The modern Simmental success story

The Harvard Business Review published its “Top 20 Business Transformations of the Last Decade.” The article highlights those organizations that have adapted and flourished in the last 10 years to become dominant players in their respective fields, and in many cases, these businesses have changed our lives.

Netflix and Amazon were both in the top three. If we know anything about recent months, we know both groups have flourished. But there are lesser-known names on the list like Ecolab in 16th place. You might know Ecolab for its cleaning products that built a long-established and successful business. But what placed the company on this list was an awareness of a need to branch out. And branch out it did—into providing water efficiency solutions globally, tripling the value of an already multibillion-dollar company in just nine years.

Three qualifications of “Top 20 Business Transformations of the Last Decade” according to Harvard Business Review include:

Reposition the core: How effectively has the company adapted its traditional core business to changes in its markets, giving its legacy business new life?

New growth: How successful has the company been at creating new products, services, and new business models?

Financials: Has the company posted strong financial performance?

So, how would the “business of Simmental” fare relative to its competitors if HBR were to dig into transformations within the ag sector? It seems a worthwhile thing to consider. We often hear folks give opinions and thoughts about many businesses. Some perspectives are well founded in intimate knowledge and facts. All too frequently, some perspectives lack the details necessary to make an accurate judgment. ASA is no different. So, let’s dig into details using HBR’s own three-pronged approach.

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.

From a genetic standpoint there are two areas of focus that directly impact the profitability of a commercial beef enterprise 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 cowherds. Let’s just look at SimGenetic trends to see if cow longevity, or stayability, and other relevant maternal traits are working for or against today’s cow-calf operator.

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.

Of the two profit centers for a commercial outfit—cowherd value and terminal calf value—the SimGenetic influence on cow longevity is evident and proven.

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.

Health and calf management continue to be a primary driver in the feedlot sector. Ken Odde, with 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 10-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.

The cattle feeder demands animals that can gain and gain efficiently. This is the core of the premise of a feedlot.

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.

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

New growth

Creativity and ingenuity are crucial if we are to have new growth opportunities. But cool ideas without the ability to truly have a positive impact on the long-term success of the commercial beef business are hollow and destined to fail. The core of any breed association is credible genetic evaluation. It would make sense then that novel approaches and new business endeavors would align with the skillset necessary to deliver elite-level genetic awareness. Massive genotyping research projects have been implemented on two fronts in recent years. It’s no coincidence that those efforts align with earlier-discussed issues of enhancing predictors of cow longevity and gaining more insight into the genetics of carcass parameters.

The Cow Herd DNA Roundup was implemented to encourage submission of unique maternal metrics that are all too frequently lacking in a genetic evaluation. To label CHR as a success to this point would be an understatement. Between the inception of the program in 2017 through mid-2019, there have been over 40,000 female genotypes, over 40,000 mature cow weights, and over 30,000 body condition scores incorporated into the genetic evaluation because of CHR.

In a similar fashion, the Carcass Expansion Program looks to glean more power from genomics by linking actual carcass data with pedigree knowledge and DNA. Much like the CHR, this multi-year research project benefits all members and has a tremendous advantage for members who are unable to directly participate by retaining ownership on their terminal calves. The genomic insight makes its way to the daily DNA tests we run on our own farm or ranch.

By definition, new growth means bringing new folks to the party. As a result, ASA has provided a platform through Total Herd Enrollment that allows for seedstock producers of any breed composition or breed affiliation to receive EPDs and Indexes. They benefit from the services and multi-breed approach the organization provides. This broadens the reach of our business philosophy—specifically allowing breeders who are looking for new association attitudes and capabilities, or for those who’ve never found a genetic evaluation home—to get the breeding, selection and marketing information they need.

International Genetic Solutions was one of the turning points and game-changers in the long-established beef business. IGS has 16 different breed association partners, and the 17th partner of the group is Neogen Genomics, Inc. IGS leverages the strength of the science team at ASA to provide the most credible and trusted EPDs in the business to breed associations across the globe. IGS is the largest beef genetic evaluation on the planet with 20,000,000 animal records and nearly 400,000 added annually.

The IGS Feeder Profit gives commercial producers and feedlot buyers the ability to communicate about the profit potential within a set of calves. This tool works across breed types and allows you to provide your customer with an awareness and marketing tool never before seen in the industry. And, by the way, at no cost to its users.

Financials

Understanding the financials of a business is crucial to having a thorough understanding of where it’s been and where it’s going. In times of uncertainty, it is affirming to know that those businesses we rely upon are not only steady, but still thriving and striving ahead. That provides the stability to keep services flowing, while allowing the potential for new growth and new opportunities.

But more importantly, ASA financials reflect SimGenetic influence in the marketplace. Our numbers are a reaction to members’ ability to sell seedstock. If the commercial producer demands SimGenetics, then our members benefit and grow and then, ultimately, grow their business relationship with us. At the same time, ASA works aggressively to keep costs in check.

The financial indicators highlight the responsible nature in which ASA uses your resources. And that prudent approach allows us to leverage any excess through programs like CHR, CXP, etc. to benefit the entire community and business of Simmental.

By any measure—in this instance, the measure of the HBR—the business of Simmental has never been stronger or more influential in the beef industry than today. Ever. ASA has never had a more impactful decade. Ever.

How did we get here? Well, first and foremost, this success is attributed to the wide swath of focused Simmental enthusiasts who have toiled and worked for generations to build, evolve, adjust, then rebuild and evolve again. Success comes one small, detail-oriented step at a time. More than 50 years ago, the Simmental forefathers took a step. And serious Simmental breeders have been methodically stepping ever since. This is no accident or luck, but rather the result of a persistent commitment to adaptability and industry relevance. Excellence creeps up slowly over time, seeking close proximity to the humble-hearted and determined.

The senior leadership at ASA has taken a similar approach to that of those serious breeders—seeking success one small, detail-oriented step at a time. Often without hype, credit, or recognition, those individuals do their part to position the “business of Simmental” in a place most never allowed themselves to dream about: clearly positioned at the forefront of the beef business. In an era of unprecedented chaos, successful businesses look to tested leadership to navigate the path forward. Fortunately, there is a track record that gives us calm in the uncertainty of 2020.

This has been the defining decade of Simmental’s place in the beef business. And the starting point of many successful Simmental stories to come.