Management Considerations for Crossbred Dairy Cattle: Marketing Dairy Beef

May 30, 2021

In the first session of the Management Considerations for Crossbred Dairy Cattle program hosted by Michigan State University and Ohio State University, Larry Rose (JBS Head of Cattle Procurement) and JT Loewe (JBS Cattle Procurement) have a conversation with the audience discussing marketing aspects of dairy beef.  Both Larry and JT share their observations and experiences with crossbred dairy beef cattle at JBS and their future thoughts on the role for crossbred dairy cattle in the beef industry.  Additionally, the new contract which Holstein and Holstein crossbred steers can be marketed on with JBS was discussed relative to the old Holstein contract.

Video Transcript

Turn it over to Larry and JT and let them answer questions or talk as they will. So go ahead. Thanks guys. Okay. I'm Larry Rose and I'm head of procurement for JBS regional beef, which is that the regional plants for JBS. Is Souderton, Pennsylvania, Green Bay, Wisconsin, Plainwell Michigan, Omaha, Nebraska, and Tolleson, Arizona. At most of our regional beef plants we harvest both cull cows and mostly Holstein steers, which is different than the fed division, which is mostly beef fed steers or some crossbreds too. Probably, you know, for the last 20, 25 years, we, we've almost killed exclusively Holstein steers as opposed to crossbreds or anything else. And we've basically built a brand of Holstein meat, which is called five-star. And over the years have built that up, you know, 20 years ago, you basically sold everything Holstein at a discount. Now most of the cattle at that time were Holstein yearling steers where people would run them on, on say, grass until they weighed seven or eight or 900 pounds or silage, and then they put them on a ration. And within the last 20 years, basically the Holstein steer markets changed to be a high-energy ration at a young age. You know, either going on feed it to 275 or 300 pounds, maybe 500 pounds. And and within the last, you know, two or three years, we started to see in the crossbreeding of the steers. What we know so far is that they've been pretty inconsistent as far as performance at the packing house level. You've you've got everything and I think a lot of it has to do with the genetics and I'm sure somebody else will be able to talk about that. But we know that as many of them that are being crossbred, that we were going to have to, to probably offer something for crossbred just because of the low number of Holsteins, or lower number of Holsteins, and the availability of the crossbreds. And we've done some trials with a few different people. We did a trial a year ago with Penn State. Probably wasn't a large enough trial to really say that we really know too much at this point in time. We've done fab tests with yields at the packing house level. On probably two to three thousand head of crossbred cattle and collected all the data that we could. And some of them have been really good and some of them have not been so good. Like I said, it's been a consistency thing. So far. I think when people first started crossbreeding, they were just trying to breed anything that would throw a black hided calf and thinking that they were going to sell it as CAB, which they probably don't qualify for CAB, but that was kind of the intent when they started. And in the last couple of years, I think that the semen companies have probably spent a lot more time trying to decide what sires work best with the Holstein cows. And it seems like there's some of them are getting better or most of them. And we don't like I said, we started a couple years ago and we probably don't have the best, most scientific information that we should have at this point in time. But it really hasn't been real easy to get to. So with that, we knew we were going to have to probably do something with the crossbred. So we developed a crossbred contract, so to speak, or contract that would work for both Holstein steers and a crossbred steer. And with that, I'm kinda, I mean, if nobody has any questions, JT is a lot better authority on on the contracts than I would be. So I'm going to turn it over to him and he can kind of explain it. If if anybody has any questions, we can kind of get to them towards the end or at any time if you want to stop us, we could probably stop and answer questions. With that, this is JT. Good morning or good afternoon depending on where you're at. To add on what Larry was talking about, the other thing that we've seen over the last seven or eight years is the National grade has, you pull Kansas or Texas, and look at what the national, ya know, what their grade by state has done. The last couple of months the national grade has been over 80%. And I think it follows a trend maybe from the nineties when we heard a lot about lean, lean, lean. And let's make pork leaner and chickens the best and whatnot. So when I put this together, the 70 percent contract that we've used the last couple of decades. That was a big topic in the industry. And we have Walmart that was actually taken a lot of our Select meat, They were taking it at $3 to $5 better, narrower than the choice/select spread. And we got along really