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Impacts of Crossbreedingon Profitability in Vertically Coordinated Beef Industry Marketing SystemsFinal Report
David A. Daley and Sean P. EarleyCalifornia State University, ChicoCollege of Agriculture
Cooperators:American Hereford Association Craig Huffhines Kansas City, Mo.
Lacey Livestock John and Mark LaceyPaso Robles and Independence, Calif.
Harris Feeding Co.David Wood Coalinga, Calif.
Harris Ranch Beef Co. David Wood Selma, Calif.
Project outline•400Angus-basedcowswererandomlymatedto10Herefordand10Angusbullsundertypical
Westernrangeextensiveconditionsinyearoneofathree-yearproject.Inyearstwoandthreetheprojectwasexpandedtoinclude600cowsand15bullsofeachbreed.Asmuchaspossible,bullsthatwereaboveaverageforthemajorexpectedprogenydifferences(EPDs)ofeachbreedwerepurchased,basedoncriteriaprovidedbyLaceyLivestock(ranchowners).
•Theprojectwasconductedasa“fieldtrial”underreal-worldconditions,notasatraditionalcontrolledresearchproject.
•DNAsampleswerecollectedonallcalvesandonlythosecattlethatcouldbetracedtoasinglesirewereusedintheanalysis.
•Thehypothesisofthestudywasthatwewouldanticipateaslighteconomicadvantagetoperformanceinthefeedlotphase,whilereducingqualitygradetosomedegree.Theexpectationwasthatthetruevalueofcrossbreedingwouldbeparticularlymanifestedwithmaternalheterosis(thecrossbredcow).
Executive Summary
General conclusions•297Angus-siredsteersand284Hereford-siredsteerswereincludedinthefinalanalysis.
•PreweaningperformancehadaslightbutconsistentadvantageforHereford-siredcalves(approximately10lb.and$12perhead).
•BackgroundingperformancehadaslightbutconsistentadvantageforHereford-siredcalves(approximately10lb.and$12perhead).
•Averagedailygain(ADG)inthefeedlotfavoredtheHereford-siredcalvesintwoofthethreeyears,andtherewasaveryslightoveralladvantagetotheHereford-siredcalves.
•Feedconversion(asfedanddrymatter)hadaconsistentandmarkedadvantageforHereford-siredcalvesincomparisontothepredominantlystraightbredAngus.
•CostofgainhadaconsistentandmarkedadvantageforHereford-siredcalvesincomparisontothepredominantlystraightbredAngus.
•MorbiditywasclosetoequivalentforbothbreedgroupswithlowermorbidityfortheHereford-siredcalvesintwoofthethreeyears.
•QualitygradeconsistentlyfavoredtheAngusgroupforallthreeyears.
•Therewereessentiallynodifferencesincarcassweightoryieldofbothsiregroups.
•Therewereessentiallynodifferencesinpercentageyieldgrades4or5betweenthesiregroups.Hereford-siredcalveshadmoreyieldgrade4/5inyearoneandAngus-siredcalveshadmoreyieldgrade4/5inyearstwoandthree.
•EconomicperformancefavoredHereford-siredcalvesinthefeedlotintwoofthethreeyears,withanaveragereturnofapproximately$30perhead.
•CarcassperformancefavoredtheAngus-siredcalvesinallthreeyears,withanaveragereturnof$15.60perhead.
•OverallnetreturnfortheHereford-siredcalveswasapproximately$30perheadinaverticallycoordinatedbeefmarketingsystem,thisdoesnotincludethematernaladvantagesofthebaldiefemale.
•PregnancyratesforHereford-siredfemales(blackbaldies)averaged7%higherthanthoseoftheAngus-siredheifers.
