Leachman’s $Profit, $Feeder, and $Ranch Financial Indexes Explained

Leachman Cattle of Colorado General 2 Comments

Leachman financial indexes allow you to HAVE IT ALL!
$Ranch: Profit from birth through weaning. Includes:
• Fertility, Milk, Growth
• Cow feed intake and mature size

$Feeder: Profit from weaning to harvest. Includes:
• Feed conversion
• Carcass value
• Carcass weight
$Profit: Puts it all together. $Ranch + $Feeder.
• One number that predicts your bottom line!

The $Profit, $Feeder, and $Ranch financial indices are economic models that predict the return on livestock purchases and sales. At Leachman Cattle, we have collected feed intake records on over 13,000 animals. These records allow us to estimate feed intake and feed conversion EPDs. These values are then incorporated into our $Profit, $Feeder, and $Ranch financial indexes.

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 sell on a grid. We realize that many don’t retain ownership,
but doesn’t it make the most sense to select from birth all the way to slaughter? Feedlots have already proven their willingness to pay premiums for superior Leachman sired calves.

Our simulation model then 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 $6,000 $Profit bull (the average 2008 born Angus 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 profitability.
The effect of most traits on profit is fairly simple to understand. Here is the list of what is included and its effect:

Revenue Traits
▪ Calving ease = more calves
▪ Weaning and Yearling EPD = more weight
▪ Fertility (days to conception) = more weight and more calves
▪ Carcass weight = worth more up to 1050 lbs.
▪ Marbling = valued based on grid premiums
▪ Ribeye area = value as impacts yield grade
▪ % Retail Product = more yield is more meat Cost Traits
▪ Cow mature size = in general bigger eats more
▪ Cow intake = more intake costs more
▪ Feedlot feed efficiency = cost of gain
Some traits are not so easily characterized for $Profit. Milk, for example, is a good thing until you get too much. When over +25, milk EPD has a more negative effect on fertility than it has a positive effect on weaning weight. There are a few traits not yet included in $Profit: longevity, structure, and disposition. These traits are important but difficult to express in dollars.

Comments 2

Leave a Reply

Your email address will not be published. Required fields are marked *