good having 30 percent Select on the contract. Since then, and over the last 20 years, Walmart's gone to to Choice and CAB. Arbitrary, that 20 years ago, would've average 71 to 72% Choice and maybe 2 or 3% Prime. You know, has moved to averaging 78% Choice and an 8 to 10% Prime. So in our markets, as there's been more of a value switch to higher quality. We've lost a lot of our Select market because we don't have much to sell. And we've seen an improvement in exports in higher quality, from people like Costco, that are now actively promoting the Prime product in their meat cases. So over the last couple of years, one, you know, when another packer quit killing Holsteins in 2016, we spent about a year and a half just trying to keep up with all the Holsteins that were out there and at that point we could not kill them all and our basis widened minus 12 and minus 15. And then the auction barns as much as minus 30 or 35 on the cash market. The industry was forced to look at other alternatives to what are we going to do with all of these bull calves? And we knew there was going to be a switch. We didn't know quite what it was. In the first year and a half or so, the semen companies emptied a lot of tanks that they had and where we had a fairly consistent genetic base on the Holstein side. All of a sudden we had maybe 15 or 20 thousand different bulls that were thrown on calves that we really had no idea what they were going to be. In the first ones that we started running fab yields on. That's kinda what we saw, that, you know, a third of them we were a lot better off to just have a straight Holstein. And a third of them were better and a third of them were equal. I think that has gotten better over the last two years, since maybe 2019. But it'll be interesting to see what their breeding with today. You know what that looks like 16 months down the road. We might actually be able to tell you what kind of improvements they've made to the fab yields of the Holstein. But with the changes in the market and whatnot. What we wanted to do with the new contract or new contracts specs, is try to, or not try. We wanted to pay more for the higher quality and try to keep the Selects about the same. So we went to more of a grid-based contract that is roughly $5 dressed more per 100 on every animal. So if you take a 118 CME price and subtract $12, right on our old contract, and divide by 61%, you come up with a base dress price of one hundred seventy three seventy seven ($173.77). And if you do the same with 118 minus 8 and get to 110 and divide by 61.5% yield spec. We come up with 178. I believe it's 86 ($178.86). So on every animal we've added $5 per 100 dressed to the initial base price. On the Primes, we've got another $10 per 100. So where the Choice are worth 40 to 45 dollars more than the old contract, then the Prime are worth an extra 125 to 135. So with the Selects, because we don't have the margin and we don't really have the market for a select of the $5 that we've added to each carcass. We've taken another four off of it, in addition to whatever the weekly Choice/Select spread is. So last week for this week's kill, I believe it's $5.91. So this week it would be it would be not minus $9.91. Hey JT, this is Garth. Can you repeat the math again? The old contract as apposed to the new. Yup. 118 minus 12 gets us to 106. And then the contract yield spec on the old contract was 61 percent. So if you take the 106 and divide it by 0.61, you should come up with 173 70 something. Now if you do the same with 118 minus 8, and get to 110 and divide that by the yield spec of 61.5 on the new contract with 0.615, you should come up with one hundred seventy eight eighty six, I believe. Did that work out? Garth? Yes. Thank you. Yup so. Right up front, you know, on the yield spec because we're killing crossbreds. Know if we've seen some come in that were maybe an Angus that we killed, it was an Angus with Holstein and also a little bit of a Jersey in there, whether it was an eighth or a quarter or whatever it was, you know, that those were yielding 60.2, maybe 60.4, you know, to the other extreme of some Holsteins that were crossed with a Charolais that have yielded from 63.3 to 63.6%. So not knowing exactly where the, you know, the yield is going to be on these crosses in two to three years or five years. You know, we we did increase the yield, the 61.5 from the old Holstein contract. But it really comes into play is where, where the suppliers or feed company or whoever's running a projection for suppliers is calculating what they think, whatever group of feeders they bought, what they think they're going to yield. So for straight Holsteins, you know, if a guy has a 1400 pound out weight live and the average yield, say at our plants is 59 and a half. Well, that would leave you with an 830 or 835 pound carcass roughly. So if you multiply the 833 pound carcass by the one seventy eight, eighty or by the dress price wherever we are locking them in, their gross dollar amount will be a lot closer than if were trying to figure right now with February being at 130, and taking eight off of it. And being at 122, a 1400 pound steer at 122 is going to be, live, is going to be about 50 to $60 too high if that that animal