Newsletters from Hojer Gelbvieh & Balancer Ranch

• Understanding Your Opportunity
• Failure to Plan
• Relentless in the Pursuit Of Excellence
• Pounds at Weaning
• Having a focus on tomorrow, as you're make decisions today!
• The Facts - Crossbreeding vs. Straight Breeding
• Multi-Breed Evaluation
• "The Inside Story"
• BIRTH WEIGHT – “The Rest Of The Story”

Understanding Your Opportunity
By: Alan Hojer

Last year I mentioned in my welcome that the cattle industry is right on the edge of being “Really, Really Good!”

I really believed that because all the fundamentals of the cattle industry were pointing towards a cattle inventory that would continue to decrease because we are still culling the cow herd. We have killed too much of the factory, “The Cow!!” So that is the supply fundamental.

For the demand fundamental, our exports markets have rebounded to almost record levels and have exceeded record levels with some countries. However, we have to remember that 90% of the US Beef is consumed right here at home.  We export 10% but that is a growing market of the very high value cuts because of the economic growth of China, Japan, Korea and yes, India. These populations want “Beef and they want GOOD Beef!!” You have to come to the US for the best beef because of our Genetic Advancement and our ability to finish our cattle right.

OK, I have been bullish for a few years now but I am really Bullish today because of the above information.

We now feed to finish everything on our Ranch from our cull cows and yearlings to calves. Here are some recent results:

Now, let’s look at some different ways to evaluate the opportunity in front of us:

Cows - When you make genetic choices for your calves, you are also making genetic choices for your cows if you are retaining heifers for your own replacements. It is so important to keep this cow in your herd because of the costs of developing this cow.  You have to find the right balance between the desired performance, the desired feed efficiency and the factors of stayability that keeps this cow in your herd. This is very important but when she goes to town she will also have great value because of your performance selection as well. If she is bringing $1,200 as a cull, what will be the cost of replacements?

Heifers and Steers - In the history of the cattle business, we have never had a better opportunity in front of us than we have right now. It is very important that we are generating the right kind of pounds in our calves so whether we are finishing our calves ourselves or selling our calves to someone else to add this finished value, our calves represent what the feeder and the market wants. “To Much Angus” is out and “Cross Breeding” is in. I understand the positive impact of crossbreeding and the negative impact of a Yield Grade 4 discount because the carcass carried to much fat. This has been our story for the last several years. What I am learning is the impact on the cattle feeder and to what extent they are going to in order to manage too much English (Angus) Breeding in a calf. They are experimenting with implants to try and reduce fat on the carcass to reduce discounts!!

As our calf supplies continue to tighten, your crossbred Gelbvieh or Balancer calves will bring more and more dollars in your pocket for two reasons:

I have listened to experts that are saying that our Fat Cattle Market has the potential to reach the High$1.20/cwt in the future. That would mean that a Finished Steer of 1,350lbs. would bring $1,620.  Make sure you are purchasing the highest performance genetics possible so YOU can maximize you’re opportunity that is right in front of you. IT IS WELL DESERVED.

Failure to Plan Is Planning to Fail!
(John Wooden, UCLA)
By Alan Hojer, Hojer Gelbvieh Ranch

I had an opportunity to be part of a Strategic Planning Group a few weeks ago. The information was so good and at times so specific that I would like to share some of it with you.

We have really come through some uncertain times in the last 3 years. The one thing that we could count on was instability and volatility. As we move forward into the next 5 years, we can expect some of the same but probably not to the same recent levels. Volatility can provide opportunity or it can really hurt us depending on whether or not we take advantage of the rising markets.

Currently the US economy is growing at a rate of 3%. In order for unemployment to go down, the US economy needs to grow at a rate above 3%. 3% just stabilized our unemployment rate. Now with this said about the US economy, you have to look globally to see how the US is going to get going again.  WE HAVE FIND EFFECTIVE DEMAND TO GROW THIS ECONOMY AND GET GOING AGAIN!!

So, let’s talk about China and India. The populations of these two nations are huge and a small move in the right direction will provide huge opportunity for the US and Others. Currently China’s economy is growing at a rate of 8.5%, China needs to grow at a rate of 5.5% or they are in a recession and they will have unemployment. India’s economy is growing at a rate of 6.5% and again they have to grow at a rate of 3% or India is in a recession and they will have unemployment as well. It has been proven that when the populations of China and India are working, the demand for Animal Protein is very strong and this Effective Demand is increasing today. These people want meat and these two countries cannot meet the demand.

