Welcome back to Angus at Work. Thanks for joining me. So glad you're here. I'm your host, Kasey Brown.
As the fall run is starting, let's talk about flexibility. This year has been a doozy with the drought, market volatility, inflation, high input costs, war, you name it. However, as we talked about in our last episode, this volatility also presents opportunity if we're in the position to take it. Flexibility offers a lot of options. And today, Karla Wilke, associate professor of range management and cow-calf specialist at the University of Nebraska, offers options in income generation and enterprises. She also shares some really cool research about smart supplementation and how the timing of it affects growth while saving you some money. So let's dig in.
Tell us a little bit about your background in the beef industry.
Karla Wilke:
So I grew up on a stocker and farming operation in the Texas panhandle, and currently, I am the cow-calf specialist for the University of Nebraska based at the Panhandle Research and Extension Center office out of Scott's Bluff. And my husband and I live north of Kimble and he farms and we also have cattle, cow-calf, and keep them for a little while after weaning.
Kasey Brown:
All right. Can you start out by telling us why we should consider yearlings as this flexible diversification option?
Karla Wilke:
So yearlings, obviously, are not the long-term commitment that a cow is. You tend to plan to keep them, possibly, from weaning through a certain amount of grazing, whether that's just the winter or winter through summer and then sell them to the feedlot. But typically, before it's two years of age, it's gone, whereas with cow, it's a long-term commitment and we hope she's around 10 years or better.
And yearlings also... say it's an average of an 850-pound weight animal, then that is going to use about 0.8 AUMs or animal unit months' worth of grazing. And a cow-calf pair that weighs 1,700 is going to be 1.7. So essentially, two yearlings can graze for every cow-calf pair. And so if we are in a drought situation and we need to get rid of some animals off of that, then we can sell two yearlings and really not be out much other than maybe a couple more months of grazing than we had intended. Whereas with the cow-calf pair, then if we have to sell that cow, we've lost a lot of investment.
Kasey Brown:
Absolutely. Can you touch a little bit about cow depreciation? I know that's a deep, deep topic, but explain why we need to think about that.
Karla Wilke:
So cow depreciation isn't really a cost that we write a check for, but it's a very real cost to our operation. Cow depreciation, in the simplest terms, is simply the cost to purchase or develop that female minus whatever salvage value you got out of her divided by the number of calves that she produced for you. So an example that I had in my proceedings paper was if you paid $2,000 for her. You sold her for $800. She had like three calves or something, then her depreciation was $400. That's a lot of cost for that operation. So if you had to liquidate her before you... just because of drought or something, then that's a pretty expensive, frustrating liquidation cost there because she wasn't open. She just needed to be sold because you didn't have grass for her. That becomes a very costly move that sometimes we have to make.
Kasey Brown:
Right. And that wasn't her fault. You talked about some considerations for stockers. What kind of things should we think about if we're going to try to add stockers to our operation?
Karla Wilke:
... so we talked a little bit about really evaluating what your forage resources are, what might work best for them. You have some annual forages? You have a place over here that's hard to get to that you don't want to calve there, whatever, so this might be a good place for them. But we talked about forage resources, labor resources, facilities, equipment, marketing options, just all the things that might go into it that you need to think through from start to finish before you decide whether or not you really are set up to do this or could get set up to do this.
Think about the genetics of your herd. Are we set up better to develop heifers for another operation? Are we set up better to run terminal because we have a terminal cross operation? Should we just be trying to target feedlot entry type animals? I mean just working through, on paper, pros and cons and what are my options that I could do here, that would be my angle.
Kasey Brown:
Absolutely, and I think that's just smart business planning, which we all need. You talked about kind of rethinking what we think about supplementation and you had a lot of research to back that up. Can you tell me some of the information? I know it's deep and there's lots of numbers, but kind of hit some of the high points of what you talked about with this.
Karla Wilke:
So one of the things that we kind of revisited was winter supplementation. And a lot of us have always kind of had the mindset that we are not going to feed them much in the winter and then we're going to have them have compensatory gain once they reach a higher quality level of forage and that does work. They certainly do tend to experience compensatory gain.
But the research that I shared actually indicated that if we feed those calves to gain a pound to pound and half a day during the winter instead of half a pound or pound between that range, that they will actually end up with some gain that they maintain, that those calves that are trying to compensate will not actually catch up completely to those calves that were supplemented at a higher range. And so that they will actually, when we finish them out or when we sell them at the end of the summer, they'll still be the heavier calves. So it was something to think about from that standpoint. We even had some data that showed that if we just barely supplement enough to keep them going, that we've totally wasted our money because those calves will compensate up to that calf's level. And so essentially, if the non-supplemented calf and the barely supplemented calf come out the same weight, you spent money that you got nothing out of. So that data was kind of interesting.
