By Sharla Ishmael

A growing number of cattle people like Fuqua are finding that collecting – and using – information on individual animals is something like getting your first pair of eyeglasses. In both cases, you start seeing things you never knew were there before. And, too, rather than stumbling into the blurry obstacles in your path, you can actually see where you’re going and avoid stubbing your toe.

Adding individual data to the decision-making process isn’t just showing producers a clearer path to reach their goals, it’s also proving to the industry there isn’t just one path leading to improved profitability. The Cattleman asks producers from the cow-calf, stocker and feedyard segments of the business how it’s improved their operations.

When James Fuqua took over the ranch his great-grandfather established in Quanah, Texas, in 1894, he knew the returns from his cattle operation weren’t acceptable – he just didn’t know why.

After doing a Standardized Performance Analysis (SPA) on the operation, he knew his costs were too high, but couldn’t determine exactly where they were coming from. He also didn’t know where his profit was coming from; all they could figure was whether they made money or lost money at the end of the year.

"I needed to know ‘who’ was doing what," Fuqua says. "So I tagged all the cows and starting keeping simple records, like whether a cow had a calf or not – just about three or four columns. Then I started gathering more data and building ratios to find out which cows were better at doing different things."

Four years later, Fuqua and his ranch manager, Bill Bradley, keep tabs on everything from calving records on the U Lazy 2 Ranch to which party is in control of Congress. Some folks might be overwhelmed by all of the different variables these two figure into their profitability equations. They say it gives them the ability to see how everything that affects the ranch’s bottom line is interrelated.

"The key to our operation is that instead of trying to make the most of everything, we try to cut down on what we leave on the table by reducing shrink, reducing our downside risk in the market and increasing our efficiency on the upside," Fuqua explains.

In one respect, looking at cattle as individual profit centers is pretty simple.

"It doesn’t matter how many cows you have, one-third of them are below average, one-third are average and one-third are above average," says Bradley, who loves to work with numbers. "The low end of your cattle cost you the profit that the high end makes. If you can identify and get rid of the bottom end, you increase both your average and your profit."

"The biggest challenge is taking pieces of information from a bunch of different places and figuring out what it all means," says Fuqua. "We do it kind of like the CIA. There is Team A and Team B, both working for the same goal but getting their inputs differently. The answers should be the same, however."

Bradley, a number-cruncher from way back, looks at all the information collected on the U Lazy 2 operation from the cost side. Fuqua, on the other hand, comes at the same problems from the revenue side of the equation. Together, they work out the "final answer" as game show host Regis Philbin would say. Both simply use an Excel spreadsheet for their record keeping.

If they come out with different answers or results, they know something went wrong in their calculations. In the four years they’ve collected data at U Lazy 2, and the two years they’ve spent analyzing it, each in their own way, they’ve decided performance can’t be measured at any one level.

"What we’re trying to do is raise higher-quality cattle with very consistent results in the most economical method of doing so," Fuqua explains. "At each phase of the operation, we look at the economic impact of what we’re doing or could do. We are multi-dimensional in our vision.

"We don’t just look at how much feed it takes to get an animal to a certain weight," he adds. "We look at how the animal is affected by stress, vaccination, etc., and we also look at the economic impact of doing nothing. We have a circular approach. We look at our goals from every angle – environment, markets, politics – and we try to keep as many options open to us as possible."

"We don’t try to ID at birth," Bradley explains. "We tag the calves at branding. That gives us the rest of the summer to match up the calves to the cows. It also makes you look at your cattle a little closer."

In terms of the type of data they collect, Fuqua says he can’t begin to say how many different pieces of information they track. It includes the usual performance factors like calving records, weaning weight, etc., but they also document environmental data – things like rainfall, grass growth, cold snaps and timing of moisture received.

"Fifty percent of the growing season in our area is between May and June," Fuqua explains. "We need moisture in March and April. The environmental stuff helps us do a better job of hedging, deciding where to feed (depending on the likelihood of cold snaps) and how/when to market (based on available forage resources)."

