Vertical integration coming soon to a packer near you

[Red Robin]

They will pay you a premium to produce their genetics under their protocal and under contract to them.

Call me nieve but if they show me 1.30 for 6 weight steers for the next 3 years, I'll hunt a pen. I can't see where being able to budget based on a known price is a bad thing. Some one enlighten me.

 

[Sandhusker]

They will pay you a premium to produce their genetics under their protocal and under contract to them.

Call me nieve but if they show me 1.30 for 6 weight steers for the next 3 years, I'll hunt a pen. I can't see where being able to budget based on a known price is a bad thing. Some one enlighten me.

It's not a bad thing if you have a number of packers to choose from in your dealings. Negotiations go both ways. However, we're seeing fewer and fewer packers with more and more marketshare. That means increasingly that the negotiations go one way - you get a "take it or leave it deal".

Also, changing companies won't be an easy thing if you become dissatisfied with your partner because you can't change genetics overnight. Sure, the paper only said three years, but what do you do if your choices are to take the renewed deal at 10 cents less or bail on them and redo the genitics of our herd for the other guy?

 

[Red Robin]

They will pay you a premium to produce their genetics under their protocal and under contract to them.

Call me nieve but if they show me 1.30 for 6 weight steers for the next 3 years, I'll hunt a pen. I can't see where being able to budget based on a known price is a bad thing. Some one enlighten me.

It's not a bad thing if you have a number of packers to choose from in your dealings. Negotiations go both ways. However, we're seeing fewer and fewer packers with more and more marketshare. That means increasingly that the negotiations go one way - you get a "take it or leave it deal".

Also, changing companies won't be an easy thing if you become dissatisfied with your partner because you can't change genetics overnight. Sure, the paper only said three years, but what do you do if your choices are to take the renewed deal at 10 cents less or bail on them and redo the genitics of our herd for the other guy?

It's all guessing at this point Sandhusker. I personally feel like if we don't become more efficient as producers in producing a better , more consistant product, our competition that is able to produce commodity beef cheaper has an advantage. The quickest way to product a repeatable premium product that I am aware of is VI. Do you have another plan?

 

[Sandhusker]

VI?

 

[Red Robin]

vertical integration

 

[Red Robin]

our competition that is able to produce commodity beef cheaper has an advantage.

Like Brazil for example.

 

[Sandhusker]

vertical integration

First of all, the quickest thing at anything generally isn't the best. Secondly, I look at what VI has done to chicken and pork and I in no way shape or form want to head down that path. I'll avoid that like the plague. You're giving up control of your business.

I agree with you that we need to improve our product and make it more consistant. However, I don't think VI adds anything that can't be done in the regular fashion. As long as I can remember, producers have been tinkering with their herds because "that's what they want now". This proves to me that producers are more than willing to provide what "they" want. All "they" have to do is tell us what they want and bid those cattle accordingly. We need communication.

 

[Sandhusker]

our competition that is able to produce commodity beef cheaper has an advantage.

Like Brazil for example.

Brazil will feed us our lunch if we try to compete in a commodity game with them, so let's not do it. Football coaches try to place their team's strengh against the opponents weakness. Price is Brazil's strength and our weakness. Audible out, we play commodities and we get sacked. We need to counter them with quality, options, safety, and even patriotism.

 

[Red Robin]

I look at what VI has done to chicken and pork and I in no way shape or form want to head down that path. I'll avoid that like the plague. You're giving up control of your business.

I have lots of neighbors that would argue with you

I agree with you that we need to improve our product and make it more consistant. However, I don't think VI adds anything that can't be done in the regular fashion.

Consistant decision making data that isn't manipulated is one thing that comes to mind quickly. For example the epd's that Smithfield has on their pigs is far superior to anything in the beef industry because they control the data points and have no reason to lie to some poor unsuspecting soul at a sale or a fool like me gazing through a semen catalog wondering if those epd's could possibly be true.
Secondly I think they could better predict replacement females in big numbers. Third , volume. They could therotically product 10,000 calves uniform in genetics , type, environment, vaccines, weight, etc. They could produce 100,000 for that matter and pick when they go to market. I think there are several advantages. I think there are a million details to work out where it benefits the producer as much as the packer but I am a firm believer it's coming.

