WEBVTT 00:00:11.720 --> 00:00:15.060 Breaking free from the chains of the past Where 00:00:15.060 --> 00:00:18.820 truth moves faster than a Holstein calf No law 00:00:18.820 --> 00:00:21.660 waiting on some printed page We're charting new 00:00:21.660 --> 00:00:25.300 ground in the digital age From genomic codes 00:00:25.300 --> 00:00:29.120 to robot facts We cut through the noise, no hold 00:00:29.280 --> 00:00:32.460 them back not your daddy's dairy news tonight 00:00:32.460 --> 00:01:03.259 we're sparking Welcome back to the Bullvine Podcast, 00:01:03.659 --> 00:01:05.659 where we cut through dairy industry noise to 00:01:05.659 --> 00:01:07.920 get you the insights that actually matter for 00:01:07.920 --> 00:01:10.959 your operation. And today, oh boy, we're diving 00:01:10.959 --> 00:01:13.359 deep into a feature piece that's been generating 00:01:13.359 --> 00:01:16.280 some serious buzz. It's all about beef on dairy 00:01:16.280 --> 00:01:20.180 or BXD programs. This one's got layers and some 00:01:20.180 --> 00:01:22.379 surprising financial analysis that's really going 00:01:22.379 --> 00:01:24.420 to make farmers rethink how they've been approaching 00:01:24.420 --> 00:01:27.819 crossbreeding for premium market access. That's 00:01:27.819 --> 00:01:30.120 right. And the context here is just, well, it's 00:01:30.120 --> 00:01:32.620 crucial right now. We are seeing market reports 00:01:32.620 --> 00:01:35.799 confirm what we all feel in the barns and, frankly, 00:01:36.019 --> 00:01:38.819 in the sale ring. Those price spreads between 00:01:38.819 --> 00:01:42.140 straight Holsteins and quality beef dairy crosses, 00:01:42.280 --> 00:01:44.680 they've widened considerably, especially across 00:01:44.680 --> 00:01:46.799 the Midwest. Oh, yeah. Everyone is chasing that 00:01:46.799 --> 00:01:49.420 premium. Absolutely. And the demand from packers 00:01:49.420 --> 00:01:52.879 for consistent, high -quality BXD product, it's 00:01:52.879 --> 00:01:55.890 higher than it's been in years. Exactly. The 00:01:55.890 --> 00:01:58.370 potential money is clearly there. But look, this 00:01:58.370 --> 00:02:00.030 is where the source material we looked at gets 00:02:00.030 --> 00:02:02.569 kind of provocative. The critical question it 00:02:02.569 --> 00:02:05.670 raises is this. Why are so many operations failing 00:02:05.670 --> 00:02:08.849 to capture the full profit potential even with 00:02:08.849 --> 00:02:11.370 these attractive market premiums? And the answer, 00:02:11.490 --> 00:02:14.330 well, it fundamentally challenges that basic 00:02:14.330 --> 00:02:17.750 ingrained assumption in dairy farming that lowest 00:02:17.750 --> 00:02:21.530 input cost automatically guarantees the highest 00:02:21.530 --> 00:02:23.409 net profit. It's just not that simple. That's 00:02:23.409 --> 00:02:25.090 the core of the dilemma, isn't it? We're going 00:02:25.090 --> 00:02:26.870 to unpack what we're calling the beef on dairy 00:02:26.870 --> 00:02:29.650 profit paradox. It's this counterintuitive idea 00:02:29.650 --> 00:02:32.310 that operations spending the most per calf are 00:02:32.310 --> 00:02:35.370 often actually generating the highest net returns, 00:02:35.509 --> 00:02:37.270 not just the highest gross, the highest net. 00:02:37.409 --> 00:02:39.550 We'll show you the specific data points that 00:02:39.550 --> 00:02:41.990 back this finding up. We'll look at why that 00:02:41.990 --> 00:02:44.849 low -cost philosophy is, well, actively sabotaging 00:02:44.849 --> 00:02:47.370 performance, and critically, how you can avoid 00:02:47.370 --> 00:02:50.229 those pitfalls. So if you are participating in 00:02:50.229 --> 00:02:52.629 BXD or even just thinking about starting, you 00:02:52.629 --> 00:02:55.330 really need to hear the specific details on consistency, 00:02:55.689 --> 00:02:58.169 genetics, and timing we're about to cover. Yeah, 00:02:58.250 --> 00:02:59.789 stick around for this one. It's important stuff. 00:03:00.009 --> 00:03:02.090 Okay, let's unpack this paradox. Let's really 00:03:02.090 --> 00:03:04.949 identify the central failure point here. A lot 00:03:04.949 --> 00:03:08.169 of operations, they jumped into BXD with a fundamentally 00:03:08.169 --> 00:03:11.310 low -cost philosophy. almost treating it like 00:03:11.310 --> 00:03:13.569 a side hustle. Right. They treated the resulting 00:03:13.569 --> 00:03:16.330 beef crosses like, I don't know, slightly different 00:03:16.330 --> 00:03:19.189 Holstein calves. Yeah, maybe a bit beefier, but 00:03:19.189 --> 00:03:22.330 handled the same. Exactly. So that means using 00:03:22.330 --> 00:03:24.810 standard, sometimes repurposed feeding programs, 00:03:25.009 --> 00:03:29.439 standard calf management protocols too. Maybe 00:03:29.439 --> 00:03:31.479 worst of all, choosing lower cost beef genetics. 00:03:31.580 --> 00:03:34.259 Maybe just using whatever sire was closest or, 00:03:34.259 --> 00:03:36.219 you know, the cheapest semen available. Look, 00:03:36.300 --> 00:03:38.340 that low cost mindset is totally understandable. 00:03:38.560 --> 00:03:40.319 I get it. When you're looking at input margins, 00:03:40.539 --> 00:03:42.939 especially with milk prices, every penny saved 00:03:42.939 --> 00:03:45.800 seems like a penny earned. But the source material 00:03:45.800 --> 00:03:49.340 we dug into notes that this approach is based 00:03:49.340 --> 00:03:51.520 on a misunderstanding of what actually drives 00:03:51.520 --> 00:03:53.379 the premium. It kind of assumes the premium is 00:03:53.379 --> 00:03:55.099 automatic just because the calf has some beef 00:03:55.099 --> 00:03:58.379 blood in it. Like magic. It is definitely not 00:03:58.379 --> 00:04:02.080 automatic. And the data here is, well, it's pretty 00:04:02.080 --> 00:04:04.060 brutal. These low cost operations, they capture 00:04:04.060 --> 00:04:06.740 only a tiny fraction of the quality premiums 00:04:06.740 --> 00:04:08.879 that are out there. The cattle just don't grade 00:04:08.879 --> 00:04:10.960 out. They're not hitting that high choice or 00:04:10.960 --> 00:04:14.259 prime range necessary for the big payoff. The 00:04:14.259 --> 00:04:17.199 result is that their net benefit after you account 00:04:17.199 --> 00:04:20.069 for the increased labor. The semen cost, maybe 00:04:20.069 --> 00:04:22.410 some slight management adjustments. It's often 00:04:22.410 --> 00:04:24.449 barely positive. Hold on. Let me just translate 00:04:24.449 --> 00:04:26.490 that into, you know, farm level economics for 00:04:26.490 --> 00:04:28.410 a second. Yeah. We are talking about the difference 00:04:28.410 --> 00:04:33.180 between maybe making, say. $40 net per calf on 00:04:33.180 --> 00:04:37.959 a marginal low -cost BXD program versus the $200 00:04:37.959 --> 00:04:41.180 to even $250 net per calf that these optimized 00:04:41.180 --> 00:04:43.740 systems are currently capturing. That's a huge 00:04:43.740 --> 00:04:46.120 difference. Massive. So if you're going through 00:04:46.120 --> 00:04:47.839 all the hassle of breeding beef, the separate 00:04:47.839 --> 00:04:49.800 ID, the marketing challenges, maybe different 00:04:49.800 --> 00:04:52.019 housing, and your net return is only marginally 00:04:52.019 --> 00:04:53.560 better than sticking with straight Holsteins 00:04:53.560 --> 00:04:55.980 and just selling a bobcalf, what's the actual 00:04:55.980 --> 00:04:58.220 point of all that extra effort? You've risked 00:04:58.220 --> 00:05:01.120 your replacement heifer pool. maybe use semen 00:05:01.120 --> 00:05:03.639 on cows that should have stayed dairy, all for 00:05:03.639 --> 00:05:07.180 a fragile, low -margin side business. It doesn't 00:05:07.180 --> 00:05:09.259 make sense. It doesn't. And that fragility you 00:05:09.259 --> 00:05:11.620 mentioned, that's what limits scalability too. 00:05:11.779 --> 00:05:14.459 If your net return is marginal, you simply cannot 00:05:14.459 --> 00:05:17.060 commit significant capital or labor to expanding 00:05:17.060 --> 00:05:20.319 the program. The ROI just isn't reliable. Right. 