2006-2007 Beef Derby Results Announced!

Danny Coward, Noxapater, Miss., takes top honors. 

Another Beef Derby is in the books and what an outstanding event it was. From the Calcutta auction in January to the final results when cattle were harvested, it was a great learning experience for everyone involved. $20,000 will be awarded to the investors who purchased the  top placing pens in the Calcutta, and those breeders who owned the top placing pens will receive another $10,000.

Tim Davis of Carolina Chiangus purchased the first place Danny Coward pen and will take home $10,000 for his winning bid. The Chiangus Cartel of John Coble, Myron Danner, Harold Jakob and Ron Jensen will split $6,000 for their winning bid on the second place Jakob/Jensen pen. The ACA Mafia of Dennis Clarahan, Myron Danner, Ralph Danner, Lene Hitz and Larry Hollers will split $4,000 for their purchase of the third place pen owned by Byerly Farms.

Beef Derby Participants
• Byerly Farms, West Milton, Pa.
• Grassland Farms, Canby, Ore.
• Clarahan Farms, Harper, Iowa
• Danny Coward, Noxapater, Miss.
• Gergen Chiangus, Broadus, Mont.
• Diamond H Cattle Co., Faulkton, S.D.
• Beckett Ranch, Miller, S.D.
• Hildreth Livestock, Dillon, Mont.
• Harold Jakob, Rockville, Neb.
• Ron Jensen, Burwell, Neb.
• Merrimac Cattle Co., Geyser, Mont.
• Chi-G Farms, Commerce, Ga.
• Danner Chiangus, Burwell, Neb.
• Ralph Danner Jr., Muscatine, Iowa
• Ramsey Chiangus, Grand Island, Neb.

By Glen Klippenstein
The “Net Return” with this Beef Derby is primarily based on calf value “in” subtracted from carcass value “out”. All costs, including feed, yardage, processing, treatment, interest and freight, are deducted from the dollar difference of “in” and “out” values. This figure represents the profit or loss as if the feedyard owned the cattle.

In order for the Derby to compare “apples to apples,” because cattle were sold at various times and market prices were different, we calculated a base price for each grade. Quality grades included Prime, CAB (Certified Angus Beef), AP (Angus Pride – upper half of low choice), Low Choice, Select and No Roll (standard). Yield grades were 1, 2, 3 and 4. In addition, carcass weights below 550 lbs. or above 1,000 lbs. were discounted. The base price was the average for the previous two years. It should be noted that Decatur negotiates their own grid with Excel.

These grid prices were then used to calculate Adjusted Carcass Value which in turn was used to calculate Adjusted Net Return. Placings were based on the top three head in each pen. The top three head are often not the same three head in each category.

The Derby cattle were fed at Decatur County Feedyard in Oberlin, Kan. Cattle were fed conventional rations during the feeding period. Data collection and analysis was conducted by Micro Beef Technologies of Amarillo, Texas. Participants received complete information, including ADG, Feed Efficiency, Back Fat, Ribeye Area, Yield Grade, Quality Grade and Net Return.

The “weights at arrival” are based on actual arrival weight plus shrink based on distance, arrived at by an historic formula. This more nearly assures that all calf arrival weights are uniform for comparative purposes no matter where they originated. Cattle are sold when it is estimated that they have optimum outside fat cover, and are on the decline for feed gain efficiency. The trick for optimum profit in the feedyard is to sell at the point where feed efficiency goes down and fat cover dramatically increases. Feed costs in today’s world are the big “gorilla.”

Not withstanding that there are many moving targets and variables in cattle and cattle feedyard profitability, one description is more constant than others. A heavy, yield grade 2 choice carcass that gained fast, dressed a high percentage and stayed healthy, will almost always be the most profitable. And the other thing that comes out loud and clear is that waste fat is very costly to put on. If we were paid on edible product after all outside fat, seam and acorn fat and kidney and pelvis fat, guts, head, hide and bone were removed, the profitability figure would be even more stark. Our industry should measure efficiency and profitability by determining total cost inputs subtracted from the value of a given quality (including tenderness and marbling for eating satisfaction) of product to be consumed. Then we could genetically engineer cattle that are real to the industry, including the cow production part of the equation.

