The drivers of profitability

Among the broader goals of all beef producers is the desire to improve profits. Genetic inputs are one of the best levers a producer has at their disposal to influence the bottom line. What do you select for? What are the traits that deliver? Where can we make the most improvement?

A power of work has been done by many great minds on understanding the genetic profit drivers of the beef industry and, if you are inclined, you can immerse yourself in research documents that are full of gold but take a will of iron to get through. There is however another way. A time honoured, tried and true path to success.

Steve Jobs said it in 1996, "Picasso had a saying that ‘good artists copy but great artists steal', and we have always been shameless about stealing great ideas”. Ironically this phrase was itself stolen. It had previously been attributed to the likes of T.S. Eliot, Lionel Trilling, Igor Stravinsky and William Faulkner. SO what are we stealing? The keys to profitability!

Days to calving is as easy to measure as recording bull entry and calving dates.

Once again to the great minds. Those much smarter than me took all the aforementioned studies and distilled them down into understandable, usable morsels known as breeding indexes. Australian Angus have four market specific indexes, Hereford have self replacing and terminal indexes, and many other breeds are also in on the act. But what is behind the index? Behind the index is all the research that points in the direction of profitability, and when you pull the indexes apart you can see where the dollars accrue, and where they leak.

In the British breed world the desired market and the production method (self replacing or terminal) and important variables for the indexes, and they influence the impact of each trait in the breakdown and account for the variability.

Below is a breakdown of the relative influence of each trait:

I’m sure the figures above will raise some eyebrows and elicit some swearing and disbelief. They are, however, the distillation of significant research and rigorous analysis. They are also particularly revealing. Calving ease and days to calving have the most significant impact on profitability. Growth, retail beef yield and marbling are the next biggest influencers. Also playing a role is the adverse effect of larger mature cow weights. What is interesting here from a Speckle Park perspective, is how little attention is paid by many breeders to these profit drivers.

Peter Drucker, the man known as “the founder of modern management”, is the originator of the idea that “you can’t manage what you don’t measure”, and it is oh so true for the profit drivers in beef production. They are not as simple to measure as you might hope, but it is not rocket science either.

Measuring calving ease entails recording and scoring the ease of birth assigning a number from 1 to 5 for each calving:

1 - unassisted

2 - easy pull

3 - hard pull

4 - surgical

5 - abnormal presentation

In time these scores will aid in selecting for the traits that influence calving ease, like the right calf shape, suitable pelvic size and the cow’s will to calve.

Measuring mature cow weight is as easy as weighing her when you wean her calf.

Days to calving is, again, an easy trait to measure. In a natural joining method, you record the date the bull goes in and the date of calving. The breedplan algorithm does the rest. In time, and with data, it helps identify those females that get back in calf more quickly. This is vital and not often looked at by some breeders. I recently saw a Speckle Park breeder extolling the virtue of their latest donor female who didn’t calve until she was three, then didn’t calve again for 17 months. Her dam hadn't calved until she was four years of age and then didn’t calve again for 41 months.

Measuring mature cow weight is also easy. You weigh and record your cows when you wean their calves. As a real strength in Speckle Park, moderate mature weight is important to maintain as it is so commercially relevant. But what is the right size and when is too small, just too small? I think if you reverse engineer the question, the answer will be revealed.

The most lucrative, non Wagyu beef market, is the long-fed premium market. It requires that a 420kg carcase is produced, with good marbling, preferable before 24 months of age. At 55% yield that is about a 760kg individual. We don’t need 800kg cows roaming our paddocks to have finished steers at 24 months hitting 760kg. To access this premium market our goal is to breed the most efficient females that are capable of producing 760kg steers with excellent marbling at 24 months.

Meat quality pays. Marbling impacts profitability by up to 16%.

Together retail beef yield and marbling make up to 37% of the profit equation and are best measured from actual carcase data, not just ultrasounds on live animals. This is unlikely to happen anytime soon in Speckle Park. If we are fair dinkum about our carcase quality in Speckle Park, we need to be recording actual data, as well as scan data (but there is an entirely different can of worms for another day).

A good example of the power of this data is in Wagyu, where actual carcase data is king. Enter Mayura Itoshigenami Jnr. He is a trait leader for marble score and marble fineness, and of his 1,662 performance recorded progeny, 842 have actual carcase data from an abattoir, submitted into the Breedplan system. The result of this mass of data and the genetic quality is that Mayura Itoshigenami Jnr sits atop the list for one of the key economic drivers. The quality and reliability of his genetics, proven by data, saw his semen sell to $68,000 a straw in 2020.

For Speckle Park, where the anecdotal evidence leads us to sprook about retail beef yield, the path to improving it in our own herds is unclear. Given its economic benefits, perhaps we should all be paying more attention. Only four animals have an EBV accuracy of over 80% for Retail Beef Yield %, and only 10 sires have 50 or more progeny with carcase scans entered into Breedplan. How on earth can you select for retail beef yield if you don’t measure for it? If your goal is to improve profits for you and your clients, how can you achieve those goals without measuring and managing the key profit drivers of beef production?