How to Build a Profitable Herd 2017

[Music] hi I'm Li Leachman from Leachman cattle of Colorado in Fort Collins Colorado and we're here today to talk about how you can make your cattle operation more profitable as we know we're in challenging times in the beef industry and most of you are trying to make breeding decisions which bulls are you going to invest in this spring bulls are still very expensive and the reality is that buying the right bull will have a huge impact on your herd for the next ten years and in contrast if you buy the wrong bow that's going to disadvantage your herd because you're going to have those daughters in your herd in those calves to sell for a decade to come the reality is most bull providers give you a lot of information on those bulls we open up these bull catalogs and they're just EPDs everywhere and all these numbers let's face it they're hard to understand they're even harder to balance we got all these different bulls different sales different breeds how do you make the decision as to which bull is right for you we think that's a major challenge in the industry today and it leads to a lot of mistakes being made in our own breeding program we go out and buy bulls from a lot of different operations to bring into our breeding program and what we're really after is we're looking for the bull that's going to move us the farthest the fastest way possible we want to improve our herd as quickly as we can and really the traits that we're most concerned with is profitability at the end of the day profitability is what we really want all the other traits contribute to profitability and so we want them but it's really hard for us to judge well now if this Bulls a little higher on growth and this Bulls a little better on carcass and maybe that's third Bulls more of a maternal bull which of those Bulls is going to leave us the most profitability in our herd so a long time ago about ten years ago now or over ten years ago now we developed a model called dollar profit and what dollar profit does is it's a simulation model it looks at all these different traits in your herd all the reproduction traits calving growth carcass information maternal traits even how much do the cows eat and what's the feed efficiency in the feedlot and it takes all that information and boils it down and says this bull that you buy is probably going to have about a hundred calves in your herd the question is how valuable are those hundred calves compared to 100 calves out of this other bull that you might want to buy and that dollar profit number that one number gives us that figure if one volt 10,000 and the other bills 8,000 what that says is the bull who scores 10,000 is going to produce $2,000 more profit over those 100 calves or about $20 a calf then the bull that's 8,000 and so that tells you how much better he is and boils everything down into one number and what we found is we'd go out and we'd look at all this information all these EPDs and understand we live eat drink and sleep these numbers and still we'd go Bible and then we'd run him through the model and he'd surprise us but being higher than we thought or lower than we thought because the reality is none of us can do all that math in our heads so we started using dollar profit in our herds in 2004 because we wanted one number that predicted profitability we realized that not everyone owns the calves all the way from birth through to harvest and retains ownership so in addition to our dollar profit number that predicts birth to harvest we also calculate a dollar ranch number and what dollar ranch looks at is just those traits that drive the profitability on your herd on your ranch and your cow calf operation realizing that you're going to sell those calves at weaning the exciting thing about using these indexes is it really keeps us disciplined in other words we don't use bulls that take us backwards we only use the ones that move us forward as quickly as possible and since we started using the dollar profit index we've seen just tremendous improvement in our herd and in the herds of our customers so much so that this year we're offering five hundred bulls in our upcoming sale in March those 500 bulls on average rank in the top 10% of the entire industry on dollar profit we know that because we take the EPDs from all these breeds and all these other breeders and put them into the model to see where average is and we know that the average bull in the industry ranks somewhere around $8,000 on dollar profit the lowest bull we have in our upcoming sale is 10,000 so with that numbers telling you is the lowest bull in our sale we'll sire progeny that are worth $20 more per head our average bull scores a 13,000 that's $50 more per head so just think about that if you have industry average cattle and you breed them to our average bull you're actually going to make a calf that's worth $50 more now I know most of you in the cattle business have herds all these promises from seed stock readers for a long time we're famous for talking about these numbers or what it's going to do for your herd and promise us that in the other but the beautiful thing about dollar profit is we've gone out into commercial