00:05:20.379 --> 00:05:22.699 The source material noted that small and mid 00:05:22.699 --> 00:05:25.500 -sized operations relying purely on cost cutting, 00:05:25.639 --> 00:05:28.639 they miss the opportunity for reliable, substantial, 00:05:28.899 --> 00:05:32.040 positive returns. Returns that are being reliably 00:05:32.040 --> 00:05:34.319 captured by their neighbors, making what the 00:05:34.319 --> 00:05:37.199 source called... Measured steps. Measured steps. 00:05:37.300 --> 00:05:38.560 OK, what does that mean exactly? We're talking 00:05:38.560 --> 00:05:41.560 huge tech investments? Not necessarily. Measured 00:05:41.560 --> 00:05:43.620 steps, as they defined it, means they aren't 00:05:43.620 --> 00:05:45.579 always investing in the most expensive, shiny 00:05:45.579 --> 00:05:48.160 new technology. But they are focused intensely 00:05:48.160 --> 00:05:50.660 on consistency. Wow, consistency. OK. Better 00:05:50.660 --> 00:05:53.319 nutrition right from day one. Good. Utilizing 00:05:53.319 --> 00:05:55.920 proven performance track genetics, not just any 00:05:55.920 --> 00:05:58.519 beef bowl, and implementing basic systematic 00:05:58.519 --> 00:06:01.459 tracking, knowing what works and what doesn't 00:06:01.459 --> 00:06:03.560 in their own system. OK, so that's the difference 00:06:03.560 --> 00:06:05.779 then. It's the difference between just sort of 00:06:05.779 --> 00:06:07.879 hoping the market stays high enough to float 00:06:07.879 --> 00:06:10.620 a lower quality animal and building a system 00:06:10.620 --> 00:06:12.920 that reliably produces a premium grading animal 00:06:12.920 --> 00:06:15.420 almost regardless of minor market fluctuations. 00:06:15.899 --> 00:06:18.319 You're building resilience. Precisely. Building 00:06:18.319 --> 00:06:22.240 a system, not just chasing a premium. Now, this 00:06:22.240 --> 00:06:24.459 leads us straight into what the research highlights 00:06:24.459 --> 00:06:27.779 as the, well. the true hidden killer of performance. 00:06:28.420 --> 00:06:31.000 And it's not just about cheap genetics, although 00:06:31.000 --> 00:06:33.500 that's part of it. It's a total lack of consistency 00:06:33.500 --> 00:06:36.000 in the calf's early life nutrition. OK, hold 00:06:36.000 --> 00:06:38.620 on. We always focus on feed costs, right? How 00:06:38.620 --> 00:06:40.860 much per ton? Yeah, that's the first number everyone 00:06:40.860 --> 00:06:42.879 looks at. But the research in this feature piece 00:06:42.879 --> 00:06:46.480 shows feed quality consistency matters far, far 00:06:46.480 --> 00:06:50.100 more, especially right now when corn and other 00:06:50.100 --> 00:06:52.860 major inputs are, relatively speaking, affordable. 00:06:53.500 --> 00:06:55.180 I have to push back just a little bit on this, 00:06:55.259 --> 00:06:58.360 though. I mean, most farmers I know, they use 00:06:58.360 --> 00:07:01.500 established nutritionists. We mix rations based 00:07:01.500 --> 00:07:04.579 on standard protein and energy content derived 00:07:04.579 --> 00:07:08.000 from feed assays. So what does consistency really 00:07:08.000 --> 00:07:10.639 mean here, beyond hitting those basic nutritional 00:07:10.639 --> 00:07:13.519 targets on paper? Are we just talking about like 00:07:13.519 --> 00:07:16.019 day to day mixing variation? Is that it? That's 00:07:16.019 --> 00:07:18.240 definitely part of it, Jake. Yeah. Mixing errors 00:07:18.240 --> 00:07:22.040 happen. But the deeper dive here shows the inconsistency 00:07:22.040 --> 00:07:25.019 often starts way earlier at the ingredient level 00:07:25.019 --> 00:07:27.240 itself. Look at the specific example they really 00:07:27.240 --> 00:07:29.990 hammered on. Molasses. OK, yeah. Staple ingredient, 00:07:30.170 --> 00:07:33.089 palatability energy binder. Right. And most farmers, 00:07:33.189 --> 00:07:35.449 let's be honest, buy the cheapest bulk molasses 00:07:35.449 --> 00:07:37.329 they can find. Makes sense on the surface. Standard 00:07:37.329 --> 00:07:39.930 practice. But the research cited in the source 00:07:39.930 --> 00:07:42.389 material, it revealed that the total sugar content 00:07:42.389 --> 00:07:45.329 in generic unbranded cane molasses can vary. 00:07:45.430 --> 00:07:48.490 Well, wildly. They documented a range from a 00:07:48.490 --> 00:07:51.009 low of thirty nine point two percent total sugars 00:07:51.009 --> 00:07:53.569 all the way up to a whopping sixty seven point 00:07:53.569 --> 00:07:55.689 three percent in samples taken just across the 00:07:55.689 --> 00:07:57.529 Midwest. Oh, wait. Thirty nine percent to six. 00:07:57.610 --> 00:08:00.069 67%. Yeah. That's not variability. That's like 00:08:00.069 --> 00:08:01.870 there's two completely different products being 00:08:01.870 --> 00:08:04.129 sold into the same name. Exactly. How are you 00:08:04.129 --> 00:08:06.029 supposed to manage delicate rumen development 00:08:06.029 --> 00:08:09.389 in a young calf when the key energy input is 00:08:09.389 --> 00:08:12.370 swinging that wildly batch to batch? You can't. 00:08:12.370 --> 00:08:15.910 And that kind of huge, unexpected swing in sugar 00:08:15.910 --> 00:08:19.629 and likely minerals, too, it just sabotages performance. 00:08:20.399 --> 00:08:22.899 The study they cited showed that this inconsistency 00:08:22.899 --> 00:08:25.079 in feed quality, these sudden drops or spikes 00:08:25.079 --> 00:08:28.019 in key ingredients like sugar, it has been shown 00:08:28.019 --> 00:08:30.660 in controlled calf studies to reduce calf starter 00:08:30.660 --> 00:08:35.360 intake by up to 18%. 18%. An 18 % reduction in 00:08:35.360 --> 00:08:37.580 starter intake. So think about that. You just 00:08:37.580 --> 00:08:40.220 invested maybe, say, $100 in high -performance 00:08:40.220 --> 00:08:43.659 beef semen. And you've basically sabotaged the 00:08:43.659 --> 00:08:45.700 expression of that genetic potential before the 00:08:45.700 --> 00:08:48.399 calf is even 60 days old. Yeah. All because your 00:08:48.399 --> 00:08:50.929 cheap molasses wasn't. consistent week to week. 00:08:51.090 --> 00:08:52.850 Wow. But here's what they're not telling you, 00:08:52.870 --> 00:08:55.409 right? And this is the crucial biological nuance, 00:08:55.570 --> 00:08:57.490 I think. This isn't just a palatability problem 00:08:57.490 --> 00:08:59.990 where the calf maybe doesn't like to taste one 00:08:59.990 --> 00:09:02.529 day. It's deeper. Much deeper. The inconsistent 00:09:02.529 --> 00:09:06.529 quality fundamentally alters those crucial early 00:09:06.529 --> 00:09:09.750 rumen fermentation patterns. And, critically, 00:09:09.990 --> 00:09:13.820 the volatile fatty acid. VFA production. Exactly. 