Profitability is the singular factor that determines the health of our industry and that means employing every available technology to increase efficiency of production and product quality.
The rules of the game are changing. Sure, quality, pounds, reproduction, performance, health, marketing, risk management and the like have always been important, but the importance has grown exponentially with the changing dynamics of the marketplace.
Use whichever metric you choose. But, reproduction is worth more than ever with $150/cwt. calves; longevity is worth more with $200/ton hay and $1,500 bred heifers; feed efficiency is worth more with $7/bu. corn; carcass weight is worth more at $1.80/lb.; and the list just goes on and on.
Yes, the value differences of superior genetics and management have moved dramatically higher. But, it’s occurred at the same time that the industry is fighting to maintain market share and its position at the center of the plate as per-capita consumption promises to decline even more. Profitability is the singular factor that determines the health of our industry and that means employing every available technology to increase efficiency of production and product quality.
That begs the question: Why hasn’t the industry seen more widespread adoption of two of the most profitable technologies available – artificial insemination (AI) and crossbreeding? I think it boils down to three things:
- Ease and simplicity. Labor and time are two of the most limiting factors in any operation. Traditional crossbreeding and AI programs require both. That’s why the new synchronization methods and the growth of hybrid and composite bulls are dramatically altering the landscape.
- Realized gains. Our marketing system expends a lot of energy talking about quality, consistency, uniformity and efficiency, but it remains fairly inept at differentiating value based upon true differences in value. Extremely tight numbers will probably keep superior genetics undervalued and inferior genetics overvalued in the short term, but that won’t always be the case.
- Profits are overrated. While profits are certainly a big part of a lot of decisions, they aren’t the sole driver.