 

[Sandhusker]

I understand what you're saying on EPDs and agree. I think sharing sire information and actual performance would do better than any EPD. That kind of fits in with what I said about Communication. If a packers wants a certain animal, they should first of all make it known what they really want, and then when they find them, let everybody else know where those carcasses came from. Example; Simmy cows bred to Angus Frontline bloodlines. I would think they would have a whole long list of data that would not only tell producers what is wanted, but how other guys got it. You wouldn't have to believe the guy selling the bull/semen, that tells you what SHOULD happen, you'll be getting your info from the guy writing the checks that tells you what DID happen.

Do you think we need to do all that in order to make better beef? I'm thinking you're using a cannon when a 12 gauge will work. I'm not convinced that we need to have all our females clones of each other. I think there's 100s of combos that will achieve the end result as long as we know that the desired result is.

 

[Bill]

I understand what you're saying on EPDs and agree. I think sharing sire information and actual performance would do better than any EPD. That kind of fits in with what I said about Communication. If a packers wants a certain animal, they should first of all make it known what they really want, and then when they find them, let everybody else know where those carcasses came from. Example; Simmy cows bred to Angus Frontline bloodlines. I would think they would have a whole long list of data that would not only tell producers what is wanted, but how other guys got it. You wouldn't have to believe the guy selling the bull/semen, that tells you what SHOULD happen, you'll be getting your info from the guy writing the checks that tells you what DID happen.

Do you think we need to do all that in order to make better beef? I'm thinking you're using a cannon when a 12 gauge will work. I'm not convinced that we need to have all our females clones of each other. I think there's 100s of combos that will achieve the end result as long as we know that the desired result is.

I am not sure what you deem to be "better beef" but once the packers do become fully VI they sure aren't going to tell the world what works and what doesn't and in a lot of cases they know that now!

Knowledge or information is power and when they identify the genetics that consistantly produce what they need they will multiply them and control them. That is why forward thinking breed associations are trying to create alliances with each other and other service providers in order to survive. EPDs are still ONE of the best tools we currently have for genetic improvement in the beef industry and at present they are mainly provided by breed associaitons who hold most of the historical performance records. With DNA markers about to explode onto the scene there will be less importance placed on EPDs and those records. That's why Cargill and others have put money into companies like MMI.
http://www.mmigenomics.com/index.html

Of course it is foolish to use only a single tool for selecting genetics to use in our herds (seen to many number freaks screw things up) but your comment that actual performance is superior information to EPDs is ridiculous as we all know how actual performance on a single animal can be easliy manipulated as well as not being able to compare actual performance within different environments. That is why proper contemporary grouping is the foundation of EPDs as it removes so many of the variables. Yes they can still be maniplulated but no where near as easily as individual performance.

As I said Sandhusker, when the packers identify the genetics that consistantly produce the product they require they will control them, not telling the world so every one else can reproduce them. Red Robin touched on in his/her (sorry) post that Smithfield is a good example in the hog industry on how EPDs should be used for genetic improvement and not marketing. DNA will make genetic improvement that much quicker and clearer.

Just a few thoughts.

 

[Sandhusker]

Bill, "As I said Sandhusker, when the packers identify the genetics that consistantly produce the product they require they will control them, "

I think those genetics are already out there, and that there are many different lines that will do the trick. I'm convinced that cattlemen can deliver what they want if only they know what it is.

 

[Mike]

For example the epd's that Smithfield has on their pigs is far superior to anything in the beef industry because they control the data points and have no reason to lie to some poor unsuspecting soul at a sale or a fool like me gazing through a semen catalog wondering if those epd's could possibly be true.

Pig and cattle EPD data gathering cannot be compared due to the greater number of progeny pigs are capable of and the short period of time it takes to verify that data.