is only going to make 59.5. So that's one of the things we've spent quite a bit of time over the last six or eight weeks, is is just walking through suppliers as far as when you're looking at gross dollars and what you're going to have left as you're buying feeders. That's going to be a lot better way to, to run projections over the next few years. Especially if we start seeing more the cattle yield, 61.5 to 63. As you know, I think the industry will improve the genetics and tighten the genetics that, that we're using. Another big difference that we did or few changes anyway, From one thousand to one thousand fifty on the old contract was minus $15, on the new one it's minus 10. So we're dinging them quite as hard and from 650 to 700. We went from minus 15 to minus 5. So we're not banging them as hard there. Outside of that range, we got a little more brutal because it's stuff that just gets in the things that we we don't have much use for over 1050 or under 650#. And honestly a supplier with a 400 pound weight range, dress, that's, live wise, that's a pretty big window for them to hit. One of the other changes that I think is for the better, is on the old contract, if they had anything that was sub Select, which would be a Standard or a Commercial or whatnot, it just fell to the daily cash market. On the new contract, everything is priced off wherever they get them, get them hedged or whatever they're delivered base price is. So last year we had some guys that had locked-in cattle at 180 to 190, dressed, early in the year. That by the time we got to July and August, you know, the the cash market dropped to 140 on a Choice. And if they caught a Standard, there were actually get paid $105 to $110 on any other outs, which is just a, as volatile as the market is. Moving the sub Select price off of wherever they have them priced, I think will eliminate some of the risk of that happening again. Any questions guys? JT and Larry, I don't see any questions yet. Maybe one question you could answer for the audience is, what kind of incentive is there for people to be raising these crossbred calves? And how can those crossbred calves capitalize on added value in some of these contracts compared to the regular Holstein. Well, to be quite frank, the only incentive really is to the dairymen right now. I think there will be enough crossbreds around maybe over the next six months, eight months. To where maybe the price of a straight Holstein calf and a crossbred beef dairy cross calf might have some incentive for you to buy him and purchase them. Right now, honestly, the industry is trying to figure out what to do with them. They're not a straight native. They're not a straight Holstein. And they are kinda out in the middle where, as Larry was talking, we spent last 15 years doing studies with CSU on shear test and taste test against CAB. That were the people that were actually eating the beef preferred the straight Holstein over the CAB. And we've used that over the last 10 years to get into places like Texas Road House, and some of these places around the nation that, that wanted a high consistent, high value, high quality, consistent product. And now one of our fears is we're contracting a few of them, is, what does our customer base, how do they perceive it when they get it? Is it, as we've talked for ten years that it's better? And now we go back and say, well now we're crossing the straight Holstein with Angus. And how do we explain it? But it could bring on a whole new, where we've gotta start over trying to get it marketed. And one of our fears is is that as other companies are, and packing houses are slaughtering them, is what does their customer base think of it because if all of a sudden they quit killing them like they did in 2016. The industry is right back in that same spot that it was then. That we've got too many of them for us to slaughter. So I have had some suppliers say that there's a little bit added value in feed conversions, and maybe calf health. Through the traits and getting them to 300 pounds that maybe they don't fight the health issues quite as bad. But in addition that some suppliers that are raising baby calves and buying or sticking with a 95 pound average Holstein weight, for example, compared to 82 or 85 weight day old Angus Holstein cross, that it takes more milk replacer to put that extra 10 pounds on, rather than buying it to get them to the point that they can get dry matter intake into them as a 115 or 120 pound calf, if that makes sense. I see Tara Felix has a question on the fab differences. She asked, you talked about the only incentive being to the dairymen, but earlier you discussed the yield difference. I wonder if you'd be willing to share more about the fab differences that you've seen. You mention a 63 yield for Charolais versus 61 for Angus. How many head were in these fab studies? And will those will the data be published? We haven't published anything yet, Tara. We did. The Charolais cattle that we killed, we killed in our Arizona plant. They yield 63 percent. The fab difference was quite a little better than a Holstein. And I think it was about 40 to $50 better than our Holstein yields. The the Holstein Angus ones that we did. And I believe you