Verticallycoordinatedbeefmarketingsystems(alliancesandpartnerships)havebecomebreedspecific,generallyAngus,inanefforttoimprovequalitygradeandtendernessandfocusontheconsumer.However,bysodoing,thevalueofcrossbreeding(heterosis)hasbeendiminished,particularlyatthecow-calflevel.TheprimaryobjectiveofthisprojectwastomeasuretheeffectofcontrolledcrossbreedinginrangeenvironmentsonpredominantlyAngus-basedfemales.Bydeterminingthevalueofheterosistobeefcattlealliances,cattlebreedingsystemsintheU.S.havethepotentialtobesignificantlymodifiedtoutilizesystematic,controlledcrossbreedingprograms.Inyearone,10Herefordbulls,selectedforspecificgeneticparameters(EPDs)werematchedwith10Angusbullsofcomparablegenetics.Bullswererandomlymatedto400matureAngus-basedcows.Inyeartwoandthree,15bullsofeachbreedwererandomlymatedto600cows.Allcattle(cowsandcalves)wereidentifiedwithelectroniceartags,andDNAsamplesweretakenonallsiresandcalvestodetermineparentage.
Allcattlehadequalaccesstocomparablefeedresourcesandmanagementinextensive,relativelyharshenvironments.Differencesinweaningperformance,feedlotperformance,carcassvalueandoverallprofitabilityweremeasured.TheonlycattleincludedintheanalysiswerethoseindividualsthatwerematchedtoonesirebyparentageverificationutilizingDNA.
Subsequenttomeasurementofindividualheterosis,theF1femalewasevaluatedfortheinitialcontributionofmaternalheterosisbymeasuringpregnancyratesontheF1females(Hereford×Angus)incontrasttotheprimarilystraightbred(Angus)group.
Dataindicatesaneconomicadvantageinthefeedlotphaseforthecrossbred(Hereford-sired)calves.Primarydifferencesweregainandfeedefficiency,resultinginalowercostofgain—approximately$5percwt.TheAngus-siredgrouphadanadvantageinqualitygrade,partiallyoffsettingthevalueinthefeedlot.However,thenetadvantagefavoredtheHereford-siredcattlebynearly$30perheadfortheentireproductioncycle.
Abstract
Historically,cattleimprovementinthe1950sand1960swasbasedontheintroductionofpurebred(registered)cattletoupgradeandimprovenativestock.Remarkablestridesweremadeinimprovingtheuniformityandqualityoftheproduct.Bythemid-1960smostherdswereemphasizingtheuseofpurebredHereford,AngusandShorthorncattle.
Inthe1960s,atremendousbodyofresearchwasdevelopedevaluatingtheuseofsystematiccrossbreedingtoimprovetheprofitabilityofbeefproduction.Thetheorywastocapitalizeonheterosis(hybridvigor)toimprovelowlyheritabletraitsandtobreedcomplementarity(advantagesanddisadvantagesofeachbreed).Systematiccrossbreedinghasthepotentialtosignificantlyenhancetraitsthataredifficulttomeasure(calflivability,mortality,conceptionrate,longevity,etc.)(Gregory,etal.1991).Datasuggesttremendousimprovementincalvesweanedpercowexposedwhencrossbreedingisproperlyimplemented.(Ritchie.1994,1996).
Basedonthisresearch,commercialproducersbegantoutilizecrossbreedingextensivelytoimproveoverallprofitability.TheincreasedlongevityandlifetimeproductivityoftheF1cowbecameobviousandthe“blackbaldie”becamefamousasthe“idealcow.”However,crossbreedingwasnotalwayssystematicandplannedbutwasfrequentlytheresultofsimplyintroducinganewbreedasanexperiment.Theresultwasoftenaninconsistentcowherd,consistingofmultiplebreedswithdiversebiologicaltypes.
Beginninginthe1990s,therewasastrongfocusonconsumerdemand,whichcausedproducerstoemphasizecarcassmerit,particularlyanimprovementinqualitygrade(marbling).Concomitantly,therewasagrowingtrendtowardverticallycoordinatedmarketingsystems(alliances)betweenproducers,feedlotsandpackingplants.Theintentwastoproduceamoreuniform,acceptableproductfortheconsumer.Thesetwotrendsresultedinadramaticshifttowardonebreed(Angus)andareductionincrossbreedingthroughouttheU.S.Thistrendhasbeenoccurringforwellover15yearsanddoesnotappeartobemoderating.Carcasstraitshaveimproved,buttheresultisthedevelopmentofapredominantlyAnguscowherdundercommercialrangeconditionsthathaslimitedhybridvigor.