Why would a cattle breeder skew EPD data? Since EPD's are based on contemporary groups, if he jacked up the data on one animal, it would lower the data, and subsequent EPD's, on the rest. I am sure it has been done, but the truth comes out sooner or later.

The biggest problem I see with cattle EPD's is that the 2 year old bulls going into the commercial breeding herd are "Interim" and never proven.

One thing for sure that the pig folks are doing is taking full advantage of heterosis.

 

[Bill]

Bill, "As I said Sandhusker, when the packers identify the genetics that consistantly produce the product they require they will control them, "

I think those genetics are already out there, and that there are many different lines that will do the trick. I'm convinced that cattlemen can deliver what they want if only they know what it is.

Agreed. Those genetics are out there and the forward thinking producer is trying to identify them. The challenge lies in trying to optimize production through heterosis and still maintaining predicatability in whatever traits your striving for. American Angus has done substantial work in providing accurate information on purebred Angus in the US but little of how they work with other breeds. Of course they want no part in promoting crossbreeding and are even so arrogant to promote Angus cattle as the "Power of One" which is nonsense. If you are a c/calf producer and are leaving 50-100lbs per calf on the table by not using a bull of another breed on your Angus cows you may as well take a drive down the road once a year and toss $100 bills out the wondow. Heterosis is the only thing that is free in the beef business.

The challenge in the case of carcass traits is getting the carcass data back from the packers. In Canada that is only possible if the c/calf producer retains ownership through to slaughter. Ultrasound adds to the dataset but not as quickly or accurately as combining carcass data along with it.

 

[Red Robin]

Bill, "As I said Sandhusker, when the packers identify the genetics that consistantly produce the product they require they will control them, "

I think those genetics are already out there, and that there are many different lines that will do the trick. I'm convinced that cattlemen can deliver what they want if only they know what it is.

Agreed. Those genetics are out there and the forward thinking producer is trying to identify them. The challenge lies in trying to optimize production through heterosis and still maintaining predicatability in whatever traits your striving for. American Angus has done substantial work in providing accurate information on purebred Angus in the US but little of how they work with other breeds. Of course they want no part in promoting crossbreeding and are even so arrogant to promote Angus cattle as the "Power of One" which is nonsense. If you are a c/calf producer and are leaving 50-100lbs per calf on the table by not using a bull of another breed on your Angus cows you may as well take a drive down the road once a year and toss $100 bills out the wondow. Heterosis is the only thing that is free in the beef business.

The challenge in the case of carcass traits is getting the carcass data back from the packers. In Canada that is only possible if the c/calf producer retains ownership through to slaughter. Ultrasound adds to the dataset but not as quickly or accurately as combining carcass data along with it.

Even if you retain ownership, there's no guarantee that the data you recieve from the packer is accurate. They have no incentive to be accurate. There is enough difference between graders to skew breeding decisions. Why is it that everytime someone favors epd's Bill that they compare them to actual data. I think a more realistic compairison is comparing them to the human mind. I've known fellas who throw out good thinking in favor of an EPD that is flashy.

 

[Bill]

For example the epd's that Smithfield has on their pigs is far superior to anything in the beef industry because they control the data points and have no reason to lie to some poor unsuspecting soul at a sale or a fool like me gazing through a semen catalog wondering if those epd's could possibly be true.

Pig and cattle EPD data gathering cannot be compared due to the greater number of progeny pigs are capable of and the short period of time it takes to verify that data.

Why would a cattle breeder skew EPD data? Since EPD's are based on contemporary groups, if he jacked up the data on one animal, it would lower the data, and subsequent EPD's, on the rest. I am sure it has been done, but the truth comes out sooner or later.

The biggest problem I see with cattle EPD's is that the 2 year old bulls going into the commercial breeding herd are "Interim" and never proven.

One thing for sure that the pig folks are doing is taking full advantage of heterosis.

