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The last four years of the Alabama Pasture to Rail Program have provided a tremendous amount of data that all can learn from. The following is a summary of the data collected from the Alabama Pasture to Rail Program from 2016 through 2019.

Performance by Year

Each of the last four years have been different for the program. For example, 2016 was the first year after the program was restarted and had a small number of participants. However, looking at the past three years, we can make some meaningful comparisons.

70.51 percent of the cattle shipped from the fall of 2017 to the spring of 2020 were consigned by farms that participated in the program at least two of the three years. 56.26 percent of the cattle were consigned by farms that participated in all three years. This indicates that the genetics were fairly similar across those years. Also, many of the differences can be largely attributed to other factors.

The 2017 – 2018 program year can be considered a fairly normal year. There were no abnormal weather or major market events. Health was largely normal on the cattle. The 2018 – 2019 program year saw major wet weather where the cattle are fed in Western Kansas. This caused tremendous issues with death loss, as well as lost performance (Table 1).

However, this all pales in comparison to 2019 – 2020. The beginning of the fall 2019 was marked by the fire at the Holcomb, Kansas Tyson facility, which sent the market into a tailspin. In an odd way, this was somewhat positive for the program and incentivized producers to try retained ownership, as the market became incredibly soft in weeks following that event. Luckily, the market recovered from that event rather quickly and provided ample opportunity to lock in price protection on all of the 2019 – 2020 cattle, other than the last two and a half loads sent after December 15.

The COVID-19 pandemic heavily impacted the cattle industry, especially the cattle feeding and harvesting sectors. First, markets began to fall almost immediately after the first positive COVID-19 case was identified in the US in January. Markets then went into a freefall, as most of the major packing facilities began to close, or at least run at limited capacity, while they figured out how to deal with the pandemic.

Producers in the Alabama Pasture to Rail Program were incredibly fortunate. Many of the cattle were able to be harvested on schedule, just before the heavy delays in slaughter occurred. However, four loads were delayed by four to six weeks, and another two loads were pushed an extra two to three weeks.

Additionally, the risk management strategy of the program is fairly conservative. The number one goal of the program is to collect data, but the second goal is to protect the value of the animals. To do this, the program uses hedges and forward contracts anytime even the slightest projected profits are seen. By doing so, the program protects against scenarios of massive losses.

For example, one of the loads that was harvested in March 2020 was forward contracted at $124.65/cwt and received a premium of $5.74/cwt. This brought the producer’s net total to $130.39/cwt for those cattle. During that same week, cattle sold on the open cash market from $105-108/cwt. Throughout March, April, and May, finished cattle prices fell as low as $85/cwt. Because of the price protection strategy, the program avoided most of that.

 

Table 1. Performance by Year

*values reflect the averages among the calves
YearNumber of HeadWeight at Shipping*Alabama Value Per Head*Final Average Daily Gain*Carcass Value Per Head*Live Weight*Carcass Weight*Marbling Score*Percent Choice or Prime*Ribeye Area*Feed Cost*Profit Per Head*
2016-2017208679$715.333.17$1,434.13125080745678.3414.16$398.32$138.20
2017-2018667768$934.233.63$1,601.16133986449079.1514.93$415.53$89.92
2018-2019610719$919.703.32$1,554.49128882744556.6013.78$447.69$2.18
2019-2020703709$837.363.41$1,624.01133686749079.52%15.27$504.24$112.10
Total2188727$878.243.43$1,586.43131584947472.90%14.64$451.38$77.17

 

Performance by Sex

The performance differences between steers and heifers were not groundbreaking, but the data is still useful. This data can give a bit more background to producers that might be interested in purchasing feeder calves to background and feed or are selling the majority of their calf crop as feeder calves.

On average, heifers are going to grow slower, be lighter muscled, have more fat on their carcass, and grade slightly better. The program data shows that trend precisely. The only data that cannot be captured is true feed intake and feed efficiency. Heifers tend to be less feed efficient than steers. If that could have been factored that into the equation, the profits between the two would likely be closer.

Interestingly, the slight increase saw in marbling score translated to a much larger percentage Choice and Prime than expected. A 457 marbling in the steers would be the middle of low Choice, with a 504 Marbling Score that the heifers averaged being the breaking point between Low Choice and Choice Average. This half a marbling score increase translated to a 12.04 percent increase in percentage Choice and Prime.

