That a bull contributes 50% of the genetics of every calf, and that virtually all genetic improvement comes via bull selection, are two well-known tenets of cattle breeding. Another is that one bull used for four years will sire 10 times the number of calves a typical cow will produce in her lifetime.
From this perspective, it's hard to argue that a producer can pay too much for a good bull. This year's record price levels, however, may challenge that notion.
Given the size of investment producers are making this year, it's doubly critical that producers buy bulls that fit their long-term market strategy and help produce a product that more consistently hits the ordained targets.
Admittedly, the next few years promise to be good ones for cow-calf producers. With relatively tight numbers, there won't be as much price differentiation as when we head into the down side of the cattle cycle. Yet, one also has to realize the unmistakable trend that genetics are becoming more valuable.
BSE, national ID and an explosion of branded programs, alliances and value-based marketing opportunities will combine not only to provide economic premiums or discounts (depending on your perspective) for cattle but also the missing infrastructure to do a better job of linking performance and genetics. Source-, genetic-, management- and age-verified cattle no longer will be simply buzzwords for progressive idealists.
The implications of these changes are dramatic. In a commodity-based system where identity is lost and everything is based on averages, it was easy to make money on inferior genetics. It can probably even be argued that the smartest economic decision was to shortchange your customer by focusing merely on your segment and profitability and relying on the fact the system would not punish you. Those days are over.
Value will increasingly be determined by the value your genetics provide, not only to you and your initial customer but the entire system. The key is determining which market segment and targets your genetic base and management system most closely aligns with, then figuring how to hit those targets as efficiently as impossible.
The calves out of the bulls you purchase this spring will make money. But the impact the bulls have on improving your herd's ability to consistently hit market targets and improve system efficiencies will likely be the No.-1 determinant of profitability in the future.