00:09:14.200 --> 00:09:16.039 Let's get technical just for a moment because 00:09:16.039 --> 00:09:18.120 this really is the root of this whole profit 00:09:18.120 --> 00:09:20.700 paradox. VFAs, they're the primary energy source 00:09:20.700 --> 00:09:24.179 for ruminants, right? And the mix of those VFAs 00:09:24.179 --> 00:09:27.620 matters enormously for development. Right. Acetate, 00:09:27.639 --> 00:09:30.139 propionate, butyrate. And specifically, quality 00:09:30.139 --> 00:09:33.019 controlled consistent molasses increases butyrate 00:09:33.019 --> 00:09:36.080 production. Now, why is butyrate so critical 00:09:36.080 --> 00:09:38.480 in those first two months of life? Butyrate, 00:09:38.600 --> 00:09:41.860 yeah. Because butyrate is the key signal. molecule, 00:09:42.080 --> 00:09:44.559 the main driver for the development of the rumen 00:09:44.559 --> 00:09:46.980 papillae. Bingo. Think of papillae like little 00:09:46.980 --> 00:09:49.100 fingers or like the shag carpet lining the rumen 00:09:49.100 --> 00:09:51.580 wall. Good analogy. A calf needs those papillae 00:09:51.580 --> 00:09:54.620 to grow long, thick, and fully functional so 00:09:54.620 --> 00:09:56.879 they can absorb nutrients efficiently later on, 00:09:56.960 --> 00:09:59.220 especially when they transition fully to solid 00:09:59.220 --> 00:10:01.700 feed. So if the starter intake is inconsistent 00:10:01.700 --> 00:10:03.919 because your molasses quality is all over the 00:10:03.919 --> 00:10:06.820 place, the butyrate signal is weak or erratic. 00:10:06.940 --> 00:10:09.340 The papillae don't develop fully. Yeah. And that 00:10:09.340 --> 00:10:12.799 calf is now essentially permanently hobbled in 00:10:12.799 --> 00:10:16.080 terms of its future feed efficiency potential. 00:10:16.340 --> 00:10:18.860 Precisely. You are literally losing future feed 00:10:18.860 --> 00:10:20.720 efficiency and conversion rate that should happen 00:10:20.720 --> 00:10:23.340 way down the line in the finishing lot. The high 00:10:23.340 --> 00:10:26.179 -end beef genetics you paid good money for, they 00:10:26.179 --> 00:10:29.059 simply cannot express their superior gain potential 00:10:29.059 --> 00:10:32.480 if the basic rumen infrastructure, the absorption 00:10:32.480 --> 00:10:35.299 surface area is underdeveloped from the start. 00:10:35.419 --> 00:10:37.480 Which means? That calf is going to cost more 00:10:37.480 --> 00:10:40.019 to finish, take longer, and is less likely to 00:10:40.019 --> 00:10:43.059 grade high choice, or prime, double whammy. And 00:10:43.059 --> 00:10:45.960 this, I suppose, is where the quality feed companies, 00:10:46.159 --> 00:10:49.360 like callback feeds that was mentioned in the 00:10:49.360 --> 00:10:51.240 source material, this is where they earn their 00:10:51.240 --> 00:10:53.740 money. Absolutely. They maintain strict specifications. 00:10:53.799 --> 00:10:55.820 We're talking guaranteed minimum coal sugars, 00:10:56.080 --> 00:10:57.919 controlled mineral levels, maybe ash content, 00:10:58.120 --> 00:11:01.059 and highly consistent BRICS readings batch after 00:11:01.059 --> 00:11:03.649 batch. Right. And for those maybe unfamiliar, 00:11:04.049 --> 00:11:06.690 a Brix reading, it's essentially a measure of 00:11:06.690 --> 00:11:09.009 the soluble solids content, which is largely 00:11:09.009 --> 00:11:12.269 sugar, in the molasses. It's a quick check for 00:11:12.269 --> 00:11:14.929 consistency. Consistent Brex readings ensure 00:11:14.929 --> 00:11:18.870 consistent energy delivery. So by paying a bit 00:11:18.870 --> 00:11:21.629 more for a guaranteed specification, you are 00:11:21.629 --> 00:11:24.149 essentially paying for reliability. Predictability. 00:11:24.429 --> 00:11:27.289 Exactly. And that reliability translates directly 00:11:27.289 --> 00:11:29.309 into stable room and development and predictable 00:11:29.309 --> 00:11:31.629 starter intake during the most critical growth 00:11:31.629 --> 00:11:34.289 phase. Okay. Okay. Let's translate this back 00:11:34.289 --> 00:11:37.149 into farmer language then. Mixing your own rations 00:11:37.149 --> 00:11:39.190 or always buying the cheapest bulk ingredient, 00:11:39.429 --> 00:11:41.830 it seems cost effective on the invoice. On paper, 00:11:42.129 --> 00:11:43.809 yeah. But when you actually factor in the hidden 00:11:43.809 --> 00:11:46.090 costs, things like storage losses, your labor, 00:11:46.289 --> 00:11:48.789 mixer wagon maintenance, the occasional bad batch 00:11:48.789 --> 00:11:51.230 that throws a whole pen off feed. Yeah. And most 00:11:51.230 --> 00:11:53.309 critically, that potentially lost performance 00:11:53.309 --> 00:11:56.769 due to an 18 % starter intake drop in that key 00:11:56.769 --> 00:11:59.320 early development phase. Yeah. The investment 00:11:59.320 --> 00:12:01.960 in consistent, quality -controlled calf feed, 00:12:02.059 --> 00:12:05.240 even if it's a few dollars more per bag, it can 00:12:05.240 --> 00:12:07.340 likely be recouped pretty easily through just 00:12:07.340 --> 00:12:09.860 10 -15 % improvements in feed efficiency down 00:12:09.860 --> 00:12:12.360 the road. Or better grading. Or better grading, 00:12:12.419 --> 00:12:15.200 exactly. You are literally buying a more reliable, 00:12:15.399 --> 00:12:17.940 more valuable final product by starting right. 00:12:18.459 --> 00:12:21.039 Okay, so that consistency argument, it moves 00:12:21.039 --> 00:12:23.559 us squarely into the realm of strategic investment, 00:12:23.799 --> 00:12:25.940 doesn't it? Because that $50 you thought you 00:12:25.940 --> 00:12:28.159 saved on cheap molasses might have just cost 00:12:28.159 --> 00:12:31.539 you $200, maybe more, in lost carcass value later 00:12:31.539 --> 00:12:33.820 on. Right. Pennywise, pound foolish, as they 00:12:33.820 --> 00:12:36.039 say. Exactly. The source material makes it clear. 00:12:36.220 --> 00:12:38.879 The most profitable farms are not the ones cutting 00:12:38.879 --> 00:12:41.019 corners everywhere. They are the ones with, and 00:12:41.019 --> 00:12:42.919 I'm quoting here, comprehensive data systems, 00:12:43.139 --> 00:12:45.659 precision feeding, and systematic breeding strategies. 