 

Table 2. Performance by Sex

*values reflect the averages among the calves
SexNumber of HeadWeight at Shipping*Alabama Value Per Head*Final Average Daily Gain*Carcass Value Per Head*Live Weight*Carcass Weight*Marbling Score*Percent Choice or Prime*Ribeye Area*Backfat*Profit Per Head*
Heifer772713$793.693.31$1,556.41128182650480.68%14.350.65$154.61
Steer1416734$924.243.49$1,602.72133486245768.64%14.800.56$34.82
Total2188727$878.243.43$1,586.43131584947472.90%14.640.59$77.17

 

Performance by Weight at Shipping

Behind health data, the weight at shipping is the second most important thing to look at. Table 3 table is organized to look at the calves by how large they were when they were shipped to Kansas. This runs from 599 pounds and under to over 1000 pounds, in 50-pound increments. It’s a lot of information, but it shows some general trends.

As a general rule, bigger is better. Bigger calves will tend to have greater average daily gains and larger carcass weights. Producers get paid on a carcass weight basis, so bigger is better up to 1050 pounds. At that point is where people start to see discounts. Additionally, the bigger cattle tend to have larger ribeye areas, allowing the cattle to get a bit fatter without sacrificing our yield grade. All of this, combined with generally lower Alabama values for big calves, generally equals greater profits on those big calves.

This creates two general cut off points. Calves shouldn’t be shipped under 700 pounds. At that point, a major drop off in performance and carcass weight is seen. These calves would be well served with 60 to 90 more days in Alabama in a situation where they are allowed to grow more frame and position themselves better for that transition into the feedyard.

A second breaking point would be for quality grade. If you are a seedstock producer that really wants to tout the ability of your cattle to grade or if you are just really interested in ensuring that you don’t have many Select carcasses, shipping them to the feedyard weighing greater than 800 pounds is a good way to give them a better chance to really hit those premiums. This would be a smart move currently if you can feed cattle cheaply in Alabama, and the Choice-Select spread can range throughout the year but is usually greater than $10/cwt on a carcass weight basis. That can add $85 to the value of the carcass, and by adding weight cheaply in Alabama, producers can realize financial benefits on each end of the system.

 

Table 3. Performance by Weight at Shipping

*values reflect the averages among the calves
Weight at ShippingNumber of HeadDays on FeedAverage Daily Gain*Alabama Value Per Head*Live Weight*Carcass Weight*Carcass Value Per Head*Marbling Score*Percent Choice or Prime*Ribete Area*Backfat*Feed Cost*Profit*
Under 6003592003.29$725.591202774$1,395.9246470.4713.910.53$497.08-$1.66
600 - 6492561893.29$806.511244801$1,488.0446472.6614.070.57$472.06$36.48
650 - 6993001803.33$846.791272828$1,547.4346268.3314.570.54$462.99$38.09
700 - 7493231743.43$871.961310845$1,580.4447469.3514.740.60$449.50$88.87
750 - 7993361643.42$920.931326859$1,611.4047073.5114.780.61$422.75$81.94
800 - 8492731593.51$972.221375887$1,691.9148676.1914.870.63$426.84$113.02
850 - 8991501573.59$989.421425914$1,721.1248477.3315.080.63$425.13$141.63
900 - 949961493.63$1,017.851451946$1,790.9650981.2515.350.70$424.27$147.71
950 - 999461523.71$1,005.621507970$1,813.1349980.4315.880.67$428.58$227.61
Over 1,000491424.10$1,055.6916341053$1,967.0250383.3716.710.73$438.58$320.40
Total21881743.43$878.241315849$1,586.4347472.9014.640.59$451.38$77.17

 

Health Effects on Performance

Table 4 divides the cattle by how many times they are treated in the feedyard. The feedyard’s standard operating procedure is to treat calves a maximum of three times. However, they have actually treated one of the program’s calves four times. Only 11.93 percent of the calves were treated at some point. That is approximately 3 to 4 percent lower than the USDA-APHIS National Animal Health Monitoring System data would suggest should be expected.

As you can see in Table 4, that is huge. If a calf is treated even a single time, ADG drops 0.42 pounds per day, carcass weights are reduced 42 pounds, and $171 in profit is lost per head. If calves are treated twice, there are drastic reductions in every performance metric as well as huge impacts on the ability of those calves to hit the Choice Quality Grade.