might have had those on feed at Penn State, I think was about 13 to 14 dollars better than a straight Holstein. So there are some fab differences. And when you talk about the quality of the meat that I think JT was discussing, we had probably, the the main difference, a lot of people, I think most people understand a Holsteins fab yields are usually from 50, depending on who you talk to and 50 to $70 a head less than a native animal. I think it depends on the Holstein. And I wouldn't quote me on that because you hear a wide range of what the value is. And probably, you know one time, Holstein meat was sold at a discount, anymore with the exception of a few of the middle meats, most probably, the most notable would be the strip. Which is inferior because it's shallower so it gets sold at a discount compared to a native. But the main difference is the fab yields. But what we've seen has been all over the board. And like I said, they've been pretty inconsistent though, the Charolais cattle that we killed, there were 700 head of them. So it was a pretty good test. And it was, basically we did a whole shift of them as far as fat cattle. And so we had really good data set on that. And there's another one from somebody else. Are you seeing a lot of cattle pull forward due to the higher feed costs right now, what does that flow look like in the next six months and packing capacity? I'll speak on a little bit of it as far as the packing capacity. And I think this is pretty much industry-wide. We've got a struggle right now with with labor. And it's, like I said, it's about every plant we've got and that it started with Covid. And it doesn't seem to be getting a lot better. People aren't maybe wanting to come to work. Maybe as much with the stimulus package. They can stay home and not work as hard and the additional unemployment. But I mean, we're, it looks like we can get 650, 660 data if we push hard, maybe a little more than that if some people run Saturdays. The incentive's there, I mean, it's not that it's not profitable. It's just being able to get people to show up for work and keep a trained workforce. As far as people pulling cattle forward, we haven't really noticed any lighter weights yet. There's probably some cattle maybe a little bit backed up. Not to the point that it was two or three or six months ago. I think as an industry, we're getting a little more current. And there might be, I mean, the on feed numbers will come out Friday and everybody will have a little better feel for it. It's probably going to show quite a little larger than a year ago. But one thing people need to understand, is a year ago was just starting the first wave of Covid when these packing houses were basically shutting down for two or three weeks at a time when it went through there back before we had any idea how to, I mean its. I'm going to be six years old this year and it was my first pandemic and the business and really the plants didn't know how to handle it and there wasn't very good guidance from anybody because nobody knew how to handle it. But if you look at the measures that the packing companies have put in force and I think it's everybody from the, you know, the major packers to the small packers. I mean, everybody wears masks. They've got dividers in between the workers. They've got dividers in between the workers in the break rooms. They've spread everybody out as best they can. And we've seen the infections go way down. And I think we had our last mass vaccination at a plant last Friday. So anybody that wanted to be vaccinated is vaccinated. And, but it wasn't a requirement. But it's roughly, I couldn't tell you the number, but it was a pretty good percentage of the employees did get vaccinated. And in addition to that, on as far as cattle weights, up until about two weeks ago. You know there's a point maybe 2.5 weeks ago that June was trading at 2.75 to $3 over the April board and way over cash. So there was incentive. It was kinda telling the feedlots to take your last two weeks of April and move them to May and sell. And with the basis adjustment that we've seen over the last 2.5 weeks in the market saying that they're only going to be worth 117 or 117.50 this morning. I think there'll be more incentive for feedlots to try to get them sold. And the whole key will be to Larry's point, that if we can get to 660 or a 665 kill to start bringing the weights down. The weights have just started to fall over the last few weeks of kill below a year ago. And probably won't bottom until we get to the end of May. But that will take a little bit of the beef production, total production off the market. Any other questions? The two groups of cattle that you mentioned, the Charolais and the Angus, from a quality, grade standpoint, What type of differences? You know, we know that our dairy calves typically do marble fairly well. Yeah, as we look at breeds such as Charolais, or Limousin, those type of crosses, has there had been any detriment to the quality grade? What we've seen so far, of the Charolais cattle, they were probably a little bit overfed. They weighed almost 1500 pounds. The grade on them was really good. There was no Prime on them, but the Choice grade pushed 90 percent, which is about