Small Farm Beef Enterprises

Dr. John Comerford

Penn State Beef Specialist

To get cattle to do what you want them to do takes a

knowledge of

• Animal Behavior

• Corral Design

• Proper handling techniques

How cattle perceive the world

• They have panoramic vision

Crowding Tub

• “Funnel cattle to working alley

Sweep Gate

• Solid sweep

• See-through

small alley

gates

Working Chute

• 20 feet long (22-26 inches wide: cows)

Direct Sales of Beef

1. Commodity Beef

a. Carcass size 300-400 lbs. for a side ($500-$700)

b. Grain fed

c. Lean

d. Young at harvest (under 20 months old)

e. No implants or sub-therapeutic antibiotics

2. High Quality Beef

a. Specialized breeding and management program

b. Heavily grain fed

3. Grass-Beef

Beef production is not the production of cattle !

It is the production of FOOD!

Be a BQA Certified Producer!

Consumer Preference and Value of Beef

Sitz, Calkins, Umberger, Feuz -U of Neb., 2004

Denver (131 consumers) -Chicago (141 consumers)

• 1=extremely desirable; 5 = not at all desirable

Desirable characteristics of beef

(1=extremely desirable; 5 = not at all desirable)1. Freshness (1.23)

2. USDA Inspected for safety (1.45)

3. Color (1.60)

4. Price (1.72)

5. Leanness (1.76)

6. High Quality Grade (1.79)

7. Tender (1.86)

8. Nutritional Value (2.20)

Desirable characteristics of beef

(1=extremely desirable; 5 = not at all desirable)

9. Country-of-origin Labeling (2.41)

10. Marbling (2.43)

11.Source assurance (2.56)

12.Environmentally friendly prod. (2.61)

13.Raised in Your region of the US (2.64)

14.Convenience (2.66)

15.Fat Content (2.75)

16.Organic/natural (3.01)

The #1 Reason ConsumersPurchase Beef

TAS

TE!TAS

TE!

Today’s Consumer

• More working couples

• More single person households

• Less knowledge about cookery

• More disposable income

• More health concerns– “chemical issues”– microbial issues

Positive Consumer attributes for Grass-fed

1. Freshness5. Leanness8. Nutritional Value (fat, cholesterol, omega 3)11. Source assurance12. Environmentally friendly prod.13. Raised in Your region of the US15. Fat Content16. Organic/natural

Calkins et al. , 2004

Management Is A Key Factor• Early castration

– Prior to 7 to 8 months of age

• Implants– Aggressive vs. Mild– Androgens vs. Estrogens

• Intramuscular injections• Nutrition

– Vitamin D supplementation

• Cattle handling

• Grass-fed beef can meet the needs of many consumers

1. Local production – face to face with farmer

(source verification)

2. Smaller carcass size

(less total cost)

3. Beef you feel good about

(production verification)

4. BUT- it must TASTE good!

Storage and cooking

• Package and store adequately

• If frozen, freeze rapidly to prevent excess purge which will make meat drier

• Thaw slowly in refrigerator or cold water

• Cook from room temperature

• DON’T OVERCOOK – 150OF maximum (medium rare- medium)

Post-mortem aging

• Strive for 14 days (10 minimum)

• dry or wet aging

• May consider high temperature aging– Hold at ambient temperature for 2 hours to

speed post-mortem glycolosis -- especially if fat is less than .20 inches

External Fat

• A target of 0.3 - 0.4 inches is good– Allows slower chilling and prevents strong

cross bonds between muscle filaments.– Also demonstrates animal has adequate

energy for rapid growth and that muscle tissue growth is stopping

Growth Rate

• Faster is better for palatability

• Strive for 2.0 lb/day for at least the last 100 days– Improves calpain/calpastatin– Animals will be ready for market at younger

age

Maturity(animal age)

• Strive for < 24 months– Less connective tissue cross linking– Older animals are less tender– Fewer problems with BSE regulations (cattle

are aged by dentition which is not always precise)

Recommendations for producing

HIGH QUALITY Grass-fed Beef

Marbling Degree Pictures

Click to add textClick to add text A B C EDAbundantAbundant

Mod. Abund.Mod. Abund.