Believe it or not, 22% of the population in India eats Beef. For every 5% increase in the consumption in India, it is like adding another US to the BEEF DEMAND!! 

With the world demand for animal proteins on the rise and a continual decline in the US and World Beef Cow Herd, we are on a path of convergence of supply and demand that will fuel some very good times right around the corner. 

The US economy is stabilizing and Domestic Effective Demand will begin to pick up in 2010. You can expect inflation to be at 4-5% by 2012-2013 and you can expect interest rates to be 8-9% of 2012-2013 as well. Between now and 2012-2013 we need to lock in any and all interest rates and control our costs of production.

The take away from the conference was that the Livestock Industry has turned the tide because of the Effective Demand coming into the market at a time of tightening Beef supplies. 

Now is the time to look at your cow herd and make Bull Buying decisions that drive productivity. We try hard to give the best balance of Performance and Carcass traits possible. Look at your Buying Decisions this year as a decision about how much Beef you can put out of your cows. Spend the money and get the best bulls possible for your herd. 

Invest in the Females in your herd to maximize the productivity of your Bull purchase.

Investing in your operation today is all about planning for tomorrow. As only John Wooden could say it best, “Failure to plan, Is planning to Fail.”  Plan today in 2010 and you will be rewarded with the “Effective Demand” in 2011.

Relentless in the Pursuit Of Excellence
By Alan Hojer

Pursuit Of Excellence is defined only by you. Only you can set the goals and objectives that make sense for your operation. Whether you live in an area that requires only 1 acre of grass for each animal unit or 40 acres of grass for each animal unit, these are factors in your environment that will need to be considered to maximize cow/calf efficiency and productivity. I know I am preaching to the choir when I talk about the production challenges so let’s talk about some other factors that we need to Pursue For Excellence!!

First, what about using other breeds to maximize cross breeding and heterosis? The different breeds have never been more alike than they are today. Over the last several years, the English breeds (Angus, Red Angus, etc.) have increased their frame and mature cow size to try and find feedlot efficiency without crossing with the continental breeds. As a result, the English breeds have increased their birth weights, decreased their marbling and still can’t add the muscle that a simple cross breeding program would provide. So as you look at selection within Breeds, your discipline needs to be “Relentless” to choose what compliments your cow herd. You can’t make a team with one type and you can’t maximize heterosis with one breed.

Second, we have to understand what is important to the feeder and the packer that is looking to add value and profitability to our calves when they leave our feedlots. Tom Brink is with Five Rivers Cattle Feeding, the world’s largest cattle feeder. I had the opportunity to listen to Tom as he described what they are looking for in the calves that they purchase. To start with, Carcass Quality and Yield Grade are very important. Five Rivers sells 60% of their calves on a marketing grid and the packers that purchase these calves sell 100% of this meat on value. If you don’t think that carcass matters, think again! 

These feeders have a data base and they want the calves that feed and grade well. They are willing to pay more for those calves because they bring more value to their bottom line. With today’s technology, these feeders have a data base that identifies the calves that have been profitable and the calves that have not. We need to pay attention and be “Relentless” in our mating decisions so that we stay in the data base that says, “BUY THOSE CALVES AGAIN!!!!”

At Hojer Gelbvieh Ranch, our herd is ranked above average for carcass and feedlot merit. We have worked hard to provide you with the continental breed of choice to help you in your “Relentless Pursuit Of Excellence!!”

“Pounds At Weaning, The Key To Cow/Calf Profitability!!!
By, Alan Hojer, Hojer Gelbvieh Ranch

Recently at the National American Gelbvieh Convention, Lee Leachman spoke at a luncheon and he said, “Tell the world.  Make sure they remember these things when they think of Gelbvieh cattle:

I couldn’t agree more. For many years now we have focused on BW which goes with cow size and in the recent MARC data, Gelbvieh has been the only breed that reduced mature cow size in its germplasm study between 1973 and 2004. Also in the most recent MARC evaluation, Gelbvieh sired calves had the lowest birth weights of the four major continental breeds and tied for top survivability to weaning of all breeds.

MARC scientist, Larry Cundiff is quick to point out the relationship between birth weight and mature weight. He credits Gelbvieh breeder’s prudence in reducing birth weight for a very desirable trend in mature cow size.