00:12:46.100 --> 00:12:48.730 Okay, but here's the rub. How does a typical 00:12:48.730 --> 00:12:51.769 operation, maybe not a mega dairy, justify that 00:12:51.769 --> 00:12:54.289 kind of upfront cost? It sounds expensive. It 00:12:54.289 --> 00:12:56.970 can be, but the source material is actually compelling 00:12:56.970 --> 00:12:59.169 here because it focuses on investments that can 00:12:59.169 --> 00:13:02.169 pay for themselves relatively quickly. It's not 00:13:02.169 --> 00:13:05.470 all about massive capital outlay. Take genomic 00:13:05.470 --> 00:13:07.590 testing for your dairy herd, for example. Okay. 00:13:07.710 --> 00:13:09.870 Standard practice for many now, but how does 00:13:09.870 --> 00:13:13.440 it fit BXD strategy? We're talking maybe a $50 00:13:13.440 --> 00:13:16.639 per head genomic testing cost for your best cows 00:13:16.639 --> 00:13:19.299 or maybe even just the heifers. That investment, 00:13:19.519 --> 00:13:22.500 the data shows, typically pays for itself within 00:13:22.500 --> 00:13:24.960 the first calf crop generated after testing. 00:13:25.059 --> 00:13:27.399 Within the first calf crop. How? Because it's 00:13:27.399 --> 00:13:29.679 foundational work. It gives you certainty, takes 00:13:29.679 --> 00:13:32.500 out the guesswork. You identify with high reliability 00:13:32.500 --> 00:13:35.679 your top performing cows or heifers, the ones 00:13:35.679 --> 00:13:37.840 with superior genetics for health, fertility, 00:13:37.980 --> 00:13:43.580 production traits. Those get bred to a... Okay, 00:13:44.100 --> 00:13:46.460 makes sense. Maximize genetic gain where it counts 00:13:46.460 --> 00:13:49.259 for the dairy. Exactly. But just as crucially, 00:13:49.299 --> 00:13:52.100 you reliably identify the lower -end cows or 00:13:52.100 --> 00:13:54.799 heifers. Those with mediocre genetics, maybe 00:13:54.799 --> 00:13:56.879 some minor recurring health issues, the ones 00:13:56.879 --> 00:13:59.179 you don't want replacements from, those animals 00:13:59.179 --> 00:14:02.019 should be instantly and confidently bred to high 00:14:02.019 --> 00:14:05.500 -quality, high carcass value beef semen. Okay, 00:14:06.080 --> 00:14:08.870 so it eliminates guessing. It minimizes wasted, 00:14:08.909 --> 00:14:12.129 expensive beef semen on cows that really should 00:14:12.129 --> 00:14:14.509 have produced a replacement heifer. Right. And 00:14:14.509 --> 00:14:17.070 it optimizes your future heifer inventory, potentially 00:14:17.070 --> 00:14:19.330 letting you keep fewer, better replacements. 00:14:19.470 --> 00:14:22.210 Precisely. You spend $50 on a test to make a 00:14:22.210 --> 00:14:25.669 far better, maybe $250 or $300 breeding decision 00:14:25.669 --> 00:14:28.210 with much higher confidence. It's not just about 00:14:28.210 --> 00:14:30.309 one decision either, is it? It's a commitment 00:14:30.309 --> 00:14:33.429 to building a more reliable system overall. That's 00:14:33.429 --> 00:14:35.730 the key. Strategic investment like this allows 00:14:35.730 --> 00:14:38.490 operations to see real grade improvements, meaning 00:14:38.490 --> 00:14:41.990 significantly more choice and prime carcasses 00:14:41.990 --> 00:14:44.690 coming out of the feedlot. Improvements of maybe 00:14:44.690 --> 00:14:47.269 20, 30 percent over a three year period, according 00:14:47.269 --> 00:14:49.429 to the analysis. Wow. 20, 30 percent increase 00:14:49.429 --> 00:14:51.250 in quality grades. That's significant money. 00:14:51.389 --> 00:14:53.789 Huge. And that kind of improvement positions 00:14:53.789 --> 00:14:57.190 them for guaranteed success, even when the current 00:14:57.190 --> 00:15:00.250 really high scarcity premiums inevitably soften 00:15:00.250 --> 00:15:02.480 a bit. Because they've built a reputation, a 00:15:02.480 --> 00:15:05.639 track record, for consistent quality that packers 00:15:05.639 --> 00:15:08.039 will continue to pay a premium for long term. 00:15:08.179 --> 00:15:11.399 They become preferred suppliers. Right. And here's 00:15:11.399 --> 00:15:13.840 a really critical point from the research that's 00:15:13.840 --> 00:15:17.200 often missed, I think. The nutrition upgrade 00:15:17.200 --> 00:15:19.379 focusing on that consistency we talked about 00:15:19.379 --> 00:15:22.779 really must apply to all calves on the dairy. 00:15:23.259 --> 00:15:26.620 not just the beef crosses. Ah, okay. Not running 00:15:26.620 --> 00:15:29.039 two separate programs? No. The source material 00:15:29.039 --> 00:15:31.559 really emphasizes that upgrading the entire calf 00:15:31.559 --> 00:15:34.139 program creates the stable, high -performance 00:15:34.139 --> 00:15:36.720 environment necessary for those expensive beef 00:15:36.720 --> 00:15:39.679 genetics to actually express themselves optimally. 00:15:39.860 --> 00:15:41.820 Right. You need a consistently high plane of 00:15:41.820 --> 00:15:43.840 nutrition for everything. You don't want to try 00:15:43.840 --> 00:15:46.460 and manage two separate tiered calf programs. 00:15:46.519 --> 00:15:49.080 You manage one excellent calf program, period. 00:15:49.159 --> 00:15:51.100 That makes sense. And farmers should absolutely 00:15:51.100 --> 00:15:52.799 check out resources from their state. extension 00:15:52.799 --> 00:15:55.340 services, too. Things like the Beef Quality Assurance 00:15:55.340 --> 00:15:58.039 Program, BQA. Good point. A lot of those resources 00:15:58.039 --> 00:16:00.860 are free and can really help standardize protocols 00:16:00.860 --> 00:16:03.539 and audit processes to ensure that consistency. 00:16:03.840 --> 00:16:06.639 Okay. This logically moves us from the investment 00:16:06.639 --> 00:16:10.399 decision itself to the strategic timeline. And 00:16:10.399 --> 00:16:12.879 this is where the math gets really unforgiving 00:16:12.879 --> 00:16:15.299 in cattle production, isn't it? Because of that 00:16:15.299 --> 00:16:17.919 biological lag involved. Yeah. You can't speed 00:16:17.919 --> 00:16:21.279 up gestation or growth rates much. Biology sets 00:16:21.279 --> 00:16:23.879 the pace. Exactly. Success in the BXD space, 00:16:24.139 --> 00:16:26.940 real success. It's built over a deliberate 24 00:16:26.940 --> 00:16:30.179 to 36 month timeline. It does not happen overnight. 00:16:30.480 --> 00:16:32.299 And you have to be strategic about the phases 00:16:32.299 --> 00:16:34.419 within that timeline, right? You can't just jump 00:16:34.419 --> 00:16:36.740 in and expect top results immediately. Precisely. 00:16:36.759 --> 00:16:38.879 The source material laid out a kind of roadmap. 00:16:39.139 --> 00:16:41.919 Phase one is foundation building. That's roughly 00:16:41.919 --> 00:16:43.799 the first six months. Okay, what's in that phase? 00:16:44.080 --> 00:16:46.019 That's doing the genomic testing we just talked 00:16:46.019 --> 00:16:48.279 about. Selecting those proven beef sires with 00:16:48.279 --> 00:16:50.820 high carcass value EPDs, not just calving ease. 00:16:51.159 --> 00:16:54.299 And critically, auditing and upgrading that calf 00:16:54.299 --> 00:16:57.279 nutrition consistency. Getting the molasses right. 