The cattle industry's greatest profit potential isn't necessarily in carcass quality or in any so-called "premiums." It's in reproductive efficiency and post-weaning feed efficiency.

To date, the industry has no Economic Efficiency EPDs, the most important of which for the cow-calf operation is actually an EPD for reproductive efficiency. For the stocker or feeder, selection for feed efficiency can translate into big dollars.

Average daily gain has a correlation of about 70% to feed efficiency.

* Therefore, if we select for weight per day of age (WDA), we run a 70% chance of the cattle also being more efficient.

* If we sell off the bottom 50% for WDA, we raise the bar of the average by 25%. If we're 70% accurate, then theoretically we improve cost of gain by 17.5% (25% x 70%).

* Therefore, if the national average cost of gain is $42.50/cwt. and we improve it by 17.5%, our selected cattle will have a cost of gain of $35.06 or $7.44/cwt. less than average.

* If the cattle gain 500 lbs. in the feedlot and we've improved the efficiency by $7.44/cwt., we save $37.20/head.

Three Case Studies * Cowan Brothers LLC, Highmore, SD, will custom graze 7,500 stocker cattle this year. Cattle are received into the backgrounding lot 45-60 days prior to grass. During their stay they'll undergo a processing and efficiency measuring regime that includes selection pressure following the backgrounding period (prior to grass), a second opportunity 75-90 days into grass, then again coming off grass prior to going to the feedlot.

This selection system is designed to eliminate inefficient cattle while augmenting the efficiency attributes of the more profitable cattle. Other aims are to select for eventual carcass quality, days to finish and type.

For less than $20/head in additional service fees, Cowan Brothers' customers receive an average of $55/head in efficiency and performance premiums.

* A similar efficiency information selection system is used in a heifer improvement program at Y6 Feeders, a division of Petsch Ranches LLC, Albin, WY. Heifers delivered in the fall or early spring are developed, tracked for performance, evaluated for future efficiency, bred and delivered back to the owner with a breakeven on average of less than $675/bred heifer.

Petsch's selection criteria are designed to provide for early elimination of heifers destined to be poor producers, inefficient converters or eventual non-breeders. Early elimination saves Y6 customers over $35/bred heifer.

* Another example is HPH Co., Atkinson, NE. Genetic selection coupled with percent of dam selection as well as a post-weaning selection system has led to a drop in feed conversions from over 8 lbs./head/day to less than 5.8 lbs. the last two years. This is on a set of black Angus cattle with no cross-breeding.

Last spring, HPH calves were slaughtered in three ultrasound-selected groups at 12, 13 and 14 months of age. The cattle converted 5.76 lbs. of feed/pound of gain for a total cost of gain of $36.71/cwt. When the feed efficiency is compared to where the cattle started just a few years ago, $71.40/steer in feed efficiency savings were produced.

The same 783 head of young Angus steers also produced carcasses that were 89% Choice or better, 6.3% Prime and 35.7% Certified Angus Beef (CAB) with no outliers. The cattle made over $80 profit/head at a time most were losing $100-150/head out of the feedlot. Though the cattle were excellent carcass cattle, the bulk of profit came from feed efficiency savings, not to mention a lower opportunity cost due to the younger slaughter age.

A post-weaning efficiency selection system can return over double the investment to perform the process. As much as $50-100 per head can be picked up just by applying a system of information collection, organization, analysis and application. Compared to the potential return, the extra work required is minimal.