Page 6 - AUTUMN BULL SALE EBOOK

$PROFIT®

Why $Profit:

Today, stockman have to make proper genetic decisions to improve profitability and the return on
their farms. However, most beef seed stock providers either provide too little data or too much
data. Most performance recorded animals have over 20 EBVs on traits ranging from growth to
carcass. This makes buying the best bull very difficult. Every bull is good on some traits and weak
on others. The challenge is figuring out how each of those traits is going to impact your bottom
line. We wish we knew which bull would make the most money from birth to slaughter, but
most of the time, we end up guessing.

Back in 2005, Leachman Cattle of Colorado decided that they didn’t want to guess any more. A
partner of Lee Leachman’s asked him to come up with one number that sorted the bulls on their
bottom line impact – so they did. Since then, Leachman has provided $Profit on all bulls they sell.
Furthermore, they are basing almost all of their own selection decisions on $Profit. Literally, they
are putting their money where their mouth is.

Lee Leachman tells the story of two bulls that he bought a few years ago from the same sale.
Both bulls had complete performance data, ratios, ultrasound, and even feed efficiency data.
They were both the same breed. After the sale, Leachman added that herd’s data into the
Leachman database to calculate EBV’s and $Profit. One bull came out at $8,374 and the other
came out at $14,258. That is a huge difference – one bull was a great buy and the other was an
expensive mistake.

How $Profit works:

$Profit assumes that the average commercial bull will have 100 progeny over its lifetime.
The model assumes that you keep 30% of your heifers as replacements and that you retain
ownership on the remainder of the calves through finishing and sale on a value based marketing
grid for carcass merit. This grid rewards both beef quality (marbling) and red meat yield. We
realize that many don’t retain ownership to slaughter, but even if you sell store you want to be
known for someone with high quality cattle and be able to demand a good price.

An advanced simulation model, developed by Dr. Steve Miller and other geneticists at Guelph
University, is used to develop partial budgets. The model factors in all of the effects on both
income and expense to come up with a net profit figure for each bull. $Profit allows you to
compare any two bulls and calculate the difference in profit that they are expected to generate
in your herd. Let’s compare a $10,000 $Profit bull to $9,000 $Profit bull (the average 2015 born
American Angus Association bull). The predicted difference between the bulls is $4,000 or about
$40 per calf. $Profit works for us and it will work for you too.

What traits are included in $Profit:

$Profit includes nearly every trait that impacts profit¬ability. The effect of most traits on profit is
fairly simple to understand. Here is the list of what is included and its effect:

6 34 AUTUMN BULL SALE CATALOGUE • MAY 2017
th