Then we also kind of looked at summer grazing and maybe summer supplementation and showed some data where we certainly got a nice linear response to more gain every time we incrementally increased the supplement. But some of that data was mixed on whether that gain, then, was maintained through finishing. So depending, again, when you're marketing, that might work out well for you if you're selling at the end of summer. If you're retaining ownership through the feed lot, might not be. Cost of supplement could play a big role in the net profit of that. So we looked at some of that.
Kasey Brown:
You talked about... what was it? Forage deferment or supplement deferment.
Karla Wilke:
Oh, yes.
Kasey Brown:
Can you tell us a little bit more about that?
Karla Wilke:
So forage displacement.
Kasey Brown:
Thank you, Yes.
Karla Wilke:
I think is what I said. Yes. So forage displacement is essentially when we feed a high enough level of the supplement that it replaces some forage in their intake. So sometimes, we feed a little bit of supplement, like a little bit of a nitrogen source, and the forage is low quality will actually increase forage intake because the bacteria in the rumen can now better utilize it. When we get up to 0.6% of body weight supplementation level or 0.5% of the body weight on a dry matter basis of supplementation, we're actually at a high enough supplement level that we are reducing some of the forage that they consume. So if supplement is cheap enough, that can be a way to either run more animals on that pasture or to just stretch the grazing days. But again, supplement cost can play a really big role in that. And in a drought year when everything's expensive, from hay to supplement, maybe not a good plan.
Kasey Brown:
Right, absolutely. And you mentioned market timing has a part to play in this. Can you talk about the summer grazing and just go a little bit deeper in how the timing, if you're planning to sell after summer, how that could help if you decide to supplement during the summer?
Karla Wilke:
So we have loads of data that suggest that even though it's summer and the grass is good, that cattle will consume the supplement and they will gain more than the controls or the calves that we're not supplementing. But the data is very mixed on whether that weight gain, then, is maintained through the finishing period. So if you are selling the calves at the end of summer grazing, then you may have benefited quite a bit from that, particularly if you were able to get the supplement fairly cheap or whatever. That may be a very beneficial management plan for you.
If you are owning those cattle through finishing, it's a little more risky because our data doesn't necessarily say that 9 out of 10 times, you're going to maintain that game. It's very mixed. Sometimes the studies, the game was maintained. Sometimes in the studies, it was not. And so where you draw the line on the ownership of those can play a big role in whether your investment supplement helps you or not.
Kasey Brown:
You shared some new data with us today. Can you give our readers some of the preview for that?
Karla Wilke:
So we had a study that we have been working on for the last three years at the High Plains Ag Lab where we were supplementing three pounds of dry distillers’ to calves out on summer range, either the whole summer, May to September, or no supplement at all was our control that we evaluated them against. So all summer, three pounds all summer, May to September or July to September, so half of the grazing season.
And for three years in a row, we got the same results in that at the end of the grazing, the body weights and the average daily gain were similar for the supplemented all summer and the supplemented the last half of the summer. But they were higher. They were similar in gain, but they were both higher than the controls. So essentially, we could save 50% of our supplement cost by only supplementing the last half of the summer and get the same gain as if they'd been supplemented the whole summer.
Kasey Brown:
Cool.
Karla Wilke:
So that was kind of interesting. And there's another study that has been published by Watson and others in 2015 and in a study very similar to that in that particular paper was conducted in Kansas on bromegrass, I believe. And in that study they conducted theirs a little differently, but their results were that their deferred supplementation and their supplementation weights were similar and both better than their controls. And so I don't feel like our study's a fluke because that is similar to what they found doing their study a little bit differently, but kind of the same concept.
Kasey Brown:
It's always nice to have that validation of hey, this is legitimate.
Karla Wilke:
Absolutely.
Kasey Brown:
Thank you so much for your time, and I love how all of your data has such base in practical knowledge and application and I love that. But we all know that the cattle business is really a people business, so I like to end on a high note. So will you share some good news with us, either personally or professionally?
Karla Wilke:
I can never separate the personal and the professional. So I'm just going to say my highlight is this conference and the attendance that we've had at it. And I know what it takes for these producers to get things organized well enough at home to be gone for two days. So the effort that everybody has made to be here and the fact that people in our industry are here to learn about the latest data and that they're on the cutting edge of what they're doing. They're such the leaders. I guess it shouldn't surprise us that in the beef industry, we continue to do more with less because these people are phenomenal leaders for their industry. And so to get to come here and put on a program like this for those people is kind of a highlight.
Kasey Brown:
I love it. That's a perfect way to end. Thank you again for your time. Thank you, listeners, for tuning in.
To get more information to help make Angus work for you, check out the resources to our print Angus Beef Bulletin and digital Angus Beef Bulletin EXTRA in our show notes. And if you like this podcast, I invite you to check out our sister podcast of sorts, The Angus Conversation. It's put on by the Angus Journal, and they sit down with industry leaders and share some really great conversations about the Angus business. You can find it anywhere you like to listen to podcasts.
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