herds across the country and we've tested this information and you'll see in our catalogs there's a lot of testimonial information because really why listen to us when our customers can tell you how this is working out and they're heard one of the testimonials that we're particularly excited about comes from rich raw at the i-x ranch in Big Sandy Montana they run several thousand cows they've been breeding to our Bulls since 2007 and when they first came to us they said listen we want to have more pounds wean for cow expose that really drives the cost of our production down and drives up branch profitability and so we said to them well you need to crossbreed and the best way to crossbreed is to use a hybrid or composite bull and we raise stabilizer composites we'll come back to that in a minute but our stabilizer composite will bring in hybrid vigor and you can select using this dollar ranch and that will increase your pounds weaned for cow exposed so now they've been doing that and over half their herd is sired by our Bulls today and their pounds weaned for cow exposed is up 12 percent on their size herd that amounts to several hundred thousand dollars more output out of the same number of cows than what they were receiving eight or nine years ago this is just a huge increase that comes from using these high dollar profit bulls but the other side of it is you have to sell your calves to someone I'm in the bull business I sell my bowls to cow-calf producers if my bull is not going to be an advantage for you as a cow-calf producer you're going to want to buy my bull at a discount not a premium and yet most of our customers in the cow calf business they want to sell their calves at a premium so what are the traits that make calves worth a premium what do feeders want that are going to buy these calves what really comes down to four things feed conversion how valuable that carcass is in terms of a marbling percentages upper two-thirds choice percent choice and percent prime how big that carcass gets and how healthy those animals are and really we can measure all those traits except for health for health you're going to have to have a good vaccination program and do the best you can do put on those other traits on feed conversion on carcass weight and on carcass merit we have EPDs that characterize those traits and so what dollar profit does is it finds the Bulls that produce the most valuable calves and then of course we want you to get paid for those calves you can retain ownership and those calves and take advantage of those premiums or you can find buyers who recognize that value Sweetwater ranch based in Hays Kansas ai2 many of our stabilizer Bulls this last year they produce the set of calves those calves went through and earned an $8 per hundredweight premium over the market they converted 5.3 to 1 they reached a 932 pound carcass weight they just headed out at the park those kind of calves are worth 10 to 20 cents over the average calf in the marketplace now you might be skeptical and say yeah but can we really get a feedlot to come forward and pay that and that's we're working with leachman cattle really comes to your advantage because we'll help you market those calves very simply we'll go through and score your calves using the reputation cattle feeder program then we will bring buyers to bid on your calves based on that score this last year a customer of ours the Sieben ranch sold their calves for 17 cents over market that's the second year in a row they've earned that kind of a pre them this is a big advantage to them in terms of profitability and really the sustainability and viability of their ranching operation you should try to earn premiums on your calves and one of the ways to do that is to use our dollar profit number to select Bulls that both build great cows and also build valuable market steers in our family we've been crossbreeding beef cattle since the early 1970s we have a rich rich family tradition of being involved in the angus business that goes clear back into the 1930s and 40s my grandfather my father my uncle all were really really involved in the Angus business and we love Angus cattle but we realized that by crossbreeding we can have an increase in pounds wean per cow exposed plus we get to combine the complementarity of multiple breeds early on we crossed Angus with Simmental and that's a terrific cross and we love that cross but we realize based on some data from Clay Center Nebraska that if we built a composite with more than two breeds then you could actually simplify your breeding program and basically straight breed where you take a composite bull breed it to a composite female and still keep over 75% of the initial hybrid vigor and that's really the simple program that our stabilisers offer they offer you the uniformity of the Angus the simplicity of a straight breeding program but they still give you that hybrid vigor in addition to that we've gone out and picked these all-star Bulls from a variety of different breeds and put them in today our stabilizer is primarily composed of Angus and Red Angus gel-v and Simmons all and South Devon genetics and that combination that's roughly 5 H British and three-eighths