Sl. Abund.Sl. Abund.

ModerateModerate

ModestModest

SmallSmall

SlightSlight

TracesTraces

Pract. Dev.Pract. Dev.

Marbling

Maturity

Prime

Choice

Select

Standard

Commercial

Utility

Can You Use Quality Grade to Determine Palatability?

Marbling Flavor TendernessOverall

Palatability

Prime 1 in 43 1 in 36 1 in 26

Up 2/3 Choice 1 in 39 1 in 22 1 in 19

Low Choice 1 in 12 1 in 12 1 in 7

Select 1 in 8 1 in 12 1 in 5

Standard 1 in 3 1 in 2 1 in 2

Odds of "Undesirable"

Source: Smith et al., 1984

A maturity

Cattle Need100 DOF

to producebeef with the

desired flavor

0

10

20

30

40

50

60

70

80

'77 '00 '01 83 '99 '93 '80

grass grain

Taste Panel overall acceptability

Schmidt et al., 2003

0123456789

'77 '88 '00 '01 '78 '83 '99 '93 '80

grass grain

Taste Panel Flavor

Schmidt et al., 2003

Fat/Cholesterol:

Is It Really an Issue?

•Cholesterol content will not be different between grass-fed and grain-fed beef.

•External fat will be trimmed equally with grain fed..

So, Where does Grass-fed Beef Fit?

Budgeting Grass-Fed Beef Production

Dr. John Comerford

Beef Extension Specialist

Penn State University

$Profit= $Returns - $Cost

Enterprise Costs

1.Opportunity Cost:

There is an alternative use value and no cash cost

Enterprise Costs

2. Variable Costs:

a. Annual cash used to produce one carcass

b. The purchase is “used up”

Enterprise Costs

3. Fixed Costs:

Annualized value of fixed resources

SteerFour Costs

• Purchase price(800#X$.88) $704.00

• Trucking cost 5.00

• Death loss (1%) 7.04

• Interest (2% for 6 mo) 7.04

Total $723.08

Feed

• Minerals (.25#/d x 180d x $300/ton) $8.75

• Supplemental grain or protein ?

Total $8.75

Vet Costs

• Dewormer ($3.50/head X 2) $7.00

• Vaccinations 3.00

• Fly control 4.00

• Treatment (5% treated @$6/hd) .30

Total $14.30

Machinery Cost

• Calculate Stocking Rate:

Average weight while grazing=962#

(based on 1.8 lbs/day gain X 180 days)

Stock at 1.5 AU/acre=.64 acres/steer

.64 acres X $20/acre= $12.80

* Insurance, repairs, misc. cost $2.00

Other Costs

• Pasture fertility ($15.00/ac)x.64 $9.60• Marketing costs

trucking 5.00commissionscheckoff 1.00Returns (1 of 50 x75% recovered) 12.14

Total $18.14

Total Variable Costs

• Steer $723.08

• Non-steer $63.61

• Interest on non-steer $.63

• Total $787.32

Fixed Costs

1. Pasture establishment

($80/ac)/10 years)) X .64 hd $5.12

2. Fences for 4-paddock rotation

(40 ac base w/ 30 yr life)

Perimeter (1 mi @ $2/ft) $10,560

Interior (1/2 mi @$1/ft) $2640

Per steer cost $7.04

Fixed Costs3. Water System

$2/acre X .64 acres $1.28

4. Land Charge

$2,000/acre X 2% X .64 ac $25.60

**$2,000/ac X 8% X 30 yr $112.71

5. Handling facilities, buildings, etc.

($10,000 /30 yr) / 40 acres X.64 acres

$5.33

6. Interest on fixed costs $.44

7. Total fixed costs $44.81

Returns

• 800 lb. steer x 1.8 lbs./day x 180 days

1124 lb. final weight

60% dress

674 lb. carcass

$1.20/lb.

Net returns $809.28

Net Returns

• Total costs= $832.13

• Total returns= $809.28

• Net Value = ($22.85)

• Breakeven value= $1.24/ lb carcass

Grain-Fed Steers• Steer costs $723.08

Vet costs $14.30Insurance, etc. $2.00Yardage ($.40/hd/dayx140d) $56.25Feed (7# DM/lb.X140dX3.2 #/d)@ $90/ton

$176.40Interest $.61Total $972.64Breakeven1250 lbs. X .63 dressing %= 787 # carcass978.08/787= $1.24/lb.