our plant average there. We see, you know, that's probably our best grading plant. And most of the Angus cross, we did at the Eastern plants, we did three or four groups in our Pennsylvania plant and three or four groups in our Wisconsin plant. And we didn't see a lot of difference in the grade compared to a Holstein on the Holstein Angus. They were pretty close as far as the quality grade goes and the yield was just a touch better on him. But like I said, there's not a huge, huge difference as far as the quality on them. On to Tara's question, what are the plans for the future and where do you see this going from a packers perspective? I think a lot of it that we're feeling our way through Tara, is what are our customers going to think of it, you know, and I think as, as the semen companies realize they were here a year, probably a year and a half ago already. And kinda explain what had happened on the first go around and the amount of tanks that they empty. We've spoken with some genetic companies that are more involved with sexing of semen and that over the next, year from now, I think we'll see better quality and tighter genetics being used on the dairy herd that they are breeding today. That will help us maybe get to a point where we can start going to the Costcos, and Texas Road House. And getting feedback on, on what they're seeing and how they feel about the meat. But the industry really has introduced something that up until now, was either one or the other. You know, you're buying native meat or you're buying Holstein meat. And until there's, once we get to that consistency on the finished product, I think we'll have a lot better idea. You know, what that day old baby calf was worth from maybe a health and conversion perspective to the feedlot and the added value that they're buying as a feeder steer, but also as a packer what we're buying. You know, what added value is it? Fab yields, same quality, and good reception from the people that are actually going to consume it. All right. Question from Kelly. You mentioned the new contract. Were there any other changes or updates than already discussed? Ah no. I guess there's one on the old contract, a yield grade five was minus 20. And on the new contract, that's minus four. Now there's been, on both contracts, Larry and I here few years ago, started standing quite a few of the fours, yield grade fours. And we're going to continue to do that. We've kinda proposed to the USDA that they need to come out with an actual yield grade criteria for Holsteins. And not just use the native born because the Holsteins tend to put, most of their extra fat, as KPH fat. And the way the yield grade criteria are set up now, the pounds that a Holstein has the capability of putting in as KPH fat bumps a lot of them. This is left up to each individual USDA greater. And they take the weight of that KPH fat in their decision on what to call them as a yield grade, each individually and they vary quite a little. And so when we were having guys that were yielding or getting 8% yield grade fours or fives. And a week later ended up with 55% yield grade fours and fives because it was a different grader rotating through the plant. They were just, it was way too inconsistent for us too. To deal with the phone calls to be real honest. Quite a little of the KPH fat and what we give up by hot fat trimming is already built into the basis and how we're buying them. And that's why we'll continue watching them. A Choice or a Prime yield grade 4 or 5, doesn't hurt as bad as what a Select yield grade 4 or 5 does. A Select, you know, when we don't have the quality, we don't have the margin and we've got extra waste. That goes straight to rendering can cut into it real quick. If we average 16 pounds aside or 32 pounds per head. And you see animals come through that have 70 pounds, that extra 30 some pounds of fat that you're paying a $1.90 for, that goes straight to rendering at $0.15. That can swing that animal 80 bucks a head pretty quick before it even hits the cooler. One thing I want to touch on on the hot fat trimming, just so everybody knows. There are several scales in the plant. Now there's a pay scale that the cattle cross or hot weight scale that the cattle cross before hot fat trimming so that the weight that, that you get paid on is the weight with the kidney, pelvic and heart fat in it. And the kidney. And the kidney. Basically the reason some planets hot fat trim. It's easier to fab the animal because you're not, you're taking the fat out of the internal cavity while it's warm and it's not cold and setup. So it's easier to fab the animal and that's why some plants hot fat trim. But you do get paid off the pay scale, which is before the hot fat trim area. And it also slides through shoots a lot better if its hot rather than cold. Right. Well, I don't see any more questions right now. Feel free to keep sending the questions you may have into the chat. And we'll keep answering them. A few announcements while we're waiting for some questions. If you look in the chat, you'll see that Tara Felix has shared a link to an article and some data for some of the crossbred research that they've done at Penn State University. So if you're interested in that, click on