The Select Sires Podcast - Ep. 3 - Supply Chain Power For Beef x Dairy

News and Updates
1/19/2022

Tune in as we take an in-depth look at the world of beef x dairy and Select Sires' tailored options that can help gain more profitability through a refined replacement heifer strategy. 

Larry Corah, professor emeritus at Kansas State University and beef supply chain consultant with Select Sires Inc., goes into detail about the state of today's beef x dairy phenomena, the importance of specific programs to a dairyman's success and answers commonly asked questions. All that and more in the third episode of the new Select Sires Podcast.

Tune in with the audio player below or by subscribing through your favorite podcast platform.


LarryCorah

Dr. Larry Corah
Professor Emeritus, Kansas State University
Select Sires Supply Chain Consultant


FULL TRANSCRIPT

Welcome to the Select Sires Podcast talking Your Success, Our Passion, starting in 3-2-1.

Joel Penhorwood

Welcome to the Select Sires Podcast. I'm Joel Penhorwood.

Beef x dairy - a now accepted practice in today’s dairy farms. It offers exciting profit opportunities while refining the replacement heifer strategy. But as a dairy farmer, how do you get the most bang for your buck in the beef world? We discuss important options to consider in today’s podcast, along with plenty of things to know about the beef x dairy world, and how Select Sires can help, as we chat with Dr. Larry Corah, professor emeritus at Kansas State University, and beef supply chain consultant with Select Sires. Stay tuned, but first let’s talk the sire of the podcast. And since we’re discussing beef x dairy, it only makes sense to head on over to the beef barns and hear from Lorna Marshall, vice president of beef operations at Select Sires.

Lorna Marshall

Hi, I’m Lorna Marshall with the beef department, excited to get to visit with you today about one of our really popular beef x dairy bulls. Our feature bull today is 7AN556 PRIME EFFECT. PRIME EFFECT came to us from 44 Farms in Texas and really is the epitome of the ideal beef x dairy bull in our world, for several reasons. First of all, when you look at him from a genetic merit standpoint, he’s a bull that does really well for the $AxH index, ranking in the top 20 percent of the breed. He gets there because he’s a moderate birthweight bull that’s extremely high growth, and yet does that in a very moderate frame package. So he ranks in the top three percent of the breed for yearling weight, and is yet breed average in terms of his yearling high EPD. Then when you look at the end product merit that the bull offers, he’s a 1.3 for marbling, which ranks in the top three percent of the breed, and is still a bull that’s very good for ribeye area. So no matter which supply chain we’re targeting, he’s going to create value-added cattle that are going to do extremely well on a high marbling or high quality based grid of supply chain. But it takes more than just genetic merit to be a great beef x dairy bull, we all know that. He is a bull that has a 3.5 CFI so jumps through the fertility hoop. And then he also is a bull that’s an outstanding semen producer. He’s one of our highest volume bulls in terms of the number units that he creates over a year’s time and so when you combine his ability to produce high quality semen, do it in volume with elite genetic merit, he’s definitely a bull that fits our beef x dairy program. 7AN 556 PRIME EFFECT.

Joel Penhorwood 

And thanks Lorna. Joining us on the Select Sires podcast, Dr. Larry Corah, professor emeritus at Kansas State University, and beef supply chain consultant with Select Sires and a wealth of knowledge might I add on a number of topics, but specifically here today, we're talking beef x dairy. And Dr. Corah, thank you so much for being here with us today. Beef x dairy, there's a lot of discussion surrounding it as of late in, in many arenas, it's uptake, more regular use in the last few years, the options of different programs to get involved in. With that growth, different opportunities, as we mentioned out in the marketplace have also come about. So before we get further into that, maybe it's a good place to start. Why beef x dairy? Why should that be something we think about on dairy operations?