00:16:57.379 --> 00:16:59.620 Getting the starter right. Got it. Laying the 00:16:59.620 --> 00:17:02.899 groundwork. Then comes phase two. Scaling what 00:17:02.899 --> 00:17:06.259 works. That's maybe the next 12 months. Here, 00:17:06.400 --> 00:17:08.460 you gradually increase the percentage of the 00:17:08.460 --> 00:17:11.299 herd bred to beef. But based on reliable data 00:17:11.299 --> 00:17:13.759 and confidence gained from phase one, you know 00:17:13.759 --> 00:17:16.519 your system can handle it. Makes sense. Don't 00:17:16.519 --> 00:17:19.079 go all in until you've proven the basics. And 00:17:19.079 --> 00:17:21.700 finally, phase three is optimization. That could 00:17:21.700 --> 00:17:24.460 be another 12 months or ongoing. This is where 00:17:24.460 --> 00:17:27.079 you're refining your protocols based on actual 00:17:27.079 --> 00:17:29.240 feedlot performance data and packer feedback 00:17:29.240 --> 00:17:32.000 from those first groups of calves, fine -tuning 00:17:32.000 --> 00:17:33.799 the system. Wait, wait, can we just pause on 00:17:33.799 --> 00:17:35.740 that biological lag again for a second? Because 00:17:35.740 --> 00:17:38.000 this is so critical. Yeah, please do. This is 00:17:38.000 --> 00:17:40.740 what makes inaction today so incredibly expensive 00:17:40.740 --> 00:17:43.019 down the road. If you're sitting there listening, 00:17:43.180 --> 00:17:45.380 maybe on the fence today, debating whether to 00:17:45.380 --> 00:17:48.119 spend that $50 on genomic testing or upgrade 00:17:48.119 --> 00:17:50.480 to that quality -controlled starter feed, remember 00:17:50.480 --> 00:17:52.900 this. The breeding decisions you make today, 00:17:53.059 --> 00:17:56.460 right now, they create the calves that will actually 00:17:56.460 --> 00:18:00.299 hit the market ready for harvest in late 2027. 00:18:00.619 --> 00:18:03.480 Scary thought, isn't it? It is. So if you delay 00:18:03.480 --> 00:18:06.119 implementing these quality controls or wait to 00:18:06.119 --> 00:18:10.000 select better genetics, you are... actively guaranteeing 00:18:10.000 --> 00:18:13.599 that you will miss the window for maximum premium 00:18:13.599 --> 00:18:16.460 potential two years from now. The train might 00:18:16.460 --> 00:18:18.019 have already left the station. It's a powerful 00:18:18.019 --> 00:18:20.440 point. The market opportunity is definitely dynamic. 00:18:20.619 --> 00:18:23.859 Now, OK, the very earliest adoption advantages, 00:18:24.019 --> 00:18:26.539 those first mover processor relationships established 00:18:26.539 --> 00:18:29.559 maybe five, six years ago. Yeah, those are probably 00:18:29.559 --> 00:18:31.910 gone. Right. The low hanging fruit. But the opportunity 00:18:31.910 --> 00:18:35.289 is still immense. Regional processors are still 00:18:35.289 --> 00:18:38.710 actively right now seeking consistent suppliers 00:18:38.710 --> 00:18:41.410 who can meet quality specifications reliably 00:18:41.410 --> 00:18:44.210 week after week. They crave predictability. They 00:18:44.210 --> 00:18:46.569 absolutely crave predictable product, which means 00:18:46.569 --> 00:18:48.529 you have to build a predictable system now to 00:18:48.529 --> 00:18:51.289 supply it. And building that system, it requires 00:18:51.289 --> 00:18:53.190 acknowledging that, you know, regional challenges 00:18:53.190 --> 00:18:54.829 really dictate different management strategies, 00:18:55.049 --> 00:18:57.569 too. The BXD opportunity plays out very differently 00:18:57.569 --> 00:18:59.750 depending on where your farm is located. Yeah, 00:18:59.809 --> 00:19:01.609 let's definitely touch on those regional differences. 00:19:01.730 --> 00:19:04.349 Let's start in the heart of dairy, the Midwest, 00:19:04.690 --> 00:19:08.069 Wisconsin, Minnesota. Processor density there 00:19:08.069 --> 00:19:10.210 is generally a huge advantage, right? You often 00:19:10.210 --> 00:19:12.509 have multiple marketing options, which gives 00:19:12.509 --> 00:19:15.390 you some leverage. True. But the big challenge 00:19:15.390 --> 00:19:18.670 there is the weather, specifically the extreme 00:19:18.670 --> 00:19:22.400 cold in winter. Crossbred calves, especially 00:19:22.400 --> 00:19:25.180 depending on the beef breed used, might require 00:19:25.180 --> 00:19:27.680 different management in the cold than straight 00:19:27.680 --> 00:19:30.480 Holsteins, which tend to tolerate a wider temperature 00:19:30.480 --> 00:19:32.779 range. How so? What kind of adjustments? Well, 00:19:32.799 --> 00:19:34.400 you really have to budget for winter housing 00:19:34.400 --> 00:19:36.960 adjustments. We're potentially talking about 00:19:36.960 --> 00:19:39.140 needing extra bedding for greater nesting scores 00:19:39.140 --> 00:19:42.440 in calf hutches or barns. Critical draft protection 00:19:42.440 --> 00:19:45.059 becomes even more important. Holsteins often 00:19:45.059 --> 00:19:47.400 run a bit hotter metabolically than some beef 00:19:47.400 --> 00:19:50.250 crosses. For crossbreds, you might need to adjust 00:19:50.250 --> 00:19:52.690 your calf jacket protocols. Maybe keeping them 00:19:52.690 --> 00:19:55.500 on longer? or using heavier grades depending 00:19:55.500 --> 00:19:57.940 on the breed, and perhaps even investing in some 00:19:57.940 --> 00:20:00.000 building modifications like better windbreaks 00:20:00.000 --> 00:20:02.920 or improved air exchange controls in those early 00:20:02.920 --> 00:20:05.539 calf facilities. It's all about mitigating respiratory 00:20:05.539 --> 00:20:08.680 risk associated with cold stress and drafts. 00:20:08.779 --> 00:20:12.319 So not huge costs necessarily, but they are necessary 00:20:12.319 --> 00:20:15.079 strategic investments to protect the expensive 00:20:15.079 --> 00:20:17.140 genetics you just paid for. You don't want to 00:20:17.140 --> 00:20:19.880 lose them to pneumonia. Exactly. Pennywise, pound 00:20:19.880 --> 00:20:22.319 foolish you get if you skip there. Okay, let's 00:20:22.319 --> 00:20:24.589 move out east. Pennsylvania, New York, different 00:20:24.589 --> 00:20:27.049 picture there, right? Generally fewer processors, 00:20:27.289 --> 00:20:30.049 less density. Yeah, much less density. Which 00:20:30.049 --> 00:20:32.410 means those individualized relationships with 00:20:32.410 --> 00:20:35.369 structured, source -verified programs become 00:20:35.369 --> 00:20:39.549 absolutely crucial. Things like National Beef's 00:20:39.549 --> 00:20:42.970 Angus Link program or Tyson's Progressive Beef. 00:20:43.210 --> 00:20:45.549 You need to consistently meet their specific, 00:20:45.829 --> 00:20:47.970 often rigorous requirements to secure stable 00:20:47.970 --> 00:20:50.250 pricing. Which implies rigorous documentation 00:20:50.250 --> 00:20:54.210 and tracking on the farm. Absolutely. And environmentally, 00:20:54.690 --> 00:20:57.369 the challenge out east shifts from extreme cold 00:20:57.369 --> 00:21:01.210 to often those really muggy, humid summers. Right. 