In my July BEEF article, page 10, I attempted to show on a cost basis why beef producers should consider the use of AI, in addition to breeding with a bull. On average, even with consideration of a worst-case-scenario, the cost per pregnancy for AI - regardless of the system employed - is comparable to breeding with a bull.
Even if a rancher is using a bull costing as little as $1,750, the poorest AI results with Co-Sync (50% AI success) and/or Syncro-Mate B (45% AI success) produce pregnancies with a cost only $12.34 and $4.64, respectively, over that of breeding naturally. When using a bull with an initial cost of $2,750 or more, any and/or all AI systems described in that article will produce pregnancies at a lower cost.
I'm not suggesting everyone sell their entire bull battery and go to AI exclusively. Nor am I naive enough to suggest AI is for everyone.
The AI systems I described each take careful planning and implementation. The selection and purchase of top-quality semen from a proven top performing bull is time consuming. Though AI can be done in any environment with any breed of cattle in just about any facilities, the herd and the management team must be up to the task. A rancher must have the end in mind before even beginning the process.
If a comparable, if not lower, cost per pregnancy isn't enough of a motivating factor for you to consider AI, here are some of the positive production efficiency factors I've experienced.
What Has AI Done For Me Today? On a large operation in the Southeast we used Syncro-Mate B on thousands of cows annually. Each year we sent nearly all the resulting AI steers (500-1,500) and the top performing natural service produced steers (300-1,000) to the feedlot. The steers were sorted by breed, AI sire and those produced by natural service. They were then fed by groups.
The AI-produced calves consistently had a cost of gain that was $15-25/cwt. less than the natural service steers. Normally, we sent the steers to the feedlot at 675-750 lbs. to be killed at 1,200-1,250 lbs. Therefore, the cattle would gain some 500 lbs. in the feedlot.
Cost of Gain (COG): Production Efficiency Savings from AI: 500 lbs. gain X $20/cwt. average COG reduction = $100/steer
Faster Finish = Less Interest Cost
We also noticed the AI-produced steers finished 45-75 days earlier than natural service steers, reducing our opportunity costs. Let's assume a steer value at the end of the feeding period of $759.50 (1,225 X $62/cwt.) and opportunity cost of 8.25%.
Opportunity Cost: Production efficiency savings from AI: $759.50/steer X 8.25% for an average of 60 days = $10.44/AI steer
Carcass Premiums In evaluating the carcasses, our AI-produced steers average 64% Choice or better while the bull produced steers were only 32% Choice or better. Using grid pricing from Beef America (week of June 26) where the basis is a Choice YG 3 we can calculate the production efficiency bonus of the 32% improvement with AI.
Let's assume the 32% improvement was all in the basis of Choice YG 3s as compared to Select YG 1. On the previously mentioned grid, the price differential was $6.25/cwt. Let's also assume 725-lb. carcasses. Therefore, if we had 100 head of natural service steers and 100 head of AI-produced steers, what's the AI production efficiency premium?
Quality Beef Premium: Production Efficiency Premium from AI: 32 additional 725 lb.-Choice quality carcasses at $6.25/cwt. spread overthe entire group of 100 head = $14.50/AI steer.
In essence, the 32 extra Choice quality steers added a total of $1,450 to the set of 100 steers. It must be noted that there would be additional YG 2s and more Prime quality carcasses, etc., not accounted for in this example.
Total Added Monies: The cumulative production efficiency bonus from AI in this herd was $124.94/steer.
I had similar results in a large Angus herd in Nebraska where we have been using AI for several years and are now slaughtering steers produced by AI out of AI-produced cows. By using 11/42 and 31/44 sisters to produce 31/44 and 71/48 brother steers (using one AI sire in each case), we have virtually eliminated the outlier (discount) animals.
This herd not only went from 70% Choice or better, with YG 3s and 4s to 95.5% Choice or better and YG 2.76, but we also eliminated all YG 4s and all Standards and nearly all Select grade cattle (only 4.5% Select).
In addition, cost of gain was reduced by $16/cwt. And, average slaughter age dropped from 19 months to 13 months, thus providing additional feed savings over the longer period.
Premium Replacement Heifers One of my Sandhills clients produces top quality F-1 black baldie heifers out of his straight Hereford cows using better than average Black Angus bulls. He usually bred his top heifers each year with Angus bulls and then sold them.
I talked him into utilizing an MGA - Prostaglandin AI program. We sorted the AI bred heifers from the natural service heifers with ultrasound, then sold both groups.
The AI bred heifers averaged $125/head more than the bull bred heifers. Is that $125 premium too much, or too little, when you consider the fact that the first calf could garnish you a minimum of $124.94-154.19 in AI production efficiency bonus dollars?
On another ranch where AI-produced females were AI bred and sold at an area heifer sale, the AI-produced and AI-bred females brought $1,000/head and $250/head more, respectively, than similar black heifers from another reputation herd bred with bulls naturally and sold the same day.
Uniformity: The Economic Mystery The greatest benefit from AI breeding that is difficult to place a dollar figure on is uniformity. With AI, all females can and should be bred to one bull. The next year, they will in turn produce calves that are all half brothers and sisters, which will lead to a more uniform calf crop. If the rancher then takes the 11/42 sisters and breeds them all to one bull, they in turn will produce calves which are 31/44 brothers and sisters - even greater uniformity.
What is the biggest problem we have in the beef industry? Lack of a uniform, high-quality product. Why? Because we're breeding mongrels to mongrels.
With AI, a rancher can solve this lack of uniformity problem in one to two generations. Try it and see what a whole set of half brothers and sisters look like in your weaning pen.
I'll show you a herd of 3,300 head in Nebraska that is now made up of 71/48 brothers and sisters. Look for yourself and see if you can't see the difference genotype uniformity makes in phenotype appearance.
Al's Bottom Line The bottom line is that AI can produce pregnancies for a cost ($30.50-39.25/pregnancy) at or below that of breeding with a bull ($29.26-46.50/pregnancy) - even when the cost of semen goes beyond the analyzed $6/unit.
AI is especially cost effective when the cost of bulls gets above $2,500.
With a production efficiency bonus of over $100/AI-produced calf, it almost doesn't matter what you pay for semen, though I encourage everyone to perform a strong price discovery search. In fact, even if you double the cost of semen to $12/unit, it will only increase the cost per pregnancy 30-40%, depending on the AI system.
Therefore, rather than $30.50-39.25 you might be looking at AI pregnancy costs of $39.65-54.95, which is still comparable to breeding natural service with a bull.
My conclusion: Artificial insemination costs less and pays more.