Dr. Larry Corah 

Well, looking forward to being with you today. Yeah, it's amazing to me how agriculture does change. Usually in the beef and dairy industry, change has been relatively slow. Yeah, we make progress in pounds of milk per cow or weaning weight on calves. But it's a slow process. But this beef x dairy changed extremely rapidly. And I think why that occurred - It's like most things in agriculture, economics drive things. And in this case, we had seen the packing industry kind of back off of buying Holstein steers, three of the four major packers cease to harvesting those cattle. That changed the market value of these Holstein steer calves as babies. And so it left the option of using beef semen and changing the economic value of that calf, and it changes it of course a lot, rather than getting 50 or 60, or $70. For that calf as a day old. Now all of a sudden, they're getting 202, 250, or even 280 For that calf, and so per 1000 cows, 1000 dairy cows, that adds almost $100,000 worth of revenue. And that's huge. I mean, that's those, that's not pocket change. And so it's really driven the whole adoption of using beef semen with dairy cattle.

Joel Penhorwood 

It's not hard to make an argument to take up beef x dairy in herds. But how can we be most successful as a breeding tactic and I think that also goes into some of the program discussion that we'll be talking about today. What are your thoughts there?

Dr. Larry Corah 

Well, I think it's really important to start with, no matter what you do in the beef x dairy space, make sure that you have a market for both those calves as either Dale's or many dairies, keep these calves on to four or 500, 600 pounds, something like that. And make sure that you have a market for those calves because as I said, we had packing push back on the Holstein steers, we still have a lot of packer resistance in terms of the beef x dairy calf, and actually only have one of the major packers that has really been pretty open to taking those calves. So if you're not careful, you can get yourself into a situation where you have used what should add economic value, but all of a sudden, you have difficulty with with creating a market. And so the marketability of these calves is extremely important, very, very important decision for the dairy operation, or for that matter, the individuals like a calf ranch or a grower yard that's buying these calves from a dairy operation to make sure that you got a market and as we'll get to here, that's why it's so important to make sure you're part of a structured program.

Joel Penhorwood 

Yeah, and as you mentioned there is it just about getting a black calf on the ground? Dairy producers do they need to be thinking about more than that?

Dr. Larry Corah 

Absolutely. That's a great question, Joel. I think we started out, you know, a lot of times the dairyman said okay, I'll try this beef thing. I just want a calf that's going to be black. And I really want cheap semen, you know, to use, well, that's probably the wrong two things to really be looking at. Yes, a black calf does have more added value. But you do need to think about the breed piece as part of the equation. You also need to think about the genetics of that calf. I mean, it's important from the dairy standpoint, that they look at birth weight and fertility on the semen they're using. But also then keep in mind the marketability of that calf when that calf leaves the dairy operation, it has to have the ability to grow, then when it gets into a feed yard, it has to have the ability to hang on the rail and create a quality eating experience for the consumer. And so there's a lot more to it. I think just as the dairymen understand the importance of genetics to improve milk production in the dairy operation, genetics are just as important and the choice of semen usage. And that is changing. We've gone from the black calf to now using higher quality genetics that really focus on traits that those calves carry when they leave the dairy operation.

Joel Penhorwood 

And Select Sires as you were mentioning there, it has positioned itself with different programs for advantageous genetics, not only getting that calf on the ground, but something as you're saying folks would want. What's involved in those genetics as far as what are those things that are going to be involved in that semen?

Dr. Larry Corah 

Well, and we'll we'll talk a little more about the ProfitSOURCE program here in detail Joel, but also when a dairyman is focusing on beef, just as they have genetic traits to select for milk production. We have genetic traits to look at from a beef production standpoint. Sometimes those are simple like with Angus genetics, it might be something as simple as $B which focus on both growth and carcass quality. It can also focus ongenetic predictability for birth weight, calving ease, which is important to the dairy but then yearling weight which is very important to a feedlot, the ability of the calves to grow. Quality grade as exemplified by marbling, genetic predictors, they're excellent predictors. I'd say in most cases, many dairyman rely on their semen supplier. So talk to your Select rep about the kind of genetic parameters you should be using in your operation. But those are very, very important, very well worth considering, just as they are in picking dairy bulls.

Joel Penhorwood 

We've touched on the importance of program cattle and making sure that there is a market for these cattle. Where does ProfitSOURCE from Select sires come into that?