that link and that should take you there and you should be able to find that. And then Garth Ruff has also added a survey for today's presentation in the chat. If you'd be so kind to click on that and take a minute or two to fill that out for us. That's greatly appreciated. And then I have also added a link to a spreadsheet tool from Michigan State University that compares, that you can compare the value of cattle, a load of cattle on the new or old JBS contracts using their different premiums and discounts and the different basis's et cetera. So if you're interested in learning more about that, feel free to click on that link there as well. And again, Tara Felix has put that link in the chat if you didn't catch that earlier. So we've got another question here, how does the other adjustment section compare versus the old contract? Well, other adjustments, I'm assuming that, not quite sure. We've got fours and fives, carcass weight range. And anything that's age, they call over 30 on the kill floor. All of that is the same. So Jay, I'm not sure if that answers your question or not, but it's, you know, we used to, maybe to put it this way, the main difference probably was that, we stood 70 percent of the Choice, 30 percent Select is what we kinda have as criteria on the old contract. Anything below 70 got discounted using the weekly Choice/Select spread, anything over 70 percent, we gave a premium based on the weekly Choice/Select spread. The new grid, so that was more of a tolerance or variance. The new contract is more of a straight grid and each carcass is evaluated based on its own merit. The muscle score part, is same premiums and discounts. Or it is basically a straight discount on a muscle score of three or a muscle score four. We've had, I think we're not seeing the muscle score issues maybe that we did 15 years ago when that was introduced into the contract. I would think that the genetics of the dairy herd has gotten a lot better. Maybe because it's bigger dairies and more consistent genetics. But you look at the amount of milk the cows are producing and the size of the cows and what they're able to put out today compared to 2000, 2005, I think in itself that the genetics of the dairy herd have taken care of the muscle score side of it. Tara has another question. Out of straight curiosity, what do you as the packer prefer or maybe where do you make more money, the purebred Holstein or the crossbred? Or doesn't it really matter? You know, honestly, it really doesn't matter. We're just I mean, right now we're trying to understand it. We did build a Holstein brand, but obviously, JBS has a swift brand for native cattle. So other than change boxes during the middle of a run, it really doesn't matter to us. We just need to understand the value of them a little bit better. And I think we'll see that with more consistency in the genetics in the next few years, as maybe these guys find it. A tighter set of bulls to use as far as their recommendations as opposed to anything that's black hided. And you see it in the auctions too, because if they run a load of crossbred fat cattle into a fed cattle auction. They'll sort those cattle. If they'd look like a black Holstein, they'll basically bring Holstein money. If they look like a beef animal, they will bring beef animal money. It just depends on the animal. So the consistency is the key here. So as long as they're consistent in their, either consistently look like a Holstein or they consistently look like a native. It'll be easier to figure out what value there is to them, especially to the packer along with the cattle feeder. As far as preference, for Larry and I, when we're ordering steaks, we've got a non implanted program in Arizona that cattle have never ever been implanted. And we'll try to order the high Choice or the Prime steaks from there because they'll eat really good. So, best meat there is. Larry and JT, I 've got a question or two questions for you. One goes back to the muscling score. You said you don't have any issues with that anymore. But what kind of scoring system is that based on and who's calling those scores? And then two, back to your mention of implants, what kind of effect are you seeing on implants in different implant strategies and what kind of recommendations would you guys recommend based on what you see or know about lots of cattle that are implanted or not. The muscle scores is called there at the grading chain by looking at the ribeye. The criteria for it was was 1.1 square inches per 100 pounds of carcass weight. That's what the criteria is. So if you take a 900 pound carcass that was 9.9, measured at the chine bone, if I remember it correctly. So that's, we're not seeing a lot of ribeye sizes these days that are below ten square inches on the Holsteins really. As far as the implants. I think that needs to be left up to each supplier based on how good their management is and how good the calves are. We're seeing and talking with with one of the companies that sells a lot of implants around the nation and specifically in the Midwest, their territory reps. It was kind of, my thoughts as far as TBA versus a straight estradiol implant and We kind of felt that the recommendations were were the same, which