Management Considerations for Crossbred Dairy Cattle: Beef Genetics and Sire Selection
June 3, 2021
In the second session of the Management Considerations for Crossbred Dairy Cattle program hosted by Michigan State University and Ohio State University, Chip Kemp (American Simmental Association and International Genetics Solutions) discusses some hurdles, facts and what-ifs regarding beef on dairy production. As Chip begins, he shares the past history leading up to the current situation we have with beef on dairy cattle production from a sire selection standpoint. Chip highlights traits that producers need to be selecting for when choosing a beef sire to successfully create a profitable crossbred dairy beef calf. Chip briefly discusses a few different marketing avenues, as well as other resources, such as the IGS feeder profit calculator.
I want to welcome everybody to our week two, of our beef on dairy series. Last week we covered some marketing. Today we're going to talk some genetics. And I'll let Jerad introduce our speaker here. Just as we did last week, I'm Garth Ruff, beef cattle field specialist here at OSU extension. And what we'll do here today, like we did last week, kind of keep things informal. If you have questions, please utilize the chat, question and answer box. And we'll allow our speaker to address those as time allows. About halfway through today's presentation I'll put a link to a qualtrics survey, similar to last week's. Just to evaluate today's program and collect some information for those of you that are logged on here today. It let's Jerad and I know how to adjust programming going forward for both Ohio State and Michigan State. So Jerad, do you want to introduce yourself and introduce our speaker? Thanks Garth. I'm Jerad Jaborek, the Michigan State University feedlot educator. And today we have Chip Kemp with us from the American Simmental Association and IGS as well, I believe. And he's going to be talking about genetics and sire selection for our beef on dairy meetings. With that, I'll let Chip take it away. Thank you both. I appreciate Garth and Jerad for taking the initiative and then the effort of making these things happen. It's important that we still find ways to add these communications, even when we can do in the traditional format that we'd all like. And so, were just going to take a stumble, maybe through some beef on dairy metrics that are valuable for all of us to ponder, hopefully for you all, certainly for myself. And to be really clear, this is going to be from a breeding gnostic viewpoint. Jerad mentioned IGS or international genetic solutions, it's a platform we'll discuss briefly, and that's going to be the premise for the bulk of this conversation. So, beef on dairy, talk about all the time. Big deal, we hear about it in every circle. There's a lot of things we need to dig into. First, gosh, for two decades or better we've been talking about the concept of precision Ag. I would argue in terms of the beef on dairy conversation, much of that has lacked that kind of precision. It's really, at least historically got its start as an artifact of other things and so, beef and dairy. To move that discussion that gets vague on vague. Beef is a whole wide genre of things and encompasses a lot, as does dairy. We know even the two most popular breeds, not to mentioned all the others. There are some distinct differences in some of the various biological pieces that those animals bring to the table. And so it's maybe a lack of clarity when we use that terminology. That is the terminology the industry is chosen. There's certainly distinct differences in the beef fundamentals, the terminal metrics as it were, of Holstein and Jersey. And we want to recognize those. We want to be on the cow base that's being utilized. And so some things we just have to get on the table. Excessive carcass length is a significant concern when it comes to Holsteins. And that's going to play into some of our conversation as we get a little bit forward. And so we need to think about that from a frame standpoint, even though maybe Holstein frame wise aren't as large as they once were. They're still pretty large. They're still pretty big. In that poses some challenges. Jerseys have greater marbling capacity than Holsteins. Just is what it is. A lot of times, or other folks in my sector more in the beef sector talking about, well, Holsteins out marbled beef cattle. And so we talk about these things and many of those folks, much like me, come from an era where that was true 25 and 30 years ago when, when Steins were marbling in the low 70 percent and most of the beef population was maybe in the mid-fifties. You fast-forward a couple decades. And now where are the Holsteins from a marbling standpoint? About the same place. They have had no real reason to select genetically for that so, they have been, obviously not made any strides there. Conversely, the beef markets aggressively selected for that. And so now we're at a spot where, actually, Holsteins are a bit of a detriment from a marbling standpoint. If we just look basic, at the genetic components. So if we want to look, consider that in some of this conversation. These things are all important. We often think about muscle confirmation, usually use ribeye area as the proxy for that. And clearly we all know that's important in this argument, this discussion. Dressing percent is a big deal. How much of the carcass is hanging after harvest? It's one of the telltale signs to a packer that there's dairy influence. And if those dressing percents get abnormally low, they know pretty quick there's likely some dairy involved. And of course, calving ease. We want to deal with that because on one hand, Jerseys are pretty easy calving creatures, they're small creatures, small creatures tend to have fairly decent calving ease. On the other hand, were breeding them to rather aggressive terminal animals in some cases. And then the other side of the equation, Holsteins, the big take of the Holstein is the fact that calving ease is a problem within that population. It just is. And so we have to acknowledge that, because when we're putting some of these aggressive terminal sires, we can really compound or problem in a hurry. And all of us have heard some of these anecdotal situations and some of the horror stories associated with it. So it's two different approaches, we don't want to conflate the two by being inappropriate. Again, just a brief little bit of history. We know that if we go into this beef on dairy conversation maybe of ten years ago or eight years ago. The beef sire was nothing but a byproduct. Call it what it was. There's a lot of Angus semen in the tank and the semen companies like hey, you know, these folks, their expectations are pretty low. All they expect is a pregnancy. And so we'll just dump the semen there. With zero regard to how that mated up biologically to a Holstein or a Jersey. It just, was it available? We threw it out there. We've evolved a little bit from that. And in some cases we've evolved a lot. I would argue, the last year or two has seen a much more aggressive selection pressure for trying to actually get a more ideal biological compliments of the beef sire and the maternal base. So we presented in some value historically. Beef on dairy calves do bring, on average, a bit more carcass merit. But what we built in, and this is the crux