Dr. Larry Corah 

Well, I think profit source is one of the programs that probably one of the very few if may be the only one in the industry that really focus all the way from the dairy operation to the consumer. President Dave was very adamant in starting a program that we build a supply chain and that supply chain starts with the dairy operation doing the right things. One of the first steps is that that steer calf or that beef x dairy calf needs to have the same kind of quality colostrum that they use with their replacement dairy heifer prospects. And so high quality colostrum is important other health strategies with the calves are very important. Another critical one Joel that's often overlooked as part of a supply chain is getting an identification system, getting an RFID tag in these calves because then when they hit the feedlot when they hit the packing company, those feedlots and packers know that they're coming from a structured program. And they have said time and time again, those are the kind of cattle we'll buy, those are the only kind of cattle that we'll buy. If it's just a generic type program where they're not focusing on structure, not focusing on being part of a program, they may have, again, difficulty in marketing these calves. So that is a key. And not only then does that identification, follow the calf through the calf ranch, through the growing program and all the way into the feedlot and ultimately to the packers. So that's the structure we have put together. We have actually had great success with that over the last year and a half, two years. And it really created a great opportunity for the dairy industry.

Joel Penhorwood 

And I would think that traceability could really separate out those beef x dairy animals from say, native cattle as far as their ability to improve over time through data.

Dr. Larry Corah 

That's an important point. There's two things that the beef x dairy area does that are unique to the program. One is traceability and traceability is becoming more important, particularly exportation of beef is a big part of the beef cattle industry. And traceability adds to that. And this is a system that allows complete traceability. It's just built into it. If you start with a dairy operation, doing things right. Then the other part is sustainability. And we're certainly going to hear a lot more about carbon footprints, carbon credits in agriculture, that's going to become a big topic over the next year or two as we address things like global warming, and the beef x dairy system lends itself to being very sustainable friendly, very important point as well along with traceability, Joel.

Joel Penhorwood 

As we continue to talk about those programs, there is some regionality pieces to these programs. It's important to talk to your local Select Sires representative about that. Any advice to producers out there looking into these programs?

Dr. Larry Corah 

Well, one of the things when you build a supply chain become the logistics and the logistics entail, you know, a calf is born on a dairy and these dairies are located all over the United States, sometimes in pretty remote areas. And so one of the challenges of putting a supply chain together is really being able to get that calf from the dairy to the calf ranch, and a lot of your calf ranches are located in the southern part of the Great Plains. And that's where a lot of our ProfitSOURCE calves are going - Southern Great Plains. So what we've had to do is set up depots to pick up calves in various parts of the country. As you can imagine, because this is a big country. It takes awhile to develop all of those and we've made a lot of progress of being able to get these Midwest calves. A lot of the West Coast calves southwest part of the United States, even the northeast part of the United States be able to get these calves picked up and get them into calf ranches. But there are parts of the country and notably the southeast is one. The Pacific Northwest is another one that we're still working on getting our details. So it's important to talk to your Select rep and see what's available in their area because that is a very important part and a very, that's a good question. We just have got to get those calves within a few days of birth to a calf ranch. And so pick up is pretty important.

Joel Penhorwood 

And making sure that they are calves that they want as well. What beef breeds are you using and with that, what are you selecting for in that?

Dr. Larry Corah 

That's a great question, Joel. I think when we first started in this area, we asked a bunch of what I call knowledgeable people in both the dairy industry and the beef industry, what breeds are likely to be used. And the suggestion came back in all likelihood, it's going to be continental breeds - continental like Charolais, Limousine, Simmental. In actual fact, as it has shaken out, probably 60 to 65 to 70% of all the semen used today is Angus and why Angus as compared to other breeds? Most packers have Angus brands. And of course, the leading brand in the United States has been Certified Angus Beef. And those create premiums. So when the animal goes into the feedlot, as well as ultimately to the packer, they have added value if they can meet the Angus brands. So that has driven a lot of the usage. But I would also say that, I think there's still a lot of questions on beef breeds. The Holstein cow is certainly different than the Jersey cow in terms of probably what the logical mating is. The Holstein cow lends itself very nicely to an Angus cross. And that seems to be far and away the most popular but there are regions that are looking at Charolais crosses, there's still regions, considering maybe a SimAngus or a even a Limousine cross. But by and large, that's the bulk of the Holstein are bred to Angus. The Jersey is a different piece, and it's a little harder to get something that'll make well with the Jersey. Part of the problem with a Jersey cow, and there are a lot of in the United States, our estimate is there's about a million Jersey cows out of that 9.4 million dairy cattle in the country. And the Jersey cow does not necessarily create a cross that's very favorable to the feedlot industry in the packing industry. Lots and lots and lots of pushback. So the breed combination may be different. There are a number that use Limousine, but there's some Charolais use that seems like a very nice cross in terms of the jersey. But there's a lot of folks also using Angus on the Jersey. But the Jersey is a little more up in question yet at this point. And I do think there's other options with the Jersey cow that we'll talk about here in a bit.

