You've heard it over and over. Cattle can't be finished in the Southeast. It's a corn-deficit area and there's a shortage of harvest facilities for fed cattle.

Apparently Waynesville, NC, cattleman John Queen didn't listen.

So what makes him think he can compete, especially in years like this when Midwest feedlots are surrounded by mountains of corn? And diesel is sky high?

“We'll never be able to compete price wise on corn with the Midwest,” Queen concedes. “There's a freight hickey of at least 50¢, sometimes 70¢. We have a pretty good supply of corn within 50 miles, but when it's $1.75 in Iowa it's $2.50 in North Carolina. Here, we're hoping our climate is more ideal year round and the average daily gain should offset the extra expense.”

Waynesville is the mountainous western section of North Carolina. Humidity normally stays low in the summer while temperatures rarely get above 85-88° F. In fact, the climate makes the area a popular summer vacation and retirement spot. In the winter, nighttime lows usually don't drop below 20° F.

On the 1,200 or so head he finishes at a time, Queen was getting gains of about 3 lbs./day. But, that was on a ration of almost all by-products. Now, he's replacing part of the by-products with rolled corn and says, “We think we can get gains of 3.4 to 3.5 lbs.”

He adds, “Our total cost of gain with by-products was anywhere from 57-64¢. With the rolled corn, hopefully we can get the total cost of gain down in the mid-50s.”

Not that he's ignoring alternative feeds. “They are still using locally available by-products,” says North Carolina State University animal scientist Matt Poore, who helps Queen with the rations. “Wet corn gluten feed makes up around 30% of the dry matter in their ration and they're only a short distance from the plant.”

And, while his price of corn can't match his Midwest competitors, Queen says freight on the cattle is a wash.

“It costs us $5 to $5.50/cwt. to get a North Carolina calf to Nebraska or Iowa. That's $36 for a 600-lb. calf. If we're buying calves in eastern North Carolina, it costs us $6/head to get them here. Then, it's another $30/head to get them to the harvest facility. In Iowa, it costs $4 to $5 to get them to the harvest facility.”

When the calves do get on the truck to go to the plant, it's usually to Moyer's or Taylor's in Pennsylvania. And the cattle are fetching more than commodity prices.

“Those plants are looking for high-quality cattle,” Poore says. “They process a lot of Certified Angus Beef® (CAB) and other high-quality beef. They are really short on cattle and have to go farther and farther to find them. They are paying a pretty good premium for them.”

“We try to buy blacks and black crosses,” Queen says. “We want CAB cattle and Japanese grade cattle.”

He apparently is doing a good job of choosing the raw material. In the two years he's been finishing, around 77% of his cattle have graded USDA Choice.

He has the numbers at hand. According to the USDA National Agricultural Statistics Service, there are more than 1 million beef cows in North Carolina, South Carolina and Georgia, the three states where Queen buys most his feeder calves.

Almost half his cattle come from one source, a cow-calf operation in eastern North Carolina. Its owner, Greg Brown, has Queen purchase the calves he can't provide for and custom feeds them in Queen's lot.

“I'm the first to admit we appear to be going in the totally opposite direction from the rest of the industry by finishing cattle here,” Brown says. “But, we were in the pig industry for 30 years and it was felt for many years that the East couldn't compete with the West in swine.”

Obviously, the dramatic growth of the swine industry in North Carolina proved that thinking wrong. Ironically, Brown says it's the swine industry that allows him to produce a low-cost calf for the feedlot. Acre after acre of improved bermudagrass has been planted in eastern North Carolina to use up the effluent from the swine lagoons.

“We have no fertilizer costs,” Brown says, “and the waste water serves as irrigation in the summer.”

The other cattle Brown custom-feeds come from tele-auctions where they can be source verified or bought direct off the farm.

That accounts for another advantage for Queen's finishing operation — the health.

“These are single-source cattle,” says Lisa Shelton, Queen's farm manager. “Most are on a good vaccination program, preferably Beef Quality Assurance (BQA) certified, and are preconditioned before they come here.”

She says death loss is around 0.5%, while their pull rate goes up to 2%. When they were in the backgrounding business, prior to switching to a finishing operation, Shelton says the death loss could go up to 2% while the pull rate averaged around 28%.

Since they know the vaccination history on the cattle, usually they just deworm, implant and booster for IBR, PI3, BRSV and BVD, Type 1 and 2.

Western Kentucky Uni-versity animal scientist Nevil Speer says feeding source-verified cattle pays.

“They can manage and feed the cattle exactly like they should be fed and managed. And, if they don't have to fight the sickness battle, they can cut 30 to 40 days off the finishing time,” Speer says.

With the pros outweighing the cons on finishing, Poore says it's a trend that's catching on in the state.

“We have a lot of smaller producers with maybe 40 or 50 head who are working cooperatively. The state department of ag people are helping grade the cattle and load the trucks. It's working out well and there's a lot of opportunity,” Poore adds.

For his part, Queen says, “We like it and we get along fine with it. We'll keep finishing cattle.”

Becky Mills is a freelance ag writer based in Cuthbert, GA.