Saturday General Session

Feedlot Perspective of Efficiency

By Troy Smith

“Efficiency” was the underlying theme of presentations offered during the 2009 Beef Improvement Federation (BIF) symposium’s Saturday morning session. Speakers talked about the challenge of higher production costs, the importance of matching cow type to the production environment and the potential advantages crossbreeding can bring to a commercial cow-calf operation. They talked about minimizing input costs, optimizing production output and how important production efficiency is to maximizing profit.

Asked to share his perspective, Harris Ranch Beef executive Mike Smith said today’s economic environment demands that beef producers in every segment of production train their focus on improved efficiency.

“At the end of the day,” Smith said, “if it doesn’t make sense from a profit standpoint, why bother?”

In describing the integrated California-based company, Smith said Harris Ranch Beef sources cattle through an “alliance” of cow-calf producers. The company owns a 120,000-head feedlot and beef-processing facility where close to 850 head are harvested five days per week. Fresh, frozen and precooked product is marketed under multiple Harris Ranch Beef labels through foodservice, retail stores and direct to online customers.

Smith talked about how feed price volatility has affected feeding operations, noting a 40% shift in feed costs during 2008. Harris used about 350 tons of feed during the year, costing an average of $300 per ton of dry matter. But for every 0.3% shaved off the cost of feed, the company can pick up about $20 per animal harvested.

Consequently, the company is very interested in improving efficiency at every opportunity, including cattle feed efficiency.

“But we have to remember that we need the consumer. We need the consumer to want to buy our product,” Smith stated, noting the importance of maintaining standards for product quality.

Questioned about whether crossbreeding has proved detrimental to company targets for carcass quality grade, Smith acknowledged that crossbreeding can have a slightly negative effect. Cattle supplying Harris Ranch Beef are expected to grade 80% Choice or better.

“But should we be trying to make all cattle alike? Should they all make Choice and Prime? No," Smith said. "Some consumers prefer Select beef. There are homes (markets) for various grades.”

He advised producers to define a market — a target they can hit consistently and efficiently.

Editor’s Note: This summary was written under contract or by staff of Angus Productions Inc. (API). To request reprint rights contact Shauna Rose Hermel, editor, at 816-383-5270. PowerPoints are posted with permission of the presenter and may not be reproduced in whole or in part without the express permission of the presenter.

The 41st BIF Research Symposium and Annual Meeting was hosted by the California Beef Cattle Improvement Association and the California Cattlemen's Association. For more information, visit www.bifconference.com or www.calcattlemen.org/bif2009.html.