of the position. We built in a lot of variability into that beef on dairy calf, such as the cattle feeder is, they know how to feed dairy cattle. They know how to feed straight Steins. They know how to feed natives or beef cattle. What they don't tolerate, and they can make money on both of those. What they don't tolerate is variability. Because if you put variability within a pen, it is ridiculously difficult for that cattle feeder to find a way to turn a profit. We'll revisit that. Again, when you do that, buyers are going to get skeptical. So we'll just have to acknowledge that. The often played why, what's your why? If you're taking time out of the middle of your day to check in on this conversation that Jerad and Garth put together. Or if you did it last week or if you do it next week. The challenge would be what is your motivation we all have that why. And that's going to come from different directions and I certainly understand that. Here's what I want it not to be. If your why, as it were. Is, you need a silver bullet to solve this problem. Or if you just want this to be easy and to be an afterthought and to not be terribly complex, rough, unfortunately I got nothing for you. If that's the goal. If you want this to be a silver bullet. It's just not that. What it is, is much in the same way that you all build a great deal of intentionality and forethought into the traditional side of your dairy business. The beef business takes just as much. And if the desire is to turn this calf not just a blimp now and again, to bring in a few dollars. But literally turn this into a long, long-term revenue and ultimately profit generator and it's going to take intentionality. There is no silver bullet. So this. This whole deal here has just got to stop. This is a picture of an animal that lives in the Palo Duro Canyon. And it's an unique little visual found south of Amarillo. But a chance. And chance too often, has been the way these things have been handled. If that's the model, that's the model you are comfortable with and that's certainly fine, to each their own. It's going to be hard to commit to steady predictable outcomes. Or we can be using other parlance that some of you might be familiar with, the kind of good to great parlance if you're familiar with that text, if not you probably should be. What's your hedgehog, what is that thing that drives your business? What is it? What is the thing that you are going to be the best at? Maybe its volume, maybe component traits, maybe it's cow production cost. Maybe it's, you are somebody who's really serious about adding value to your calves or whether it's because you're selling high end Holstein or Jersey females to other folks? Or it's because the beef on dairy calf, maybe it's got value, but I would argue that maybe it should be something closer related to just profit per cow. And yes, no question. The traditional dairy aspects are going to be the driving force of that. But the more and more we can also tie in predictable terminal metrics, beef metrics, or cow knowledge, we can actually get a much grander and a much more thorough picture of overall profit. It's likely that there are some who are remarkably gifted. Some cows, that is, are remarkably gifted from a dairy standpoint, but their ability to help in the generation of a beef calf is so low that it actually holds them back and vice versa of course. And likely the ideal cow is the one whose great from a dairy standpoint, maybe she's not elite, but she's great, and still can produce a very valuable terminal calf. If we can do both of those things, we look at an overall profit from the enterprise standpoint, and that's arguably the Hedgehog some of us should be thinking about. Just some business things. So just some very big picture stuff that you all just think about all the time before we dig into trying to define this a little closer. And again, from an intentionality standpoint, what is it that you're producing from this beef on dairy mating? And that might sound a little dumb. Someone's going to say, well Chip, that's a stupid question, you know what I'm producing. Well, actually I don't. Because for some, all that you're really aiming for is a pregnancy or a lactating cow. Some just acknowledge this as a byproduct. Some at least go a step farther and say, well, it's a cost recovery mechanism. I've got to breed her, so if I can at least get some of that cost back that goes into that third round of semen and all that it takes. Then maybe it's cost recovery. But then you've got the others, when they say, what am I trying to produce? Some are saying, I'm trying to produce a profit from a beef animal. So and again, I'm not judging which of these, that's to each individual operation's purview. To me, I think we do want to at least acknowledge the fact that there are different approaches to this. And so one of them, one of the things that happens whether you're in the traditional beef space and I'm talking to a cattle buyer on the High Plains, or if I'm talking to you all. There's always this tension between setting ourselves apart. And really what a lot of times what this comes down to is, are we comfortable with the commodity approach? And I don't say these things, there's no good or bad or good ill or disparaging. This is just the way it is. You can be extraordinarily profitable in the commodity business. Margins tend to be lower, but in the way you do things, you can be predictable, and proven, consistent and you can could win. Or, in other cases which are much harder, we can try to decommoditize portions or all of our business. Sometimes the margins can be lots bigger, risks can be greatly enhanced as well. And so, sometimes there's a strength in setting yourself apart. Sometimes there's a strength in saying, hey there's a system here. Lets work the system and be perfectly comfortable working the system. And again, you just have to acknowledge from a business enterprise standpoint whats your goal because it's going to affect some of the things that we need to talk and of course it's going to affect your marketing strategies and one size doesn't fit all, we know that we're not all marketing our calves in the same fashion or in the same way. However, maybe we all are right now in a very similar fashion, but some of us would like to continue embracing that approach. Some of us might like to look for something slightly different. So, what's the marketing strategy of the enterprise. These things, if they're not helping inform your genetic decisions, I would ask why? Because when it comes to the dairy side of your business, you inherently ponder these things prior to your matings. You're not just pushing a straw of semen, without forethought of these particular components and a whole bunch of other things. And so, I would just throw that out there, that this is the way we have to be thinking. If we are actually going to be successful in the beef on dairy space. Or if we're just going to take the outcomes as they as they fall in our lap? If you think about nothing else, if you remember nothing else that we talk about today. I would ask you to remember this. Because I think this may be the single most important acknowledgment that we have to make in the beef on dairy space. If we go to a packer, a packer has the ability, because they have the ability to adjust premiums and discounts. They have the ability to adjust