Adding Profitability to your Operation

~  The PMB $Indexes as explained below are shown in the PMB Sale Books  ~


All of us have a Need for Stronger Decision Support Information.

We have been using EPD’s to compare the probable genetic differences between cattle for more than 20 years. Recognizing that these measurements and comparisons enabled selection decisions to be made which were almost universally used to increase “performance”, the unanswered question is:

Did this selection for higher performance increase profitability?

 The answer is that it is impossible to tell as the EPD’s have largely
concentrated on the probable output results without considering the input costs!

Our challenge is to OPTIMIZE the interaction of the numerous
genetic antagonisms to YIELD the GREATEST PROFIT.


 For example

Lower Birth Weight may provide a higher percentage of calves weaned which increases revenue, but may also reduce the weaning weights and hence the pounds available to sell. This decreases revenue.

More Milk can provide more pounds to sell, increasing revenue, but usually requires higher feed intake which increases cow maintenance expenses and may delay rebreeding which results in both higher feed costs and less pounds to sell.

Bio-Economic Indexes

An attempt to optimize the financial relationships between Input Costs and Output Revenues resulted in the calculation of the Bio Economic Indexes created by the American Angus Association and others.  While they are a step forward in the evolution of Genetic Selection Tools, the feed costs that are included on the input side have assumed that feed intake is primarily related to animal weight, performance and milk production and do not recognize differences in metabolic efficiency.

Since Feed comprises about 70% of all input costs, it is easily the largest cost factor to consider when striving to enhance profitability. The exclusion of Feed Efficiency differences seriously negates the usefulness of the AAA published $ Indexes.


The PMB $ Indexes

The EPD’s for Feed Intake and RFI calculated by the American Angus Assn. from the PMB Individual Feed Intake Test records have enabled PMB to create a group of $ Indexes which include both the values of growth and the offsetting input costs including feed intake differences.

These are our customer’s principal business plans: PMB Supporting $ Economic Index
All calves are sold at weaning $TSWC  (Terminal Sire Weaned Calf)
Heifer Index - All Calves are sold at weaning $HBTS  (Heifer Bull Terminal Sire)
Ownership is Retained – Calves Sold at Average Price $FL  (Feed Lot)
Ownership is Retained – Calves Sold on Grid $GP  (Grid Premiums vs. Average)
Replacement Heifers – Optimum Future Cows $RH  (Replacement Heifer)
Overall Beef Industry Profit Enhancement $TP  (Total Profit)
          (Sum of $TSWC, $FL and $GP)

 
Discussion

Remember, these indexes MAY assist you in evaluating the probable genetic impact of alternative bull selection decisions. They have been designed to differentiate the potential impact on profitability for your particular business plan. The indexes are based on EPD’s which have been calculated by the American Angus Association. The Economic Values may not precisely reflect the market conditions on sale day as the market conditions can be volatile.

As with all EPD’s, their use is DIRECTIONAL rather than precise.

Remember, the genetics of your cow herd are fixed and are not impacted by mating decisions. The genetic impact of your decisions will be reflected in your calf crops. 

 THIS IS THE PROFIT MAKER BULLS APPROACH – WE’RE USING IT TO ENHANCE PROFITABILITY

NOW YOU CAN TOO!


Here is How to Use the PMB $ Indexes

Sell all Calves at Weaning  ► Use $TSWC
Retain Ownership – Sell on Average  Use $TSWC plus $FL
Retain Ownership – Sell on Grid  Use $TSWC plus $FL Plus $GP = Total Profit

1. Select your Business Plan
2. Compare the Bulls against each other and against the Average Angus Bull
3. Determine the difference in profitability between bulls
4. Make your Genetic Acquisition Decision

Sample Comparisons

        Lifetime (100 calves)
  Bull A Bull B Avg. Angus Bull Bull A Bull B Avg. Angus Bull
$TSWC $80.00 $55.00 $52.60 $8000 $5500 $5260
$FL $25.00 $60.00 $34.30 $2500 $6000 $3430
Sub Total $105.00 $115.00 $86.90 $10500 $11500 $8690
             
$G $17.50 $46.10 $25.75 $1750 $4610 $2575
$Total Profit $122.50 $161.10 $112.65 $12250 $16110 $11265

Create Replacement Heifers – Use $RH when it is available.

Until $RH is available, we recommend that you use bulls with negative RFI EPD’s in conjunction with a milk range between +20 to +30.  Select as much growth as possible while keeping frame size towards the middle of the breed.


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