Underthenewmarketdirection,withverticallycoordinatedsystemsbecomingtypical,itiscriticaltoevaluatedifferencesinprofitabilitywhencontrolledcrossbreedingisimplementedinanAngus-basedoperation.Potentially,therearesignificantopportunitiesforthecattleindustrytocapturevaluefromcrossbreeding,whilenotsacrificingtheconsumerfocusofthebeefindustry.
TheprimaryobjectiveofthisstudywastoconductacontrolledcrossbreedingsystemcomparingAngusandHerefordbullsundercommercialconditionsemphasizingeconomicdifferencesattheranch,feedlotandpackingplant.Majortraitsthathavethepotentialtoimpacttheoverallprofitabilitytoaverticallycoordinatedalliancearebeingrecorded.Resultsshouldbeapplicabletoanylarge-scalecow-calfoperationandofparticularinteresttothoseparticipatinginverticallycoordinatedpartnershipsand/oralliances.
Inordertofairlyassesstheimpactofcrossbreeding,dataontheproductivityoftheF1femalewillbeimportantandwillrequirelong-termcommitmenttomeasuringlifetimeproductivity.
Introduction
FourhundredmatureAngus-basedcowsweresortedandidentifiedwithelectroniceartagsintheLaceyLivestockprogram,basedinIndependence,Calif.InyearonepredominantlyAnguscowswererandomlymatedto10Herefordor10Angusbullsselectedbasedonrigorousgeneticparameters(EPDs)foroverallmerit.Inyearstwoandthree,theprojectwasexpandedtoinclude15bullsofeachbreedand600Angus-basedcows.Theprojectwasconductedforathree-yearperiod,thetypicallifespanofabullunderWesternrangeconditions.
LaceyLivestockhasutilizedAngusbullsexclusivelyforthepast10yearsonanAngus-,Hereford-andGelbvieh-basedcowherd.RetainedreplacementheifersarepredominantlyAngus,yetstillincludeotherbreeds.Heterosiswouldnotbemaximizedwithinthissystem.However,thebreedcompositionofthecowherdissimilartomanycommercialprogramsintheWestandtheresultsshouldhaveapplicationtomostoperationsthathavebeenusingAngussiresforseveralyears.
Duringselectedphasesoftheproductioncycle(pre-conditioning,weaning,feedlot,carcass),completerecordsweremaintainedonallcalvesborntotheproject.However,thesedatawerecollectedunderextensiverangeconditions(real-world),socattlewerenotmanagedlikethoseinatraditionalresearchproject,butweremanagedsimilartothoseinfieldtrialdata.Forexample,birthdates,weights,etc.werenotrecorded.Allcalveswereweighedontheranchat
pre-conditioning.DNAsampleswereobtainedforparentageverification,andeachcalfwasidentifiedwithanelectronicidentificationdevice(EID)placedintheear.
Atfeedlotarrival,cattleweresortedintosirebreedgroups.Hereford-siredsteersandAngus-siredsteerswerefedinseparate,adjacentpenslocatedatHarrisFeedingCo.undertraditionalcommercialfeedlotconditions.Onlysteersthatcouldbeindividuallyidentifiedtoonesire(notmultiplesiresorunknowns)wereincludedintheanalysis.Individualmorbidityandmortalitywererecorded,alongwithgroupfeedefficiencyandgaindata.Ultrasoundofribfatandaninterimweightwereusedtoassistinthedeterminationoflogicalharvestendpointforyearone.Interimweightswereusedinyeartwoandthree,sinceresearchersfoundlittleadditionalvalueintheultrasound.
Atthepointofharvest,allcarcasstraitsweredeterminedbyaUSDA(U.S.DepartmentofAgriculture)grader(carcassweight,backfat,ribeyeareas,KPH,marblingscore).Dressingpercentwascalculatedusingapooledcarcassweightdividedbygross-truckweight.
Datawereanalyzedusingstandardstatisticalproceduresforcomparingwithinandacrossbreedvariations.Alleconomicvalues(inputandoutput)weremonitored,andeconomicmodelsassessingthevalueofheterosiswereevaluated.
