Producing Optimal Carcasses

What does it take to produce an optimal carcass?This is a question that producers often ask.While there are a number of things we can do as livestock managers, I think the first step it to actually define what an optimal carcass means.

In my mind, an optimal carcass is one that meets the target specifications for weight; fatness, eating quality – MSA Index and has a high yield of saleable meat. I also think this is something that producers need to do consistently, and do so with the most efficient use of resources.  There are a few steps I think producers focused on optimal carcass production need to consider.

1. Clearly define the breeding objectives for your herd. I’ve often talked and written about the importance of defined breeding objectives. The reason being, these objectives define the type of genetics you need to use to meet your market and to breed cattle suited to your program.

2. Know what you are actually trying to achieve! Markets are well defined for weight, fatness, and eating quality. If you know what these specifications are, you can start to plan on the process of growing to meet these. Specifications are readily available from processors and from feedlots. So you need to get in touch or at least look at the specifications on company web sites and choose realistic options for your program.

3. Focus on what you can control. There are three key areas you control as a producer. These are:

• Maturity pattern: This determines the ability of your animals to meet specifications. It also impacts on productions traits such as fertility, so you need to consider both aspects in order to be productive and profitable.

• Growth rate: Your ability to choose the correct genetics, and to manage nutrition to express those genetics, has a massive impact on optimal production. Using EBVs and feedback from previous sales can help you fine tune growth rates. But you still need to manage pastures, crops and supplements to make that growth happen.

Finally, you need to manage the way you finish and sell animals:  The final stage of production, selling and transport can derail your program.  Stress, poor handling or other factors can impact on your eating quality index and cause you to miss the optimal.  So this final stage should be managed as carefully as your genetic decisions or feeding programs. 

Managing Growth

A large part of optimal carcass production is the management of growth of animals.  This actually starts with your choice of genetics.  The ability to select for growth using EBVs is an opportunity you shouldn’t overlook.  It’s well proven by many research and commercial trials that, EBVs do work and can be a very effective tool for producers.  

However, genetic potential can and is often limited by nutrition.  Growth is a function of the daily intake of energy and protein.  Ensuring your cattle have sufficient to maintain growth paths is the practical aspect of management.  

The CRC for Beef Cattle highlighted the impact growth paths have on carcass yield, fatness and eating quality.  The research showed quite markedly that slow pre weaning growth resulted in cattle that were smaller than normally grown cattle.  

However these slower grown cattle never catch up in weight, even in feedlot conditions.  The simple message being that to meet carcass weights, these cattle had to be grown longer, and this ran the risk of impacting carcass fat specifications or lowering MSA Index values.  Either way, slow pre weaning growth is not ideal

Slow post weaning growth was also researched.  It was found that slower than the optimal 0.7kg / day resulted in cattle that grow faster in finishing programs.  They tended to be a bit leaner and have less marbling.  So if this is an issue for your markets, this may also be a path to avoid.  

The CRC data really suggests we aim for 0.7kd / day for animals up to feedlot entry.  To do this, you should remember that your cattle will need to eat at least 3 – 3.5% of their live weight on a Dry Matter basis each day.  Ideally this feed would have a minimum of: 

• Energy 10.5MJ / Kg

• Crude Protein 14%

• Fibre 30 – 40% NDF

A simple rule to remember is that the faster your cattle grow, the fatter (and slightly more muscular) they will be.

Eating Quality

There are many factors that have an impact on MSA Index values.  As producers, its important to focus on the ones that have a high impact and are controllable on farm.  High impact variables include Marbling and Ossification. 

Your genetic selection and nutritional management will influence your animal’s ability to develop marbling.  It’s a trait worth considering if this can be selected for without compromising your other production traits.  Ossification, can be improved by growth rates and achieving higher weight for age. Again it’s important to balance this with other traits that matter to you, like carcass fatness and marbling.

The amount of Tropical Breed Content will impact on your MSA Index.  But you need to be realistic. If your environment is nest suited to Indicus cattle, then you should use that to your advantage. You can still select for growth, marbling and fatness and achieve MSA Index scores that are quite high if you manage these traits well.

How you sell your animals also has a huge impact on your ability to meet optimum carcass specifications, particularly for eating quality.  The work done by MSA highlights the impact that sale yard stress and handling has on eating quality.  Cattle sold through saleyards have MSA Indexes that are 5 units lower than those sold direct to processors.

Summary

Producing optimal carcasses does require some serious attention across genetics, nutrition, and turn off.  More importantly, if you don’t have a clear idea of what your optimal carcass requirements are, and utilize past feedback to fine-tune your program, you’ll find it a much harder challenge.  Having some clear objectives and using the tools that are now available is the key starting point for anyone determined to consistently hit their targets.  

