Beef Cattle Research Updates
Compiled by Harlan Ritchie, Steven Rust & Daniel Buskirk, Beef Cattle Specialists, Michigan State University

Milk EPD an Accurate Indicator of Milk Production and Calf Performance

In a long-term study, Oklahoma State University researchers mated crossbred cows to Angus and Hereford bulls that were either very high or very low for milk expected progeny difference (EPDs). The difference in High and Low Milk EPDs for Angus sires was 27.3 lbs. Heifers from these matings were born over a 5-year period (1989 through 1993). When the heifers were 6, 7 and 8 years old, milk production was measured and weaning weights of their calves were compared. Following is a summary of results:
• Cows sired by High Milk bulls produced significantly (P<0.05) more milk than cows sired by Low Milk bulls in all months except for the seventh month.
• Cows sired by High Milk bulls had 30.5 lb heavier calves at weaning than those sired by Low Milk EPD bulls. The difference was 30.8 lb for Angus cows and 30.2 lb for Hereford cows.
• Cows sired by High Milk Angus bulls were significantly lighter than those sired by Low Milk Angus bulls (1156 vs 1210 lbs). However, High and Low Milk Hereford cows did not different significantly in body weight.
• Cows sired by High Milk bulls had significantly lower body condition scores than cows sired by Low Milk bulls (4.97 vs 5.27 for Angus and 5.10 vs 5.27 for Hereford).
• Compared to Low Milk cows, there was a tendency for High Milk cows to have longer calving intervals, later calving dates and lower calving percentages than Low Milk cows. However, the differences were not statistically significant.

These results indicate that High Milk EPD bulls sire cows that produce more milk and wean heavier calves than cows sired by Low Milk EPD bulls, but may do so at the expense of body condition and reproductive efficiency (Erat and Buchanan. 2005. Oklahoma State Univ. Beef Res. Report).

Early Weaning Improved Reproductive Performance of Cows Compared to Normal Weaning

The objective of a collaborative study between USDA, Montana State University and American Simmental Association scientists was to determine the effects of early weaning vs. normal weaning time on a cow’s reproductive performance. A total of 357 Angus and Angus x Simmental cows were assigned to one of two treatments: 1) calves were weaned early at 80 days at the time of prostaglandin (PGF) injection and start of AI breeding; or 2) calves were weaned at a normal age of approximately 215 days. Estrous cycles of all cows were synchronized for AI breeding. Bulls were turned out with cows beginning 2 weeks after AI for the remainder of a 50-day breeding season.
• Pregnancy rates from AI were significantly higher (P<0.05) for early weaned cows than for normal weaned cows (66% vs. 54%).
• Overall breeding season rates tended to favor cows that were early weaned compared to normal weaned cows (94% vs. 89%).
• Date of conception was 7 days earlier for early weaned cows.
• Early weaned cows gained more weight during the grazing season and were 79 lbs heavier than normal weaned cows at the time of normal weaning.

The authors concluded that early weaning at the start of a synchronized breeding season increased AI pregnancy rates and cow weights at the time of normal weaning and that early weaning may be a viable alternative to that of culling cows during periods of low forage production (Geary et al. 2006. Proc. Western Sec. ASAS. 57: 99).

Beef Carcasses Are Getting Fatter

USDA reports show that beef carcasses have gradually become fatter over time. In 1996, 51.6% of carcasses were Yield Grade 1 or 2, while 32.8% were Yield Grade 3 or 4. Ten years later, in 2006, only 32.8% were Yield Grade 1 or 2, while 46.9% were Yield Grade 3 or 4. Equally disturbing is the fact that quality grade has declined slightly over the same time frame. In 1996, 53.0% of carcasses graded USDA Choice, compared to 51.8% in 2006 (SOURCE: Cattle-Fax®).

