NEWS
The summer of 2009 could be
best described as cool and wet.
The humans and animals at Genetic Resources have
certainly enjoyed
this contrast to the hot humid weather summer
usually brings. The cool
and wet conditions have
provided
us a good supply of forages for the summer,
so again the humans and animals love that.
We will soon be weaning calves and preparing for
another winter in the tundra. Where has the time
gone??
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UNCOMMON SENSE ::
Why do we call it
common sense when so few seem to have it?
Absent herd-specific data, what has been the genetic
trend among commercial beef cow operations within
the United States? Angus breed registries account
for approximately 45% of all beef cattle registered
within
a given year in the United States. While it is not a
perfect correlation, extrapolating the Angus data
may at least provide a sense of genetic trend
direction in commercial cow herds. Reviewing the
genetic trends within the Angus breed EPD’s from
1990 to 2006 the weaning and yearling weights have
approximately doubled. During the same time period
milk production has tripled. Clearly, the trend in
Angus cattle during these 16 years has been toward
increased growth and milk production.
Increased growth and milk production, be it
registered or commercial, has a cost in terms of
additional inputs. There is a point in every herd at
which we spend more on input costs than the value of
the product produced (i.e. diminishing returns).
This point is dynamic and will vary from year to
year depending on the value of product produced
(calf prices x lbs sold) and the cost of production.
Decreasing calf prices and increasing production
costs, as we are experiencing in the current
economic environment, are driving the point of
diminishing returns downward (decreased
profitability) in most herds. When the cost of
production exceeds the value of increased
production, added performance is not the solution to
increased profits.
What options are available to increase profits or
decrease losses in commercial cow herds in light of
the current situation? In the current economic
environment we have an opportunity. An opportunity
to review the genetic composition, input costs and
management associated with cow herds. While every
herd is unique
the following areas may provide opportunities worthy
of increasing your profits:
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Look at your operation from a global
perspective: Few decisions have an
isolated effect.
The unintended consequences of a decision
often lead to the development of additional
problems that are sometimes worse than the
original.
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Develop a new perspective: While the
phrase “think outside the box” is overused in
may cases, it does illustrate this point.
Begin thinking about your operation from a
different vantage point. If you begin
reviewing ways to improve the balance of input
costs and output production in your operation
from the “I can’t do anything“ viewpoint, you
will likely succeed
in not doing anything. |
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Seek input from others: Employ the
insights and skills of those who you trust and
that know your operation. Managers deal with
many people in their business from
nutritionists, to bankers and agronomists.
Take advantage of their expertise, after all
you are already paying for it. Brainstorm with
these individuals and work with them to find
creative solutions to your challenges.
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What are your competitive advantages:
Look for opportunities that would provide you
an advantage not every one else has or can
use. An example of this might be a feed source
you are not using that could be incorporated
to your advantage. Perhaps there are forage
sources that could be utilized with little
additional cost, such as unused pastures or
woodlands. Is there a commodity feed source in
your area you could incorporate into your
operation? Is direct marketing your animals an
alternative? |
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Match genetics and management:
Generally speaking an animal best adapted to
their environment and management produce at a
lower cost. Are high growth or high milk EPD
animals best adapted to your operation given
the associated input and management cost
increases? Given the estimate that feed costs
comprise over 50% of cost of maintaining
a beef cow, does it make financial sense to
increase feed costs in light of lower calf
prices? |
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Thought to be one of the greatest intellects
in the history of man, Albert Einstein was an
interesting and
colorful individual. There are numerous
quotations attributed to him, but one of my
favorites is “We can't solve problems by
using the same kind of thinking we used when
we created them.” While I am sure
this quotation was not originally directed at
the beef industry, it however seems very
appropriate as we search for improved
profitability.
(September 2009 - Vol. 1) |
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