the price of a group of cattle such that they're not going to take a big hit. Now that doesn't mean on a given pen, now and again, they don't take a big hit. That can certainly happen. But they have a mechanism then to quickly change how that impacts them so that they can avoid taken that blow on a consistent basis. Many of the folks who are here, this conversation are going to be more on the farm level and on the production end. And unfortunately, and I say this totally sincerely. Unfortunately, for the most part, the bar has been set so low that the man or woman on the dairy is, hey, it'll cost me $6 or $7 a straw to make this beef on dairy calf. Yeah, I'm not going to get much out of it, but I got a pregnancy. And so life moves on. The bar has been set no higher than, yeah, I'll give you a few bucks, hey, can you breed a cow for me. What a shame! We should have a greater expectation, especially the folks in that space breeding those calves. These folks are AI companies. That's what they do. That should be a base level expectation. We should be able to expect a great deal more as we're trying to add value, but the reality is in many cases we haven't. And so we have a packer who can essentially control but a lot, a little bit. Folks on the other end of the spectrum have grown to expect so very little that they tolerate almost anything. And then you have the folks in the middle. The cattle feeder gets hung. Because, we on the production side, continue to harp with them. Hey, we're making more, we're making better. We need more, we need better. We need more per head for these calves. And as they try to pay up for these beef on dairy calves, here's what happens, happens frequently. And you all hear these horror stories all the time. You all get a group of calves and the top 25 percent of those guys are phenomenal. Phenomenal. They are on par with native beef cattle in terms of their ability to be profitable in the traditional beef business. No concerns. The next 25 are just tolerable. Just tolerable. But we'll live to fight another day. The next 25 percent are not very good at all. And almost baked into the cake is a loss. But then you've got that bottom 25 percent, which is synonymous anymore with the infamous Black Holstein. And those calves are wretched. They're essentially Holsteins in the way they function, which would be okay if the buyer knew he was buying a lot of whole Holsteins because he could budget that in. He knows how to budget that in. But, when he paid a premium up for a beef on dairy calf and he gets that and the packer says, well, I'm only taking those with the Holstein basis. He just bled. He just bled in a wicked fashion. And so, what's his likelihood the next time he sees a beef on dairy? What? He's not going to pay up. At least certainly not to the extent that he has because he has to account for that variability. It's the one thing a cattle feeder cannot tolerate. And so, if you think of nothing else, remember, our alley in this and making this sustainable for all of us is to listening and hearing to cattle feeders and how we scratch their itch just a little bit. They need this. And no matter what you predict, whether they're producing, excuse me, whether they're day olds or they're feeder calves. Or whether you're somebody owning them all the way through. Or you go back to the traditional side of your business, on the dairy side. You all know this. Without these things we don't get profitability. And yet, in the beef on dairy conversation we've ignored most of these things in mass and pretended like there's just some mythical value in these calves that may or may not exist, but it's certainly not going to materialize in terms of dollars. So I'm just going to review a couple things and certainly, you all know better than I do. We can add value in different ways. This is a traditional approach. Commodity approach one, I'll call it. And that's, we're going to sell these calves shortly after they're born. Maybe it's the next day, maybe it's next week, but they're going away pretty quick. And so what's important here? This is where most of us are going to be at. Most of the folks listening to this are going to say, yeah, Chip, I get a consistable dollar figure that, their consistent dollar figure that I can have faith in, that works for my operation. And I want to be able to move those calves pretty quick, get them out of my hair. They're not in my wheelhouse. I want them gone. And you should. It makes good sense for a lot of operations. The things I'm going to challenge you with is, if you're settling just for fertility, which again, should be baked into the cake or just make it a black hide. No! Without building the right kind of the terminal genetics, there is not going to be a long term pull through for your calves. The one thing that is known in the beef business, and you all probably know this too by this point, if buyers of large groups of calves they keep records on all of us at a high level, smart business. They need to know who bought a set of calves did it to work or not. And believe me, whether you know it or not, if you're moving any number of calves at all, even if they're going through calf ranches and getting all mixed up, trust me, if you're calves don't work terminally, you're going to pay the price. They are going to identify them eventually. So even if you're selling them off the farm at day 1 or week 1, having measureables that you can provide, that show terminal metrics, gives you value. Another approach that is gaining steam it's gaining conversation. And that's folks, as they see that there's becoming a reasonably large trade on a consistent basis of dairy cross feeder cattle. And when we see groups like you can see in the middle there I reference Superior Livestock Auctions, I can reference others. But Superior is the biggest player in feeder calf market in the United States. By a lot, the second is not really even close. And so as a result, they have an unusual level of influence and they move a lot of dairy based cattle. And so I would argue that for those of you who have an appetite and an ability to retain some ownership or all of those calves through the calf ranch phase, whether that's on farm raising or raising them somewhere else. You have the potential to capture the attention of folks who are looking for the kind of cattle you can produce, because there is data that is very clear. In fact, we have research data in hand from some projects that shows that native beef cattle, mated the right way, have equal profit, excuse me. Beef on dairy calves bred the right way have equal profit to native beef steers when bred the right way. We don't even think this is difficult anymore. We actually believe in quite confidently. We think the data is clear. That's a little different for heifers, but for steers, it's available. And anytime we sell a dairy influenced calf in this business, we just have to acknowledge it. Anytime you sell one, somebody's going to take some, some meat off the bone. They know that if they are dairy they know they can. They know they can. And so the longer you can own these calves, the more you can lessen that, and the more you can capitalize on the benefits of the traditional beef business at large. We can use tools. Again, I reference one here like the IGS feeder profit calculator, which is a terminal measure tool. We'll talk briefly about it