2006 Costs and Returns for U.S. Cow-Calf Producers

Cattle-Fax® recently published its annual Cow-Calf and Stocker Survey, which was conducted in January, 2007. Following is a brief summary.
• Average cow-calf profit was down slightly in 2006 from the peak in 2005. However, it was the eighth year in a row in which the majority of the respondents were profitable. Profit on calves sold at weaning was $100 or more for 51% of producers, $25 to $100 for 35% of producers, and $25 or less for 14% of producers.
• Annual average cash cost to run a cow increased by $15/head, from $351 in 2005 to $366 in 2006.
• Feed costs accounted for approximately 62% of total cash costs at $226/cow.
• Operating costs which include labor, vet/medicine, interest expense (excluding land), and other supplies were $1/head lower than in 2005 at $136/head.
• An operation with an average cow cost of $366/head and a weaning percentage of 85% equates to a breakeven calf price of $78/cwt.
• Average steer weaning weight was 563 lb, which was 17 lb lower than in 2005, largely due to dry conditions and short forage supplies throughout a large portion of the U.S.

Seventy Years of Progress in Corn Production

A recent report by the National Corn Growers Association compared U.S. corn production in 2006 with that in 1936, revealing the amazing progress made over the 70-year time frame. Following is a summary:

U.S. Meat Supply Will Decline as Corn Prices Increase

According to USDA forecasts, the 2007 U.S. meat supply will decline by 1.7 lb per person because of rising feed costs due to the demand for ethanol, which will push corn prices to their highest level in a decade. Total beef, pork and chicken output will decrease by 1 billion lbs, which translates to 220 lbs of meat and poultry per capita in 2007, down from 221.7 lbs in 2006. Producers are using less corn and more wheat in their diets and are marketing cattle and broiler chickens at lighter weights because of rising corn prices. In the meantime, food prices are projected to increase by 2.5 to 3.5% this year (SOURCE: John Gregerson, Meatingplace.com).

Per Capita Beef Supplies Will be Tight

According to Cattle-Fax® analyst, Kevin Good, per capita beef supplies will be as tight in 2007 as any year over the past 15 years, and will be price supportive to fed cattle values throughout the year. He went on to say that with the lack of expansion in the nation’s cow herd, along with the increasing exports, net beef supplies should change very little in 2008, which will be supportive to wholesale beef and fed cattle prices (SOURCE: Cattle-Fax Update).

Continued Consolidation in the Beef Industry

The beef industry continues to consolidate, as shown in the following table.



Like it or not, consolidation is leading to a more coordinated production system that can deliver an increasing supply of branded or differentiated beef products to meet the diverse needs of consumers. Producers now have more opportunities to produce cattle that meet the specifications of these growing branded markets (SOURCE: Cattle-Fax Trends).

Organic Food Sales are Soaring
Organic foods will account for 4% of U.S. grocery sales by 2008, as sales volume soars in 2007, approximating the 22% increase in 2006. Organic fruits and vegetables, currently nearly 6% of sales in that category, will increase greatly in market share, accounting for about 20% in 5 years (SOURCE: Kiplinger Agriculture Letter).

Relative Importance of Weight, Quality Grade and Yield Grade as Determinants of Beef Carcass Value

Colorado State University researchers constructed a data set of 2,000 carcass records to closely approximate carcass weight and grade characteristics of the U.S. fed cattle population. Two carcass- pricing grids, a quality-based and a yield-based grid, simulating actual beef-pricing systems were used for the analysis. Grid prices were computed for each of three Choice-Select spreads ($5, $10 and $20/cwt).

For both grids, carcass weight was the single most important driver of carcass value per head, accounting for 70 to 90% of the variation in total revenue per head when the Choice- Select price spread was $10/cwt or less. As the Choice-Select spread increased, the importance of weight as a value driver declined, and the influence of quality grade increased.

Quality grade was the second most important driver of grid value, accounting for about 8 to 9 times more variation in revenue per head than yield grade when the Choice-Select spread was $20/cwt. Yield grade played a minimal role in both pricing systems, accounting for less than 10% of the variation in total revenue per head.

The authors noted that current gridprice signals reward production of cattle with heavy carcass weights and high quality grades. Consequently, when quality grade premiums are high, it may encourage overfeeding of cattle, resulting in excessive numbers of YG 4 carcasses. They concluded that premiums for YG 1 and YG 2 carcasses currently are not large enough to encourage production of high-cutability carcasses, except when the Choice- Select price spread is very low (Tatum et al. 2006. Prof. Anim. Sci. Vol. 22, No. 1).