It’s important to remember that if you are not entirely sure where to start, to seek advice or help to define your goals.  Its one of the services I’ve been delivering over recent years, and it's certainly something you may want to consider in your program.

Selection to Increase Saleable Meat Yield

As cattle producers, we are focused on the production of red meat that can be used to feed people.  I’m not sure that many people really know just how much red meat comes from their cattle. I think it is an important trait to consider and work on improving.  After all increasing red meat yield per animal is a more efficient way to use your feed resources and be more profitable in the long term.

When considering Red Meat Yield, its important not to be confused with Dressing Percentage.  Dressing percentage is commonly talked about by people and confused with yield.  In simplest terms, Dressing Percentage is simply the carcass weight of an animal as a percentage of its live-weight.

Dressing Percentage is a useful tool to measure and to understand, particularly for producers who are looking to market cattle direct to abattoirs. Knowing how your animal will dress and so fit a payment grid can make a big difference in receiving the grid price or suffering a discount for being over or under the weights.

It is important to remember that Dressing Percentage is influenced by factors associated with an animals live-weight.  In particular the length of time off feed and water.  A simple rule to remember is that as live-weight decreases, Dressing Percentage will increase.  Other factors that can have an impact include pregnancy status (cows and heifers) as well as grain or grass finishing programs.  

So Dressing Percentage is something that has to be considered and managed in order to achieve optimum returns when livestock are sold over a grid.  However focusing on the yield of red meat should be a major focus for producers.  

In basic terms yield is generally described as Saleable Meat Yield (SMY).  It is defined as the proportion of the carcase that can be processed and sold to the consumer. This includes all the bone-in or boneless cuts that we commonly see at retail level, plus manufacturing meat that has been trimmed to a desired fat coverage or level.

The level of Saleable Meat Yield (SMY) can vary dramatically among animals.  A real issue for processors or butchers is this variation will impact the efficiency of processing or retailing.  It basically costs the same to process a carcase into its primal and retail cuts. 

Lower yields either as a result of less muscle or over fatness, quickly become financial issues for that portion of the supply chain.  In the longer term it reflects back on the producer who may find their lower yielding cattle are purchased for lower prices or avoided all together.

As producers the challenge is to increase the amount of saleable red meat each animal produces.  There most effective methods are to focus on meeting specifications for fatness.  Over fat animals require more trimming, and this impacts on the amount of product for sale after processing.  

The second and major way is to focus on selection for muscle volume within the herd.  This can be done using both EBV’s that address meat yield, and to visually select animals for their muscle score.  

Over many years, NSW DPI has researched the impact muscle score has on saleable meat yield.  One of the key findings from this research showed that selection for muscle score was a skill that could be used in all beef herds.   

More importantly the research highlighted that for each increase in muscle score at the same live weight and fat depth, dressing percentage increased by 1.7%. 

Saleable meat yield as a percentage, increased by 1.5 to 1.7 % and lean meat yield (denuded of fatness) increased by over 2%. In lightweight steers, this equated to 10–15% increase in value.

The research looked at this over three steers that were all the same live-weight and fatness.  The additional increase in yield of saleable meat through increased muscling was a significant contributor to the value of those animals to both producers and retailers. 

In the last few weeks I’ve been working through these concepts with several producers to improve their herd’s suitability to several emerging markets.  We have also been looking at the breakdown of a beef carcase and the proportion of red meat from each primal cut.  Selection for muscle has a positive impact on increase the amount produced as well as improving the shape and appearance of these muscles when they are processed into retail cuts.

Judging steers in a show ring

Preparing and showing steers is perhaps the most common of all livestock showing in Australia. I know for many people steer competitions are the starting point in their livestock career. In my own case, showing steers with my school was an integral part of my exposure to the broader industry.

Steer competitions allow many young people the opportunity to learn a range of responsibilities and gain skills and knowledge that can be used in their future careers and in their broader lives.

Preparing a steer requires knowledge of selection, nutrition and a commitment to ensure the steer grows according to a specific end point. For young people there is the responsibility of not only feeding and caring for the animal, its also about the preparation and training.

So what brings success in a steer ring? As a judge I have some pretty clear expectations for steers. The things I consider are important not just for the show ring. I am looking for the traits that are economically and commercially relevant. Through judging I hope that people preparing steers, learn to use that experience in their approach to commercial operations, and so produce more economically valuable animals for themselves and for the clients they hope to attract.

