other and need to respect the needs in each segment of the industry. The purpose here is to outline industry needs that ranchers can influence.