For years I have had customers tell me how they have finally found the right cross for their Angus or Red Angus cows. With the first cross, they are thrilled and amazed with the 100 to 150 more pounds of calf that they get to wean in the fall. They have recognized the length of calf and early maturity of the Gelbvieh genetics as the major contributors to this success.

Each year I make my breeding decisions on the ability to maximize weaning performance when I consider the performance part of the decision. Yearling performance will fall into place if I get the weaning right!

I know that I am probably preaching to the choir but sometimes we need to talk about what we are doing right instead of what we need to change. Much of the industry message over the last 6 years has been CAB or Marbling and the net result is many cattleman have lost their heterosis because of the lost art of crossbreeding and they have lost pounds of calf weaned trying to follow the latest spin. Crossbreeding will add $100 per cow to your bottom line and Gelbvieh weans more pounds of calf than any other breed.

Following the “Smart Cross” system will insure that you wean not only the maximum amount of pounds but the right kind of calves that will convert and feed well for the feedlot that buys your calves.

The key to maximizing pounds at weaning is not just the Gelbvieh or Balancer Bull but it is also the cow. The cow is what brought me to the Gelbvieh breed in the first place. In 1991, no other breed could match the capabilities of what Gelbvieh influence can accomplish in a cross bred cow. According to the above MARC date, a cow with Gelbvieh influence is the best that it has ever been.

If you are not keeping your own replacements, talk to me so we can help you start. Or help you source some Gelbvieh Cross replacements. This is the next step that you need to take to maximize your weaning weight potential.

With these high corn prices, your best defense against these higher costs is selling more pounds of calf. You will sell more pounds of calf if you do everything that you can to WEAN POUNDS!!

Summary:  Buy a Gelbvieh or Balancer Bull and Build Cross Bred Cows!!

Having a focus on tomorrow, as you’re making decisions today!
By Alan Hojer, Hojer Gelbvieh Ranch

Often when I am talking to cattlemen they ask me what would be the best kind of a bull for my herd. Everyone is looking for the quick easy answer but the answer is much more complex than that. Several factors need to be considered and I generally find myself asking a lot of questions so I can make a proper recommendation. Some of those questions are as follows:

These are just some the economic type of questions that I find that most people understand and can answer very quickly. The questions that tend to be more difficult to answer are the carcass questions and where do they want to go with this part of their program. If we just sell our calves at the sale barn we shouldn’t need to care, Right?  Well, I think we do need to care.      
To make my point I want to share with you a conversation that I had this summer with an old friend that I had the opportunity to get to know when I was on the National AGA Board. Today, this individual oversees the operations and cattle purchases of several feedlots that consist of several 100,000 head. My question was “What is the number one thing that affects your operations the most that impacts your profitability?”  I figured that he would say the high cost of feeders or something like that. His answer was Yield Grade 4 cattle. He said that in our world in SD, we need to get back to using a crossbreeding program of the right mix of Continental (Gelbvieh) and British (Angus/Red Angus etc. )  genetics. This will allow the feedlots to feed longer, add more carcass weight and not have the carcasses heavily discounted because of fat.

These same issues were echoed by Dr. Harlan Ritchie in a recent article in the Gelbvieh World as he talked about “Looking Ahead. ”

Most of these carcass traits are very heritable and you can make genetic advancements fairly quickly. The Ultrasound work that we are doing on our sale offering is to help you move your calf crop to the most desirable balance as possible. This balance needs to be done so you maximize the traits that make direct economic sense to you (Growth, Length, Fertility etc. ) while understanding and adapting to what makes direct economic sense to the people that buy your calves.

My advice is to stay “Aligned” correctly with those that you may not know but whom know you because they are buying your calves. The right kind of choices that you make today will drive their decisions to buy your calves tomorrow.     

THE FACTS
CROSSBREEDING VS. STRAIGHT BREEDING
By Alan Hojer

I get asked all the time, “If you were raising commercial calves, would you have purebred Gelbvieh?” My answer is always No. Would I have Purebred Angus? My answer is always No as well. Whenever you straight breed anything, you are single trait selecting and this almost always leads to problems that will need to be corrected down the road.

The following are some thoughts to keep in mind as you manage through the market forces that encourage you to Straight breed Angus on Angus vs Crossbreeding with your Angus cow base.

Summary- Crossbreeding with Gelbvieh on your Angus cow base will ensure that you receive the advantages of superior replacement females along with mates that can gain rapidly and efficiently in the feedlot and combine a desirable level of Quality and Yield grades. At Hojer Gelbvieh Ranch we are driven to tell the right story to help you grow your profitability and future in the cattle business.