The traits that matter

Whenever I consider a class of steers, my first thoughts are about the class specifications. Specifications for weight and fatness are essential! The processor for various reasons sets a weight. These range from;

• ensuring that the primal cuts that the carcass will be broken down into are the correct size for further fabrication into retail cuts

• efficiency of processing within a plant

• ease of processing. For example a local butcher has smaller lighter bodies both for retail purposes and for the simple reason that there isn’t enough room in a small chiller for a larger carcass!

If a steer is too heavy or too light for class specifications, I automatically discount it as a place winner. In the commercial world this discounting happens with a lower price offer from the purchaser.

There are some important lessons to consider beyond the obvious discounting for price (or points in a competition). If your steers are too heavy then they should have been entered into a different class. Or in commercial operations sold to a heavier market. 

If you don’t direct cattle into the appropriate market then not only do you receive a lower payment, you have also lost money and time growing extra weight that isn’t being financially recognised at sale. So effectively you are costing yourself more money.

My second consideration for class specifications is for the specifications for fatness. Again there are fat depths set for a reason. These include the minimum required for MSA grading (3mm on the rib) as well as to ensure an evenly covered carcass. Over fat cattle create more issues with excessive trim. 

Again the consideration is not just the discounting that occurs for over fatness, but the cost and time spent to lay down this fatness that is then wasted.

The lesson to consider is that if you are preparing steers, for competition or for the market, know your specifications! If you are failing to meet the specs, does this mean you need to consider:

• Feeding program – are you growing at the optimum daily rate for your target? If it is too slow will you fall below the minimum? Too fast and will you overshoot?

• Fatness – Consider not just your feeding but also your animals maturity patter. Is your maturity pattern correct for your target market / class specifications? Later maturity animals lay fat down later, so will you be able to meet the requirements with your maturity pattern. Similarly are you not being too ambitious with early maturity patterns?

Once I’ve considered the suitability of the steers to their class specifications, I assess each steer for its overall muscle volume. Muscle is directly related to saleable red meat, and so the more an animal has, the more saleable red meat is available and so the value of that animal increases.

I assess muscle volume using the industry accepted muscle scores. I find it useful to think about volume in the same way it is calculated for any shape. Essentially it means to consider length, depth and width.

So I look at the length of the animal. I consider its width, through the loins and rib eye, and the width of stance and through the hindquarters. Lastly I look to see how deep is the muscle volume extending from the hindquarters down to the stifle. I like to see broader, rounder, longer steers.

My final consideration is to look at the overall fatness of the steer. It’s one thing to meet specifications. However it’s another to be evenly covered across the carcass. I look and feel over the major primals and over the carcass to see if the fat appears to be evenly distributed. Sometimes you can feel the fat coverage is uneven or hasn’t quite extended across the major areas.

As a carcass judge I’ve seen many bodies that are unevenly finished. This adds to the processors level of trim and overall reduces the value of the carcass to the processor. So its something I do try and consider and provide feedback on.

Essentially I use these three key areas to judge steers. Ultimately the steers that meet specification, display the high degree of muscle and even distribution of fatness are the ones I will select to be my place winners.

I don’t spend any time worrying about what the herd is like that produced these steers. I don’t worry about the heifers in the herd or anything outside of the ring. As a judge I can only assess what I see in front of me. Just as a buyer will only consider what is in front of them at the sale and if they will suit the processors needs. Focusing on these things does provide breeders with the information they need to fine-tune their program at home.

And for young people making their way into the industry, the lesson of knowing the market specifications, choosing cattle that suit their market and selecting for yield are lessons that will take them a long way into commercial and show ring success.

Look beyond the hype

The Australian cattle market has certainly offered a lot of excitement in the past six months!  The value of cattle has steadily increased, and so to has the excitement and hype around beef prices.  Without doubt this is one the best periods I've ever heard of for producers looking to sell cattle!  Pretty much every type of animal is finding a ready demand, from restocking animals, to slaughter cattle.

I happened to have a look at the Eastern Young Cattle Indicator - the EYCI ending yesterday the 10th of September 2015.  The EYCI is a 7 day rolling average, that looks at the prices paid for young cattle (vealers, yearling heifers and steers) that are heavier than 200kg with a muscle and fat score of C2 - C3.

The EYCI has reached 584.50 c/cwt.  Thats an incredible figure!  

So its really hard not to be excited and not to be caught in the hype of a strong market, that continues to offer such great returns.

Having said that, there are some lessons worth paying attention to, and I'm encouraging my clients to remember those lessons despite all the hype!

