Capturing Management Value

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Capturing Management Value Kevin Hill, DVM, Merck Animal Health Do more things that make you money. Stop doing the things that don t. Make sure you can tell the difference. What Makes You Money?

1 Capturing Management Value Kevin Hill, DVM, Merck Animal Health Do more things that make you money. Stop doing the things that don t. Make sure you can tell the difference. What Makes You Money? Calves Sold thru Superior Livestock 700, ,000 60,000 lots 500, million calves 400, , , , Capturing Management Value The Profit Formula: Income Expenses = Profit Heavier Calves More Calves Add Value/lb 2016 Angus Conven9on, Indianapolis, Ind. 1

Capturing Management Value: Goals Capturing Management Value: Strategy - - - Wean More Calves - Improved Reproduc9ve Efficiency - Wean more live calves, improve health Wean Heavier Calves - Nutri9on

2 Capturing Management Value: Goals Capturing Management Value: Strategy Wean More Calves - Improved Reproduc9ve Efficiency - Wean more live calves, improve health Wean Heavier Calves - Nutri9on of Dams (including gesta9on) - Improved Gene9cs - Implant - Parasite Control Add Value - Immune prepara9on - Weaning stress management - Gene9c quality for feeding efficiency Wean More Calves - Improved Reproduc9ve Efficiency - Wean more live calves Wean Heavier Calves - Nutri9on of Dams - Improved Gene9cs - Implant - Parasite Control Prepare Calves for the next phase Add Value - Immune prepara9on - Weaning stress management - Feeding efficiency Improve Gene<cs Improve Vaccina<on Protocols Improve Cow Nutri<on Improve Calf Performance Capturing Management Value: Ac<ons Improve Gene9cs Improve Vaccina9on Protocols Improve Cow Nutri9on Improve Calf Performance Buy BeCer Bulls Update Herd Health Protocols Update Nutri<on Plan Deworm & Implant BUY BETTER BULLS 2016 Angus Conven9on, Indianapolis, Ind. 2

3 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Yearly Price Differences $12 $15 per hd BULL Life9me yrs 4 Sale wt of calf 550 VALUE Calves per yr 20 Sale price $ 1.35 Cull value /lb $ 1.10 slide $ 0.10 Cull wt Feed carry cost/day $ 1.50 Bull A Bull B Purchase Price $ 2, Purchase Price $ 3, Purchase & Feed $ 4, Purchase & Feed $ 5, Cull value $ 2, Cull value $ 2, Net Cost $ 2, Net Cost $ 3, Bull cost per calf $ Bull cost per calf $ Increased Wt. 0 Increased Wt. 20 Slide adj price $ 1.33 Calf Value $ Calf Value $ spreadsheet Increased Value $ Net Bull cost per calf $ Bull B advantage per calf life9me $ 3.10 $ What will buyers pay for pre- condi:oned calves? $12.00 IMPROVE VACCINATION PROTOCOLS Premium per cwt $10.00 $8.00 $6.00 $4.00 Health Premiums $/cwt Vac 45 = $55 /hd Vac 34 = $ 25 /hd Vac 45 $2.00 $ Vac Angus Conven9on, Indianapolis, Ind. 3

Weight 550 lbs Expenses: Price off the cow $ 1.50 Vaccinate and Deworm $ - V34 Value $ 825.00 Labor $ - Vacc Boosters $ 2.00 Mortality 1% Labor $ 0.50 Morbidity 10% Total Processing $ 2.

4 Weight 550 lbs Expenses: Price off the cow $ 1.50 Vaccinate and Deworm $ - V34 Value $ Labor $ - Vacc Boosters $ 2.00 Mortality 1% Labor $ 0.50 Morbidity 10% Total Processing $ 2.50 Cost/tx $ Treatment Cost/hd $ 1.50 Days on Feed 45 Feed Cost per day $ 1.00 ADG 2.0 Total Feed Cost $ Gain lbs 90.0 Labor per day $ 0.25 Actual Wt Total feed labor $ Wt. minus death loss Total Feeding Costs $ Slide per cwt $ 0.10 Slide adjusted price $ Summary: (V45-V34) Premium $ 0.03 $ per hd V34 Value $ Net Sale Price $ Weaned/Vacc Sale Value $ Weaned/Vacc Sale Value $ Increased Value $ Expenses $ $ Net Profit $ per hd ROI 1.5 : 1 Cost/Benefit Analysis of Preconditioning and Weaning (comparing V34 to V45) Weight 550 lbs Expenses: Price off the cow $ 1.50 Vaccinate and Deworm $ - Value at Weaning $ Labor $ - Vacc Boosters $ 2.00 Mortality 1% Labor $ 0.50 Morbidity 10% Total Processing $ 2.50 Cost/tx $ Treatment Cost/hd $ 1.50 Days on Feed 45 Feed Cost per day $ 1.00 ADG 1.5 Total Feed Cost $ Gain lbs 67.5 Labor per day $ 0.50 Actual Wt Total feed labor $ Wt. minus death loss Total Feeding Costs $ Slide per cwt $ 0.10 Slide adjusted price $ Summary: (V45-V34) Premium $0.03 $19.00 per hd Value at Weaning $ Net Sale Price $ Weaned/Vacc Sale Value $ Weaned/Vacc Sale Value $ Increased Value $ Expenses $ $ 1.34 Net Profit 1.34 $ per hd ROI 1.0 : Angus Conven9on, Indianapolis, Ind. 4