Multi-Breed Evaluation
By Alan Hojer, Hojer Gelbvieh Ranch

In the back of our 2002 sale catalog, I wrote an article called “Birth Weight-The Rest Of The Story. ” I received more positive comments about that article than anything I have ever written. Believe or not, I do like to write and educate. Many of the issues that I raised to have you think about really put the whole birth weight issue in perspective for a lot of people. People began looking at all the components of how to measure a bull rather than putting so much weight on birth weight. People began to recognize the value of length of calf and how that translates into real dollars in their pockets but it also translates into a higher birth weight and hence a higher birth weight EPD. This did not mean less calving ease. But most important, I had customers come up with some parameters on EPD’s that they felt would position themselves to match a particular bull with their cows. This plan worked for two years until now when we have what they call Multi-Breed Evaluation.

Multi-Breed Evaluation is a fancy way of saying, “WE ARE GOING TO CHANGE YOUR EPD’S AGAIN!” This time the change has been relatively confusing and I have spent enough time trying to understand why the AGA has made these changes that I will give you some new guidelines to follow as you develop your new parameters to purchase your next herd sire. Remember, I said in the last article that people are an environmental factor that can affect birth weight. Well, one person made these changes and we all have to try and interpret the implications of this change.

First of all some things to understand. When we record calves, our calves for any single trait are compared only against calves that are in the same contemporary group. In other words, if our birth weight range was from 69 lbs. to 98 lbs. , these calves in this group would have a higher or lower EPD depending on where they were placed in the group. That does not mean that the individual birth weight was high, it just means that relative to the group, an individuals birth weight was higher than the average or lower than the average or average within the group. But based on the individual’s position within the contemporary group, the individual animal’s EPD’s would change. Anyway, the bottom line is this, rather than an individual sire being measured across all progeny that is produced, more emphasis is put on individual groups of progeny and therefore we have lost critical mass and accuracy. I believe that you can look at the EPD’s as indicators of what to expect from a trait but not to calculate what to expect from a trait.

Specifically, the birth weight EPD was most affected. In some sire groups you will see little change but in other sire groups you will see significant change. The largest change came in the Balancer and Hybrid groups. Multi-Breed Evaluation gives a credit to birth weight of these crossbred groups that will significantly lower the birth weight EPD. Research has shown that crossing Gelbvieh with Angus or Red Angus has a very big affect on birth weight. In other words, lessons the birth weight. Much of this comes in reduced length of calve and less bone mass. With this in mind, when you are selecting for sires for these English breeds, concentrate on buying as much performance as possible because the cross is a great cross and high performance will maximize the affect. Heterosis is free but cross breed correctly.

As these changes in our system occur, we as your seed stock supplier have to continue to evaluate and adapt to the changing market. With the numbers game that is being played, I see that we had two choices. One, use lower EPD Gelbvieh Genetics to manage numbers and lower overall quality or two, educate our market and maintain the pace of increasing quality that will drive your performance and profitability. At Hojer GELBVIEH we chose to continue to increase quality to drive your profitability.

As always, if you have any questions, talk to Alan at 605-847-4155!!

“THE INSIDE STORY”
By Alan Hojer, Hojer Gelbvieh Ranch

Traditionally at this time, I would send out a mailing to alert you to watch your mail box for the 2004 HOJER GELBVIEH RANCH SALE CATALOG. I would also tell you more about the bulls in the offering. This year I want to take this time to tell you about us and why we do what we do and when we do it. In other words, how we see ourselves different than other breeding programs.

To start, most other seed stock suppliers want to take $50.00 off of the sale price on the day of the sale if you take your bulls home. I want you to send you bulls home with me. I will care for your bulls and put them through a transition so they are ready for breeding on grass. The information that I gather from observing the development of the bulls over the next 90 days is critical in making my future breeding decisions. I do understand the risk of keeping the bulls but I also understand the value of information to drive your future production and profitability. I consider this to be a major philosophical difference.

COMMUNICATION: It is the objective of our program to send you several communications prior to the sale day, not just send you a sale catalog. Most importantly, to provide education about the bull offering and industry information to allow you to make the best decision possible. We have had post office problems so if you do not receive our first mailing by early January, give us a call. We have been very consistent with this approach for 12 years.

REWARDS: The “Commercial Lifetime Patronage Discount Program” is the first of its kind in the industry and we have customers that ARE receiving as much as $500 in cash back. I will put cash in your hands for doing business with us. YOU are our best advertisers and I have decreased our advertising budget and I am investing in you. We really feel good about this and I know the wives like it as well.