Their goal is to market Choice, Yield Grade 3 cattle on a balanced grid that pays based on both quality and yield. Their data has surprised them in some ways. For instance, they’ve found a direct correlation between their cattle that grade Prime and efficiency in feed conversion.

Fuqua says their Prime cattle have the least days on feed, cost less and surprisingly have yielded at least better than their average cattle, as well. They’re using DNA technology on all the Prime carcasses in order to identify genetics on both the cow and bull.

But as important as genetics are, "It’s just the building block, not the Holy Grail," Fuqua says. "The process is as important as the genetics. We want all cattle – mediocre, good, whatever, to reach their genetic potential by using a system that makes it natural for that to happen."

In fact, they now feel so comfortable with the power of their particular brand of individual management that U Lazy 2 has branched out into contract growers and franchises. The growers are paid bonuses if their cattle perform under U Lazy 2’s guidelines and direction.

"A lot of people don’t want to go to the trouble of managing their cattle individually," Fuqua explains. "That’s where our company comes into the picture. They just have to be willing to put up with a little interference on their genetics and their processing."

While reluctant to share actual dollar figures on how much they’ve improved their net returns, Fuqua says he’s beating the stock market. That’s not something you hear very often in the cattle business, even when the stock market is down a little.

Meanwhile, in Worland, Wyo., Mike Healy is using individual animal management to focus in on overall profitability and culling cows whose calves won’t meet carcass specifications for carcass weight and rib eye area. Healy’s LU Ranch requires smaller-framed, thrifty cows to make it through the winter in a desert environment that only sees 5 to 9 inches of precipitation.

"We had a fairly small-framed herd, straight Angus," Healy explains. "The first year (data was returned), we had 20 or 30 carcasses out of about 680 steers that were under 600 pounds. So we started culling cows that had a calf under 600 pounds. Then a couple of years later, we had eliminated enough of them we stepped up to 625 pounds just to take care of the natural variation that occurs."

Since 1996, Healy has been able to tap into the benefits of a sophisticated individual management system called Electronic Cattle Management by feeding his cattle at Decatur County Feedyard in Oberlin, Kan.

In short, ACCU-TRAC^® Electronic Cattle Management is a computerized system developed by Micro Beef Technologies Inc. that uses a multitude of physical measurements taken in the feedyard at two different intervals. It’s a tool feedyard managers can use to identify the most profitable marketing date for each animal.

The software is based on a continuously refined system of nutritional models and mathematical equations to figure a daily incremental cost of gain for the animal.

"When the incremental cost of gain meets the sale price, that’s the ‘ideal’ day to sell that animal," explains Matt Cravey, (title) with Micro Beef. "Because past that point, every pound the animal puts on costs more than you can get back. We use ultrasound to measure an animal’s backfat deposition rate, and the program sets minimum and maximum boundaries on backfat, weight and other factors to circumvent discounts."

The ECM system was one of the reasons that Healy decided to feed with Decatur. His previous attempts to get individual information back from the packer had been frustrating at best. Worse, even when he got information back, Healy says it was hard to make sense of it.

Now, with five calf crops fed through the system, Healy not only gets the data he wants, he knows how to use it in combination with a sensible crossbreeding system to weed out cattle that fail to measure up.

The result of these combined efforts are at least threefold: no carcasses weighing less than 600 pounds for the last two years; fewer carcasses with rib eyes measuring less than 11 square inches; and the herd is positioned to meet specifications for a new integrated production system called Future Beef, which pays producers to meet their requirements.

Having specifications to shoot for is critical in Healy’s opinion.

"Until you have criteria to meet on the carcass side, I wouldn’t go through the efforts of trying to hit a target unless you have flexibility in your herd to do some additional culling," he explains. "If you do, just get rid of those extreme cases, like carcasses with less than 10 inches or more than 17 inches of rib eye.

He’s not saying you must have carcass data in order to get the goody out of individual management. What he is saying is that you simply need to know what your goal is.