Forthepurposesofthisreport,economicdifferenceswereassessedbyactualcostsandreturntothefeedlotandpackingplant.
Methods
Thevalueofdirectandmaternalheterosishasbeenirrefutablyestablishedinpreviousresearch,mostnotablytheelegantworkattheU.S.MeatAnimalResearchCenter(USMARC)byKoch,CundiffandGregory.However,therealeconomicvaluereturnedtotheproducerunderextensiveWesternconditionsandcurrentmarketstructurehasnotbeendetermined.Directheterosisisdefinedastheincreaseinperformanceofthecrossbredcalfrelativetotheaverageofthestraightbredparentalbreeds.Maternalheterosisistheincreaseinperformanceofthecrossbredcowrelativetotheaverageofstraightbredfemalesoftheparentalbreeds.Asummaryofliteraturehasestablishedthefollowingvaluesforheterosis:
Direct heterosis – examples Survivaltoweaning–1.9% Weaningweight–3.9% Postweaninggain–2.6% Yearlingweight–3.8% Feedconversion–2.2%
Maternal heterosis – examples Calvingrate–3.7% Weaningweight3.8% Longevity–38% Numberofcalves–17.0% Cumulativeweaningweight–25.3%
Decadesofresearchhaveestablishedthattheprimaryadvantagetocrossbreedingisinthelowlyheritabletraitsinareasthataregenerallyclassifiedasreproductionorfitnesstraits.Therearesmall,net-positiveeffectsinmanyareas(pregnancyrate,calflivability,health,generalperformance,etc.)thatresultinaverysignificantreturnbutareverydifficulttomeasure.
Thevaluefromcrossbreedingisprimarilyevidencedbyincreasednumberofcalves(lifetime),cowlongevityandcumulativeweaningweight(lifetime).Similarly,onewouldnotanticipatedramaticdifferencesinfeedlotandcarcassperformanceincrossbredcattlebecausethesetraitstendtobehighlyheritable.However,theincreasewouldbeanticipatedtobepositiveforseveralmeasuresoffeedlotperformance.
Themostsignificantadvantagetocrossbreedingwillbeintheutilizationofthecrossbredfemale.Developingandmaintainingacrossbreedingsystemwhichcapturesmaternalheterosisiscriticaltolong-termprofitabilityinthecommercialcow-calfbusiness.
Results and Discussion
Thebasecowherdfromwhichthesubsetof600cowswasselectedhadbeenutilizingAngusbullsforapproximately10yearspriortotheinitiationofthisproject.However,thecowswerenotstraightbredAngus.Therewerestillpreviousbreedinfluencespresentinmanyofthecows(primarilyGelbviehand/orHereford),butthereisnoquestionthattheherdwaspredominantlyAngus.Therefore,mostpeoplewouldanticipateslightlylowervaluesforheterosisthantheliteraturevaluessincethefemaleswerenot100%Angus.However,theauthorswouldarguethatthisfieldtrialmoreaccuratelyreflectshowcrossbreedingisappliedunderreal-worldcommercialconditions.
Thisprojectwasnotdesignedtodeterminelifetimeproductivity(assessingmaternalheterosis).Sinceitwasconductedasafieldtrialunderextensiverangeconditionsforthreeyears,therewasanopportunitytoassesseconomicreturnforbothfeedlotandcarcasstraits(directheterosis).TheauthorshypothesizedaslightadvantageinfeedlotperformancefortheHereford-siredcalves.Pregnancydataforyearlingheiferswereobtainedfortwoyears;thatinformationprovidespreliminaryinsightintolifetimereproductiveperformance(maternalheterosis).
Approximately30dayspriortoweaning,calveswereindividuallyweighedandpre-conditioned.Hereford-siredcalves(n=290)averaged15lb.morethanAngus-siredcalves(n=304),weighing513and498lb.respectively(Table1).Thesedatareflectapproximately3.0%directheterosisforweaningweight,whichmirrorstheexpectationintheliterature(3.9%),especiallyconsideringthedamswerenotstraightbred.Basedonthestandardpriceforthedurationofthestudyof$1.20perlb.,theeconomicadvantagetotheHereford-siredcalveswas$18.