GUEST CONSIGNERS: I have been asked by other breeders, “Why do you do it?” I do it because we have to fulfill the need that has been created by our success. To stay at 35-40 bulls would have put too much upwards price pressure on you. We needed to expand our numbers to keep a lid on our average price that you bid from the seats. People tell my that I am crazy but I am in this for the long run and listening to you the market and adjusting to you is the right thing to do. The integrity of Eisenbraun Gelbvieh, Ron Steffen and Jamie Larson are second to none and I am proud to have them help meet our demand that is created by you.

THE LITTLE THINGS: I take calls year around because people look at me as a source of information and they know that I want them to call. We want to communicate!! After the sale last year, we helped you find 14 additional bulls because of misfortunes that you ran into while your bulls were on pasture. Most people would have just said that they were sold out. When you are in trouble or have a need, you can count on us to be there.

Over the next two weeks, our group will be calling you to verify your address, answer any questions and to ask you for your business. We are doing this because we care.

BIRTH WEIGHT – “The Rest Of The Story”
By Alan Hojer, Hojer Gelbvieh Ranch

As I talked to some of my fellow Gelbvieh Breeders about writing an article on birth weight, they all agreed that this is probably the most misunderstood piece of information that is used to purchase a bull. Well, here it goes and I am going to give it to you with both barrels because I am seeing too many people making decisions that are not in the best interest of their farm or ranch just because they do not have all the facts on birth weight.

I am often asked by my customers, “When you buy a bull, what birth weight are you looking for?” My response is always that it is one of the last things that I look at, because birth weight is influenced by so many things that are non-genetic, which is the environment. The environment can be many things – the first of which is weather. The colder and longer the duration of the winter, you will see an increase in the birth weights of your calf crop. I am assuming that the nutritional needs of the cattle have been met. I have talked to breeders in Texas and North Carolina about the use of certain genetics and they agree that as you move south and east, that birth weights decrease. As a mater of fact, they specifically say 10-12 pounds less. Same genetics, different values. The weather is an environmental factor that plays a huge role and is out of your control. Currently we are calving our first calf heifers and the calves are anywhere from 8-12 pounds lighter than where I would like to be. Nice winter, lighter birth weight calves.

Feed is another environmental factor that affects birth weight. When you increase the amount of protein in the ration, you will grow calves. WE need to make sure that adequate protein is available to the cow as she needs a certain level of protein to help her utilize the feed stuffs that she is picking up. Management of the level is key. I am aware of situations where people are actually not meeting the requirements of the cow on purpose so they can produce lighter calves so that the birth weights are lower so it looks good for you on sale day. In this case, the human becomes part of the environment. On our ranch, we feed to maintain a body condition score of 4.5 – 5.5, with protein levels of 8% to 11 % with heavy emphasis put on maintaining a good balanced mineral program.

Probably the most economically important thing that affects birth weight is length of calf. Everyone wants long stretchy calves on sale day because that means weight and we still sell calves by the pound. Well those calves weighed more when they were born as well, and this has nothing to do with calving ease. I have seen some short, blocky fronted English breed of calves that calve extremely hard at 60-70 pounds and weighed 140 less at weaning than stretchy Gelbvieh / Gelbvieh Cross calves that weighted 85-95 pounds. You picked up weaning weight, profit, and calving ease. Length of your calves is money and it is very economically important to you not to give it up. This is why crossing purebred Gelbvieh genetics on any Angus cow base is instant cash in your pocket. You will get instant length and muscle. This translates into cash.

I got a little off the subject but I can get pretty excited when I know I can help you make more money. Anyway, yo know your cow herd better than anyone else. Take home the genetics that will do you the most good –not what has the best birth weight. Birth weight is only one factor to consider when burying a bull and should not be the primary one. I am confident that any bull in this sale offering can be used on any cows without concern about calving ease. With that said, if you are looking for a bull to put on heifers, give me a call and I will make several recommendations.

Put more value on the CE and BW EPD’s as they are more representative of the genetic potential of the bull. Also, look at the bull. Look for the smoothness through the front shoulders and look at the length of the calf.

The most important things that I can do for you is to provide you with the best genetics possible and to provide you with knowledge. Knowledge will allow you to use these genetics to achieve maximum profitability. At Hojer Gelbvieh Ranch, we intend to lead in both areas.