Continental optimizes the cow herd those cows are going to flesh as easily as a Hereford Angus cross and yet those steers when they go into the feedlot they're going to reach higher Marcus weights than would your Angus steers and they're going to do it with lots of marbling again that's part of the selection of the breeds that we put in the stabilizer and then of course we've been applying with dollar profit selection to that gene pool one of the things that's really important in our business is to have good data and we have a very large database now our dollar profit database composed of our cattle and other select seed stock herds from around the country is now up to almost a million animals and in that database we compare all of these seed stock for all the different traits it's not the largest database in the country but it very well could be the best database because all the data that's in there comes from top-tier seed stock producers that are really concerned with making sure that contemporary groups are done well that we measure all the traits one of the traits that a lot of people don't measure is feed intake and obviously in your in your ranching operation output is important but input cost is increasingly important we all know that the cost of feed and the cost of graph has gone up tremendously and yet most people are still selecting feed stock that eat more and more feed that's where these great big yearling EPDs come from they typically come from animals that eat a lot of feed and of course then they produce daughters that go into your herd and then those cows get big and they eat a lot of feed and so several years ago we started measuring feed efficiency in our animals and what we're doing is we're putting a bowl and a pen we're measuring how much feed they eat per day and then that turns out that's really heritable when we measure that trait we might find two Bulls in the same pen as an example one bull might be eating 17 pounds of feed a day and the other believing 42 pounds a day and they weigh the same so there's this huge difference in input cost that translates in the profitability you much rather have the daughters out of that low feed intake high output bull then you would out of that high feed intake bowl because those daughters are just going to eat too much feed they're going to cost you more they're going to eat more grass they're going to reduce your stocking rate they're going to increase the cost of purchase feeds all these things hurt your profitability and then when the calves out of those Bulls get in the feedlot those low intake efficient Bulls produce calves that have much better feed conversion in the feedlot in our upcoming sale we're going to offer 498 stabilizer Bo they're the top cut of our spring born 2016 calf crop a lot of people think that these bulls are going to be too expensive especially given calf prices today but in last year's sale 50% of our Bulls sold between 3 and 5 thousand dollars in addition to the Bulls we're offering a hundred and fifty heifers this is a chance to really upgrade your cow herd if you're in the seed stock business or some registered Angus registered red Angus and also about 20 Charlet heifers in the sale in addition to a really nice lineup of stabiliser heifers just like the Bulls these heifers are really high on dollar profit if you want to get into our system and become a cooperator and raise bulls with us give us a call we can talk about investing in these heifers together in this day and age with video and internet a lot of you're tempted to stay at home and purchase bulls that way and and we encourage you to the sale obviously be broadcast on superior livestock you can call us and place a sight unseen order and we'll bid for you but what we'd really like is for you to come out and take a look at the cattle for yourself we've got a great event planned we're going to start out on Saturday night the 18th with an event at the Budweiser Center just a very small gathering where you can spend time visiting with us talking about the offering then on Sunday we've got a great seminar plan we start at 1 o'clock in the afternoon it'll go for about three hours educational program talking about stabilisers talking about crossbreeding about marketing your calves about what you can do to make your operation more profitable from a management standpoint Sunday night is our banquet should be about 400 people in attendance we're going to serve a great prime rib dinner and have some wonderful Western entertainment and then the sale of kickoff at 9 o'clock on Monday morning all this will be in Fort Collins Colorado our hotel center will be the Embassy Suites which is a great place to bring your family and stay they've got a great swimming pool for the kids we just invite you to come out and join us even if you're not in the market for a bull or female we'd love to have you join us and see the operation and so we invite you to come on out [Music] you

Channel: LeachmanCattle

Views: 102,863

Rating: 4.7925925 out of 5

Keywords: Leachman Cattle, Lee Leachman, Bulls, Stabilizer, Stabiliser, Simmental, angus, $Profit

Id: 1S-C8qWk1eQ

Length: 15min 39sec (939 seconds)

Published: Wed Mar 15 2017