Cattlewereweanedanddeliveredtoagrowerlotforashortbackgroundingphasepriortoarrivalatthefeedlot.Theprojectcalveswerepartofamuchlargercontemporarygroupfromalargescaleoperation.Allverylightcalvesthatwerenotreadytobesenttothefeedlotwereremovedfromthegroupandreturnedtoaforagedietpriortodeliverytothefeedlot.
Steerswerefedanaverageof155daysonastandardfeedlotfinishingration.Therewerenodifferencesinaveragedailygaincalculated,leaving“deads-in”inastandardfeedlotfinancialperformancesummary(3.45Angus-sired,3.48
Results and Discussion continued
Table 1. Ranch performance summary (preweaning weight)
Angus-sired Hereford-sired Traits (n = 304) (n = 290)
Weight 498 513
In Value ($1.20) $597.60 $615.60
Value Difference $18.00
Hereford-sired).FeedconversionfavoredtheHereford-siredcalvessignificantly(7.44Angus,7.05Hereford),anapproximate5%effectduetodirectheterosis,somewhathigherthananticipatedbasedonpreviousestimates.Therewereslightbutnon-significantdifferencesinmorbidity(10.77%Angus-sired,9.51%Hereford-sired)andhospitalcosts($14.52Angus-sired,$12.68Hereford-sired).
Ultimately,themajordifferenceinthefeedlotsummarywasthedifferenceincostofgain.Whenalltraitswerecombined,theHereford-siredcalveshadalowercostofgainof$4.37percwt.andalowerbreakevenof$2.22percwt.TheprimarycontributortotheadvantagetotheHereford-sired,crossbredcalveswasfeedconversion.Feedlotperformancedatawererelativelyconsistentforallthreeyears(Table2).
Atharvesttherewereminordifferencesincarcassweight,dressingpercentandyieldgrade(includingallfactorsrelatedtoyieldgrade).However,therewasasignificantadvantageinmarblingscore(qualitygrade).(Table3).
TheAngus-siredsteershada19.5%advantageinpercentgradingChoiceorhigher(66.4%versus46.9%,respectively),resultingina$15.60percarcassadvantagetotheAngus-siredgroupduetocarcassquality.ThepricespreaddifferentialvariedbetweenChoiceandSelectatthetimeofharvestofeachgroup.Forpurposesoftheeconomicanalysis,weusedtheaveragedifferenceof$10percwt.
Table 3. Carcass performance summary
Traits Angus-sired Hereford-sired
Carcass Summary
Live weight 1,236 1,232
Hot weight 782 782
Yield percent 63% 63%
Quality Grade Summary
Prime .82% 0
Choice 65.66% 46.9%
Choice or better 66.4% 46.9%
Select 33% 53%
Yield Grade Summary
Total Yield Grade 1 & 2 43% 49%
Yield Grade 3 51% 45%
Total Yield Grade 4 & 5 6% 6%
Value Difference $15.60
Results and Discussion continued Table 2. Feedlot and financial performance summary
Traits Angus-sired Hereford-sired
Head 297 284
Dead 4 4
Finished 288 275
Weight in 673 674
Weight out 1,232 1,232
Feedyard performance summary Day on feed 155 155
ADG 3.45 3.48
Conversion-as fed 7.41 7.05
Conversion-dry matter 5.52 5.25
Cost of gain $79.77 $75.98
Death loss percent 1.35% 1.41%
MorbidityPercent morbidity 10.77% 9.51%
Hospital cost/head treated $14.52 $12.68
Hospital cost/head placed $1.91 $1.30
Cost SummaryDelivered cost/cwt. $119.68 $119.68
Total cost of gain/cwt. $87.05 $82.68
Breakeven/cwt. $105.18 $102.96
Value Difference $27.50
Insummary,thetwodifferentsirebreedgroupswereremarkablysimilarinmosttraits.Differencesatweaning(preweaningweights)showedaconsistentadvantagetotheHereford-siredcalves.Therewererelativelyslightdifferencesinfeedlotperformance,butthedatatendedtofavortheHereford-siredcattle.Again,thisfitswithourexpectationofcrossbreeding—smalldifferencesinmanytraitswithalargenetpositive.
