The Future of the U.S. Beef Cattle Industry HPJ 2019 Cattle U by Lee Leachman

1. The Future of the U.S. Beef Cattle IndustryHPJ 2019 Cattle Uby Lee Leachman

3. Is the sun setting or rising? We will see more improvement in Beef Cattle in the next 20 years than in the last 100 years!

4. The report of my death was an exaggeration….-- Mark Twain, 1897

5. Seven Factors Accelerating Improvement in the U.S. Beef Industry • Advanced Reproductive Technologies • Genomically Enhanced EPDs • Databases with Unique Phenotypic Data • Selection Indexes that Directly Improve Profit • EPDs and Indexes on Commercial Herds • Precision Feedlot Management • Coordinated Value Chains

6. #1 Advanced Reproductive Technologies

7. The TOG Toolbox Sorted Semen Recipient Solutions Genetic Resources In Vitro Fertilization Cloning Technology Embryo Transfer Artificial Insemination Precision Breeding Gene Editing Reproductive Toolbox Animal Husbandry

8. Trans Ova Genetics IVF program adding to the genetic improvement success of the major genetic companies

9. #1 Advanced Reproductive Technologies • We can go faster than ever before! • Example: A dairy bull calf born before his dam reached 12 months of age. • Fewer cows will produce more bulls. • We currently use 10,000 cows to make 2000 bulls. With ART’s we could make all of our bulls out of our top 40 cows.

10. #2 Genomically Enhanced EPDs • Until very recently, we lacked the computer models that could accurately convert data from 50,000 SNPs to breeding values. • Faster computers, and better models – ssBLUP and BOLT. • Now we have the equivalent of 5 – 20 progeny on each of the triats measured. • This means we will make better mating decisions and more rapid genetic progress.

11. #3 Databases with Unique Phenotypes • It costs money to collect data. • Who is going to collect the important, expensive data: • Feed Efficiency/Conversion • Pulmonary Artery Pressure / Heart Failure • Respiratory Disease Resistance • Carcass Red Meat Yield • Traits we have not even considered….. • We have a 1.1 million head database, that runs a weekly genetic analysis on 26 traits and 13 indexes.

12. Feed Conversion Data Leachman Cattle has the industry’s largest private database with feed Intake records. We currently have over 25,000 animals with feed intake records.

13. Profit Driver: Feed IntakeA tale of two bulls… • Same herd. 1244 AYW vs. 1222 AYW. • 17 vs. 42 lbs. of dry matter / day (9,125 lbs. / year). • Converted 4 to 1 vs 10 to 1. • 40% Heritable = 112 cows vs 75 cows on same grass. • Which bull’s daughters do you want?

14. Our competitors made rapid progress: Day 43 Day 57 Day 71 Day 85 1957 Chicken Genetics 2001 Chicken Genetics How did they do this?

15. #4 Selection Indexes that Directly Improve Profit • Every breeder selects based on some kind of index…. • Usually, it is one developed in their head based on what they like! • Is that a bad system? • Is that the best possible system? • Is there an underlying industry profit function? • If so, wouldn’t it be better to select cattle that maximize that function?

16. CowHerd Genetic Profit Drivers • Output: • What does her calf weigh? • What is the calf worth? • Reproduction: • Calving ease / live calf %? • Does she breed at 15 months? • Does she breed back early? • Longevity: • Does she stay in the herd? • Cow cost: • How much does she eat?

17. Feedlot Profit Drivers What is your calf worth at weaning? • 35% Conversion • 30% Grid • 18% Carcass Wt • 17% Health • A $600 Spread Between Herds from Top to Bottom! • From 185,000 steers at DCFY in Oberlin, KS

18. Profit Driver: Beef quality! Colorado State University M.S. Thesis: M. R. Emerson (2011)

19. #5 EPDs and Indexes on Commercial Herds • Do cow/calf outfits keep their most profitable replacement heifers? • How could they, there is no data! • What if we could predict key things like: • Growth, milk, and carcass traits. • Lifetime fertility. • Udder quality. • Disposition. • What if we could simply predict which cows would be the most profitable ones?

20. #6 Precision Stocker / Feedlot Management • When should an animal on feed go to harvest? • Answer: when the marginal daily feeding cost is equal to or greater than the marginal value of the gain in the animals value on that day. • Do feedlots have a good way of knowing when this is? • NO • What is needed? • Predictions of growth rate, carcass merit, and feed cost on an individual basis. Plus, an estimate of the likely change in the future market.

21. #7 Coordinated Value Chains • The ability to produce and deliver beef tailored to the specific desires of consumers. • Examples: • Prime beef • Natural, Never Ever beef • Organic beef • Grass fed beef • Low Carbon Footprint beef? • Designer fatty acid profile beef?

22. #7 Coordinated Value Chains • FPL Food / Chatel Farms

23. What is possible if we dream?

24. Settle for “Good” or Seek “Great” “Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great. … Can a good company become a great company and, if so, how?” -- Jim Collins, Good to Great Vision for the Year 2020

25. World Population Density Vision for the Year 2020

26. The U.S. Industry will be the Global Leader in the Efficient Production of the Highest Market Value Beef.

28. What is possible if we dream? • Improve stocking rate by 10%. • 1300 lb. cows that raise 650 lb. calves. • Higher conception and longevity. • A 50% reduction in post weaning death loss. • Feed conversion of 4 to 1. • Average carcass weight over 900 lbs. • Each animal harvested within days of their optimum harvest date. • Grading 70% Prime and 70% YG 3 or better. • Traceability that allows a consumer to see where and how their beef was raised. • Our industry will add over $300 per head to the value of an animal over the next 20 years!

29. The sun is rising! Questions?