We hear a lot about using precision data to make better decisions in agriculture, but not a lot about using it to improve profit margins in the beef sector. "Everything is going to precision. We feel as cattlemen we should be doing that as well," says Dan Dorn, feed yard manager at Decatur County Feed Yard in Oberlin. "At Decatur, we are doing it,"
Established in 1971, Decatur County Feed Yard as one of the first feed yards in the country to sort cattle using chute scales to measure weight and ultrasound to measure backfat in 1987, and the first commercial feed yard to sort fed cattle using video imaging in 1992. In 1994, Decatur began using its ACCU-TRAC Electronic Cattle Management System to track cattle from the ranch to the processor.
The 40,000-head northwest Kansas feed yard now has about 210 active ranch customers from Florida to Hawaii – all of which seek out Decatur County Feed Yard to measure efficiency and baseline the performance of their cattle, which they retain ownership of through the feed yard. "You cannot manage what you don't measure," Dorn says. "We focus on return to ranch. How many dollars every year did that animal put in my pocket?"
Value in measuring, retained ownership
About three years ago, Decatur started their own Value Discovery Project, and found significant differences in groups of cattle. The project involved 185,000 calves out of Decatur's database, mathematically adjusted to 625-pound steers for a flat baseline, and using a standardized ration price of $6 corn and $1.20 fed cattle price.
With these prices, return to ranch ranged from $550 per head to $1,195. Some groups averaged $350 to feed, and others $640 on the same ration. Profits were 35% driven by feed efficiency, 30% by quality grade and yield grade, 18% from hot carcass weight, and 17% from animal health. "Feed efficiency is a huge number that really drives profit. It's just as heritable as carcass traits," Dorn says. "If they're efficient on the farm, they're efficient on the feedlot and vice versa, because of that heritability."
According to 20 years of CattleFax data, retaining ownership of calves consistently makes more money when calves are sold as finished cattle from March to May, and Dorn says the time is right to do it. "Prices are high and producers that are strictly cow-calf are going to have some taxes to pay," he says. "This is a perfect time to defer some income, retain ownership and feed some cattle, figure out what you have so when things go south, you know how you can improve and stay in that $1,195 adjusted range."
See where you stand
Decatur also adds value by individually managing cattle to an optimum endpoint. When cattle are introduced to the system, they are measured for frame score, weight, backfat, and projected feed efficiency, and assigned ranch identification.
From there, cattle are fed to near finish, sorted and then marketed over a 10 to 14-week period in groups depending on weight and optimum endpoint. When it comes time to sell them, cattle are sold individually to the packer on a value-based grid, so ranchers are paid for the value of the beef rather than commodity prices. They are typically shipped in two-week intervals.
Once all animals in the herd are sold, ranchers receive individual closeouts for each animal – for 100 animals, the producer will receive a closeouts with 100 individual records. This data includes quality grade, feed efficiency, and return to ranch value. Ranchers also have a chance to see where they stand compared to others, and Dorn says it's typical to see significant spreads – usually from $1,700 to $700 from highest to lowest return to ranch.
"It gives you a good indicator of where you fit in the industry with everybody feeding with us. It's another way of benchmarking yourself," Dorn says. "If you know what you have, you can make huge strides in your bottom line."