later. I'm not going to go into a great deal of detail on this call because we're somewhat limited in our time span. But it's a free service that gives you third party views of the terminal metrics for a set of calves, including partially dairy calves. And it gives you metrics to prove your point based on credible genetic knowledge. Now this is the one, more and more folks from the dairy side are tapping into, that I realize it's a scary step. In that it's what I'll call commodity approach 3, which is owning those calves to the end. And the reality is if you're building the right kind of cattle, as I said a moment ago, anytime you sell a partial dairy, somebody is going to try to take something out of the equation, they're going to try to put something back because they can. So if you don't give them that opportunity, means you own those all the way until they are harvested and at that point, they get paid on their merit. Its the only point in the beef on dairy space where you're really totally, fully, going to get paid on your merit. And I think the data is abundantly clear. We can make beef on dairy calves whose merit is more than good enough. In many cases, quite stellar relative to the traditional beef business. But, this does require some added risk. There's no question about it. Sometimes, this doesn't mean that the dairyman or dairywoman is going to feed them at their own place, they are going to send these off to folks who are experts at this, in the same way you are experts at your business. Let experts do what they do in their business. And if you do that, these cattle can take advantage of the premium and discount structure in the current beef business and if handled appropriately, have proven themselves to be very, very successful. In particular, the steers. The heifers are a bit more of a challenge. But sexed semen will help solve a lot of those kind of things. Also note, if you have an interest in at least exploring this, even if it's on a small-scale one-shot deal, you don't have to feed five or 600 calves at a shot to determine if this works, you can, certainly can. There are people who will help you do that. But if you said, I'd rather just feed 75 or 100, okay. There are folks who can help you do that. In some cases, even smaller numbers than that, and by the way, they will front you the bulk of the money in many cases. Most feeders now have the mechanism whereby they will help front, in some cases up to 75 percent of their value. So that you all just deal within the profit and loss stuff out of that 25 percent. So you're not sitting idle, waiting for the revenue that you live on. And so it isn't one of these zero-sum games where folks say, I can't do this because I defer all of my revenue for a year and a half. No. That doesn't have to be the case at all. So this also gives us the informatics, the feedback loop that's going to allow us to make smarter decisions. It gives us a chance to take advantage of these pieces. We don't have to, if we, if we use this commodity approach to feeding cattle, we don't have to invent new metrics, new machines, new complicated programs. We're just smack in the middle of the beef business. And I would say some of the programs that exist in the beef on dairy space are very successful. When you are very successful, they don't position themselves square in the middle of the beef business. They are intentionally somewhat more complicated programs and play on the periphery and they can be very successful. Don't get me wrong. But they can also limit your outlet for a set of calves. The goal here, let's just be really simple. For most folks, you may be different and that's perfectly okay. But for most folks, if they're going to play in the commodity space; What are they going to try to do? They're going to try to produce a black calf with minimal white, that's going to grow efficiently enough. that it's going to yield efficiently enough, that's going to grade Choice or better. and is not going to have a yield grade discount. If you do those things and you stay healthy, you can win in the beef business. And so that allows you to play right in the middle, right? Because now you're taking the advantage of potential CAB premiums, and many of these cattle can be very successful in capturing some of those certified premiums way, way up there. And so we don't want to discount the commertor or the current commodity approach, it can benefit a lot of you, in particular if you're a Holstein-based dairy, which most probably are. If you want to understand this better? A lot of folks are going to try to give you lots of complicated schemes and efforts, but the truth. If you want to know the beef on dairy space better? Become a cattle feeder. You will learn fast. And in three years from now, you'll be better situated with a substantial revenue stream and in most years and profit stream that most folks can only dream of and you have the potential to do that. So I throw that out at you as a commodity approach you should strongly consider. Now some of you, there is a lot of disconnect from this. Maybe it's because of your location. Maybe it's because of the genetics of your cow herd. Maybe it's because of the size of your operation. Cool. I'm all about that. I work with folks all the time who were trying to decommoditize they're approach, and I think that's appropriate for a lot of folks. I think there are a lot of ways we can do that. If you're going to do this, you need to get you're hands around the supply chain you're working with. Maybe you've become the beef supplier for a small local brand name, branded operation, who's been raising their own cows for a lot of years in the traditional beef environment and they're realizing, man, I'm not really making a lot of money on those calves. I can actually have you make calves for me a certain way. I could source them, run them through my program, be money money ahead for everybody. But, they're going to have specs and you're going to have to hit it. And that means you're going to have to use some serious genetic knowledge, same that you do on the dairy side to hit those specs. And your cattle can hit those specs. I assure you. The other nice thing about what you all bring to the table relative to a conventional beef business is because you are mating year round. You don't have the seasonality that is associated with the traditional beef business. And so you're, especially for some of these smaller supply chains. You better align from a just-in-time business model, where you can be providing more appropriately sized finishing groups on a regular basis. In certain supply chains that can be much more attractive and much more appealing than trying to figure out a way to manage groups that are really just two different groups. They only come twice a year. But if you're trying to get some early and stretch some late. You all have the potential to be much more at 12 o'clock on a more regular basis, than the traditional beef business in certain regards. And so, if you're going to decommoditize yourself, you want to embrace that. It's an opportunity. But anytime you try to build something new, this is not anything novel for anybody on this call. It's going to take a lot more work, and a lot more sleepless nights, and it's going to have a lot more potential, and a lot more risk. A couple things to ponder though about these supply chains. One choice is