Accuracy is the key many people ignore when TRYING to use EPDs. Without a doubt the short gestation and multi-sibling litters add to the hog accuracies as does the dairy industries avoidance of jumping on the "bull of the month" band wagon concept some in the beef industry employ. Dairy producers use them for genetic selection and look for accuracy while too many producers fall for the "curve bender" pitch on a yearling only to find out later that the proofs show he bent the curve the wrong way! :lol:

Good point re: heterosis. Both the hog and chicken industries have evolved to cross-breds (F1s or F2s whatever you want to call it) and although beef producers have started to warm up to the concept are years behind.

 

[Red Robin]

I am not sure what you deem to be "better beef" but once the packers do become fully VI they sure aren't going to tell the world what works and what doesn't and in a lot of cases they know that now!

.

Why should they tell the world Bill? I wouldn't . They don't have a moral responsibility to the production side of beef. They are in business to make money. What they will do , as Sandhusker or someone said, they will increase their profit at a retail level and COULD be in a position to pay more for cattle from the producers.

 

[Bill]

Bill, "As I said Sandhusker, when the packers identify the genetics that consistantly produce the product they require they will control them, "

I think those genetics are already out there, and that there are many different lines that will do the trick. I'm convinced that cattlemen can deliver what they want if only they know what it is.

Agreed. Those genetics are out there and the forward thinking producer is trying to identify them. The challenge lies in trying to optimize production through heterosis and still maintaining predicatability in whatever traits your striving for. American Angus has done substantial work in providing accurate information on purebred Angus in the US but little of how they work with other breeds. Of course they want no part in promoting crossbreeding and are even so arrogant to promote Angus cattle as the "Power of One" which is nonsense. If you are a c/calf producer and are leaving 50-100lbs per calf on the table by not using a bull of another breed on your Angus cows you may as well take a drive down the road once a year and toss $100 bills out the wondow. Heterosis is the only thing that is free in the beef business.

The challenge in the case of carcass traits is getting the carcass data back from the packers. In Canada that is only possible if the c/calf producer retains ownership through to slaughter. Ultrasound adds to the dataset but not as quickly or accurately as combining carcass data along with it.

Even if you retain ownership, there's no guarantee that the data you recieve from the packer is accurate. They have no incentive to be accurate. There is enough difference between graders to skew breeding decisions. Why is it that everytime someone favors epd's Bill that they compare them to actual data. I think a more realistic compairison is comparing them to the human mind. I've known fellas who throw out good thinking in favor of an EPD that is flashy.

What incentive do the packers have to send back inaccurate data back to the producer? :roll:

As far as actual physical numbers explain to me how you take two bull calves who are full brothers born in two different herds and subjuct to two entirley different sets of management. One calf is allowed to grow on grass and eased into the breeding season on a high roughage ration. Let's say his bw is 85, ww is 700 and yw 1150. The other bull has a corn ration in his face from 2 months on until Denver. His mom was shown as a yearling and fattened right up so his BW was 100, ww 825 and yw 1300.

How do you compare the two without a contemporary group setting?

Did you miss what I wrote about EPDs being but ONE tool that we have? I wood say that using all of the tools is only "good thinking".

 

[Bill]

I am not sure what you deem to be "better beef" but once the packers do become fully VI they sure aren't going to tell the world what works and what doesn't and in a lot of cases they know that now!

.

Why should they tell the world Bill? I wouldn't . They don't have a moral responsibility to the production side of beef. They are in business to make money. What they will do , as Sandhusker or someone said, they will increase their profit at a retail level and COULD be in a position to pay more for cattle from the producers.

Read what I wrote. I am referring to the Cargill and Tyson's of the world.

The smaller packers who want to actually work with instead of control producers in the VI concept will need to provide the information back.

 

[blackjack]

...i know i'm changing the subject a bit but i had the vet preg checking yesterday...and we were talking conception...he had just done a herd of holsteins and almost 50% were open... he says this happens quite regularly cause the breeding for milk production has taken over from other important traits... all i am going to say how many times have we seen in the industry that by the time the rancher catches up to what they other part of industry wants...the rules change again...the good middle of the road cow usually stays in the game...