Joel Penhorwood

We’ll continue on with this discussion, but first let’s take a quick break. We’ll be right back.

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Mike DeGroot

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Joel Penhorwood

The Select Sires Podcast continues. Dr. Larry Corah is our guest today.

Dr. Corah, continuing on our conversation about beef x dairy, there's a pretty exciting program called HerdFlex. Tell us more about that and why it's unique and how it can offer some pretty great potential.

Dr. Larry Corah 

Well Select has become a real industry leader under the leadership of Chris Sigurdson. Select built a program called HerdFlex. HerdFlex is really, instead of putting semen in a dairy cow, you're putting a straight beef embryo in and that is a different calf completely. Just as a beef x dairy is different than a straight Holstein, the HerdFlex calf or the embryo calf is again a totally different animal. It's one that because it's a straight beef and not only a straight beef, but extremely high quality beef, one that has the ability to grow, one that has the ability to grade from a carcass standpoint, and there's a lot of interest - growing interest - I really do believe that the embryo program in due course will become a very important part of using the dairy cow uterus to create a high quality animal everybody wants that that embryo calf. So the market ability is really improved. And even in Holstein operations, it adds flexibility to the marketing program. So a number of Holstein operations are looking at the embryo calf that embryo calf will bring 100 to $150 more than a beef x dairy cross calf that makes it economically worthwhile to consider. But it really lends itself to the Jersey program, where you get away from thatJersey cross it at this point still nobody really wants to buy. And it really fits extremely well. Now, there are things to consider Joel in going to an embryo program, it's one you really need to sit down with again, your Select rep and have an in depth discussion because an embryo, the synchronization program's just a little different, the time to put in an embryo is a little longer than it would be to put semen in that cow. The technician part of that is extremely important. Not everyone that can put in semen can put in an embryo. And we've gone to a training program at Select Sires, that we are training technicians throughout the United States to be able to put embryos in. A lot of dairy operations are going to train their own people to put embryos in. But I do think that's going to be a very, very important part of the dairy industry as we move forward. It's going to even create additional economic value for those dairy operations. And we're very excited about the HerdFlex program that Select Sires offers.

Joel Penhorwood 

Yeah, really a full bred beef calf coming out of that some great potential as far as profit. What are you seeing now that we talked about that traceability component of ProfitSOURCE, and really being able to then see back some results? What are you seeing as far as feedlot and carcass performance of beef x dairy? And maybe it's on these crosses, maybe it's also through HerdFlex.

Dr. Larry Corah 

But one of the things we wanted to do is create additional economic value as we started the discussion and we're finding out from the survey data that's being done both the Superior Auction as well as the California auction system that the beef x dairy calves will bring considerably more money than a straight Holstein. The Holstein steers are traditionally discounted about $40 a hundredweight, where in contrast, the beef and dairy cross is only $15 a hundredweight. In contrast, I think when we get to the embryo program will not be looking at any discount, we'll actually be looking at premiums maybe as much as as a 4 or $5 premium above traditional market price for beef. So I think we're going to see a lot of added value. We have limited feedlot and carcass performance data at this point, Joel, but what we've seen is extremely encouraging. For example, we've been able to take the beef x dairy calves, and market, they should be marketed on a grid, that's a very important discussion that we haven't gotten into, they need to be sold on a grid, because that captures the added value for quality grade. Beef x dairy calves have better yield rates than do beef cattle, that is an economic advantage. And we've actually been able to sell these calves bringing a premium above the market. Now that is based on the carcass value, I should mention that we don't still get the dressing percentage on a beef and dairy that we do with a beef animal. So the we're about one to one and a half percent lower dressing percentage, so you're going to get a little fewer pounds a carcass, but the value of each pound of that carcass is gonna be right up there with beef cattle, and maybe in many cases even getting a premium. So again, that's important, why be a part of a supply chain is that if they can capture added value when they hang them on the rail that gets funneled back throughout the whole system and ultimately to the dairy. So we're very encouraged by the data we're seeing, we're going to collect a lot more data here in the next six months. And that's an exciting part of documenting the success of this program.

