Ultrasound and Wagyu Cattle Boost Small Feedyard’s Profits

By: Larry Stalcup Reprinted

with permission from Calf News

Tenderness pays, even if it means keeping cattle on feed an extra 100-150 days.

That’s the Wagyu way of feeding at Morris Stock Farm near Gruver, Texas. And ultrasound data collected on every animal helps identify cattle that will produce a Prime or High Choice carcass demanded by high-end steakhouses –demand that produces a $15-$20/cwt. premium.

Joe Morris, his wife Nancy, daughter Brandy, and his sister Sherry, run the 6,000-head feedyard. His father, Vance, started it in 1957. “My dad began custom feeding in 1962,” Morris says. “We’ve never missed a feeding since then and we’ve never been empty. Not many feed-yards can say that.”

The operation also includes several thousand farm acres, where wheat and native pasture provide grazing for Morris’s cow-calf and stocker program.

When the economy went south in 2009, they looked for a niche to offset the market downturn. Wagyu was the answer.

He began working with the Texas Wagyu Association (TWA), which has been a springboard for many producers, small and large. Some, in the weekend-ranchers category, may run four or five animals. Others are all-in with Wagyu bulls on breeds of females, from Angus to Holstein and beyond.

Wagyu refers to all Japanese cattle. “Wa” means Japanese or Japanese-style and “gyu” means cattle, says TWA. Wagyu are the cattle made famous by Kobe beef. Known for its extreme marbling and tenderness, Wagyu was not available outside of Japan until recent years.

The breed has now established itself in many places around the world, and has strong foothold in Texas.

“Wagyu beef has a higher ratio of mono-unsaturated fatty acid to saturated fatty acid, are more tender and tasty, and can improve marbling and quality grade in crosses,” TWA says. “Wagyu bulls are great for calving ease in heifers, with birth weights normally between 40 and 60 pounds.”

While custom feeding for others, Morris Stock Farm also produces Wagyu F1 and full-blood animals.

“This program has kept us open,” Morris says. “We have a niche. I don’t have to compete with Cargill, JBS and others who get breaks on high volume purchases of medicines and other inputs. Last year we received cattle from 35 different producers from the Panhandle, South Texas, Louisiana, Arkansas and other states.”

Calves typically go on feed at about 500 pounds. “They are all-natural and receive a corn-based ration that includes an alcohol based product, Kobe Tech E,” Morris says. “It has been proven to aid in conversion, weight gain and marbling.”

Average daily gain is a little lower than what is typically seen. “We see gains of 2.2 to 2.5 (pounds per day),” Morris says. “Some Angus-cross cattle see 2.8. They will be on feed close to 300 days.”

Ultrasound Sorting

All cattle are scanned by ultrasound at least twice, usually by Lynn Allen with Cattle Performance Enhancement Co. (CPEC).

Ultrasound images with overlays show backfat, marbling and muscle depth (an indicator of ribeye size) measurements using the computer processing procedures developed and patented by John Brethour, one of the founders of CPEC and former Kansas State University meat science researcher. Wade Taylor, DVM, and Tom Noffsinger, DVM, are the other two CPEC owners.

“Cattle are first scanned at about 120-140 days on feed,” Allen says. “From that scan, we figure out where they are in marbling. We scan them again in another 80-120 days. From that data, we have a good idea what they’ll do with another 60-90 days on feed.”

A Beef Marbling Score (USDA) of 8.0 is Prime. Over 7.0 is near High Choice. If the cattle show Low Choice or below the first scan, they are usually sorted out and fed for normal marketing channels.

“They have to be Prime or High Choice because they are going to high-end markets,” Allen says. “With the ultrasound, we know which cattle will be ready to go to those markets.”

During a recent scanning session at the Morris yard, one steer topped 1,500 pounds with a BMS of 8.2. With a carcass that will likely push 900 lbs., and a premium of $15-20/ cwt. for Prime, that’s an extra $135-$180 per head.

Morris says the feedyard “focuses on F1, a few F2s or full-blood Wagyu.” One animal fed for a TWA member finished with spectacular BMS 12, YG. The BMS 12 was based on an Australian grading score. It would correlate to a very high USDA Prime score.

Now, with so many Holsteins in the feeding picture due to low beef-cow numbers, Morris says some customers are looking at Waygu bulls bred to the dairy-breed females. We’re trying to fine-tune the ultrasound scans for Holsteins.”

He says most feeding customers have Wagyu bulls on Angus females. “It appears that the more Angus we get in them, the more they grade,” he says. One customer with Angus crosses is Rex Ralston of Gruver, who is also on the TWA board.

“We’ve been running Wagyu bulls about nine years,” Ralston says. “I started using them on heifers for easy calving. I ended up putting them on my commercial black females. We feed out 100-150 calves a year and we’re trying to add more. Most finish at Prime. That’s why we have stuck with them.”

He prefers to feed with Morris, both because it specializes in Wagyu and is within a half hour of his farm-ranch operation. “Also, I don’t think you have to feed these cattle 400-500 days like some do. Joe is able get them to grade at least 100 days faster.”

Most of the Morris cattle are slaughtered through a local small packing facility. Beef is then marketed through several buyers that cater to the high-end markets. One is Foodshed Exchange, which connects chefs to primary food sources.

Morris says that since some customers may not be seasoned in Wagyu production, he works closely with them to help improve their efficiency. “Part of what we do is educate producers on what they need to do to get their cattle ready for the feedyard,” he says, adding that he also sends potential customers located too far away to facilities closer to their ranch. “I’ve had people call from Oregon wanting me to feed their cattle. I put them in touch with someone closer to them. They’ll do the same for me.”

For smaller operators like the Morris family, remaining in business in times of a short feeder supply requires both cowboy ingenuity and finding the niche that fits their operation. “We’re all in this together,” Allen says. “In this Wagyu program, we’re identifying the higher marbling product that will bring a lot more dollars. Others in our industry may need to find their own special market, then develop a plan to service it.”