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Strong markets influence decisions

It's hard to pick up a farm paper without seeing an article speculating on cowherd expansion. Yes, there are logical reasons for that, starting with the obvious: cattle prices. Next in line is the above-average forage now available in much of cow...

It's hard to pick up a farm paper without seeing an article speculating on cowherd expansion.

Yes, there are logical reasons for that, starting with the obvious: cattle prices. Next in line is the above-average forage now available in much of cow-calf country, long plagued by drought.

A factor generally not mentioned is revenue management. The added value of the steer portion of a calf crop allows holding heifers until Jan. 1 or later. Will these heifers then sell as feeders or become replacement females? The strong bred-heifer market likely will influence that decision.

The bottom line is, conditions are right for expansion in the next five years. So how does this affect the rest of the industry?

First, an already-reduced feeder cattle supply becomes further reduced. Traditionally, heifers make up 32 to 38 percent of the fed cattle mix. In years of liquidation, such as 2009 to 2012, the share of heifers average about 38 percent. Currently, that's closer to 33 to 34 percent, which indicates we are entering a rebuilding phase.

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What else could be impacted? Here are some things that perhaps you did not know about heifers vs. steers.

Looking at Kansas State University Research and Extension's Focus on Feedlots newsletter, data on 167,000 cattle sold from July through September 2014 shows significantly different performance between the two, especially now. As you'd expect, heifers gain more slowly (about half a pound per day) resulting in poorer feed conversion and a higher cost of gain ($6 per hundredweight) than steers.

The average finished weight of heifers in late summer was at least 150 pounds less than steers, for a carcass weight spread of nearly 95 pounds. Historic data from a large feedlot database indicates a 60-pound to 70-pound spread between heifers and steers is more normal.

What surprises many people is how much better heifers grade than steers. In the database first noted, heifers averaged 10 to 11 percentage-points (ppt) higher Choice and Prime than steers.

Looking at Certified Angus Beef acceptance rates in two of our databases, compared with steers, heifers were 5 ppt and 9 ppt higher, respectively. Therefore, we can see the net effect of fewer heifers on feed will be a slight reduction in the share of Choice and Premium Choice cattle.

Two other noteworthy differences are that heifers typically have 1.2 to 2 ppt more yield grade (YG) 4 and 5 carcasses, and feedlot death loss is generally 1 ppt higher in heifers.

So why do heifers outgrade steers? Obviously, gender difference is part of the answer, but a major part of the disparity can be explained by how heifers respond to the use of growth implants and the feeding of MGA.

Scientists at Colorado State University and Kansas State University (2007 and 2014), summarizing results of numerous trials, reported implanting heifers reduced the share grading Choice and Prime by only 2 to 3 ppt, while the impact on steers can be as high as 8 to 10 ppt with aggressive implant strategies.

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Their research summary also discussed the feeding of MGA, a common feed additive with heifers, which improved quality grades by 2 to 3 ppt.

Editor's note: Corah is vice president of Certified Angus Beef LLC.

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