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 --> 00:01:03.789 we're sparking Welcome back to the Bullvine podcast, 00:01:04.010 --> 00:01:05.969 where we cut through dairy industry noise to 00:01:05.969 --> 00:01:07.609 get you the insights that actually matter for 00:01:07.609 --> 00:01:11.269 your operation. We are focused today on really 00:01:11.269 --> 00:01:14.150 the single most critical decision impacting your 00:01:14.150 --> 00:01:16.950 cash flow and your long term herd stability, 00:01:17.349 --> 00:01:20.230 precision breeding and the rise in beef on dairy 00:01:20.230 --> 00:01:23.000 market. And this is a deep dive you cannot afford 00:01:23.000 --> 00:01:26.040 to miss. We're unpacking the secret math, the 00:01:26.040 --> 00:01:28.260 actual research that determines if your beef 00:01:28.260 --> 00:01:32.239 on dairy strategy is generating $6 ,215 a month 00:01:32.239 --> 00:01:35.219 in profit, or if you're setting yourself up for 00:01:35.219 --> 00:01:38.260 the industry's most catastrophic liability, a 00:01:38.260 --> 00:01:41.980 $4 ,000... replacement heifer bill. It all comes 00:01:41.980 --> 00:01:44.180 down to reproductive efficiency. Okay, let's 00:01:44.180 --> 00:01:45.819 unpack this immediately because the market is 00:01:45.819 --> 00:01:47.859 just screaming at us. We're operating in a time 00:01:47.859 --> 00:01:49.819 of what we're calling dual scarcity and understanding 00:01:49.819 --> 00:01:52.019 both sides of this coin is, well, it's essential. 00:01:52.200 --> 00:01:54.540 It really is. On one side, the U .S. beef cow 00:01:54.540 --> 00:01:57.219 herd is absolutely tapped out. I mean, USDA data 00:01:57.219 --> 00:02:00.200 confirms it's at a 64 -year low, sitting at just 00:02:00.200 --> 00:02:03.219 27 .9 million head. The number is staggering. 00:02:03.560 --> 00:02:05.519 We haven't seen inventory this low since 1961. 00:02:06.079 --> 00:02:09.250 It creates a vacuum. A huge vacuum. The beef 00:02:09.250 --> 00:02:11.550 industry is desperate for inventory. Feedlots 00:02:11.550 --> 00:02:13.969 have bunk space to fill, and they just can't 00:02:13.969 --> 00:02:16.050 wait for the native beef herd to rebuild. No, 00:02:16.050 --> 00:02:19.370 they can't. So they are turning to us, the dairy 00:02:19.370 --> 00:02:22.669 industry, as their primary, most reliable feeder 00:02:22.669 --> 00:02:25.469 calf supplier. That desperation is what's driving 00:02:25.469 --> 00:02:28.219 this. This unprecedented premium on the beef 00:02:28.219 --> 00:02:30.599 cross calf. That's the scarcity driving the opportunity. 00:02:30.960 --> 00:02:33.120 But then on the flip side, we have our own internal 00:02:33.120 --> 00:02:35.080 scarcity issue, which is the hidden liability. 00:02:35.460 --> 00:02:37.879 Dairy heifer inventory is also at a historic 00:02:37.879 --> 00:02:41.560 low 2 .5 million head. That's the lowest since 00:02:41.560 --> 00:02:43.659 the USDA even started tracking that specific 00:02:43.659 --> 00:02:46.819 metric back in, what, 2001. That tight supply 00:02:46.819 --> 00:02:49.680 is the ticking clock. And that tightness means 00:02:49.680 --> 00:02:52.099 that the cost of failure is astronomical. If 00:02:52.099 --> 00:02:53.599 you miss producing a replacement, you have to 00:02:53.599 --> 00:02:56.189 go out and buy one. And a springing heifer. We're 00:02:56.189 --> 00:02:58.689 seeing them anywhere from $3 ,000 up to, I mean, 00:02:58.750 --> 00:03:02.229 $4 ,150 for top -tier genetics. That is a massive 00:03:02.229 --> 00:03:04.349 penalty. But the opportunity is so intoxicating. 