Many breed associations and seedstock producers use Dollar Indexes to promote their product. When cow-calf producers analyze Dollar Indexes, they need to ask, “Which link in the beef production chain will get the profit?” If it’s not the cow-calf producer, then you need to shift your emphasis elsewhere. Charity begins at home! Select for traits that are profitable for the cow-calf producer. The rest of the beef production chain does just fine taking care of itself.
Terminal Indexes like the American Angus Association’s $Beef and Leachman’s $Feeder profit feedlots and packers by maximizing muscle, growth, and marbling – traits that when maximized are antagonistic to fertility, which is the cornerstone of cow-calf profitability. Blended indexes like AAA’s $Complete and Leachman’s $Profit attempt to reconcile these opposing forces by hunting for outliers, but true outliers are rare and rarely breed true. You might make a dollar, but it’ll cost you two dollars.
Dr. Dorian Garrick’s study of the American Angus industry made the stakes plain. In 2017, the average Angus steer netted $144 more than in 1980 – but it cost $136 MORE per year to run a cow. The cow-calf producer was bleeding $136 annually so someone else could pocket an extra $144. Over a 10-year average, packers, and processors capture 87% of the available profit in the beef value chain. Feeders and stockers capture 6 to 8%, while retailers capture 1%. That leaves just 3 to 4% for the cow-calf producer.
It is time for family farms and ranches to stop subsidizing the rest of the beef production chain. Profitable farms and ranches build prosperous communities. Charity begins at home!
Quote Worth Re-Quoting
“Don’t worry about people stealing your ideas. If your ideas are any good, you’ll have to ram them down people’s throats.” ~ Howard Aiken
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