00:21:01.289 --> 00:21:04.069 Bad for respiratory health. Can be brutal. That 00:21:04.069 --> 00:21:06.750 high humidity significantly increases respiratory 00:21:06.750 --> 00:21:09.450 challenges in all cabs, but maybe especially 00:21:09.450 --> 00:21:12.549 in certain crosses. Some of the Black Angus crosses, 00:21:12.710 --> 00:21:15.410 for example, can be less heat tolerant than Holstein's. 00:21:15.529 --> 00:21:18.200 So what's the management adaptation there? Producers 00:21:18.200 --> 00:21:20.660 really need to factor in enhanced summer health 00:21:20.660 --> 00:21:23.339 protocols, maybe more aggressive fly control, 00:21:23.559 --> 00:21:26.619 which carries disease, certainly excellent ventilation 00:21:26.619 --> 00:21:29.480 to manage heat and humidity stress, especially 00:21:29.480 --> 00:21:32.000 during that critical first 60 days. So again, 00:21:32.039 --> 00:21:34.019 it's an investment in labor, maybe preventative 00:21:34.019 --> 00:21:36.259 medicine, maybe facility upgrades for airflow? 00:21:36.599 --> 00:21:38.420 Correct. Different climate, different necessary 00:21:38.420 --> 00:21:40.980 investments. Okay, then let's look west. California, 00:21:41.200 --> 00:21:43.660 Idaho, big dairy states. Big advantage there 00:21:43.660 --> 00:21:45.900 is often the year -round feeding conditions. 00:21:46.730 --> 00:21:49.170 Generally more moderate climate, which is a major 00:21:49.170 --> 00:21:51.670 plus for consistent growth and getting cattle 00:21:51.670 --> 00:21:53.529 to market weight efficiently. Less environmental 00:21:53.529 --> 00:21:56.170 stress. Right. The challenge out west, though, 00:21:56.289 --> 00:21:58.970 is often scale. Some of the major processors 00:21:58.970 --> 00:22:02.950 there require just serious volume to even get 00:22:02.950 --> 00:22:05.099 in the door with a supply agreement. Which can 00:22:05.099 --> 00:22:07.099 sometimes lock out smaller, more specialized 00:22:07.099 --> 00:22:09.720 dairy operations from direct packer access. It 00:22:09.720 --> 00:22:12.339 can. However, the flip side is the advantage 00:22:12.339 --> 00:22:15.880 of proximity to major Western feedlots, huge 00:22:15.880 --> 00:22:18.759 efficient feedlots. That offers different marketing 00:22:18.759 --> 00:22:21.039 options beyond just selling direct to the packing 00:22:21.039 --> 00:22:24.000 plant. You can potentially sell uniform truckloads 00:22:24.000 --> 00:22:26.559 of high quality feeder calves directly into these 00:22:26.559 --> 00:22:29.079 large scale finishing operations. So a different 00:22:29.079 --> 00:22:31.460 economic model potentially, but still heavily 00:22:31.460 --> 00:22:34.480 reliant on producing consistent high -quality 00:22:34.480 --> 00:22:37.039 calves that those feedlots want. Quality always 00:22:37.039 --> 00:22:39.799 matters. And the common management caveat, really 00:22:39.799 --> 00:22:41.400 across all regions that came through in the source 00:22:41.400 --> 00:22:44.680 material, is this. Crossbred calves, regardless 00:22:44.680 --> 00:22:47.259 of breed, may respond differently to your standard 00:22:47.259 --> 00:22:49.740 Holstein health and nutrition protocols, especially 00:22:49.740 --> 00:22:52.579 during that critical first 60 days. Which translates 00:22:52.579 --> 00:22:55.299 directly to potentially increased labor, more 00:22:55.299 --> 00:22:57.480 vigilance, and maybe different treatment strategies 00:22:57.480 --> 00:23:00.359 needed. It's not just business as usual. Nope. 00:23:00.740 --> 00:23:03.930 Definitely requires adaptation. Okay, that brings 00:23:03.930 --> 00:23:06.029 us back maybe to the biggest challenge a producer 00:23:06.029 --> 00:23:08.509 faces, especially a mid -sized one. Let's say 00:23:08.509 --> 00:23:12.259 a 200 -cow operator listening right now. Is it 00:23:12.259 --> 00:23:14.599 really realistic for them to invest in these 00:23:14.599 --> 00:23:17.660 comprehensive data systems that the source material 00:23:17.660 --> 00:23:20.779 claims are required for top tier success? Isn't 00:23:20.779 --> 00:23:24.000 that advice just for the 5 ,000 cow mega dairies? 00:23:24.160 --> 00:23:25.880 That's a really great question, because if the 00:23:25.880 --> 00:23:28.299 answer is yes, only for mega dairies, then this 00:23:28.299 --> 00:23:31.539 whole high premium BXD thing becomes inaccessible 00:23:31.539 --> 00:23:34.200 to the vast majority of producers. But the source 00:23:34.200 --> 00:23:36.420 material actually emphasizes that comprehensive 00:23:36.420 --> 00:23:38.599 data system doesn't necessarily mean you have 00:23:38.599 --> 00:23:40.660 to go out and build some expensive proprietary. 00:23:41.319 --> 00:23:44.319 database from scratch it means using the tools 00:23:44.319 --> 00:23:47.059 that are available strategically leveraging what's 00:23:47.059 --> 00:23:48.880 out there okay so what are those strategic tools 00:23:48.880 --> 00:23:51.640 for say that smaller operator under 200 cows 00:23:51.640 --> 00:23:54.140 for a smaller operator the key phrase from the 00:23:54.140 --> 00:23:57.380 analysis was partnering for expertise focus on 00:23:57.380 --> 00:23:59.779 excellence and the basics consistency over complexity 00:23:59.779 --> 00:24:03.779 and leverage external resources effectively Like 00:24:03.779 --> 00:24:06.440 what? That means maybe utilizing cooperative 00:24:06.440 --> 00:24:09.819 nutritionists who manage feed consistency protocols 00:24:09.819 --> 00:24:12.960 for multiple farms, using readily available third 00:24:12.960 --> 00:24:15.400 -party tracking apps on a phone or tablet instead 00:24:15.400 --> 00:24:18.619 of building custom software, and really relying 00:24:18.619 --> 00:24:22.079 on reputable semen companies that provide detailed, 00:24:22.140 --> 00:24:25.460 reliable carcass data EPDs on their sires rather 00:24:25.460 --> 00:24:27.660 than just picking the lowest cost bowl off the 00:24:27.660 --> 00:24:31.039 list. So using external expertise and data to 00:24:31.039 --> 00:24:33.480 guarantee consistency and informed decisions. 00:24:33.660 --> 00:24:35.519 Exactly. They don't have to invent it all themselves. 00:24:35.799 --> 00:24:38.740 Okay, what about mid -sized operations, say 200 00:24:38.740 --> 00:24:41.700 to 500 cows? For them, that staged approach we 00:24:41.700 --> 00:24:43.819 talked about earlier is probably crucial. They 00:24:43.819 --> 00:24:45.839 can often leverage existing dairy cooperatives 00:24:45.839 --> 00:24:48.299 for marketing power and maybe even data aggregation. 00:24:48.579 --> 00:24:50.480 And they can look at farm management software 00:24:50.480 --> 00:24:52.579 that integrates their existing parlor and breeding 00:24:52.579 --> 00:24:55.059 records, but allows them to specifically track 00:24:55.059 --> 00:24:57.700 BXD performance metrics, conception rates by 00:24:57.700 --> 00:25:00.339 sire, maybe early health events, weaning weights. 