00:03:04.449 --> 00:03:07.509 We are seeing current beef cross calves selling 00:03:07.509 --> 00:03:12.569 for a staggering $680 up to $1 ,160 a head. You 00:03:12.569 --> 00:03:14.789 can see why farmers are chasing this check. Oh, 00:03:14.789 --> 00:03:16.689 absolutely. And I saw that same report you did 00:03:16.689 --> 00:03:19.229 out of Ontario. Christophe Wan, the specialist 00:03:19.229 --> 00:03:22.810 from Omafra, reporting prices hitting $15 per 00:03:22.810 --> 00:03:26.680 pound. Fifteen dollars. That translates to fifteen 00:03:26.680 --> 00:03:29.319 hundred dollars for a hundred pound calf. He 00:03:29.319 --> 00:03:30.860 said he felt like he was talking about blueberries, 00:03:31.080 --> 00:03:33.879 not bull calves. That's how ridiculous the demand 00:03:33.879 --> 00:03:35.900 has gotten. I love that quote. It's perfect. 00:03:36.080 --> 00:03:38.860 But here's the shtick, right? Everyone is looking 00:03:38.860 --> 00:03:41.419 at that $1 ,100 check, but they need to look 00:03:41.419 --> 00:03:43.620 at the math that justifies taking that risk. 00:03:44.039 --> 00:03:47.620 Farm Bureau data shows a huge majority, 72 % 00:03:47.620 --> 00:03:50.500 of dairy farms, are now using beef genetics on 00:03:50.500 --> 00:03:53.000 at least part of their herd. It's become standard 00:03:53.000 --> 00:03:55.479 practice. It's the stampede. Everyone is doing 00:03:55.479 --> 00:03:57.960 it, which makes me immediately skeptical. And 00:03:57.960 --> 00:03:59.800 you're right to be because the research we're 00:03:59.800 --> 00:04:01.900 about to dive into, this foundational work from 00:04:01.900 --> 00:04:04.020 Dr. Victor Cabrera's team at the University of 00:04:04.020 --> 00:04:06.560 Wisconsin -Madison, it proves that for herds 00:04:06.560 --> 00:04:09.180 below a specific non -negotiable reproductive 00:04:09.180 --> 00:04:12.479 performance threshold, there is actually no viable 00:04:12.479 --> 00:04:15.180 beef on dairy strategy. And that's the controversy, 00:04:15.340 --> 00:04:17.819 isn't it? The majority of that 72 % could be 00:04:17.819 --> 00:04:20.240 flying blind. They're eroding their long -term 00:04:20.240 --> 00:04:23.759 herd stability, gambling with a $4 ,000 replacement 00:04:23.759 --> 00:04:26.360 bill down the line. All because they saw that 00:04:26.360 --> 00:04:28.740 short term, you know, that eleven hundred dollar 00:04:28.740 --> 00:04:31.220 cash infusion. It's solving a cash flow problem 00:04:31.220 --> 00:04:33.740 by creating an accrual accounting disaster. That's 00:04:33.740 --> 00:04:35.480 it. Exactly. We have to look past the immediate 00:04:35.480 --> 00:04:38.339 check and really look at the actual math. Absolutely. 00:04:38.420 --> 00:04:41.180 The math is the gatekeeper and this model forces 00:04:41.180 --> 00:04:45.019 honesty. Let's get into it. Segment one, the 00:04:45.019 --> 00:04:48.279 core math. Reproductive efficiency is the gatekeeper. 00:04:48.420 --> 00:04:51.279 So the brilliance of Dr. Cabrera's team wasn't 00:04:51.279 --> 00:04:54.120 just in calculating like. the calf revenue. It 00:04:54.120 --> 00:04:56.139 was in integrating that revenue with the overall 00:04:56.139 --> 00:04:58.860 biological stability of the operation. They created 00:04:58.860 --> 00:05:01.259 a decision support model called income from calves 00:05:01.259 --> 00:05:05.860 over semen costs, or ICOSC. ICOSC. Right. It's 00:05:05.860 --> 00:05:07.879 a crucial metric because it captures the true 00:05:07.879 --> 00:05:10.160 cost of breeding. It strips away all the milk 00:05:10.160 --> 00:05:13.319 price volatility. It ignores feed costs. It isolates 00:05:13.319 --> 00:05:15.040 the economic efficiency of your reproductive 00:05:15.040 --> 00:05:17.259 program. Which is what you need. And here's the 00:05:17.259 --> 00:05:20.250 key part. It factors in the opportunity cost 00:05:20.250 --> 00:05:23.149 of not producing a replacement heifer you actually 00:05:23.149 --> 00:05:26.050 needed. That opportunity cost is the $4 ,000 00:05:26.050 --> 00:05:28.970 elephant in the room. By calculating that liability 00:05:28.970 --> 00:05:31.610 up front, the model determines if your breeding 00:05:31.610 --> 00:05:34.870 strategy is truly sustainable. They tested 30 00:05:34.870 --> 00:05:37.230 different breeding strategies, mixing sexed dairy 00:05:37.230 --> 00:05:40.529 semen, conventional dairy, and beef semen, and 00:05:40.529 --> 00:05:43.009 ran them against three starkly different levels 00:05:43.009 --> 00:05:45.670 of reproductive performance, all defined by the 00:05:45.670 --> 00:05:49.230 21 -day rolling pregnancy rate. This is the roadmap. 