Following are a few things that I’ve learned from what I see in the data.

Feed efficiency is a huge profit driver, especially noticeable with today’s price of feed inputs. Extra fat is expensive to put on, however smaller REA’s, more marbling and more outside fat have produced more CAB high grading cattle that usually bring a “premium.”

ACA breeders and friends gathered in Denver during the National Western Stock Show for the Beef Derby Calcutta. After a nice hors d’oeuvre reception, those in attendance bid on the opportunity to choose the pen they believed would win the contest. More than $25,000 was invested during this event.

If cattle go into the feedlot “green” (in the 525-650 range) and have the genetics to gain fast, stay lean, marble and are mild mannered, they’ll yield a higher net profit to the feedyard. As Luke Lind of Five River Ranch Feedlot said, “the only way we can pay $1.20 - $1.25 for calves is to make them big. We must have enough pounds to cover costs… weight is what drives profitability in the feedyard industry.” Conversely, the older heavier calves, heavier weights from high milking cows, and creepfed calves are less feed efficient as feedyard “calf feds.”

It also appears that most cattle need to be at least in the 14-15 month of age range to “grade” and must have the genetics bred in to do it. If the marbling genes aren’t there, they won’t get it done at any age or amount of energy intake. There are huge differences in the dollars to ranch return. This figure represents how many dollars a producer should have received when sold as a weaner to get the same amount they got at harvest. Those figures ranged from $517 - $1,028 per head. One particularly uniform pen averaged $921 real proven worth when landed at Decatur Feedyard. Ironically, this pen of 5 steers most easily would be identified as Chi phenotype. Because they came in at about 700 lbs their final net profit to the feedyard figure was lessened by the decrease in feed efficiency. These cattle ranged from 1,399 lbs to 1,474 lbs and carcasses ranged from 923 lbs to 962 lbs and all 5 head graded choice. If they had been a month younger or 100 lbs less, they could have possibly won the “net return” portion of the Beef Derby, but they were an ideal blend of profit to the ranch and profit to the feeder.

It is also very clear that YG 1 & 2’s are not rewarded nearly enough for absence of waste fat. In fact the YG 1’s often have much less dressing percentage than YG 3’s, so in essence a high premium is paid for YG 3’s or over, compared to edible product in them. This must and will change. We need to be poised to take advantage when it happens.

A group of ACA members attended Beef Empire Days in Garden City, Kan. Seven head from the Derby were selected for the contest. In the live portion of the contest, Chi steers placed 1st, 7th, 14th, 15th, 18th & 24th. In the carcass competition, Chi steers placed 4th, 5th & 12th.

The pen that won the Net Return was also a great blend with more dollars going to the feeder and a little less to the ranch. Both entities must be rewarded to stay healthy and profitable. These calves came in at 511 lbs., were younger and very feed efficient (first). When the most profitable 3 head were tallied for this contest they won it soundly with an adjusted net of $208/head with the second and third net/head of $152 and $122 respectively. In all three cases uniformity was amazing and it was borne out in the results. Phenotypically the first and third pens were the largest framed, longer bodied, trimmer made and leaner appearing. Most of the other good pens had a bit less frame, they appeared stronger with more body and volume and showed a bit more waste. There were very obvious differences in rate of gain by sire and ranch groups. With few exceptions these cattle had an attractive and sound appearance, and excellent disposition. Feet and legs were not a problem and inability to shed hair belonged to only 4 or 5 head.

As in anything we do, there was a set back or two. One outfit had 2 head harvested at over 1,000 lb carcass weights. This slight overweight cost them about $400 and possibly a higher standing in the “Net Profit” Derby Contest. In another contestant pen, one steer got into another feedyard pen and was therefore lost for the contest and still another in the same pen got very sick and was of course out of the running to compete. Otherwise, this was a great contest and exhibition of what outstanding cattle can do when put in the hands of a truly outstanding feedyard with all the technology and marketing opportunity available. A special thanks to Dan Dorn, who has worked tirelessly when he had other things to do. Even he is learning from the data he compiled for all of our educational use and an additional thanks to Myron Danner who’s mind and soul are in this exciting project.

Send more calves – Let’s make it even better!!! Call Myron or Glen!!