00:25:00.579 --> 00:25:02.779 Focusing on gradual system improvements, adding 00:25:02.779 --> 00:25:05.240 capabilities as they go, rather than a massive 00:25:05.240 --> 00:25:07.819 disruptive overhaul all at once. Right. Bite 00:25:07.819 --> 00:25:10.049 -sized chunks. And then for the large operations, 00:25:10.289 --> 00:25:13.789 over 500 cows. Yeah, for them, the source material 00:25:13.789 --> 00:25:15.990 was pretty clear. To get those top -tier net 00:25:15.990 --> 00:25:19.089 returns consistently, you probably must build 00:25:19.089 --> 00:25:22.589 or invest in truly comprehensive systems, whether 00:25:22.589 --> 00:25:25.549 that's sophisticated in -house tracking or adopting 00:25:25.549 --> 00:25:28.230 enterprise -level software platforms. Why the 00:25:28.230 --> 00:25:31.380 difference at scale? Because... Partial implementation, 00:25:31.759 --> 00:25:34.359 like only focusing on genetics but ignoring nutrition 00:25:34.359 --> 00:25:37.779 consistency, or vice versa, rarely works well 00:25:37.779 --> 00:25:40.380 when you're dealing with large numbers. The inefficiencies 00:25:40.380 --> 00:25:45.000 get magnified. To realize those $200, $250 net 00:25:45.000 --> 00:25:48.000 returns per calf reliably, They need commitment 00:25:48.000 --> 00:25:49.799 and system integration across the board from 00:25:49.799 --> 00:25:52.180 breeding decisions through calf rearing, grower 00:25:52.180 --> 00:25:54.880 phase, finishing data feedback, all the way through 00:25:54.880 --> 00:25:57.220 marketing agreements. So the operations that 00:25:57.220 --> 00:25:59.400 are maybe struggling to capture the full premium, 00:25:59.500 --> 00:26:01.400 they aren't necessarily doing anything fundamentally 00:26:01.400 --> 00:26:03.640 wrong. No, not necessarily. They might just be 00:26:03.640 --> 00:26:05.940 optimizing for different constraints, giving 00:26:05.940 --> 00:26:08.440 low capital availability or labor shortages, 00:26:08.500 --> 00:26:10.660 which unfortunately limits their access to these 00:26:10.660 --> 00:26:13.740 emerging highest value quality driven premiums 00:26:13.740 --> 00:26:16.400 right now. OK. Let's shift gears slightly and 00:26:16.400 --> 00:26:19.059 talk about the future. Because this current high 00:26:19.059 --> 00:26:21.700 premium environment, well, it likely won't last 00:26:21.700 --> 00:26:24.259 forever at these levels. We can't just react 00:26:24.259 --> 00:26:26.259 to today's prices. No, you got to look ahead. 00:26:26.440 --> 00:26:30.299 Market cycle, always have, always will. The premiums 00:26:30.299 --> 00:26:32.559 are great right now, yeah. And they will likely 00:26:32.559 --> 00:26:35.799 hold. Reasonably strong for a while yet, based 00:26:35.799 --> 00:26:38.579 on current beef herd numbers, but markets will 00:26:38.579 --> 00:26:41.339 moderate eventually. Absolutely. As more and 00:26:41.339 --> 00:26:44.859 more producers adopt BXD successfully, that scarcity 00:26:44.859 --> 00:26:47.680 premium, the part driven just by lack of supply, 00:26:48.039 --> 00:26:50.509 it naturally starts to soften. And the beef cow 00:26:50.509 --> 00:26:53.990 herd, while rebuilding slowly, will rebuild eventually. 00:26:54.170 --> 00:26:56.450 Plus, there's new packing capacity development 00:26:56.450 --> 00:26:58.730 in the works. Right. Those new plants, while 00:26:58.730 --> 00:27:00.950 they take years, not months, to come online, 00:27:01.230 --> 00:27:03.349 they should eventually alleviate some of the 00:27:03.349 --> 00:27:05.269 bottlenecks we've seen in the last few years. 00:27:05.450 --> 00:27:08.509 Which likely compresses packer margins and eventually 00:27:08.509 --> 00:27:11.650 premiums paid back to the farm. It's the logical 00:27:11.650 --> 00:27:14.460 outcome. So the long -term strategy here for 00:27:14.460 --> 00:27:16.859 anyone really serious about making BXDE a core 00:27:16.859 --> 00:27:19.619 part of their dairy business is to focus relentlessly 00:27:19.619 --> 00:27:23.160 on quality differentiation, operational efficiency, 00:27:23.559 --> 00:27:26.160 and maybe leveraging technological advantages 00:27:26.160 --> 00:27:28.319 where you can. Those are the things that maintain 00:27:28.319 --> 00:27:31.279 margins after the easy scarcity premiums fade 00:27:31.279 --> 00:27:34.400 away. Exactly. Investing now in feed quality 00:27:34.400 --> 00:27:37.500 consistency, in systematic management, improving 00:27:37.500 --> 00:27:40.119 your quality through data that creates durable 00:27:40.119 --> 00:27:43.660 value that transcends simple market cycles. You're 00:27:43.660 --> 00:27:46.319 not just chasing a temporary trend. You're building 00:27:46.319 --> 00:27:49.500 a long term, specialized, value added business 00:27:49.500 --> 00:27:52.579 line within your dairy. Well put. And alongside 00:27:52.579 --> 00:27:55.819 that strategic focus, we have to be. you know, 00:27:55.819 --> 00:27:58.640 brutally honest about the risks associated with 00:27:58.640 --> 00:28:00.579 this kind of expansion or specialization too. 00:28:00.680 --> 00:28:03.180 Good point. What are the key risks? Well, we 00:28:03.180 --> 00:28:05.000 talked about the potential for increased labor, 00:28:05.079 --> 00:28:06.980 especially during that critical first 60 days 00:28:06.980 --> 00:28:10.059 for crossbred calves. That's a real quantifiable 00:28:10.059 --> 00:28:12.140 cost you have to budget for. If you're borrowing 00:28:12.140 --> 00:28:14.559 capital to expand facilities, maybe you buy new 00:28:14.559 --> 00:28:16.640 equipment for precision feeding or data tracking, 00:28:16.799 --> 00:28:18.859 you need to keep that debt level conservative. 00:28:19.899 --> 00:28:22.279 Financial advisors always recommend maintaining 00:28:22.279 --> 00:28:24.880 a reasonable debt -to -asset ratio, especially 00:28:24.880 --> 00:28:27.480 in a sector as historically volatile as dairy. 00:28:27.940 --> 00:28:30.559 Don't overextend based on today's peak premiums. 00:28:30.579 --> 00:28:33.359 Sound advice. What else? And the final, really 00:28:33.359 --> 00:28:36.460 critical risk, processor relationships change. 00:28:36.759 --> 00:28:39.279 They just do. Yeah, that's a constant worry. 00:28:39.539 --> 00:28:41.660 Plant modifications happen. Ownership transitions 00:28:41.660 --> 00:28:45.079 occur. Program requirements get tweaked, sometimes 00:28:45.079 --> 00:28:47.079 with very little warning. So you need options. 00:28:47.400 --> 00:28:49.509 Always have alternatives. Always have a plan 00:28:49.509 --> 00:28:53.069 B, maybe even a plan C for marketing your cattle, 00:28:53.170 --> 00:28:55.450 even if those alternatives aren't currently your 00:28:55.450 --> 00:28:58.650 first choice processor or program. Flexibility 00:28:58.650 --> 00:29:00.549 in marketing is just survival in this sector. 00:29:00.769 --> 00:29:03.170 OK, so maybe think of it like a quick risk checklist 00:29:03.170 --> 00:29:05.980 before diving deeper or expanding. Yeah, exactly. 00:29:06.160 --> 00:29:08.839 Like, have I realistically budgeted for the increased 00:29:08.839 --> 00:29:11.839 labor? Have I actually checked and verified the 00:29:11.839 --> 00:29:14.380 consistency of my calf starter feed ingredients 00:29:14.380 --> 00:29:17.539 recently? Do I have at least two viable marketing 00:29:17.539 --> 00:29:20.119 channels for these calves? And if you can confidently 00:29:20.119 --> 00:29:22.680 answer yes to those, you're much better prepared 00:29:22.680 --> 00:29:25.880 for the inevitable market moderation ahead. Right. 