00:05:49.490 --> 00:05:51.290 I mean, you need to know which tier you fall 00:05:51.290 --> 00:05:53.290 into before you even think about signing the 00:05:53.290 --> 00:05:55.170 next semen contract. Let's start with tier one, 00:05:55.310 --> 00:05:57.810 high performance. This is the top 10%, maybe 00:05:57.810 --> 00:06:00.790 15 % of operations, defined by a pregnancy rate 00:06:00.790 --> 00:06:03.689 of around 30 % or higher. They are settling towels 00:06:03.689 --> 00:06:06.490 fast and efficiently. And the economic outcome 00:06:06.490 --> 00:06:09.600 here is staggering. For a typical thousand cow 00:06:09.600 --> 00:06:12.600 herd in this category, the monthly net calf income 00:06:12.600 --> 00:06:15.379 generated by a strategic beef program is exactly 00:06:15.379 --> 00:06:18.860 what we teased at the top. It's $6 ,215. That's 00:06:18.860 --> 00:06:21.300 pure profit from their breeding decisions after 00:06:21.300 --> 00:06:23.420 accounting for all semen costs and, critically, 00:06:23.579 --> 00:06:27.259 their replacement needs. It truly is the $6 ,215 00:06:27.259 --> 00:06:30.759 dividend, and it's paid entirely on reproductive 00:06:30.759 --> 00:06:34.279 efficiency. It's not a beef dividend. It's a 00:06:34.279 --> 00:06:36.819 fertility dividend. Exactly. And their optimal 00:06:36.819 --> 00:06:39.279 strategy is fascinating because it is so highly 00:06:39.279 --> 00:06:42.959 selective. These herds have what the researchers 00:06:42.959 --> 00:06:46.350 call. excess fertility. If they use conventional 00:06:46.350 --> 00:06:49.089 dairy semen across the board, they actually end 00:06:49.089 --> 00:06:51.370 up with a surplus of heifers they don't need, 00:06:51.509 --> 00:06:54.230 which just congests their heifer barn and inflicts 00:06:54.230 --> 00:06:56.230 rearing costs. They're almost too good at their 00:06:56.230 --> 00:06:58.389 job, you know? So the optimal strategy shifts 00:06:58.389 --> 00:07:01.689 from just producing replacements to maximizing 00:07:01.689 --> 00:07:04.990 genetic gain and profit. Exactly. They use surgical 00:07:04.990 --> 00:07:07.949 precision. They use expensive sex semen only 00:07:07.949 --> 00:07:10.069 on the most genetically superior animals, which 00:07:10.069 --> 00:07:12.509 they've identified through genomic testing. We're 00:07:12.509 --> 00:07:14.569 talking first service heifers and maybe the top 00:07:14.569 --> 00:07:18.189 20 % of first lactation cows. This secures their 00:07:18.189 --> 00:07:20.829 pipeline with elite genetics. And then the remaining 00:07:20.829 --> 00:07:23.589 60 to 70 % of the adult cow herd the animals 00:07:23.589 --> 00:07:26.129 with lower genomic merit or those later in their 00:07:26.129 --> 00:07:27.889 productive life. Yeah, the ones you don't necessarily 00:07:27.889 --> 00:07:29.970 want a replacement from. They can go straight 00:07:29.970 --> 00:07:32.750 to beef semen. And that's how they maximize the 00:07:32.750 --> 00:07:35.310 calf premium while maintaining genetic advance 00:07:35.310 --> 00:07:37.850 and herd size stability. They're effectively 00:07:37.850 --> 00:07:40.300 running a dual factory. optimized by fertility. 00:07:40.500 --> 00:07:43.300 Right. Now let's look at tier two, mid -performance. 