2017-02-16

1

Adding Value from Pasture to Plate“ a career in search of value”

Kevin Unger

Resource Manager

Lincoln County Feedyard

Leachman Cattle Of Colorado

Which dog do you want to be?

2017-02-16

2

Decatur County Feed Yard

2017-02-16

3

“A Tradition of Innovation” Calf Weaning Since 1980 Introduction of Ultrasound for Sorting 1987 Video Imaging 1992 NCA Strategic Alliance Pilot Project 1992-93

Cooperation between segments Significant Value difference between cattle Significant amount of variability to manage

Many Learning Opportunities

Decatur County Feed Yard

Decatur County Feed Yard

“A Tradition of Innovation”• Implemented the MicroBeef Electronic Cattle Management System (ECM)

– 1994• Established the Decatur Beef Alliance 1994• Original Investor in Future Beef Operations 1997– Expanded Relationship with Cargill Meat Solutions

o Most “Value added” minded packing companyo Invested resources to track carcass informationo Negotiated Grid and Source and Age program

“You cannot manage what you do not measure”

2017-02-16

4

Define Value?

val·ue noun \ˈval-(ˌ)yü\

: the amount of money that

something is worth : the price or

cost of something

: something that can be bought for a

low or fair price

: usefulness or importance

Merriam-Webster Definition:

Decatur County Feed Yard

550-lb Calf Price ($/cwt)

J F M A M J J A S O N D J F M A M J J A S O N D

Choice Fed Steer Price ($/cwt)

Seasonal Calf/Fed Prices

2017-02-16

5

How Does ECM Work?

Identify the individual animal’s growth curve & mature body weight

Sorting is done objectively based on growth curve analysis & projection

Growth

Units

Time Units

Late

Maturing

Early

Maturing

BirthX

X

The Decatur Beef Alliance• Established in 1994

• No More Average Management• No More Average Marketing

• No More Secrets

2017-02-16

6

ACCU-TRAC ®

Electronic Cattle Management Facility

Measurement Stationswith Automatic Cattle Movement Automatic

Sort Gates & PensVideoImaging

Ultra-soundStation

Pro-cessingChute

Automaticindividualanimalsequencingstation

Ultrasoundmeasurementsof internaltissuecharacteristics

Individualanimal processingand sortselection

Automaticmeasuringof externaldimensions

Automaticintegratedelectronicscales

Sequenc-ingStation 2 4 6

1 3 5

71 2 3 4 5 Alley to Sort Pens

WeighStation

Increased Profitability When Marketing Individuals

ARRIVAL - DAY 1 DAY 140DAY 80 DAY 200

120 Day Shipping Window

Sold at Target Finish - Not Over-finished

$

Fed Long Enough to Achieve Quality Grade

$

Sold When ICOG Meets Sales Price

$

Fed Longer When ICOG is Lower Than Sales Price

$

Sold at Target Weight -Not Over-weight

$

Fed Long Enough to Reach Minimum Weight

$

2017-02-16

7

Decatur County Feed Yard

Grid (example)

Yield Grade 1 Yield Grade 2 Yield Grade 3 Yield Grade 4 Yield Grade 5

Prime $16.20 $13.70 $12.20 ($4.80) ($9.20)

CAB $11.20 $8.70 $7.20 ($7.80) ($12.80)

Choice $7.20 $4.70 $3.20 ($11.80) ($16.20)

Select $0.80 ($3.30) ($4.80) ($19.80) ($24.20)

Stand ($11.00) ($13.50) ($15.00) ($30.00) ($35.00)

550 Carcass Weight Range 1000

2017-02-16

8

Cattle on feed

At DCFY

AVERAGE

Return to Ranch

Where Do you

Fit?

Decatur County Feed Yard

Net Return to the Ranch

-$83 +$83

2017-02-16

9

Cattle on feed

At DCFY

AVERAGE

Return to Ranch

Are You

Here in the

Top 1/3?

Decatur County Feed Yard

Net Return to the Ranch

-$83 +$83

Cattle on feed

At DCFY

AVERAGE

Return to Ranch

Or

here in

the bottom

2/3?

Decatur County Feed Yard

Net Return to the Ranch

-$83 +$83

2017-02-16

10

Decatur County Feed Yard• Retain Ownership

• Capture Data

• Base Line Your Herd

• Get paid for Genetic and

Management Inputs

• Improve Net Return to your Ranch

• Producers who make Data Based

Decisions see Profit at the end

“You cannot manage what you do not measure”

• Analysis of over 185,000 calves fed through Decatur

County Feed Yard

– All of the cattle were in groups of over 50 head and of known

origin

• The study was done by mathematically adjusting each lot

to a 625 lb. steer on arrival

• Ration price was standardized using $6.00/Bushel Corn

• Fed market price was standardized using $120/CWT

Value Discoveryand Feed Yard Profit Drivers

2017-02-16

11

How big are the value differences on a 650 lb. steer?

Value can range from $550 to $1,175!!

WHAT ARE YOUR CALVES WORTH?

Efficiency 43%

Grid Value 39%

Carcass weight 18%

Animal health 17%

Dry Matter Conversion(Feed Efficiency)

Carcass Traits (Quality andYield Grade

Carcass Weight

Animal Health30%

QG &YG

18%HCW

17%AH

35%DMC

Decatur’s Value Discovery and Feed Yard Profit Drivers

2017-02-16

12

Decatur County Feed YardProfit Drivers

•Feed Conversiono 1 pound difference in dry matter feed

conversion on a 585 lb calf with $6.00/bu corn is $103 into or out of your pocket

•Carcass Weighto Maximum Hot Carcass Weight Target is

999 lbs. •Carcass Traits

o Yield Grades, 1, 2 and 3. Measurement of Ribeye is best indication of muscle.

o Quality Grade:o Prime, CAB, Sterling Silver, AP, Choice

Puts it all together. One number that predicts your

bottom line and carries over to the feed yard and Ranch.

“Just one thing”

$Profit

Lincoln/Leachman Customers have discovered that:

2017-02-16

13

Thank You!

• Baseline• Market Timing• Sorting• Data• $Profit• Best Management

What Drives Value