My View From The Country

The Bottom Line Is That Beef End-Product Quality Matters

I've always found the beef industry structure to be a little cruel. Cow-calf producers are the farthest removed from the consumer. However, as the only fixed-cost operators in the system, they are the only ones who care about absolute price.Thus, building and maintaining demand becomes their responsibility.

In college, I was taught that reproduction was 10 times as important as production traits, and that production traits were twice as important as carcass traits. I think those priorities would describe many cow-calf producers' breeding programs; at least I know that philosophy has dominated our decisions.

We understand that the cattle must work for the downstream segments that create value out of our product once it leaves the ranch gate. Still, we tend to focus on making sure that our cowherd is positioned to be profitable. Thus, we’ve emphasized fertility, growth, maternal traits, and the convenience traits like fleshing ability, disposition, structural correctness and udder quality.

We want the cattle to convert, grow, maximize grid performance and provide a great eating experience for our customers. However, calving ease and weaning weight have a much more direct correlation to our bottom line, so we tend to focus on those traits that are measured before those cattle leave our operation.

The reasoning is pretty sound. In the short term, traits like feed efficiency in the feedyard, or carcass traits, don’t have much of influence on the bottom line of a rancher. Sure, the marketplace is growing more sophisticated and beginning to differentiate cattle based on their value moving forward in the production chain. However, reproduction, calving ease, weaning weights, mature size and the traits that drive maternal efficiency are paramount for cow-calf producers. Or are they?

It probably depends on how long of a view you want to take. In the short term, those traits are the economic drivers, no question. But when you take our product out to the consumer level, it’s obvious that this is the interface that really matters. The value that the consumer puts on the eating experience, and the amount and quality of product we put on the plate, ultimately determines the amount of dollars that enter our industry. It is at this point, where demand is ultimately arbitrated, and the result determines not only the size of our industry, but profitability and sustainability as well. At this point, the value of all of these post-weaning traits actually becomes paramount to the system. 

I’ve always found our industry structure to be a little cruel. Cow-calf producers are the farthest removed from the consumer. However, as the only fixed-cost operators in the system, they are the only ones who care about absolute price. Thus, building and maintaining demand becomes their responsibility.

Even though cow-calf producers have to be focused on utilizing the genetics and management that maximize profits for their segment, they also must provide the genetics and management that allows for a growing and prosperous industry. Even for the cow-calf producer who sells every calf at weaning, it is post-weaning traits that have the biggest impact on their bottom line over the long term.   

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Discuss this Blog Entry 2

James McGrann (not verified)
on Dec 23, 2013

Don't underestimate the role the sector beyond the cow-calf sector can determine quality.

Frank Schlichting (not verified)
on Dec 23, 2013

I don't agree, price is set by market forces. If there is no money in producing beef farmers will produce other products. Supply and demand determine price. Value added products are all hype, most beef is consumed as burger who cares about genetics or color? You can't tell the difference in a burger it all tastes the same.

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What's My View From The Country?

As a fulltime rancher, opinion contributor Troy Marshall brings a unique perspective on how consumer and political trends affect livestock production.

Contributors

Troy Marshall

Troy Marshall is a multi-generational rancher who grew up in Wheatland, WY, and obtained an Equine Science/Animal Science degree from Colorado State University where he competed on both the livestock...

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