Additionally, the likelihood of death and calves that have to be “railed” becomes exponentially greater every time that animal is brought to the hospital pen. “Railout” calves are calves that are chronically sick. These calves will never get better in a feedyard environment, but likely will not die either. They need to be removed from the pen, as they are a constant source of disease that could make other calves sick. In the past, these calves would’ve have been shipped to slaughter at a light weight, but now they are sold locally to a backgrounder that attempts to straighten those calves out.

 

Table 4. Health Effects on Performance

*values reflect the averages among the calves
Number of TreatmentsNumber of HeadPercentage of TotalFinal Average Daily Gain*Carcass Value Per Head*Live Weight*Carcass Weight*Marbling Score*Percent Choice or Prime*Ribeye Area*Treatment Cost*Profit Per Head*Death or Railout Percentage*
0192887.073.52$1,603.34133385547771.1414.64$0.07$100.750.41
11838.363.10$1,478.33124381344767.5714.64$24.36-$60.257.10
2522.382.38$1,421.42114378943844.2314.49$50.38-$241.9515.38
3241.101.00$956.3486870139812.5014.16$66.35-$871.8141.67
410.050.99$960.63819531603100.0012.18$102.35-$154.560.00
Total21881003.43$1,586.43131584947472.9014.64$4.15$77.171.78

 

Percentile Rank of Performance Traits

Table 5 provides a listing of some of the carcass and performance data in percentile rank order. This is each of those traits ranked individually. This does not mean that the top 1 percent of all cattle had a 1097-pound carcass that graded Prime with an 18.80 square inch Ribeye Area. It is a place to look at each trait individually and see how your calves stacked up with the rest of the cattle in the program.

 

Table 5. Percentile Rank of Performance Traits

*values reflect the averages among the calves
Percent RankLive Weight*Hot Carcass Weight*Average Daily Gain*Calculated Yield Grade*MarblingMarbling Score*USDA Quality GradeRibeye Area*Carcass Value*Carcass Price*Premium*Payable Amount*Profit*
1171110975.171.07Slightly Abundant766Prime18.80$2,253.96$223.81$13.05$1,572.77$558.56
515821,0114.681.49Moderate661Choice+17.61$1,985.70$209.04$9.24$1,402.23$429.58
1015229754.371.81Moderate613Choice+17.00$1,882.09$204.06$7.55$1,320.62$349.91
2514279143.932.32Modest525Choice015.80$1,745.11$197.84$5.51$1,186.12$225.09
5013208483.462.86Small455Choice-14.60$1,581.77$188.06$3.24$1,050.19$102.80
7512157822.983.47Small402Choice -13.50$1,425.02$177.41-$4.00$900.70-$23.87
9011117182.524.00Slight370Select12.49$1,293.60$167.51-$12.00$746.85-$146.49
997776171.035.15Slight321Select10.60$1,045.64$143.35-$31.16-$263.56-$1,256.80

 

Conclusion

From all of this data, there are several take home points as producers think about marketing calves in the future.

  • Health is key. It’s impossible to make money on dead calves, and sick calves aren’t much better. Producers can’t prevent all illnesses, but they an work hard with health programs to prevent as much as possible. This means following good vaccination strategies, providing proper nutrition, and having good animal husbandry practices, such as like weaning, etc. Feeder calf buyers will pay for it.
  • Don’t send calves too small. Little calves struggle in the feedyard. The transition from the home farm to this kindergarten-like environment, where calves from across the country comingle, is tough to say the least. Bigger calves seem to handle it better. Additionally, in general weight can be added to cattle in a much more cost-effective manner in Alabama than in the feedyard, providing financial benefits in both cost of production and greater outcomes in the feedyard.
  • Steers and heifers perform differently. This is largely why heifers are cheap, but a good set of heifers that are managed correctly at home might be a nice little profitable niche.
  • Mother Nature is unavoidable. Rain, snow, wind, blizzards, floods, drought, pandemics: they are out of a producer’s control. Additionally, the cattle markets in the U.S. are wildly volatile, even in the best of times. Have a plan on how to handle those things if possible, and understand their effects on the market and the performance of your animals.
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