Joel Penhorwood 

Data helping make the right decisions and there are decisions to be made as it's not a one size fits all program. ProfitSOURCE does have several different partners. Would you be able to touch on that, you know, we hear things like TD Beef or Power Genetics, or otherwise. What do those mean and what does that mean for me as a dairy producer?

Dr. Larry Corah 

These are really specific programs within ProfitSOURCE. In other words, there is a specific market for those calves. TD Beef as an example those calves go into the Tuls calf ranch program in Texas, they've been great partners, and then ultimately into the Friona feedlot industry, which is one of the largest cattle feeding companies in the United States. And so TD beef is a program you hear a lot about in the industry. It is one program within ProfitSOURCE. Like all programs, probably not all calves necessarily fit TD. So we have a number of other options available as part of ProfitSOURCE. But the key is to know that you got a market and that those calves ultimately have a home in a feedlot as well as in a packing plant. Critical part of decision making.

Joel Penhorwood 

Dairy producers love to talk about genetic traits and indexes. There are some unique ones to keep in mind with regard to beef x dairy.

Dr. Larry Corah 

Absolutely, absolutely. And, you know, besides some of the things we talked about in genetic predictors, there are other things that we have to manage that are part of beef x dairy or even had been a part of the Holstein steer before. One of which is carcass length, but we didn't talk about that. But in sire selection, you need to use a little more moderate frame type of genetics so that carcass length is not a concern. That's one of the reasons packers backed off of harvesting Holstein steers. Another one is the incidence of liver abscesses. Liver abscesses are much higher in Holstein steers than they are in beef cattle. It's just because of the production system, the calf ranch system, the grower program, the early part of the calf's life does impact a higher incidence of liver abscesses. So that's part of the reason that we're getting some of the packer pushback on these cattle and concern and so we're working to manage the liver abscess issue through sire selection. We can manage the carcass length issue, but those are all important pieces that have to be considered and why this is an important discussion to sit down with your rep and really go through all these details and get the right genetics that are going to really work for all aspects of the industry.

Joel Penhorwood 

And the idea is it's all part of a really advantageous replacement heifer strategy to maximize profitability on the farm. And kind of coming back out of those further details on beef and dairy that we talked about. For those wanting to get involved, I think a question you've probably been getting is how do you determine how many cows to devote to this beef x dairy program on your farm?

Dr. Larry Corah 

Well, that's a great question. And you know, I asked a lot of our dairy folks and we've had a lot of discussions on it and they I get the same answer all the time and says it depends. Well, it depends. On what? It depends really on where the dairy is at in terms of a lot of things that they're doing. In other words, if they're in a mode to grow the numbers of cows that they're milking, then they're probably going to have a smaller percentage of the herd they can devote to the beef x dairy. Another area, for example, is if they got a market for that replacement heifer, and there's still parts of the country that are able to sell a dairy replacement, heifer, reproductive performance is critical. There's a lot of variation in the reproductive performance of dairy operations. And if the higher the reproductive performance, reproductive efficiency, the higher percentage of the cattle they can devote as kind of a rough figure and to not avoid your question totally, we use a figure of about 50%. In other words, I think a typical dairy operation can probably safely devote 50% of their dairy cows to using beef semen, some will be able to go higher than that some will be able to go as high as 60%. Others not as high as 50. And there may even be cases of smaller operations, Joel, where it just doesn't really fit. I mean, it's both the way, the way they're structured, the way they're set up. They might be 100, 200, smaller type operation, sometimes it'd be places it doesn't fit. But I think in most dairy operations is going to fit extremely well.

Joel Penhorwood 

Common question by producers. And to wrap things up a little bit. What are some other questions that you're hearing? Maybe what are some questions you should be hearing or would like to hear folks be asking that we can answer here today or attempt to talk about?