"Until you have a partnership with an alliance where there are criteria the alliance has set up to pay premiums and discounts based on the targets, basically you’re after the animal that gains efficiently," Healy says.

"One of the things that relates strongest to profitability of an animal is average daily gain. If you find those individuals that don’t gain very well and cull their mothers, I think that’s the biggest single step you can take to improve the profitability of your cow herd if you are retaining ownership."

Healy also says you don’t have to accumulate several years worth of data before you can start using it to make decisions.

"Initially, you can make progress culling on one year’s experience because you’re culling the absolute bottom," he explains. "The natural range in variation would suggest the best the bottom group can ever be is low average."

Both Healy and Fuqua agree that having a better view for the big picture of your operation raises expectations for your suppliers as well. For example, Healy wants more information from his seedstock suppliers.

"Part of the criteria for Future Beef is having a frame score 5 animal," he says, having just sent off his contract to them for fall placement. "Suddenly, I realize that I have no idea what the frame scores are on the bulls I’m buying. We’ll take a range, but we can’t have our bulls contributing to the variation that will push their progeny beyond the specifications that we have to live up to."

One of the several enterprises Will Pape runs is a stocker and cow-calf operation in northern New Mexico. The big lesson he’s learned after four years of individual data collection on mostly purchased stocker cattle is that there is no one-size-fits-all solution for producers.

"It’s like the blind men and the elephant," Pape explains. "They’re each asked to describe the elephant. The man standing at his trunk says, ‘Elephants are like snakes.’ The man standing by his leg says, ‘Elephants are like trees.’ The idea being that each of us is only seeing a piece of the truth as it relates to us. So that means as producers, each and every one of us has to figure out what works best for us.

Pape believes the initial impact of individual animal management from a stocker point of view is identifying your best and worst suppliers of cattle. Another thing he’s been convinced of is that a producer doesn’t necessarily need carcass information to make profitable changes in his or her operation.

"If I didn’t get a single piece of information back from the feedlot or from the packing plant, it would be worth it to me to start figuring out how I can reduce the poor performers and increase my superior performers," Pape explains.

For example, on Pape’s operation, keeping track of the sources of their cattle uncovered the fact that 80 percent of the poor performers came from two of the 13 ranches where he purchased cattle. However, after two years of getting the same results Pape decided to try something different.

"We randomly took cattle we were getting from those two ranches, split them into two batches and sent them to Oklahoma – where they did great on wheat! Everybody says genetics, genetics, genetics. Well, that’s only a piece of the picture. It’s the right genetics for the right geography for the right management style."

Pape is also chairman of the board for AgInfoLink, a company that provides animal identification, data collection and information management services, so he knows a little something about the technology needed and available to implement an individual system on the ranch.

"You can get started with as little capital investment as a pencil," he says. "You don’t have to have computers. We generate reports and fax them back to producers. There are also now people who, for a service fee, will come out to your operation and bring their portable scales, do the weighing and at the end of the day give you the data."

Pape says he’s continually surprised at what he learns with each new piece of data collected and each new customer.

"What we have found is a very high correlation between the gain at our midseason weigh (about 70 days) and how well they did on a grid in terms of dollars per pound," he explains. "If I were a typical stocker operator, I would take those animals that weren’t producing for me – and I stress for me – take them to auction and replace them with cattle better suited to my operation."

The day before he spoke with The Cattleman, Pape and his crew had weighed a large number of heifers (at midseason) that gained 4 pounds a day… on grass. Even so, about 10 percent of the cattle had gained less than three quarters of a pound.

"I’ve still got a low end," Pape says. "But my low end is now more like 10 percent instead of 20 percent. My high end is in the stratosphere, it’s almost unbelievable. But I also have a very clear picture of what my inventory is. So as I go into the second half of the stocker phase, I’ve got a detailed understanding of what I’ve got out there and how it’s performing."

"What we’re trying to do is collect as much information as we possibly can, so that we can start seeing which things are important," Pape says. "Because frankly, we don’t know."

