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Reposition the Core

 

What is ASA’s core? The ASA mission statement should suffice. “The success of the American Simmental Association is dependent on our members’ cattle making a significant genetic contribution to the beef industry.  By utilizing the most advanced science, the highest priority is to maintain services and products which bring value to ASA members’ customers.” 

Fair enough. That means we must provide tools that allow members to generate cattle that work in the marketplace and that are in demand. To see if we’ve continued to position the business of Simmental to meet that directive, we will tackle this in two parts. First, we’ll look at genetic indicators of whether SimGenetics are working in today’s beef business. Secondly, we will look at how they fare relative to customer demand.

From a genetic standpoint, a very complicated and dynamic business can be boiled down to two areas of focus that directly impact the profitability of a commercial beef enterprise (our “members’ customers” from the mission statement): maternal traits and terminal calf value. 

Maternal traits: The plight of the short-lived cow has become all too recognized in the modern ranching community. It has been repeatedly highlighted over the last couple of decades as commercial operators have bought too heavily into straightbred cow herds. Let’s just look at SimGenetic trends to see if cow longevity (stayability) and other relevant maternal traits are working for or against today’s cow-calf operator. 

Clearly, over the same period that you’ve heard neighbors and pundits lament the concern with cows that can’t last, members and their customers have experience and proof that SimGenetics are clearly a solution to that problem and more. Calving ease, maintenance costs (mature size and milk production), and weaning weights all favor balancing those straightbred British females with Simmental genetics. Simmental breeders continue to moderate mature cow size and milk production with no loss in performance, resulting in lower maintenance costs. What is more, it is recognized that the largest mature-size beef breed is now a prominent British breed, a fact acknowledged by their own association. 

Of the two profit centers for a commercial outfit — cow herd value and terminal calf value — the SimGenetic influence on cow longevity is evident and proven. What about the other profit center — terminal calf value? 

Terminal calf value: As more data is shared and utilized, it becomes abundantly clear what determines the demand for a terminal beef calf: health and the ability to minimize/avoid the need for prophylactic health aides; efficient gain, marbling and in some cases, access to certain branded programs based on visual traits. If you can do those things, you have the potential for significant returns. If you can’t, you are relegated to the edges. 

Health and calf management continue to be a primary driver in the feedlot sector. Market sector data and scientific literature leave no room for doubt. Dr. Ken Odde’s (Kansas State University) work with the Superior Livestock Auction dataset highlights these facts. Simultaneously, the recognition that responsible crossbreeding and heterosis provide positive benefits in health is gaining more steam. A ten-year dairy industry crossbreeding study conducted by the University of Minnesota highlighted similar health benefits in the crossbred dairy female. Other animal agriculture sectors have known this for quite some time. The “business of Simmental’’ has consistently touted the appropriateness of responsible crossbreeding to solve a myriad of problems. That approach is more vital now than ever given feedlot health concerns associated with BRD and late-term congestive heart failure issues. While much is to be learned in the arena of heart health, research and anecdotal benefits of Continental-derived breeds suggest a great deal of promise in this area for SimGenetics. 

The cattle feeder demands animals that can gain and gain efficiently. This is the core of the premise of a feedlot. Slow-growing or poor-doing cattle make it essentially impossible for profit in that sector. Simmental breeders have always acknowledged this and have continued to select for growth performance while still ratcheting down mature size and inefficiencies.

The packer has one essential duty: to deliver to the beef purchaser the caliber, consistency, and quality of product their customers demand. Period. It is no more complicated than that. And fortunately, Simmental-influenced cattle are flawlessly positioned (this comes from decades of work and sweat) to compete in the beef business of 2020 and well beyond. SimGenetics allow for efficient and responsible gain and flexibility in carcass weights, which gives marketing latitude, and high cutability carcasses with superior marbling ability. As a strong bonus, most Simmental-influenced calves come with a strong punch of hybrid vigor. The terminal trend chart proves the responsible selection for each of these important traits. 

The genetic merit is proven. What does the market think of what we are doing together? Fortunately, this is easy to demonstrate. Two items to consider — 1) how has the demand changed for Simmental-influenced terminal calves? and 2) how has the demand changed for SimGenetic sires? Simmental-influenced terminal calves? and 2) how has the demand changed for SimGenetic sires?

We could look at internal ASA info to get a glimpse, but it’s likely more impactful if we look outside of our business to see what others think. Let’s consider number 1.  We will use information from the largest marketer of feeder cattle in the United States. Their data will do nicely. Early in 2020, Dr. Bob Hough wrote an article for the Western Livestock Journal that dug into the large Superior Livestock Auction dataset to analyze breed types represented in the data. The numbers showed a seven-fold increase (yes, seven times as many!) in the number of SimAngus™ calves highlighted in 2018 when compared to 2010. During that same time period, Angus-identified calves dropped 11% and Hereford-sired calves went up 0.6%. 

When it comes to the demand for SimGenetic sires, we could look at the increase of Simmental and SimAngus bulls in any semen company catalog over the last decade. The pages allotted to SimGenetics have grown greatly. Just one example — Select Sires carries twice as many SimGenetics bulls today as it did in 2010. Or, we could view the open-access information provided by the National Association of Animal Breeders (NAAB). NAAB numbers show a combined look at semen sales and custom semen collection to indicate an increase in Simmental semen usage between 2013 and 2018 of 179%. Yes, 179%. Over the same time frame, Angus increased 56% and Hereford had no change. 

Or, we can consider the bull sale reports posted on the websites of those three breeds from October 2019 to present. Using those results, Simmental and SimAngus bulls out-averaged the other two breeds by roughly $200 per head. 

Popular press is another manner to evaluate our success in highlighting SimGenetics to the commercial producer. In both 2014 and 2020, BEEF magazine conducted a large survey of producers regarding the breed composition of the bulls they owned or intended to purchase. The rate of increase for SimGenetic demand outpaced every other breed highlighted in the top seven responses, positioning SimGenetic sires in a very desirable spot of high customer demand and trending in an ever more positive direction. 

Maybe we look at a different angle of SimGenetic demand. What about the demand for high-type females as evidenced by the desire for junior exhibitors to own and display at the AJSA National Classic? Any single year in the last decade might underestimate or inflate this demand. If we average the number of head for years 2012 and 2013, years 2015 and 2016, and years 2018 and 2019, we get a less biased view of the changes across the decade. Steady increase in demand is evidenced by increased average attendance numbers of 389 head, 535 head, and 655 head, respectively. Even the youngsters get it!

Have we positioned and repositioned the core of our business for success? Clearly, SimGenetics are on an arc never before seen in the history of the Simmental business. So far, the HBR would be impressed. 

 

 

 

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