the new Select. So if you're out there thinking you're going to shake the world up by producing low quality grades, I'm guessing you're probably not thinking that. That isn't going to happen. On the other hand, as we've made high-quality products so readily available, a lot of that's due to genetics. A lot of that's because we're feeding cattle too long to be real frank. There are a lot of cattle fighting in those upper spaces. And recognize this is going to tie into one other thing I'll talk about in a second. You could make an argument that low-cost producers have an advantage. In fact, in the traditional beef business there's no argument to be made. It's just basic fact. Abundantly clear. Low-cost producers make money. And high-cost producers, it doesn't matter what their calves sell for, you don't make money. While you're business model is different, there's still some similarities. And so if we can acknowledge these things before we start making genetic decisions, we can be money ahead. Recognize anyone can sell steaks, doesn't take any skill in the beef business to sell steaks. It's the rest of it. You all also have a story. So I'm going to jump through some of this pretty quick. You can go back and review these after this comes out as a recording. But, we need data and facts. So I work with a group called International Genetic Solutions. It's the largest multi-breed genetic evaluation on Mother Earth. We work very open armed with any and all commerce. Our job is to essentially provide genetic awareness for any and all beef cattle on the planet. And one of the things we do that I don't think anyone else has a good handle on, is understanding the crossbred terminal calf. We also understand that crossroad maternal aspects, but that's not relevant to this conversation. The crossbred terminal calf. And that's where myself and you all converge. Because in this conversation, you all are beef producers, you are all making a crossbred terminal calf. That's our specialty. So IGS, what is it? It's a tech company. Just like so many other firms you work with in your business. We use millions of data points to try to give the best correct genetic tools we know how to do. That's our job. Those tools manifest themselves in different ways, mostly in the form of EPDs and indexes. Indexes being the more appropriate tool in most cases, the feeder profit calculator is one that's used very much in this kind of conversation because it puts dollars and cents on terminal metrics of feeder calves. So, there are, we know this, there are roughly four or five breeds of relevance in this conversation of beef on dairy. And because we collaborate with any and all, we're going to leverage our IGS data. It's a massive database and it's remarkably good. And we have contemporary group structures that allow us to glean a lot of knowledge. We're also going to use USDA meat animal research center or MARC data. Kind of the gold standard in historic breed comparisons. Constant research coming out most of universities, but not always. And then the other, even associations that are not necessarily apart of IGS. And that's not just in the United States, it's a global outfit. And so we're going to leverage that data, whether that's available as well. And so when we look at that, we're going to talk, there's four breeds of relevance. Before we start talking about those breeds I want to acknowledge they're probably another breed or two. Wagyu, for example, is one that is getting a little bit of a following. We'll see, there's some metrics there that in certain environments that's going to be pretty productive and in other situations probably going to be a challenge from a profit standpoint, but we can talk about that on another day. We're going to focus on the four big ones. And just throw them out there real quick and we're going to say kind of high level, then I'll let you ask questions. Angus. Clearly. Large supply. That's a huge benefit. They marble like crazy. It's a huge benefit. They grow like crazy. It's a huge benefit because you may or may not know if you're not super tied to the beef side of things. Angus genetics have changed a lot in the last 20 years. A lot. They used to be a pretty moderate sized creature. They used to be, from a cow standpoint, pretty low maintenance. They have de facto become the terminal breed in the beef business. And I say that because they sire the bulk of the calves by their level of influence. And that means that the bulk of the calves that die are sired by Angus bulls. So by definition, then you're the terminal sire. They've also selected probably the most aggressively for straight wall terminal metrics. And it's not an, it's not a good or a bad thing, it's just an observation. So at first rush, they're going to be some things that make you go, that makes perfect sense and they should align very well in this, and they do to an extent. There are still some challenges. Angus cattle are British and British cattle tend to have less muscle mass. And so they're smaller REA or ribeye area, and they are the largest beef breed in the business at present. And that's not me saying that. I'll show you something here in a second to back that up. When you put those two things together, and this is, you can't read this and I know that, but I'm going to pull a subset and hide it. This actually comes from the Angus science team. And if you can't read the blue line, it's just a subset of what it says before. That they acknowledge in their own science team that the Angus cows been identified as having, as being the largest cow, and having the largest carcasses. And again, one might say, well that's perfect. That makes really good sense. Yes, but if you're going to mate that to a Holstein, you have to recognize that you're putting a reasonably light muscled, big animal, mated to a reasonable liked muscled, big animal. And if you're a cattle feed or if you're a packer, these are challenges. Long carcasses, if they get too long, get a massive discount from the packer. Okay, just from a processing standpoint, from a manufacturing standpoint, can be really, really difficult. I used to work in one of those major plants, trust me, it can be a nuisance. And as a result of that, there's some serious discounts associated with cattle that we make too big. So what we're trying to do here is think like a cattle feeder and a cattle a feeder needs flexibility in some level of nimbleness. And when they start to get into certain upper weights, when they're flirting well into the 1500 pounds, at lives weights and beyond. They have to wonder about, not only carcass weight, but in this case, actually carcass length. And they are exposed to a lot of pain. Now, most of the time, some will say, Well, yeah, but, and I agree, yeah but. Most of the time those calves are stunted at a pretty early age because they are on high carbohydrate or high energy diets. And again, think like a cattle feeder. Certain times, maybe it's only one out of 10 times. Or whatever the dynamics are in the business at present. They have to achieve those initial gains. As a result, they may have to back off of the energy. They may not stunt those calves as quickly. Now long-term they're facing some serious size issues. It's a risk reward issue. And we just have to manage mature size or ultimate size in some of these half Holstein steers and that could the challenge from the