are a lot of calves might get an implant to 250 pounds or 300 pounds. I know some guys that give a Ralgro at day 3 when they come in the crates because they feel it helps the health. So there's all different kinds of of employing strategies. We, when I was with Smithfield and helping them with basically working with all the cattle they had on feed around the nation, we tried 20 thousand head with the Revalor-XS. And I can tell you that those cattle came in and they graded 45 to 55 percent Choice, no Prime and 7 to 8 percent were outs because it was just too hot, it was too much TBA. I think personally, we got to where we didn't implant the cattle for Smithfield until they weighed 750. We were basically shipping a couple thousand calves a week from the calf ranch and we had the a luxury, if you will, that at 750 pounds, we could go in and out of that 2000 head that had shipped, say 3.5 months before, and we could pull out the bottom 1000 that maybe weren't gaining as good and implant those. And leave the top 1000 head alone, where we'd never implant them. And then again at 1050#, we could go back in and out of the top 1000 that had not been implanted yet. We'd take the top 500 and leave them as never implanted. And that's how we kind of developed this never implanted program or we were apart of it at 500 head a week. And we saw the top 500 head that have never ever been implanted, we'd averaged between 30 and 35 percent Prime. So that implant will knock, you know, too much TBA can knock down the quality grade. And I guess I'm not saying never use it, but using TBA just as a terminal implant, which there are 200 days out there, Synovex has got a one feedlot or a one grass that's 75 percent basically the strength of the one feedlot that we've got people using. And then we've got people using, just doing an Encore at seven hundred pounds. And not using any TBA because it fits their operation, of they've got 1600 head on feed and trying to get stuff implanted on a timely basis and finding the help to do it. It just fits their operation the best. So, I think the TBA, I've asked, I think it may be a part of a study. With some cattle that are on feed with Elanco in Texas, we'll have to find out if we can actually get it compared. But the Holstein meat tends to be a shade darker in color anyway. And my question to them was, by adding TBA, a male hormone, are we causing the meat to be another shade darker, which can knock it down from a Prime to a Choice or Choice to Select. So, as far as implants, I think if there were mine and I was feeding them, I would probably feed them to 650 or 700 before they had an implant. And then, at that point, use a straight estradiol implant and not enter, I wouldn't put the TBA into them until we hit the terminal endpoint. There's a question from Jay. Now the yield grade four or yield grade five is not $40. It's $10 a 100. Yeah. That said yield grade five. Yeah. Yield grade five is 10 dollars, just like the yield grade four on the new contract. The old contract it was $20 on them. Did I answer your question on the implants well enough? Yeah. Thank You. So you said that at the Arizona plant you guys have the never ever program. Are there options like that in some of your Eastern plants for producers? There aren't. It's pretty hard to do. It's a little easier out there because it's actually in a real, I mean, there's five different feed yards that feed all of them. And the criteria down there is never implanted, but it's also no antibiotic the last 300 days. So in the dry climate, they don't find the need to run crumbles. You know, when a storm comes through the weather's fluctuating. And we get a cough running through the pen, which I think a lot of guys that helps them in the upper Midwest with their respiratory issues. Thank you. This is Garth, I've got a question. You mentioned the muscle scoring in the Holstein cattle has gotten better over the years. And maybe this leads into next week's conversation a little bit from a genetic standpoint. When we're selecting those beef bulls, of course ribeye, it's a criteria, but is, but with that muscling score getting better over time and the dairy cattle is selected for frame size, maybe a more appropriate way to improve yield? Most of the issues we had with muscle scores was when people were still feeding a lot of yearling Holsteins. You'd see it a lot more in them and I'm assuming that's because they were taller and before they ever started putting on weight. If you're calf feeding them, you don't have issues with the muscle scores. And that's on the Charolais the genetics behind those, that was like a frame size six bull. So I think it is, I think frame size does play into it. As we're, people are crossing. Then you know, the marbling and what not would also play into it also. Do we have any other questions from the audience? If you would take a second to fill out that survey, we've put the link there in the chat box. Certainly appreciate that. That lets us know, both Jerad and I, as far as programming, how today's program was and how we can prioritize things in the future. Yeah, Larry and I'd like feedback on that also, please. Sounds good. Either one of us or professional speakers, were cow buyers by trade. We