For instance, out of the same group of cattle Pape just weighed, he says maybe 1 percent "went nuts in the chute" due to temperament. Because he has individual data, he also knows that not one of those agitated animals gained better than a pound a day.

Another example would be the difference in shrink he found by tracking which trucks, among three different companies, each animal rode in to the feedyard over the course of two years. The cattle transported on one particular company’s trucks showed a significant increase in shrink and a resulting disadvantage in weight through re-implant time at the feedyard.

Pape figures they probably lost $80 to $120 per head in pounds, not counting the extra feed those cattle weren’t converting. After the second year with the same results, he and his crew asked to ride in one of the company’s trucks.

"One of my ranch hands suggested we get walky talkies (in the trailer) and give one to the driver. That probably saved our lives. As he started down our road, it was like one of those NASA training films! The suspension in those trailers was nothing. It’s interesting how a little thing like that can have such a dramatic impact on your production."

Maury Adams of AzTx Cattle Co. in Hereford, Texas, makes a point to take part in the processing of their "computer cattle" each time they run through the chute. It takes all of about 12 seconds for the animal to get tagged with a feedyard tag and an EID button, vaccinated and have its hip height roughly measured.

At the same time, Maury is matching all the tags in his nearby laptop and checking the animal’s background on the screen for all the information he needs to sort the animal into an outcome group. He, too, is using the ECM system, but without the entire offering of bells and whistles – at least until more of the yard’s cattle are on the program.

Adams also makes regular trips to watch each group of computer cattle killed at the packer – and collect even more data.

"Our customers wanted carcass data at a reasonable price," Adams explains. "And we figured by doing this we could help the customer so much more on managing their cattle. We’re making the customer money and getting them data to back up what they’re trying to sell."

Adams says the immediate benefit to his customers is helping them to target the best grid. They do charge a fee for collecting the data, but he says that on any given set of cattle, he can get that fee back and more if they’ll sell on the grid.

"It also helps us to prevent sending the packer something (the customer) will get discounted on, like lights and heavys," Adams says. "Actually, I think doing this has helped us sell our other customers’ cattle better, too, by finding the best grid for them based on what we’ve learned from the EID cattle and following them to the cooler."

Long term, Adams says the benefit for their customers is more flexibility in spreading out their marketing alternatives. The individual data the feedyard tracks helps both the producer and the feedyard manager decide how different cattle can be managed and how to dissect the herd to get the most out of each individual.

Some customers have learned their cattle just need to go straight to the feedyard, as they wouldn’t benefit from going on grass first. Others are using the data to build "reputation" cattle that have a history of consistently grading Choice, for example, even if it costs a little more to do it. Yet others are testing the limits of extremes in management and how the genetics in their herd can or can’t respond.

"We can do a lot by sorting their cattle here," Adams says. "But if they would do it on the ranch, there is even more potential to squeeze profit out of the cattle and to identify subpar animals as early as possible, before they invest any more money, feed or medicine in them."

It just so happens that Micro Beef Technologies and Midwest MicroSystems (makers of CowSense™ software) have cultivated a working relationship to help producers take some of the ECM technology developed for feedyards and use it to sort at weaning.

For example, producers might be able to determine, while the animal is still in the chute, if it would be more profitable to send a steer directly to the feedyard, put it on wheat pasture for 60 days, or on grass for 120 days, or background for 45 days and then send it to the feedyard.

"In reality, they also might find a group of cattle they don’t want to own because there’s too much risk in it," says Larry Hafer of Midwest Microsystems. Beyond the ability to keep and cull more effectively, he also points out less tangible benefits of an individual management system.

"One of the challenges in this business is that folks aren’t always as heavily staffed as they need to be," Hafer says, "mostly because they can’t afford to have more help. Especially on the cow-calf level, these are extremely busy people that work extremely hard to produce a product.

He believes they need a tool that makes it easier to access information more efficiently and save some time in the decision-making process so they can get the other critical components of their operation taken care of that day, too.