Angus perspective. Chars, Charolais excuse me, high ribeye area, heavy muscled continental cattle, loads of growth, lots of retail product and retail yield, those things are very appealing. And cattle feeders love feeding Char influenced cattle. Again, certain problems don't present themselves in the beef business. Carcass length is just not a problem in the beef business, just doesn't exist. And it's rarely even mentioned. But if we're putting these on Holsteins, we have to recognize these cattle along with their own genetics, much like Angus, along with heterosis, we're going to get some big carcasses, if we're not careful. So we have to be really really cautious about that. The breeds we talk about, Charolais struggles from a marbling standpoint. And in an era when marbling is king. Some of that may be overblown, depends on how you interpret the data, but no question, marbling is a big factor in our business and nobody is looking to go backwards on that front. An animal that tends to be a bit of a detriment from a marbling standpoint can be a challenge, so you combine the marbling concern, the frame size concern, and then the other component depends upon how your marketing your calves. If you're in one of the systems where color isn't a big concern, then not a big deal. Color is just color. On the other hand, we have to be honest if we're trying to expose ourselves to the open market, the reality is, for good or for it. Black hides tend to bring more money in today's world, maybe that changes five years from now, but it doesn't look like it's going to change anytime tomorrow. And so as a result, we can't ignore the fact that when we take the black off an animal and that will happen consistently with Chars, they turn into kind of spotted smoky animals as you're probably familiar. We lose our ability to capture some of those hide color based premiums. So we want to acknowledge that. The Limousin population probably, the base for most of the value added programs in the beef on dairy space. Lot of ribeye, lot of trimness and cutability. Though, admittedly dairy cattle don't get terribly fat. So the cutability issue is less of a concern. And they're pretty moderate in growth and size. Now that's a double edged sword. When I say moderate, that can be a good thing because they can align reasonably well from a frame size standpoint. However, they do tend to be one of the lower growing, actually of the group we will talk about, using IGS data they're the lowest growing of the group that we'll talk about. And feedlots make money on efficient growth. And so there's always this balancing act and that's a challenge. Again, like Chars, they struggle from a marbling standpoint, that is not a strength. And they have a smaller genetic pool than these two other breeds we'll talk about. And you might say, what does that matter? Well, just like you all know, when your traditional business, when you start getting locked into a particular channel, You need that variability, it's variability in your base seedstock population that allows you to stretch and move the biological curve. In smaller populations, it's harder for them to do that. We know why Limmies are popular, mostly because of the very solid marketing programs that use their genetics. And those are very well-respected. They're high on jerseys and they work really well there. The question is, do they have enough marbling to keep a Holstein in check? And also be cautious. A lot of time we'll hear folks, well, we need to put these big ole tops on these cattle and some buyers talk about, well we need big backs. Big loineyes, big ribeyes in these cattle. We don't need these massive tops. And in fact, I can give you some very painful examples where I've went through a dairy or feedyard of cattle. And the person selling them the semen convinced them to breed just purely for big tops. And when you look at profit and we broke down those sheets, they were bleeding to death. Seeking ribeye sizes that no housewife in the United States wants, nobody that goes to a steakhouse wants. And so they thought they had something great. But the reality was they were hemorrhaging cash, looking for something that the market doesn't reward. We need enough ribeye to offset any sort of dairy discount. That's when it stops. And then the fourth of the breeds would be the Simmental or SimAngus populations. Again. They're continental, so they have a lot of ribeye. Again, probably not quite as high of cutability as the other two. But still pretty high cutability relative to Angus, again, I told you that's really not a big issue here in the dairy space because your breeds tend to be pretty lean. So that's not a major concern. Similar to Limmies in terms of moderate mature size, but to get that with more actual growth. So that's an appealing combination from a cattle feeder standpoint, I'm moderating size a little bit or more appropriately more moderate carcass weight and carcass length. But I do it while still keeping some of that quick growth that I'm looking for, a profitable growth. So those are appealing. The Simmental and SimAngus populations will marble more effectively than the other two continentals, and they don't marble as effectively as Angus does. The Simmy populations concern is historically, they've changed colors. As you may know, they used to be a red and white animal. You probably remember that from the FFA or poster on the wall, the reality is they're not that anymore. That's changed significantly. Only 1.8% of the population is that anymore. So a couple of quotes that recently came out from Kansas State University, Dr. King Odde, and two separate reports, one of those reports shows that if you look at, Tri County Cattle Feeders a major cattle futurity. Over 17 years, through 2018, there's about 60 thousand had in there. And if you looked it showed some unique trends. Yes, there's a lot of marbling in Angus cattle and clearly identified that wasn't earth-shattering news. What they saw there was marbling increased in a whole host of populations. And actually interestingly enough, because we're feeding cattle so heavy anymore and maybe arguably a couple of weeks too long. From a biological standpoint, a lot of cattle are marbling, it doesn't take as much magic to marble. It does take more magic to stay lean and high cutability and in their data kinda shows that. But interesting things out of that data, Char cattle carcass values relative to their English counterparts predominately Angus, Red Angus, and Hereford, Char had a big expanse in terms they're added carcass valuable over those English populations. But it also showed that the Simmental and SimAngus sired calves and these native beef cattle were clearly the most impressive in terms of actual checks that got paid for carcasses, the thing that we care about. And so, that shows some advantages for a couple of breeds there. They also acknowledged that Angus is our highest marbling breed. But again, that doesn't come as a shock to anybody. Also, you see if you look at the 2020 summer sales, these are the big, massive, highly promoted sales through Superior Livestock Auction. Another record from K-state shows that SimAngus and Charolais cattle top that report quite a little bit over their English counterparts. Which there's just more Simmental cattle in the country then there are Chars. So it's not a surprise then that there's twice as many