1. KSU Cattle Value Optimization Seminar What Feedyards Are Looking For in Cattle They Buy By Tom Brink

2. Five Rivers Ranch Cattle Feeding, LLC Formerly 50-50 owned by ContiGroup & Smithfield Now owned entirely by JBS USA Thirteen feedyards in Eight States 890,000 head of feeding capacity Have sold cattle to 4 of the 5 major packers Majority sold on grids (formulas)

3. (1) Economics of Cattle Size and Finish Weight

4. Economics of Size & Weight Is BIGGER better? Or is SMALLER better in a high feed cost environment?

5. “The industry wants a steer that can produce a 700- to 800-lb. Choice carcass with a Yield Grade less than 3.” True statement?

6. “The industry wants a steer that can produce a 700- to 800-lb. Choice carcass with a Yield Grade less than 3.” Choice YG 3 or less 700-800 lbs. ?

7. Compare feeyard performance in steers that produce 700 to 800 pound carcasses with those with carcass weights of 850 pounds or more.

8. Need cattle with the same placement weight and same health status and death loss. Also need to de-trend the performance data for out month.

9. Steer Performance Comparison 700-800 lb. carcasses 784 lb. carcass wt. 782 lb. placement wt. 1.05% death loss DMI = 19.29 lbs. ADG = 2.93 lbs. Dry F/G = 6.63 lbs. 158 days on feed >850 lb. carcasses 866 lb. carcass wt. 787 lb. placement wt. 0.98% death loss DMI = 20.34 lbs. ADG = 3.30 lbs. Dry F/G = 6.20 lbs. 169 days on feed Multi-year closeouts on more than 470,000 head.

10. Steer Performance Comparison 700-800 lb. carcasses 784 lb. carcass wt. 782 lb. placement wt. 1.05% death loss DMI = 19.29 lbs. ADG = 2.93 lbs. Dry F/G = 6.63 lbs. 158 days on feed >850 lb. carcasses 866 lb. carcass wt. 787 lb. placement wt. 0.98% death loss DMI = 20.34 lbs. ADG = 3.30 lbs. Dry F/G = 6.20 lbs. 169 days on feed

11. Steer Performance Comparison 700-800 lb. carcasses 784 lb. carcass wt. 782 lb. placement wt. 1.05% death loss DMI = 19.29 lbs. ADG = 2.93 lbs. Dry F/G = 6.63 lbs. 158 days on feed >850 lb. carcasses 866 lb. carcass wt. 787 lb. placement wt. 0.98% death loss DMI = 20.34 lbs. ADG = 3.30 lbs. Dry F/G = 6.20 lbs. 169 days on feed

12. Steer Performance Comparison 700-800 lb. carcasses 784 lb. carcass wt. 782 lb. placement wt. 1.05% death loss DMI = 19.29 lbs. ADG = 2.93 lbs. Dry F/G = 6.63 lbs. 158 days on feed >850 lb. carcasses 866 lb. carcass wt. 787 lb. placement wt. 0.98% death loss DMI = 20.34 lbs. ADG = 3.30 lbs. Dry F/G = 6.20 lbs. 169 days on feed

13. Steer Performance Comparison 700-800 lb. carcasses 784 lb. carcass wt. 782 lb. placement wt. 1.05% death loss DMI = 19.29 lbs. ADG = 2.93 lbs. Dry F/G = 6.63 lbs. 158 days on feed 1,225 lb. live weight >850 lb. carcasses 866 lb. carcass wt. 787 lb. placement wt. 0.98% death loss DMI = 20.34 lbs. ADG = 3.30 lbs. Dry F/G = 6.20 lbs. 169 days on feed 1,353 lb. live weight

14. 1,225 lbs. 1,353 lbs. The heavier-finishing steer creates more value in the feedyard… +$52.05 per head advantage $4.25

15. “The industry wants a steer that can produce a 700- to 800-lb. Choice carcass with a Yield Grade less than 3.” Choice YG 3 or less 700-800 lbs.

16. “The industry wants a steer that can produce a 700- to 800-lb. Choice carcass with a Yield Grade less than 3.” Choice YG 3 or less 700-800 lbs. 850 lbs. plus

17. (2) Health in Feedyards

18. Cattle health in the Feedyard “Old problem” but still identified as the #1 production problem feedyards face Impact on performance and carcass quality is well documented We have the technology and know how to get cattle better prepared to leave the farm or ranch…implementation is lacking Many cattle still need stronger immunity when they leave home.

19. Impact of Health & Death Loss* Death LossADG DMC Profit per head 0% - 0.5%3.13 6.69 +$14.30 0.5% - 1.5%2.99 6.89 +$2.25 1.5% + 2.86 7.03 -$19.49 *775 to 850-lb. yearling-fed steers sold January thru March 2010 2.4% difference between best and worst groups (0.48% vs. 2.88%).

20. (3) Traits correlated with Grid Premiums

21. Traits correlated with grid premiums South (KS-TX) Correlation Prime/Choice 0.60 Dress Percent 0.37 YG 4 & 5 0.00 YG 1 & 2-0.24 Heavies-0.29 Darks-0.32 Standards-0.49 222,557 steers & heifers North (CO-NE) Correlation YG 1 & 2 0.39 Prime/Choice 0.35 Dress Percent 0.22 Darks-0.08 Standards-0.21 YG 4 & 5-0.46 Heavies-0.46 113,858 steers & heifers

23. First choice in feeders: AN x Continental 50% to 75% Angus and 25% to 50% Continental Good feeding, Good grading, Good yielding animal that is usually the right size Higher percentage British cattle lack often muscle, yield and produce too many YG 4s. Higher percentage Continental cattle lack quality grade, and often get too big before they finish. Balanced combination of Angus and Continental breeding is tough to beat.

24. Creating more valuable feeder calves QSA-PVP (Age & Source) Load-lot groups Post-weaning management Health protection Right genetics within breeds Right combination of breeds $ $$ $$$ $$$$

25. The End