have another question that just popped up in the chat. Could you repeat the percent Prime and percent Select for straight Holsteins, as the beef bulls used to produce crosses has become more consistent, will focusing on quality or yield traits in crossbreds have a greater impact on value at the packer level? Yeah, I think it will. The Holsteins have the ability to grade very well. I mean, the ones that we don't implant in Arizona, we've got, they'll come in from, consistently, from 25 to 35 percent Prime. And very few Selects on them. I've got guys in the upper Midwest looking through weekly data. It's about the top 35 or 40 percent of the contracts that we kill that I was looking at in Green Bay the other day, average 19 percent Prime and they're guys that just don't implant. So it's, the genetics are going to play something into it. But I also feel that, you know, where suppliers pick their implant program that works best for them. We'll plan to it. If not more so than maybe even the genetics. Because the genetics on the Holstein side I think are there. Not saying that if you don't cross them with a no quality bullthat, you know, you can strip that out of them. But the implant will have more impact on it. As far as the value at the packer level, like we were talking, there's been a big shift to higher quality. Our export business now compared to the late nineties, is poorer for Prime and whatnot to Japan and Southeast Asia, is you know, a big part of our business is that higher quality meat and that"s what they're willing to buy. Another quick question I guess, here, on the crossbred side of things. As the genetics get a little bit better for the crossbreds. And I think this kinda goes into the last question we had here. And the yield improves. So you're talking about 63.5% on those Charolais crosses as the dressing percent or the yield becomes more comparable to a beef animal. Do you see those crossbred calves being marketed more like native cattle compared to the Holstein side of things? I did like, I think that they, you know, like I said, even today, if you run a set of crossbreds through an auction, I mean, if they look like a native, they'll sell like a native. And I mean, I think the fab yields can be improved. That's a given. And like I said, a lot of it's genetics and I think that probably part of it is how you feed them. Because I think if they have more traits of a straight beef animal. And just for an example, there's a company that, I'm not given a plug to them, but there's a group in Minnesota that actually has crossed the Jerseys with Holsteins and Limousins. And they seem to sell them pretty well. So I'd say somebody knows something, you know, about fab yields and so forth when they get them to the plant, because a packers not, I mean, we're not known for giving a premium for something that doesn't deserve a premium. So I think there's definitely, you just need to look at the genetics, if they tighten it. If you're using a high grading, high-yielding Angus bull that they've selected for this purpose. I think you're probably going to help the cause all the way along. And, you know, if you're selling them, you know, by the yield. And they're going to yield as well as a native, then they'll darn sure bring as much as a native. And I have heard from different suppliers that they've gotten along the best if they feed them and treat them, feed wise, the same as a straight Holstein, that pushing them on a high-energy ration from 275 or 300#, that they get better conversions rather than more like a native trying to roll them on silage are running them on grass or like that, that they just tend to get too much frame and grow out the calf-fed side of it. Thanks for answering that question guys. Anymore questions here before we decide, wrap things up. Few quick announcements. Next week, same time. We plan on having the second session for this program where we will focus on genetic selection or sire selection for producing crossbreds. So as we kinda talked today or as Larry and JT attributed to today, there's inconsistency with some of crossbreds that are being produced today. Some shortcomings because of that, you don't have consistent performance from those animals as far as fab yields and stuff like that, they may be less than Holsteins, similar to Holsteins or maybe a little bit better. So sign in next week if you're interested in learning a little bit more about genetic selection and how we may be able to improve the performance of these crossbreds when they go to packer level. Another thing I'd like to add here real quick before we sign off, I notice your speaker next week is from the Simmental Association. I will tell you that we did quite a few Angus- Simmental Holstein crosses. And they, our data was better on them than it was on the Angus. And I'm not sure on the Penn State ones. I believe some of those cattle were Simmental Angus Holsteins crosses too. Okay. I don't see any more questions coming in the chat, so I think we can wrap this presentation up. I'd like to thank our speakers for today. Very much for having a conversation with us about what to expect when it comes to crossbreds at the packing level.

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