00:07:43.879 --> 00:07:48.459 This is where I think most solid average operations 00:07:48.459 --> 00:07:50.879 probably sit, consistently hitting a pregnancy 00:07:50.879 --> 00:07:53.899 rate between 20 and 25%. And this is where the 00:07:53.899 --> 00:07:56.339 story changes completely. The economic advantage 00:07:56.339 --> 00:08:00.339 drops and it drops deeply. For that same thousand 00:08:00.339 --> 00:08:03.339 cow herd, the advantage falls dramatically to 00:08:03.339 --> 00:08:06.589 about 2 ,000 one one others a month. Still important, 00:08:06.810 --> 00:08:08.910 but less than a third of the potential profit 00:08:08.910 --> 00:08:11.129 from tier one. And the strategy has to shift 00:08:11.129 --> 00:08:13.389 because their margin for error is just razor 00:08:13.389 --> 00:08:15.589 thin. They no longer have that massive fertility 00:08:15.589 --> 00:08:18.329 cushion to fall back on. Not at all. So the optimal 00:08:18.329 --> 00:08:20.610 strategy requires much more aggressive use of 00:08:20.610 --> 00:08:23.069 sexed semen. You can see the shift in priority 00:08:23.069 --> 00:08:26.050 here. They have to use sexed semen on heifers, 00:08:26.050 --> 00:08:29.069 obviously, but also aggressively on first service 00:08:29.069 --> 00:08:31.529 primiparous cows, those first lactation animals. 00:08:31.569 --> 00:08:33.730 Why they're specific. Well, because the genetics 00:08:33.730 --> 00:08:35.690 on those young cows are critical to the future 00:08:35.690 --> 00:08:38.190 of the herd. And if they miss a conception, they 00:08:38.190 --> 00:08:39.909 just don't have the pregnancy rate buffer to 00:08:39.909 --> 00:08:41.850 catch up later. So they're hedging their bets. 00:08:41.929 --> 00:08:44.169 They're committing more of their capital. The 00:08:44.169 --> 00:08:46.870 expensive sexed semen to replacement production 00:08:46.870 --> 00:08:49.190 before they can even think about shifting to 00:08:49.190 --> 00:08:51.870 beef semen on later services or on older cows. 00:08:52.070 --> 00:08:54.870 They have far less flexibility to cash in on 00:08:54.870 --> 00:08:57.840 beef. Right. If they gamble on beef semen on 00:08:57.840 --> 00:09:00.179 a first lactation cow and she doesn't conceive, 00:09:00.500 --> 00:09:03.179 that cow stays open longer and they've potentially 00:09:03.179 --> 00:09:05.860 missed generating a future high value replacement. 00:09:06.379 --> 00:09:09.320 That $1 ,000 calf check looks pretty weak when 00:09:09.320 --> 00:09:12.139 you're carrying a 180 day open cow. And then 00:09:12.139 --> 00:09:14.700 we hit the harsh reality check. This is what 00:09:14.700 --> 00:09:17.440 defines whether that 72 % of the industry is 00:09:17.440 --> 00:09:20.500 operating sustainably. Tier three, low performance. 00:09:20.700 --> 00:09:23.399 This is defined as a herd with a 21 -day pregnancy 00:09:23.399 --> 00:09:25.659 rate of less than 20%. And the outcome is the 00:09:25.659 --> 00:09:27.960 headline everyone needs to hear. Zero dollars. 00:09:28.580 --> 00:09:31.240 Not viable. Let's spend some time on this. Why 00:09:31.240 --> 00:09:33.779 is the viability zero? I mean, why is there no 00:09:33.779 --> 00:09:36.120 viable strategy for using beef semen at this 00:09:36.120 --> 00:09:38.710 level of performance? Because fundamentally, 00:09:39.009 --> 00:09:43.269 at a 15 % or an 18 % pregnancy rate, your herd 00:09:43.269 --> 00:09:45.929 is struggling just to keep up with its natural 00:09:45.929 --> 00:09:49.289 culling rate. Even if you use 100 % conventional 00:09:49.289 --> 00:09:52.009 dairy semen, you're fighting a constant battle 00:09:52.009 --> 00:09:54.789 against herd contraction. So you're essentially 00:09:54.789 --> 00:09:57.549 already short on inventory before you even consider 00:09:57.549 --> 00:10:01.600 cashing in on a beef calf. Precisely. Every straw 00:10:01.600 --> 00:10:03.980 of beef semen you use in that tier three category 00:10:03.980 --> 00:10:07.759 is not a profit maximization move. It's an inventory 00:10:07.759 --> 00:10:10.700 deletion event. You trade that necessary future 00:10:10.700 --> 00:10:13.779 replacement heifer for an $800 calf check today. 00:10:14.120 --> 00:10:16.720 But then two years from now, you have to buy 00:10:16.720 --> 00:10:19.779 a replacement for $4 ,000 just to keep the lights 00:10:19.779 --> 00:10:21.679 on and maintain the same number of milking stalls. 00:10:21.899 --> 00:10:24.259 You just lost over $3 ,000 on that exchange. 