SimAngus type lots on that than those Chars. But it shows some different advantages for some different breeds. Some other data to look at, semen sales. You all know this trend pretty clearly even if you don't know the specific numbers. Dairy sales, dairy semen sales, at a time when dairy cow numbers, we believe the numbers that are presented, I guess we are going to, have actually stay pretty stable or even increased slightly in the last number of years. In that same period of time. From 2013 to 2020, dairy semen sales are down over almost 5.5 million units with more calves, or at least the same number. That says, almost all we gotta say right there. We know what's happening. Those cows are still getting bred. We're just not using dairy semen to do it. We're using this. So this is beef usage in that same period of time. And you can see, massive uptake. And I don't think there's any credible beef geneticists, any credible beef extension personnel, any industry in the beef industry, any voice within the beef industry is going to scream really loud that this semen is going mostly into traditional beef operations. Don't think that's the case at all. Almost, all of this game, almost all of it, is going into your programs, into dairy programs at your place. And so you can see if you look at this, the massive uptick in the overall volume of semen from the beef side. If you look at this, you can see the trends in the breeds that are the most popular over this time. In the interest of good time, I'll let you go back and review these numbers down the road if you want to look at this talk again, that you can parse into these, but this is a simple breakdown. If you look in 2013, you can see where the breeds were, you can see how there are some subtle shifts in that in 2020. Certain breeds that were more favorable in 2013 across the entire AI sector are slipping a little. Some that were not terribly prevalent, and probably still aren't heavily used in the AI sector of the traditional beef business, are massively growing. Why? We would have to assume it's your business. So some underpinnings, there's a lot of hype, where I say at times, unfortunately, religion tied to beef bulls. Religion thank you very much. And it's not my cows. We want to be cautious. You all probably do some of the same in your own space. But the one thing we want to be able to do here in the beef on dairy sector is to be singularly focused on facts. Let's not let emotion get in, crowding thing up too much. And so I'm not going to read all of this off to you. Other than to say, we've got to be clear thinking as we read data, identifying the beef bulls. And I don't get cautious. Every once in a while we hear folks wanting to pick high fertility bulls against terminal bulls. This is Chip's opinion. On this statement I'm not speaking for anybody other than my own self. I think that's ludicrous. Because by its very nature, if you produce a calf with no value or limited value, your long-term ramifications of how that impacts your business are huge. And so saying these few things are juxtaposed or in other words, silly. The reality is we need to find high terminal bulls that have built-in fertility, composite bulls by the way. Crossbred cattle are just more fertile. It's just the truth. And so we need to combine that fertility with terminal metrics without ignoring ignoring calving ease. It's crucial to your business. And those things cannot be ignored. Not only for the level of difficulty getting that calf on the ground in that moment. At the level of sub-clinical dystocia that you experience for a week or two after that, that has an impact on lactation. Those who say calving ease doesn't matter just because a Holstein is a big cow, I think they are completely wrong. I think the data supports that, that's just a wrong headed approach. Yes. Can the Holstein have a big calf? Yes, she can. There's no point in pushing the envelope too far, however, because clearly a dead calf is not profitable at all. That more importantly, even if she has it, the stress and her producing ability in the coming weeks is negatively impacted. We need to be sensitive to calving ease for you, your staff, and the cow. I'm just going to talk about one example of how you can use data and put it to work. So some of you may be familiar with a relationship we have with the Holstein Association, Holstein USA, and using data to complement that cow base. Scouring the industry at large, weighing all that in, and this isn't a HolSim talk. There are plenty of ways you can get online and get information about this. But essentially, it's an index, I told you early on, indexing is the right way to go. The index is based off of this feeder profit calculator tool and then we have to make some adjustments for some of those pieces that are just unique to the beef on dairy model, they're not a concern in the traditional beef business. Those are calving ease, ribeye area for muscle, and carcass length. And again, what came out of that, again, not to belabor this, you can get this information in a lot of places. Is we identify the population that's going to be the most appropriate for this outlet, were SimAngus cattle of a certain type. And again, certain type is not necessarily important for this conversation today. It allowed to get much about precision, agriculturally focused on that population of calves. And so just those opportunities I think as you all are moving forward that you don't, you don't want to forego these. I think these are crucial. You have the ability to have a product that's far more consistent than many in the traditional beef business just because of environmental variation. And so don't lose that. You'll have some traceability things they can really be an advantage for you. And when it comes to be laser focused on how do you appropriately fit terminal metrics in your population. It's a true advantage, you don't have to consider, outside of calving ease of course, any maternal components what's so ever. So it gives you back that precision Ag approach. And if you do that, you might find bulls that are maybe similar to the HolSim approach or maybe they're a completely different set of bulls all together, depends upon the business model that your company works in. And the last thing I'd say, is be intentional. You have a valuable asset in your semen rep that comes to your place on a regular basis. Absolutely. But also don't defer all of this to them. You wouldn't do that on the other side of your business. You're engaged here. And I would encourage you to engage at the same level on the beef side. This data is available for you to consider. And if you ever have questions, there are dozens of people you can reach out to. And I'll give you my email in a minute. You can always reach out to me if you can't find somebody else to talk to you about it. With that said, there's my name. In case that matters. It's eight letters. It's easy, there is my email. And again, not very complicated in its own right. So, I will be done, it leaves just a few minutes for questions. Jerad, Garth, I'll give it back to you. Thanks for the presentation Chip. At this time, if anyone has questions, if you're comfortable and would like to unmute your mic, you can ask a question or enter that in the chat box. Or in the question and answer box, excuse me. And we can pass those along and address those questions that