If it is possible to have a favourite ratio, 10:2:1 is mine. The reason for the favouritism is this ratio comes from one of my favourite pieces of extension material, done by Melton et al. way back in 1995. The 10:2:1 ratio reflects the relative importance of reproduction:production:product, particularly for those marketing calves directly from the cow herd.
We often forget about this ratio in our everyday operations, but it is an especially important one to remember during bull-buying season.
The math seems pretty simple. Reproduction is five times more important than growth and 10 times more important than carcass in terms of profitability, if we are marketing our calves out of the cow herd. In reality it is a lot more nuanced than that and may even be shifting for your cow herd.
How it works
I thought working through some basic examples would help to illuminate how this relative emphasis works. Let’s use a 100-head cow herd. The herd breeds 100 cows, and has a 15 per cent culling rate. If you think that’s high, I would suggest it is actually rather low for most of us. To put that in perspective if you keep all your own replacements you would have to keep only 30 per cent of your heifer calf crop to maintain herd size. With a 15 per cent culling rate from our 100 cows we are instantly at 85 calves. If we assume another five per cent loss to weaning, we would produce 80 calves for every 100 cows that are bred to a bull the year before. Let’s use a 500-pound average weaning weight in our example.
Based on these numbers a one per cent improvement in weaning weight will result in five pounds more per calf, or 400 pounds of calf (80 weaned calves x five pounds per calf). This also has the effect of slightly lowering the price per pound for the group if we consider a normal price slide, where heavier calves are worth slightly less per pound.
If we make a one per cent improvement in fertility across our 100-cow herd, this means that we produce one more calf. The result is 500 pounds. This is not quite as simple as adding 500 pounds though. Remember that 15 per cent culling rate. That means we need to keep 15 to 20 replacement heifers to keep our cow numbers up, assuming we cull open cows and have that same 15 per cent open rate on our replacement heifers. Improving fertility by one per cent equates to one less open cow, which means we only need to replace 14 cows, and thus we have freed up another entire calf for sale. Additionally, when you do the math, it means we wind up with more bred heifers that we can either market or retain into the cow herd.
Another important aspect of this ratio is the consideration that more performance may come at a cost concerning cow size and the resulting cow maintenance cost. Finally, since calves are sold as pounds of calf, the driver of growth, trumps that of carcass characteristics.
Use the ratio
Once you start figuring out the angles, the 10:2:1 ratio makes quite a bit of sense. It also is something that deserves marked consideration as the industry evolves. Because genetic change takes a long time in the beef industry, thinking about where we are today is not good enough.
Market signals are increasingly moving backward down the chain. Recently this has been highlighted by the announcement of the agreement between BIXS and Cargill to exchange data. As well marketing avenues have changed to include more forward selling and contracting of calves, and direct selling and sourcing.
It is entirely likely that there will be a monumental shift in a lot of operations towards the more integrated methods of production, where the farm is more closely tied to the consumer. This means an increased focus on performance and on carcass and end-product qualities.
If we retain ownership and market on a grid system the reproduction:production:product ratio actually is closer to 2:1:1. This means fertility is still the prime profit driver, but it is now only twice as important as either growth and carcass, and carcass and growth characteristics are tied in terms of driving profit.
The extreme other end of the scale is where the owner of the cow herd, also owns the retail outlet and markets specific cuts on the shelf. In this case, profit is driven squarely by end-product merit and growth and reproduction take a back seat in importance. Because each calf is worth more, and the value is driven by end-product quality on the shelf getting more calves is less important than getting the right quality of calf for the market.
If you have the scale where you can use different types of sires in the cow herd, or you are purchasing replacements you can have the best of all worlds in many ways by maintaining fertility and focusing on carcass and growth traits with your terminal sire. It is very important to maintain the focus on the right balance of traits for each type of sire used in these systems.
No matter what your system, there are definite signs that the shift towards integration is in full force, and breeding beef cattle takes a long time. Now might be an opportune time to have a look at your cowherd and your future direction and start planning your ratios moving forward.