The most important one is to never forget your customer!  Yes there is a demand for cattle, and there is good money on offer!  But, there are some producers who have been disappointed with the returns they have made.  Its important to remember your customer is looking to buy product for a specific purpose.  Thats why they have set specifications for the cattle they want! Its really important to remember that even though the market is strong, there are still discounts for cattle that aren't suitable for a customers needs.  

I reckon some producers are not thinking about this part of marketing cattle as much as they would have done in the past!  So just because the money is good, don't forget you still need to do some homework and send cattle to the right places!

If cattle don't meet a customers needs, then send them somewhere else, or prepare them to meet the customer. That way you won't drop your returns and you will get the rewards you have been working towards!

I've also noticed a recent article by Beef Central looking at the prices for grained cattle custom fed for 100 days.  Its a really good article that looks at custom feeding on a quarterly basis.  

The analysis done by the Beef Central team predicts a loss of $20 / head on custom feeding cattle.  There are various reasons for this outcome, one of the big drivers is the cost of feeding cattle, particularly in grain prices.  

There are a few things I wanted to touch on from this article.  The assumptions used to make this prediction are pretty standard across the industry.  However, the margins on feeding cattle are so slim, as seen in this analysis, that it doesn't take much to take a budget from a positive to a negative.  It could be grain price, it could be purchase price of cattle.  

In my experience the big variables are actually the performance of the cattle themselves!  A lot of producers over hype how good their cattle are! 

Not all cattle perform well in feedlots.  Poor growth, poor health, behavioural issues that make them unsuited to feeding through to lack of yield.  These are all issues that frequently occur in feedlots, and in the case of custom feeding, these issues impact directly on the profit of the activity. 

I reckon its important to do some homework and look into your marketing plans more closely.  Don't get caught up just on the cattle market and the value of the EYCI!  Just because the market is strong, it doesn't mean you can switch off thinking about ways to do things better, or to market your cattle to the most appropriate destination!

Personally I want to see producers receive as much return as possible, and not waste any opportunity to make a strong return.  But if you're going to make that happen, you have to stay switched on and not let the hype and excitement prevent you making the right decisions.

Hitting the Specs

Beef production should be profitable.  No matter how much we like working with cattle, without making a return no-one can stay in production for long. 

So what drives profit in a beef herd?  Most people think profit is driven by the average price you receive per kilogram of beef produced.  In actual fact, the average price received only accounts for about 20% of the variation in profit for most beef enterprises.  

The big driver of profit is the cost of production for a kilogram of beef.  Cost of Production is driven not just by costs, but by the kilograms of beef produced.  Across Australian beef enterprises, 80% of the average variability in Cost of Production is due to the variation in kilograms of beef produced by the enterprise.  

I reckon the most effective way of improving profit in a beef herd is to look at more efficient methods of producing beef.  There are lots of simple ways to improve a herds production levels without increasing costs.  

Now thats not to say that your shouldn't focus on ways to increase the average price per kilogram you receive.  Whats important is you shouldn't be spending a lot of money chasing a higher price!

I'm constantly surprised at how many producers overlook the importance of hitting market specifications. Its even more surprising when those producers tell me they want to make more money for their cattle.

Specifications define the weight, fat, age, sex or breed of cattle most suitable for a particular market segment.  Cattle which meet these requirements will be paid accordingly.

By hitting the specification you can budget on the price you will receive per kilogram.

However if cattle don't meet the specification, the price received will be lower.  And the further outside the specification the bigger the price drop.

So what does that really mean? Industry figures suggest the cost or the loss from cattle not meeting specification is almost $130m annually!  

At a farm level, around 25- 30% of cattle don't meet specifications.  Putting some value on this is a challenge.  However some work by the CRC for Beef cattle provides some good figures (http://www.agrifood.info/review/2009/Slack-Smith_Griffith_Thompson.pdf).

The estimates from this paper, and other industry studies suggest losses per head can be up to $60.  Over the average sale lot, these losses can mount up and become pretty savage towards the enterprises profits. 

Specifications are not just important for cattle sold to the processor.  Feedlot operators set requirements. Non compliance can result in deductions of up to $0.10/kg.  If you were working on a slim margin to start with, a loss of $0.10/kg can turn a slight profit into a loss!

I reckon the opportunity for producers to make a little more comes down to a few things.  Firstly addressing production.  Secondly, take the time to work out your Cost of Production and then start addressing issues which can improve your profits, like your market compliance rate.  Focussing on these areas might be the most efficient way to increase your profits without having to make huge changes to the way your run your business.

If you do want a hand to look at ways to do this, don't hesitate to get in touch with me.  I'd be surprised if we can't come up with a few new ideas.