you may have. And Garth has also posted a survey link into the chat box that you can click on. And if you'd be so kind, a little bit of that feedback is greatly appreciate it. So we have a question, are the HolSim index weights publicly available? So, great question, and no. The weightings of that index, I can tell you how that index is calculated. And in the beef sector, essentially none of the indexes that are built in the beef industry are, you know, the weightings necessarily out there. I will tell you, indexing. Lots of folks who talk about indexes, there's a difference between indexes and scientifically credible well built indexes. And I would encourage you to do to work with folks who understand that an index has to have a number of good pieces. One, it has to have the appropriate inputs. And that is something that tends to be discounted in a lot of indexes. A lot of indexes tend to be solely output related. If don't worry about the inputs, the cost of getting there, the salvage value of animals or things of that nature, the index is not all encompassing. It's not robust enough. Plus you have to use independent arbiters of the economic conditions. We don't assign those, for us, for the most case, we use like Cattlefax because they're independent of us. Those metrics are credible, and the people, they have believability. We let a lot of scientists go through our indexes. So we give it a scientific credit as well. But we tend to not openingly, we don't publicize those. And there's a couple of reasons. The reasons why, in the beef sector, they're still going to do a relatively small number of beef bulls that go and service the dairy industry. Just is, it's a fairly small number. And could unintentionally get folks to fixate on certain pieces that are maybe a little unhealthy. The reality is we're pretty open about how the HolSim index is handled. Again, you can find some other talks or just real quickly. We used a profit calculator which has proven its veracity to Superior and a number of cattle feeders and a number of folks who really believe that that tool identifies the terminal metric and says it identifies. So we use that as the base. And then we're going to adjust. We have some curvilinear adjustments if that terminology matters a lot. To put pressure on, downward pressure on carcass length, upward pressure on ribeye area, an upward pressure on calving ease. Now if somebody said, I want to get a sense of how the HolSim index looks, and if this terminology means anything to anybody. Jerad, if there's anybody listening that this resonates with. If you look at, because these are Simmental cattle in this particular situation. If you look at the other two indexes that the Simmental Association puts out, it would be an all-purpose index and a terminal index. Those two correlate pretty well with each other over the whole lifecycle, one's a terminal index. But the HolSim index, interestingly enough, correlates slightly higher with API, the whole lifecycle index. And that is after some thought and kind of digging into it. The reason is because that whole lifecycle index tends to reward smaller mature cow size in the beef business. They're lower cost females. And so, the HolSim also has a downward pressure on size, carcass length. And so there's a bit of connectivity there. And so, if somebody wanted to get a decent sense of where the animal might fit. If you looked at a Simmental animal with a good API that also had a good calving ease, moderate growth, good marbling, and good ribeye. You're pretty close. Thanks. Any other questions? Feel free to enter them in. We'll give you another minute or two to type those in. We got another one that came in. While I agree that calving ease is an important consideration, where do we make the cutoff? We've seen daughter calving ease improve dramatically in Holsteins recently. Is that being accounted for? I think that's great. So I'm going to say is, I think the concept of cutoff is the point here. I think a lot of times in, you know, I'm a guy too. And sometimes we just want somebody say, Hey, give me a threshold so I don't do more or less, so that's going to be cut off. And then I have gutters around my decision-making. And that's the beauty of indexing. When indexing is done appropriately, it takes into account the subtleties and it's a little more nuanced than that in most cases. For example, might you take a slight increase in risk of a calving ease problem if you had a massive increase in opportunity from a terminal standpoint? Maybe? You might. Some other individual may not. And so indexing allows for those things to be boiled down into one number. And so while these HolSim calves in particular, are going to be very high calving ease as a population. They're going to be exceptions where you can kind of push the envelope a little bit more and try to get a few more pounds out of that. So I wouldn't want to say whether it needs to be some definitive cut off because the cutoff of one operation from their management, their approach, their genetic line up isn't the same at the other dairy also running the same breed of cattle in the next county over. I think it's a little bit more nuanced than that. I acknowledge that calving ease isn't, in the Holstein population, in particular, isn't nearly the challenge it was a hand full of years ago. But again, using IGS data, and we evaluate, and we pride ourselves on trying to use as much data that's out there, even data that maybe beef folks don't typically use. And our current understanding of calving ease in the Holstein population as we compare them against traditional beef breeds. They are far and away the worst, by a margin, than the worst beef breed from a calving ease standpoint. And so we don't want to ignore that either. We've got another question here, Chip. When you refer to carcass length, are you referring to frame size? Clearly they are highly related. Frame size is about skeletal measures, so yes. From my common hill billy dialect, yeah, they're kind of the same. The difference is that carcass length is a much more precise measure of what we're looking for. And so actually when we built the profit calculator, excuse me, when we built the HolSim index, we pondered using frame size because it's kind of a proxy for carcass length. On the other hand, we found some very good literature that gave us the ability to go directly at the point of concern, which was carcass length. And that really is the trait of our interest. And so anytime we can get closer to the actual trait of interest, we're going to go there. So yes, big frame cattle tend to be longer carcass length cattle. And, to be real clear, super high growth cattle are going to tend to be on average, big growth cattle tend to be bigger cattle and tend to be longer carcass length cattle. So what I would contend here is in general, in particular, when you're mating to Holsteins. I think our contingent would be different from the some you see in the market space. We think you have an advantage here with some crossbreeding and heterosis. And those things are both phenomenal tools that are at your disposal in these beef on dairy matings are baked into the cake. And especially if you're using a composite bull on a Holstein, you even get a little bit more. You might be better served to let those components take you over the hump. And that said, why doesn't aggressive....