With appropriate respect offered to the author, publisher and comment providers who recently collaborated on the article entitled “Could mediocrity be the right goal? A practical perspective on cattle production” (link: Could mediocrity be the right goal? A practical perspective on cattle production | Ag Proud), I’d like to share several thoughts on why cow-calf producers should avoid such a mindset.
To begin, believing that mediocre cattle can be both acceptable and profitable over the long run is a fallacy. Producers targeting mediocre cattle as their long-term production goal have chosen a low-to-no profit road. As an industry, we tried this approach in the 1980s and 1990s. It failed miserably. Mediocre cattle (known also as commodity cattle) were everywhere back then. They were the rule, not the exception.
Result: Beef demand was in shambles. We lost market share to chicken and pork year after year and beef cattle ranchers and farmers left the business in droves. They simply could not make a living. We permanently exported some of the best young minds out of the beef industry. Many of our sons and daughters saw no future in ranching and sought careers elsewhere. That is the fruit of mediocre cattle. We who remember those two decades have no desire to recreate that same business environment ever again. There is no margin in commodity cattle.
Fortunately, producing mediocre cattle and watching our industry get hammered bought about meaningful change. The resulting shift toward higher quality cattle has been positive for all segments of the cattle business.
For most of the past 25 years (roughly 2000 to the present), the focus was to improve our cattle and offer consumers better beef. This strategy worked better than we could have imagined. Superior genetics, management and innovative marketing methods that rewarded top-quality cattle combined to significantly enhance our end product. Consumers came back and beef demand grew like never before. We still have plenty of challenges (always will), but if the yardstick is overall industry prosperity, the past couple decades are much preferred to the 1980s and 1990s. A high-quality product and strong demand go hand in hand, no surprise. Continually making better cattle is the road we must stay on, both individually and collectively, because more improvement is both possible and necessary. It is also proven effective.
As a final point, let me address the cost/value assumption set forth in “Could mediocre cattle be the right goal.” A theme of the article is that lower costs will accompany the production of mediocre cattle. Spending less might result in your cattle being mediocre, but at least you’ll have costs under control. Sounds intuitive, but this blanket claim was debunked by Cattle-Fax over a quarter century ago.
In the mid-1990s, Cattle-Fax analyzed high-profit ranching operations to determine why they were unique. They discovered that while high-profit ranchers had lower production costs overall, they actually spent MORE than their less-profitable peers on genetic inputs, animal health and pasture utilization. They invested in the creation of better genetic, healthier animals that would enter the beef supply chain and create superior value for everyone who owned them all the way to harvest. They were making value-added cattle well before most of us knew what that meant.
High-profit producers did not believe keeping costs down mandated the production of mediocre cattle. They understood the need to carefully manage input costs, but also knew cattlemen sell outputs for a living. The objective is to effectively balance both.
Spending more on pasture meant smaller outlays for winter feed. They grazed their cows longer, yet took care of them nutritionally, while actively investing in genetics and health to create superior animals. They exploded the myth that competitive production costs pigeonhole a producer into outputting commodity cattle.
Years later, we can still gain wisdom from this proven approach. We can also learn from both the mistakes and successful decisions the beef industry made during the past four to five decades. The takeaway is pretty simple: Each producer should continually strive to improve the genetics and health of each successive calf crop, while doing so in a cost-effective manner. Mediocrity should never be the goal. Not for anyone.
Tom Brink is a long-term cattle industry veteran who has held numerous leadership positions during the past 35 years. He resides in Brighton, Colorado and can be reached at [email protected] or 303-478-4331.
