Association Commentary When Genetics Matter in the Feeder Cattle Market

by Tom Brink, RAAA Chief Executive Officer

What will happen when the U.S. feeder cattle market transitions away from hide color and begins to emphasize genetics in the price-discovery process? In other words, how will the beef industry change when groups of feeder cattle and calves are valued according to their genetic merit for downstream performance and carcass traits?

1. The commercial market will become more rational in assigning value. Feeder cattle with verified superior genetics for growth and carcass traits will bring a higher price. Feeder cattle with weaker or non-verified genetics will bring lower prices. Thus, stronger economic signals will be sent to cow-calf producers to eliminate low-end genetics that hold the industry back today. The same impact will be felt in the replacement female market too, as maternal genetic merit receives greater emphasis.

2. Faster improvement.

With stronger economic signals to breed better commercial cattle, the U.S. cattle population will shift more rapidly in the direction of higher quality and greater value. Better genetics make the financial pie bigger for everyone. This change will benefit all segments of the beef supply chain, while continuing to provide consumers with a high-quality product. The beef industry will become more competitive, efficient and sustainable as a result.

3. Cattle feeders, stockers and backgrounders will experience improved predictability in the feeder cattle and calves they purchase. Genetic knowledge will improve performance and breakeven predictions because genetics determine approximately one-third of growth and carcass outcomes.

4. Genetic tools will become more important.

With commercial cow-calf producers being paid for superior genetics like never before, the value and importance of genetic evaluations conducted by breed associations will take on greater importance. More traits will be quantified and data collection and submission by seedstock producers will increase, further strengthening EPD calculations.

Commercial Marketing Team and Value-Added Programs staff is on page 20