00:29:26.000 --> 00:29:29.099 But if you're just relying on cheap inputs, guesswork 00:29:29.099 --> 00:29:31.680 on genetics, and baking everything on one process 00:29:31.680 --> 00:29:34.400 or relationship staying exactly the same forever... 00:29:35.000 --> 00:29:36.859 Well, you're building on a fragile foundation. 00:29:37.460 --> 00:29:39.640 All right, let's wrap this up then. Let's distill 00:29:39.640 --> 00:29:41.819 it down. Our farmer, maybe they just finished 00:29:41.819 --> 00:29:43.859 morning milking. Perhaps they are driving to 00:29:43.859 --> 00:29:46.180 the feed store right now, feeling the weight 00:29:46.180 --> 00:29:48.299 of that biological lag we talked about, maybe 00:29:48.299 --> 00:29:51.319 questioning the real cost of inconsistency in 00:29:51.319 --> 00:29:53.920 their current program. What are the three absolute 00:29:53.920 --> 00:29:56.359 must -know things from this deep dive that they 00:29:56.359 --> 00:29:58.539 can actually act on? Okay, insight number one 00:29:58.539 --> 00:30:01.000 for immediate action, like this week or this 00:30:01.000 --> 00:30:03.039 month, you need to audit your calf nutrition 00:30:03.039 --> 00:30:06.619 program specifically for consistency, not just 00:30:06.619 --> 00:30:09.220 for the lowest cost per ton. Stop buying those 00:30:09.220 --> 00:30:12.339 critical ingredients like molasses or maybe key 00:30:12.339 --> 00:30:15.279 protein supplements solely based on the cheapest 00:30:15.279 --> 00:30:18.079 bulk price tag. You need to demand and actually 00:30:18.079 --> 00:30:21.559 check the consistency documentation. Ask your 00:30:21.559 --> 00:30:23.660 supplier for those bricks readings on molasses. 00:30:23.680 --> 00:30:25.700 Ask for the guaranteed minimum total sugars. 00:30:25.859 --> 00:30:29.680 Ask about sourcing consistency. Ensure you aren't 00:30:29.680 --> 00:30:32.339 unknowingly compromising that vital early starter 00:30:32.339 --> 00:30:35.940 intake by maybe 10, 15, even 18 percent due to 00:30:35.940 --> 00:30:37.519 variable quality you didn't even know about. 00:30:37.640 --> 00:30:41.119 That directly sabotages your high value BXD program 00:30:41.119 --> 00:30:44.420 before it starts. So pay for the quality controlled 00:30:44.420 --> 00:30:47.220 feed, that extra $5 difference per bag or whatever 00:30:47.220 --> 00:30:49.480 it is. View it as an investment in predictable 00:30:49.480 --> 00:30:51.900 performance, not just an added cost. Absolutely. 00:30:52.039 --> 00:30:53.740 OK, insight number two. Insight number two. This 00:30:53.740 --> 00:30:55.579 is a medium term strategy. Think next three to 00:30:55.579 --> 00:30:57.880 six months. Build a strategic data driven foundation 00:30:57.880 --> 00:31:00.480 for your BXD program now. This means actually 00:31:00.480 --> 00:31:04.660 starting that 24 to 36 month roadmap today. Don't 00:31:04.660 --> 00:31:08.319 wait. Invest that $50 or so per head in genomic 00:31:08.319 --> 00:31:10.579 testing for your best cows and heifers to make. 00:31:11.099 --> 00:31:13.480 truly informed replacement versus beef decisions. 00:31:13.740 --> 00:31:16.579 And simultaneously, select proven beef sires 00:31:16.579 --> 00:31:19.500 with documented, reliable, high carcass value 00:31:19.500 --> 00:31:23.079 EPDs, not just calving ease. Look at marbling, 00:31:23.160 --> 00:31:25.099 ribeye area potential. And the source material 00:31:25.099 --> 00:31:28.160 was just unequivocal on this. This upfront investment 00:31:28.160 --> 00:31:30.400 in data and genetics pays off quickly through 00:31:30.400 --> 00:31:32.119 much better, more profitable breeding decisions 00:31:32.119 --> 00:31:34.240 down the line. This is really the difference 00:31:34.240 --> 00:31:36.440 between just sort of hoping for a high value 00:31:36.440 --> 00:31:38.960 calf and purposefully, systematically creating 00:31:38.960 --> 00:31:42.289 one. All said. Okay. And the third insight. And 00:31:42.289 --> 00:31:44.470 finally, insight number three. This is the long 00:31:44.470 --> 00:31:46.089 -term positioning looking out over the next one 00:31:46.089 --> 00:31:48.670 to two years. Position your operation for durable 00:31:48.670 --> 00:31:51.380 quality differentiation and efficiency. not just 00:31:51.380 --> 00:31:53.700 riding the wave of current scarcity premiums. 00:31:53.720 --> 00:31:56.059 Understand that today's really strong premiums 00:31:56.059 --> 00:31:58.720 will moderate as BXD adoption increases and the 00:31:58.720 --> 00:32:01.000 national beef herd eventually rebuilds. That's 00:32:01.000 --> 00:32:04.180 just market economics. So build those systematic 00:32:04.180 --> 00:32:07.640 management processes now. Start tracking BXD 00:32:07.640 --> 00:32:10.460 -specific data points. Look into implementing 00:32:10.460 --> 00:32:13.500 precision feeding where feasible. Document your 00:32:13.500 --> 00:32:16.319 health protocols rigorously. Do that so your 00:32:16.319 --> 00:32:18.880 future margins depend more on your own operational 00:32:18.880 --> 00:32:21.819 efficiency. and your proven ability to deliver 00:32:21.819 --> 00:32:24.420 consistent quality and less on just hoping for 00:32:24.420 --> 00:32:26.480 tight market supplies forever. And remember that 00:32:26.480 --> 00:32:29.460 biological lag. The breeding, feeding, and management 00:32:29.460 --> 00:32:31.740 decisions you make this week are literally creating 00:32:31.740 --> 00:32:34.799 your farm's market reality in late 2027. You 00:32:34.799 --> 00:32:36.880 just can't afford to wait if you want to capture 00:32:36.880 --> 00:32:39.380 that value consistently. Well, this has been 00:32:39.380 --> 00:32:41.019 another deep dive from the Bullvine podcast. 00:32:41.279 --> 00:32:43.759 Look, if this kind of impartial analysis and 00:32:43.759 --> 00:32:46.380 frankly, financial reality check helps your operation 00:32:46.380 --> 00:32:48.859 succeed in navigating these big structural changes 00:32:48.859 --> 00:32:52.640 in the BXD market, then head over to www .thebullvine 00:32:52.640 --> 00:32:54.880 .com. We've got more articles there that really 00:32:54.880 --> 00:32:56.359 try to tell you what's actually happening in 00:32:56.359 --> 00:32:58.339 the dairy industry beyond the headlines. And 00:32:58.339 --> 00:33:00.700 seriously, subscribe wherever you get your content, 00:33:00.880 --> 00:33:03.740 Spotify, Apple Podcasts, wherever. We're actually 00:33:03.740 --> 00:33:06.599 releasing these deep dives twice weekly now because 00:33:06.599 --> 00:33:09.339 there's so much changing. And trust me, you really 00:33:09.339 --> 00:33:10.960 don't want to miss what we've got coming up next 00:33:10.960 --> 00:33:12.900 week. We're going to be focusing specifically 00:33:12.900 --> 00:33:16.279 on those new packing capacity developments, the 00:33:16.279 --> 00:33:18.980 proposed plants actually coming online, and digging 00:33:18.980 --> 00:33:21.480 into what they could mean for regional pricing 00:33:21.480 --> 00:33:23.880 differences, especially as some of those older 00:33:23.880 --> 00:33:26.200 established processor relationships inevitably 00:33:26.200 --> 00:33:28.279 start to shift. It's going to be interesting.