SETTING up herds to deliver more calves and feeder cattle capable of superior feedlot performance is the key to boosting profitability in northern Australia, according to one of the world’s largest Brahman breeders, Consolidated Pastoral Company.
CPC’s chief executive officer Troy Setter presented a forward-thinking perspective of fertility selection and its value in profit-challenged northern herds at the 2016 World Brahman Congress, held in Rockhampton, Queensland, last week.
The largest privately-owned beef producer in Australia, CPC runs 375,000 head of cattle across 20 stations covering 5.6 million hectares.
Numerous crosses are used in its Brahman-based herd.
When looking at northern Australia’s cattle production system it is important to understand what customers are looking for, according to Mr Setter.
The industry’s main customers are the Indonesian live export trade, which takes feeder cattle up to 350 kilograms, Vietnam which takes 300 to 500kg cattle, the Australian processing sector which wants prime grass or grain finished to 500 to 600kg and cull cows for various slaughter markets.
According to the Northern Beef Situation Analysis report 2001-2012, the average profit per adult equivalent, which equals a 450kg animal, in the region was just $6.16.
But the top 25pc of businesses had a profit per AE of $61.96, Mr Setter said.
That top band had higher income through better herd productivity and lower operating costs, he said.
Northern Australia’s production systems were defined by uncontrolled joining and challenged by lactational anoestrus and low branding rates, he said.
“Much of northern Australia has between 50 and 60 per cent branding rates. Over a period of ten years or longer, those rates aren’t sustainable - you have to buy females in every couple of years,” he said.
“We’re challenged by very strong wet and dry seasons and poor quality soils.
“Genetic gain is slower than CPI - costs are going up faster than productivity is.”
Against that backdrop, fertility and genetics were the way to improve profitability, Mr Setter argued.
“We can do lots with fencing and water and supplementary feeding but this is the big one - the area we’ll get most bang for our buck,” he said.
“Building genetic progress is like a snowball. If you pack it right before you push it off the hill you can build a lot of momentum.”
It was important to use consistent measures, he said.
Measuring fertility in the female herd is done via live calves weaned to the females joined - that gives the weaning percentage.
“We’d like to be able to look at a yield - kilos of cows run versus kilos of calves weaned - but the infrastructure is not there yet,” Mr Setter said.
The number of females joined is the number of females you are trying to breed with bulls or artificially inseminate at the start of the year.
Cows are culled during the year and not taken out of the female count.
Bull fertility is measured in terms of how many bulls are put out with females for breeding - that provides a joining percentage.
“One of big challenges we have is the relationship between weight and pregnancy in maiden heifers,” Mr Setter said.
“There is a temptation to push for heavier cattle to try to get the joining weights up.”
But CPC had found it’s not about breeding heavier cattle, it’s about finding the heifers that get pregnant at younger and lighter weights and first-calf heifers that rebreed in the same year.
Pushing females up to 450 to 500kg to get them back into calf creates challenges later, Mr Setter said.
It costs a lot of money and takes a lot of time to do, so the key is finding the heifers than can do it younger.
“Very small numbers, less than 10 per cent, fall into that category but we need to find them and propagate them through the herd,” he said.
Average weaning weights across northern Australia are 180kg, with first round calves weaned from May through to July.
If everything goes right, by the end of the year producers have a 220kg weaner.
The gain in second year of life is about 90kg and the gain in the third year takes it to 420kg.
“So if you have to get to 420kg before you hit puberty you do not get your first calf until the animal is four years of age,” Mr Setter said.
“We want cattle that can hit those weights and puberty younger.”
Late conception was problematic.
These heifers would calve out of season, increasing the likelihood of heifer and/or calf death and had a reduced chance of re-conception which ties up capital, Mr Setter said.
“For a big part of the dry season, our pasture curve dips below maintenance and cattle lose weight,” he said.
“If calving is happening in the middle of that, we have to put a lot of feed down their throat and we really risk low body condition which is a challenge for re-joining.
“Also, a 400kg cow has a lot less maintenance and production costs than a 600kg cow.”
Better body composition before first calving through to the start of second mating was clearly related to superior reproduction.
“Our pregnancy testing results certainly show body condition 2 and 3 score have a lot more calves and a higher chance of survival,” Mr Setter said.
“As we select, as an industry, we need to look at body condition.”
CPC’s experience is that younger calving also improves fertility in the longer term.
Northern Territory Department of Primary Industry data shows fertile yearling-mated females go in calf in their first year and keep going back in calf in the years following.
Yearling-mated females drop seven calves in five years compared to two-year-old matings which produce only five.
“If you go back to that $60 profit per AE, delivering two more calves from your breeding herd in the same time makes a massive difference to the bottom line,” Mr Setter said.
What does it cost to run a cow that is a three-year-old calver?
DATA presented at the 2016 World Brahman Congress by Consolidated Pastoral Company’s Troy Setter showed, under an assumption of a calf worth of $500, total costs including capital for land and cow was $705.
So a three-year-old cow owes the producer $205 and therefor won’t cover costs of production on her first calf.
A 2.5 year old would be close to breakeven, with net value for first calf at $88.
But a two-year-old, at a net value of first calf $30, is making money.
“Heifers that calve older than two years of age do not make you any money until their second or even third calf,” Mr Setter said.
“That’s a compelling reason to get females calving earlier.”
Longevity was also important for profitability, he said.
“If we can get our Brahmans to have a calf earlier and last longer, the returns are even greater,” he said.
“We can put more selection pressure on cows and have more cull heifers and cows to sell, creating more revenue.”
What is the trade-off in terms of increased weight gain versus increased calving?
For CPC, fertility outweighs increased weight.
“We don’t want to lose sight of weight but our energy is going into fertility,” Mr Setter said.
CPC figures show 5pc more calving in a 10,000 head breeding cow herd equals 500 more calves on the ground.
Based on an exporter feeder price of $3.50/kg, that is an extra $63000 over a 20kg weight gain.
A cow that does not give a calf every year is a very expensive cow, Mr Setter said.
“She has a significant capital cost and there is a big freight cost to get her off the property,” he said.
CPC puts the cost to run a cull cow for a year and cull her at $285.
“The question is how many dollars can you invest of that $285 to make sure she does have a calf,” Mr Setter said.
Focus on feed conversion and ADG
FEED conversion and average daily gain was something CPC was also focussed on because feedlot performance was a key variable with reasonable control that could be used to drive profitability.
“We want high fertility and great feedlot performance,” Mr Setter said.
So how is CPC putting all this through its business?
It’s strategy is to increase fertility with more calves and younger puberty, increase productivity of the trading herd with faster young growth and improve carcase yield and quality - which is something Mr Setter said customers both in Indonesian and Australia were increasingly interested in.
CPC is now yearling joining all females to find those young fertile genetics.
CPC’s studs have a zero tolerance for not weaning a calf every year from three years of age onwards.
“Days to calving is important but it’s not the only measure we focus on,” Mr Setter said.
“We also want fast young growth, mature cow weight and good temperament.”
Objective measurement is combined with functionality.