Grass-Fed vs Grain-Fed

• There may not be much difference in cost to produce beef

• Grass-fed is subject to more fluctuations in cost

• Grass-fed marketing is intermittent

• Generally do not use cost aids such as implants

• Less predictable performance

Ten Places to Find Free Money in the Beef Business

1. Growth-Promoting Implants

Implant Economics:

One implant costs $2.74

Feedlot:

Average difference in weight gain= 56 lbs.

Advantage:

56 lbs. X $.90=$50.04

Return per implant= $47.30

Weaning weight:

Average difference in weaning weight = 17 lbs.

17 lbs. X $1.25/Lb. = $21.25

Return per implant= $ 18.51

2. Covering Hay Bales

Covering Hay Bales

Price of barn to store 100 bales= $12,000

Annual cost w/ 30 yr life= $400

Average edible portion saved=

(800 X .04) X $25.00/bale= $1.00/bale in loss

(800 X .30) X $25.00/bale = $ 7.50/bale in loss

Net savings = $650/ year

Plastic Wrap

Custom cost of wrapping = $5.00/ bale

TDN value of wrapped grass hay= 62%

TDN value of dry rained-on hay= 46%

Corn-equivalent value= $27.55/bale

$20.55/bale

$7.11/bale

3. Feeding Waste

Waste = 2.5 %

Waste = 40%

Feed Waste:

800 X 2.5% X $25.00/bale = $ .62

800 X 40% X$25.00/ bale = $10.00

800 X 8% X $25.00/bale = $2.00

Feeder cost = $750

($750-$150)/ $1.38= 434 bales to pay for it.

4. Controlled Calving Season

Controlled Calving Season

• Management time at calving• Uniform groups to sell• Nutritional program is most economical• Breeding program can be enhanced• More effective genetic comparisons• Better pasture utilization• More effective health program• Management priorities are maintained

5. Castration of Male Calves

Castration:

Bull calves are worth $1.12 at 500 lbs.

Steer calves are worth $1.26 at 500 lbs.

Difference = $70 per calf

Alternatively:

Castration takes about 2 minutes, so the job pays at the rate of

$2100 per hour

6. Having Enough

Bull Power

Yearlings: 15-20 cows

2-3 yr-olds: 25-35 cows

Mature bulls: 40-60 cows

Bull Power

One cow in heat per day for each 19-21 cows in the herd.

60 cows = 3.2 cows in heat

A young bull probably cannot breed more than 2 cows in a day.

Lost breeding day:

21 days X 1.8 lbs./day X $1.25/ lb.= $47.25 per calf

Annual cost of a bull: ($1500/4 years)=$375/yr

Per cow cost for 20 cows= $18.75

7. Buying Good Bulls

$1200

$2000

Buying Good Bulls:

Cheaper Bull More expensive bull

$1200 $2000

Bwt EPD 2.0 2.0

Milk EPD 18.0 18.0

YR Wt. EPD 70 80

WWT EPD 30 42

12 lbs/calf X 28 calves/yr X 4 years X $1.00/lb.=

$ 1344

The true value of the second bull is $3340

8. Palpating the Cow herd

Palpating the Cow Herd

The average cow has an annual cost of $400

In 2004 the average cow sold a calf worth

$ 497.25 (a record return)

A cow left open this year and retained in the herd must sell a calf worth $897.25 at weaning in 2006.

9. Put a Black Hide on Them

In a 4-year average of feeder calf pools in West

Virginia and Pennsylvania, a calf sold as “black”

compared to the average of all other calves

(except Holsteins) had a value that was $56.00

per calf higher.

10. Crossbreeding

X

To Take Advantage of Heterosis

The Value of Heterosis:

Starightbred population: 0

Crossbred calf: 8.5%

(500 lbs. X 8.5% X $1.12) = $47.60

Crossbred Cow/Crossbred Calf: 23.3%

(500 X 23.3% X $1.12) = $130.48