Cattle culled from our beef and dairy herds fill an important role in meeting the nutritional needs of our population. Currently, the U.S. population consumes approximately 60 pounds of beef per person per year. Of this consumption upward of 50 percent is consumed as ground beef. One of the primary uses of cull cattle is the production of ground beef.
Based on cow-calf budgets, the estimate of the income contribution of cull cows to the gross returns are in a range of 15 percent. This estimate is based on a 1,200-pound cow with a market value of $65 per hundredweight. With proper care, feeding and good marketing, the opportunity presents itself to increase the market value through weight gain, to improve grading category and to provide more acceptable products to our consumers. Thus, livestock veterinarians and producers have a stewardship responsibility to properly feed and care for cull animals, enabling producers to capture the value of these animals and help to ensure they meet the high standards of our food production system.
The veterinary profession has been going through dramatic changes in the kinds of services provided to clients. Services offered include consulting on health, reproduction, nutrition, genetic selection and management services, and providing services for artificial insemination, embryo transfer, in vitro fertilization and ultrasound technology for carcass traits and pregnancy diagnosis.
Pregnancy diagnosis utilizing a skilled veterinarian with a technique known previously as “brown arming” has been offered as a paid-for service for 60-plus years and now has, in part, been enhanced by ultrasound technology, which enables earlier pregnancy detection and management of cull animals. A status symbol of veterinary skill and physical ability is commonly discussed in quantifiable terms, that is, how many cows can he or she preg check per hour or per day.
We have justified this service to clients based on the amount of money saved in feed costs by removing these less fertile cows from our herd inventory.
Veterinarians became adept at partial budgeting showing the financial savings of culling cows early and saving on annual feed costs. At an annual total cow cost of $606, 54 percent of this cost is in the form of feed cost, which would be $325. At an open culling rate of 5 percent, the savings per cow would be $16.25. The entire savings would only be realized if the entire yearly feed cost of keeping the cow is charged to the open cows.
However, the typical fiscal cow year of pregnancy check to pregnancy check runs from October to October, while the only savings is taking place during the winter feed phase. At a per-day charge of $1.66 per cow, assuming total annual cow cost of $606 divided by 365 days, and a winter feeding period of 150 days, it is reasonable to assume this part of feed cost is $249. With those assumptions, a 5 percent open culling rate is now a savings of $12.45 per cow. Not insignificant, but in a herd of 200 cows with most of the feed costs not a cash outlay, it is usually not enough to convince producers of the value of early pregnancy checking.
Change the value proposition
Perhaps the opportunity for veterinarians lies in turning the equation around. Instead of promoting feed cost savings, the discussion with clients could focus on spending more money on feed and increasing the sale value of cull cows.
Beef cull cows are one of the only livestock categories for which the market value per pound of live animal increases as animal weight and body-condition scores increase. Looking at market data on cull cows, the USDA separates condition scores of dressed market cows into commercial (premium white) and utility, which includes breakers and boners, and cutters and canners. This designation is a function of the estimation of percent lean. The commercial category includes those 70 to 80 percent lean; the utility category includes breakers at 75 percent lean, boners at 85 percent lean, cutters at 90 percent lean and canners at greater than 90 percent lean.
There are great differences in prices between those percent-lean categories. There may be as much as $20 to $30 per hundredweight difference in live-weight value. What is often not included in the value proposition for producers is the value of the gain. A cull cow in the category of lean and low-dressing percentage weighing 1,200 pounds using current market prices has a value of $70 per hundredweight. This same cow after 90 days on feed, with an average daily gain of 3 pounds, will weigh 1,470 pounds, fit in the commercial category and be worth $95 per hundredweight.
We can calculate the value of the extra 270 pounds. The 1,470-pound cow at $95 per hundredweight is worth $1,396.50. Subtract the $840 value of the cow weighing 1,200 pounds at $70 per hundredweight for a difference of $556.50. Divide $556.50 by 270 pounds for a value of $2.06 for each pound added. At a ration cost of $200 per ton, which includes yardage, and a cow consuming 30 pounds dry matter, there will be an increase of $1.06-per-pound income over feed expenses.
In a herd with a 5 percent culling rate in the fall, at a time of lowest seasonal cow prices, the value of feeding cull cows becomes very apparent. Instead of saving non-cash costs of $15 per cow, we now are spending an additional $3 per head per day in feed costs for 90 days. This extra spending results in a gross cash revenue of $560 per cow for this scenario. After subtracting $270 in total feed costs, we have $290 cash income per cow sold at the heavier weight and better grade.
The key to this enterprise is to feed cows for 60 days or longer to allow cull cows in the leaner categories to achieve the premium white grade. To accomplish the change in grade the ration needs to be formulated to achieve average daily gains of at least 3 pounds.
By helping clients recognize and capitalize on this revenue opportunity, veterinarians can significantly increase the value proposition in offering early pregnancy-testing services, while potentially extending opportunity to provide health services for an additional class of cattle and across the operation.
Sidebar: Livestock Stweardship
“Being admitted to the profession of veterinary medicine, I solemnly swear to use my scientific knowledge and skills for the benefit of society through the protection of animal health and welfare, the prevention and relief of animal suffering, the conservation of animal resources, the promotion of public health, and the advancement of medical knowledge.
“I will practice my profession conscientiously, with dignity, and in keeping with the principles of veterinary medical ethics.
“I accept as a lifelong obligation the continual improvement of my professional knowledge and competence.”
All graduate veterinarians are required to repeat this oath upon graduation from a veterinary medical school. For those that include livestock in veterinary practice this has even greater significance. This means that we have a stewardship responsibility for the health and welfare of our herds, and a stewardship responsibility to prevent and relieve any animal suffering. In addition, we have a stewardship responsibility to utilize resources wisely, both land and livestock, and to be aware of any food safety issues that may result from practices at the farm and ranch level. Using the term “stewardship” I believe brings a new level of awareness to us as veterinarians and to our consumers.
Demographic changes, mainly driven by economics and economies of size, have produced larger agricultural operations with fewer people directly involved in production. One of the consequences has been a loss of connection to food production by the vast majority of our population. This shift has resulted in a loss of trust in our food production system. Some now view animal production for food as cruel, or the products as unhealthy, with no concept of actual production or the truth about food.
The definition of stewardship from Webster’s dictionary is: the careful and responsible management of something entrusted to one’s care. One of the purposes of my position and of all of us as livestock stewards is to rebuild the trust that has been lost. I have written a mission statement much like the oath that veterinarians take upon graduation. It states: “I have a stewardship responsibility to manage available resources, land, livestock and my personal life while leaving behind a better place for the next generation.”
The objective for all of us in agriculture is to bring this message to the public. Let us be willing to communicate to those not involved in agriculture, be passionate, be well versed in the facts and defend this great culture and occupation.