5 App store for ipad or health- manager.com UPDATE NUTRITION PLANNING 2016 Angus Conven9on, Indianapolis, Ind. 5

The most important management skill to master for health, produc9vity, and profit, is nutri9on.???? The Nutri9on Challenge: As nutrient requirements increase (e.g., for pregnancy and lactation), the quantity and quality of forage needed by the cow increases.

6 The most important management skill to master for health, produc9vity, and profit, is nutri9on.???? The Nutri9on Challenge: As nutrient requirements increase (e.g., for pregnancy and lactation), the quantity and quality of forage needed by the cow increases. Don C. Adams Mcal/Day Protein Energy Months Since Calving NRC Grams/day Grams per Day Mineral Requirements for Lactation Calcium Phosphorous Month Since Calving NRC Angus Conven9on, Indianapolis, Ind. 6

CRUDE PROTEIN, % 18 16 14 12 10 8 6 4 2 0 Crude protein in cattle diets on Northern

18 16 14 12 10 8 6 NRC2000 Protein Energy -4-3 -2-1 FEB 0 1 2 3 JUNE 4 5 6 7 Months

edu Protein Energy 18 900 16 800 Mcal/Day 14 12 10 8 700 600 500 400 Grams/day 3 6 6

7 CRUDE PROTEIN, % Crude protein in cattle diets on Northern Great Plains rangeland Protein is green APR MAY JUN JUL AUG SEP OCT NOV DEC FEB Mcal/Day NRC2000 Protein Energy FEB JUNE Months Since Calving Grams/day Don C. Adams dadams1@unl.edu Protein Energy Mcal/Day Grams/day NRC APR 0 1 JUNE Months Since Calving Angus Conven9on, Indianapolis, Ind. 7

Nutrient Quality = Milk ProducNon = Weaning Wt. Conclusions: Cows grazing dormant Nebraska Sandhills grass range Late Gesta9on Protein supp. vs. none Early Lacta9on Grass hay vs.

8 Nutrient Quality = Milk ProducNon = Weaning Wt. Conclusions: Cows grazing dormant Nebraska Sandhills grass range Late Gesta9on Protein supp. vs. none Early Lacta9on Grass hay vs. Irrigated meadow Nutri9onal supplementa9on during late gesta9on and/or early lacta9on: 1) Had lijle impact on re- breeding 2) Had significant effects on weaning wts, number of calves weaned, and subsequent fer9lity of heifer calves. Fetal Programming 2016 Angus Conven9on, Indianapolis, Ind. 8

9 You Can t Fool Mother Nature V with My cows can rough it through. The only profitable cow is the one that calves on her own and survives on na9ve forages. A real cajleman can see what his cows need. Conclusions: Inadequate Nutri9on may result in 1) Lower Concep9on Rates 2) Lower Weaning Weights 3) Lower Life9me Performance of calves Energy and Protein Calculator Brood Cows Step One: Test your Feeds and Evaluateyour Current Plan Cows: Estimates: 30 lbs of Hay as fed per hd/day 2.1% DMI % of Body Weight provides 1300 lbs avg Cow Body Weight 27 lbs of Dry matter intake, 150 head in feeding group 1.6 lbs Protein, and Hay: 12.2 lbs TDN. 90% Dry Matter of Hay 6% Protein 37 lbs Hay AF required to supply Protein target 45% TDN 27 lbs Hay AF required to supply Energy target Goals: 2.0 lbs protein per hd per day Load: 11.0 lbs TDN 2.3 tons per day % of Goal from Proposed Feed 110% 81% Protein C:\Users\Khill4\Desktop\Herd Planning\Dashboards\Cow ra9on calculator.xlsx Energy 2016 Angus Conven9on, Indianapolis, Ind. 9