ThemostnotableanddramaticdifferencewasthelowerfeedconversionfortheHereford-siredcalvesoverallthreeyears.Thisfact,coupledwiththeotherfeedlottraits,resultedinasignificantlylowertotalcostofgainandbreakevensfortheHereford-siredcattle.Intermsofcarcassperformance,dataweresimilarformosttraits,withtheexceptionofmarblingscore/qualitygrade,whichsignificantlyfavoredtheAnguscattle.
Becauseofthelengthoftheproject,researcherswereonlyabletocollectlimiteddataonreproductiveperformance,anareawhereyoucananticipatethemostdramaticresponsetocrossbreeding.Remember,forthemajorityofcow-calfproducerstheeffectofmaternalheterosisiscriticaltooverallprofitability.PregnancyratesonyearlingheifersthathadbeenidentifiedbacktoHerefordorAngussireswerecollectedinyeartwoandthreeofthestudy.Inbothinstances,therewasa7%advantageinpregnancytotheHereford-siredcattle(93%vs.86%)inarelativelyshortbreedingseasonwhereheiferswerebredwithartificialinsemination.
Results and Discussion continued
Thesedataaresimilartothoseofanotherlargecrossbreedingstudy—CircleARanchHeterosisProjectconductedinMissouri—whereresultswereidentical.Thelong-termimplicationsofhigherpregnancyinyearlingheifersaredramatic.Thisinformationallowsfordeepercullingofeithermaturecowsorreplacementheifersand/ortheopportunitytogrowthecowherdbecauseofahighercalvingrate.Inaddition,thereisthedocumentedeffectofincreasedcalflivability,increasedrebreedingratesand,mostnotably,adramaticincreaseinlongevity.
WhentheCircleAdatawereanalyzedbyVernPierce,UniversityofMissouri,foreconomicemphasis,theresultsshowedanadvantageof$514netpercowovera10-yearperiodor$51differencepercowperyear.Analysisshowsthatovera10yearperiodaproducerwhoutilizesHerefordbullsonAngus-basedcowscomparedtoaproducerwhousesAngusbullsontheAngus-basedcowswillhaveimprovedcashflow,increasedherdsizeandmorecalvestosell.(Pierce.2009)
Thedatafromboth,extensivefieldtrialsmirrorpreviousresearch.TheHarrisprojectincludesareal-worldeconomicanalysisthatfavorscrossbreedingforthecommercialcowcalfproducerinourcurrentmarketstructure(Table4).Theeconomicdatasuggestcrossbreedinghasthepotentialtosignificantlyboostreturninaverticallycoordinatedmarketingsystem.
ReferencesGregory, K.E, L.V. Cundiff and R.M. Koch. 1991. Breed Effects and Heterosis in Advance Generations of Composite Populations for Preweaning Traits of Beef Cattle. J. Anim. Sci. 69:947-960
Pierce, Vern. 2009. Comparison of the Economic Value of Hereford Sired Herds vs. Angus Sired Herds on Long Run Economics. A Simulation based on performance data.
Ritchie, H.D. 1994. A Review of Beef Cattle Composites. Department of Animal Science Michigan State University, East Lansing, MI 48824.
Ritchie, H.D. 1996. An Economic Perspective of Beef Cow Efficiency. CSU, Chico Beef Day 5th Annual Meeting, Feb. 17, 1996, Chico, Calif.
USDA – National Agriculture Statistics Service 2002 Census of Agriculture Ranking of 2002 Market Value of Agricultural Products Sold.
Results and Discussion continued
Table 4. Economic summary
Traits Angus-sired Hereford-sired
Ranch $18.00
Feedlot $27.50
Carcass $15.60
Net Value Difference $29.90
Impacts of Crossbreeding on Profitability in Vertically
Coordinated Beef Industry Marketing Systems.
Final Report — September 2010.
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