Dr. Larry Corah 

Well, I think one that always comes up is is this a fad or is it sustainable over a long period of time? And I truly think, Joel, this is not a fad. We went through a period in maybe the late 80s and early 1990s, that there were a number of these beef x dairy, particularly Holstein, Angus crosses, graded notably in the western half of the United States. And because of the economic value that came with the replacement dairy heifer that soon disappeared. I think in this case, because of the increased use of sexed semen, that continued improvement of the technology of sexed semen, this is not a fad. This is something that's in place, one of my colleagues always said we're still in the first inning of a nine inning game. That's a pretty good analogy, we have a lot to learn as an industry of how to manage these calves, there's a should they be handled exactly like we used to handle Holstein steers or other things we can do differently. All of those, we're still in a learning process at Select Sires. We continue to work with authorities and leading researchers throughout the United States to gather answers to a lot of that, for example, one of the things that I think we haven't talked about is how important the calf Ranch is to ultimately the performance of these calves through the feedlot and carcass phase. And so we're looking at things like milk replacer, the pounds of solids that these calves should be getting. And I think in many cases, in the dairy industry at the calf ranch level, we're probably not using a high enough level of nutrition, high enough level of solids on these calves as the data is starting to show. And these are all things that we're gathering information on, because it's part of a supply chain. Each part of supply chain has to be successful and be able to create a valued calf as it moves through the system.

Joel Penhorwood 

And we're looking at it from one end of the supply chain, getting that calf on the ground and into it. As you talk to folks from the other end - at the packer side - are they seeing the results, the attention to detail?

Dr. Larry Corah 

They really consider that important. For example, health is one aspect that feedlots and the packers are very concerned about all of us as consumers, we prefer that we're consuming meat from an animal, it's been healthy through its life. And so that goes back to starting and doing it right at the dairy with the colostrum. That's the initial piece, but then it's the vaccination program - the dipping of navals - all of these kinds of things that are critically important. And ultimately the thing that's exciting, I think, to a lot of the packers and they really get excited about the embryo program. But even still on the beef x dairy they recognize that this is a different carcass. This is an animal that unlike the Holstein because of some things like ribeye shape, image of a straight Holstein compared to beef in the consuming public. The beef x dairy cross is a different type of carcass and much more appealing and much more an animal that can be put into a lot of programs and creating the right kind of opportunity for us.

Joel Penhorwood 

Anything else you'd like to talk about?

Dr. Larry Corah 

It's a great topic. And I think anytime that we can add economic value in agriculture, we need to look at it as an option or an opportunity. And the beef x dairy is really created that not only a change in the dairy industry, but it's also created opportunities for us in the beef industry as well. And so I do think one of the things you'll start to see a lot of that we haven't talked about is more of a stronger relationship between these dairy operations, especially the larger one and the cattle feeding entities. You'll see that develop in the United States. We're helping facilitate that process. And it just creates a working relationship that really, whether you call it networking or whether you want to call it whatever, it creates economic value for all levels of agriculture. And this is exciting.

Joel Penhorwood 

Well, great discussion here today with Dr. Larry Corah, a professor emeritus at Kansas State University, and a beef supply chain consultant with Select Sires. Hey, we like to end these conversations on a little bit of a lighthearted note and since we're usually talking maybe some more of the dairy topics, let's go on the beef side. What's your favorite cut of steak?

Dr. Larry Corah 

Well, that's, that's, for all of us. You know, beef is a very important part of the American diet. And one of the things the beef industry has done very nicely is improve the quality of that end product. The flavor, the tenderness, all of that is improved greatly over the last 10 years. And certainly, we all have the opportunity to enjoy it. I'm sure I'm like most guys, I probably for the longest time enjoyed a 12 ounce ribeye or 12 ounce strip steak. Part of the process of getting older, however, is I probably don't need to eat 12 ounces, I maybe need to seven or eight is fine. So I've actually started lately, I'd say in the last couple years, eating a lot more tenderloins. They're very tender, they're very flavorful,  they're an excellent beef cut, but there's an awful lot of good beef cuts out there.

Joel Penhorwood 

Can't argue with you there. Dr. Corah, thank you so much for joining us.

Dr. Larry Corah 

Thanks. Enjoyed it.

Joel Penhorwood

Learn more about ProfitSOURCE, the beef x dairy program at Select Sires, visit www.selectsires.com/profitsource. I’m Joel Penhorwood. Thanks for tuning in to the Select Sires Podcast.

 


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