Step Two: Identify options to correct deficits Protein Sources Feedstuff DM% TDN% CP% Cost/ton Alfalfa Hay Full Bloom 88 54 16 $ 90 Alfalfa Hay Early Bloom 90 59 19 $ 110 DDG Wet 36 97 30 $ 120 DDG

10 Step Two: Identify options to correct deficits Protein Sources Feedstuff DM% TDN% CP% Cost/ton Alfalfa Hay Full Bloom $ 90 Alfalfa Hay Early Bloom $ 110 DDG Wet $ 120 DDG Dry $ 270 Corn Gluten $ 320 Cojonseed Whole $ 430 Soybean Meal 44% $ 497 Block 20% Natural $ 620 Block 36 w Urea $ 620 Molasses Tub 20% $ 976 Urea 46%N $ 1,800 Proteins sorted by cost/cp% Feedstuff DM% TDN% CP% Cost/ton Cost/CP Urea 46%N $ 1,800 $ 6.31 Alfalfa Hay Full Bloom $ 90 $ 6.39 Alfalfa Hay Early Bloom $ 110 $ 6.43 DDG Dry $ 270 $ 9.89 DDG Wet $ 120 $ Soybean Meal 44% $ 497 $ Corn Gluten $ 320 $ Cojonseed Whole $ 430 $ Block 36 w Urea $ 620 $ Block 20% Natural $ 620 $ Molasses Tub 20% $ 976 $ Step Three: Get professional help for best-cost solutions 2016 Angus Conven9on, Indianapolis, Ind. 10

CALF GROWTH TECHNOLOGIES - PARASITE CONTROL - IMPLANTS Effective Parasite Control Use the right product at the right 9me. Beef: Deworming Method % Infected Post Treatment Avg.

11 CALF GROWTH TECHNOLOGIES - PARASITE CONTROL - IMPLANTS Effective Parasite Control Use the right product at the right 9me. Beef: Deworming Method % Infected Post Treatment Avg. Egg Count Pour-ons Injectable Parasite Control Cydectin - Pour-on Dectomax - Pour-on Ivermectin - Pour-on Ivomec - Pour-on Panacur - Drench Oral Safe-Guard - Drench Safe-Guard - Feed Safe-Guard - Mineral Safe-Guard - Liquid Formulation Methods with 10 or more farms No Treatment - N/A Dectomax - Injectable Ivermectin - Injectable Ivomec - Injectable Ivomec Plus - Injectable Choosing the right product for effective deworming can add $20 per head 2016 Angus Conven9on, Indianapolis, Ind. 11

Implant at Branding and Pre-Conditioning 80 60 40 20 % of All Lots Implanted 60% 40% 20% 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 0% 2009 2010 2011 2012 2013 Price by

12 Implant at Branding and Pre-Conditioning % of All Lots Implanted 60% 40% 20% % Price by Implant Status $180 $180 $160 $160 $140 $140 price per cwt $120 $100 $80 $60 $40 Steers Implanted Steers Non- implanted price per cwt $120 $100 $80 $60 $40 Heifers Implanted Heifers Non- implanted $20 $20 $ $ Angus Conven9on, Indianapolis, Ind. 12

13 Calf Weight 570 Calf Weight 545 Value $ 1.40 Slide $ 0.10 cwt Slide Adjst. Price $ 1.43 Implant Cost $ 1.25 Natural Premium $ - cwt Expected Gain 25 lbs $ - per hd Premium Price $ 1.43 Calf Value $ Expense $ 1.25 Net Value $ Net Calf Value $ Advantage to Implant $ ROI 16 : 1 What Makes You Money? Not CerNfied Natural Since 2005, posi9ve effect on price only two (2) years 2006 $1.40/cwt 2008 $0.84/cwt $0.90 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Yearly Price Differences/cwt $4.00/cwt Not Different Capture Management Value Management AcNons Buy Bejer Bulls Improve Vaccina9on Protocols Improve Nutri9on Planning Maximize Growth Technologies Value Reward $10-15/hd Sale Premium $20-40/hd Sale Premium Unlimited opportuni9es $20/hd Implant opportunity $20/hd Effec9ve deworming 2016 Angus Conven9on, Indianapolis, Ind. 13

14 Keep Smiling! Kevin Hill, DVM Angus Conven9on, Indianapolis, Ind. 14

Beef Cow/Calf, Projected Budget for Calves Sold in 2015, South Missouri

Beef Cow/Calf, Projected Budget for Calves Sold in 2015, South Missouri Fall 14 Spring 15 Calving Calving Calf crop, % weaned 88% 85% Steer calf sales: 580 lbs. @ $250/cwt. x 85% x 1/2 -- $ 616.25 580