00:10:24.480 --> 00:10:26.779 Instantly. It instantly wipes out the premium 00:10:26.779 --> 00:10:28.759 and throws the whole balance sheet deep into 00:10:28.759 --> 00:10:30.980 the red. The researchers put it so simply. The 00:10:30.980 --> 00:10:34.179 $6 ,215 profit is a dividend paid on reproductive 00:10:34.179 --> 00:10:36.279 efficiency. If you don't have the efficiency, 00:10:36.500 --> 00:10:37.980 you don't get the dividend, you get the replacement 00:10:37.980 --> 00:10:40.559 penalty. It's all about sequencing. You can't 00:10:40.559 --> 00:10:42.899 build a structure that relies on future stability 00:10:42.899 --> 00:10:46.139 on a broken reproductive system. If you are Tier 00:10:46.139 --> 00:10:48.700 3, your first dollar should go toward fixing 00:10:48.700 --> 00:10:51.179 why your cows aren't settling, not toward buying 00:10:51.179 --> 00:10:53.710 premium beef genetics. That message, Fix Your 00:10:53.710 --> 00:10:56.309 Fundamentals, first leads us perfectly into the 00:10:56.309 --> 00:10:58.750 uncomfortable industry reality check in segment 00:10:58.750 --> 00:11:00.850 two. Let's talk about the sheer volume of the 00:11:00.850 --> 00:11:04.750 shift. The stampede is enormous. Beef semen sales 00:11:04.750 --> 00:11:09.950 hit 7 .9 million units in 2023. That is 31 % 00:11:09.950 --> 00:11:13.830 of all semen sales to dairy. 31%. And we know 00:11:13.830 --> 00:11:16.759 72 % of farms are using beef genetics. This is 00:11:16.759 --> 00:11:18.860 now standard operating procedure. And the external 00:11:18.860 --> 00:11:21.299 projections are just massive. Ohio State economists 00:11:21.299 --> 00:11:23.220 are estimating that beef on dairy could account 00:11:23.220 --> 00:11:25.519 for 15 percent of total U .S. cattle slaughter 00:11:25.519 --> 00:11:28.659 by 2026. This isn't some pilot program anymore. 00:11:28.740 --> 00:11:30.840 It's a structural transformation of the entire 00:11:30.840 --> 00:11:32.820 booth supply. But this is where the skeptical 00:11:32.820 --> 00:11:35.080 farmer in me, the one who looks at the parlor 00:11:35.080 --> 00:11:37.539 data, not the glossy magazine ads, gets nervous. 00:11:37.820 --> 00:11:40.620 If 72 percent are adopting this. But historically, 00:11:40.799 --> 00:11:43.460 the average national dairy herd PR is closer 00:11:43.460 --> 00:11:45.639 to that 20 percent to 22 percent range. Which 00:11:45.639 --> 00:11:48.519 is right on that edge. Right on the edge. That 00:11:48.519 --> 00:11:50.960 means a massive portion of the industry is sitting 00:11:50.960 --> 00:11:55.080 firmly in that dangerous tier two or worse, that 00:11:55.080 --> 00:11:57.340 crippling tier three category. They are fundamentally 00:11:57.340 --> 00:11:59.700 misaligning their strategy. They're making decisions 00:11:59.700 --> 00:12:03.090 based on cash flow temptation. That $1 ,100 check 00:12:03.090 --> 00:12:05.649 is real today, but the $4 ,000 liability is a 00:12:05.649 --> 00:12:07.669 cruel, meaning it hits two years from now. It's 00:12:07.669 --> 00:12:10.590 a very human mistake. Prioritizing the immediate 00:12:10.590 --> 00:12:12.870 gain over the deferred cost. It's the definition 00:12:12.870 --> 00:12:15.450 of ignoring the hidden liability. You are intentionally 00:12:15.450 --> 00:12:18.169 creating an internal inventory shortage that. 00:12:18.490 --> 00:12:21.149 in today's market is punishingly expensive to 00:12:21.149 --> 00:12:23.789 solve. And the inability of the industry to recover 00:12:23.789 --> 00:12:25.830 the replacement pipeline quickly is the other 00:12:25.830 --> 00:12:28.350 crucial element of this heifer crisis. That 2 00:12:28.350 --> 00:12:30.730 .5 million heifer inventory low isn't just a 00:12:30.730 --> 00:12:33.230 number. It explains why replacement prices are 00:12:33.230 --> 00:12:35.990 so volatile and so high. The problem is the lag 00:12:35.990 --> 00:12:38.629 time. A heifer born today doesn't give you a 00:12:38.629 --> 00:12:41.799 gallon of milk for 24 months. The shortage we're 00:12:41.799 --> 00:12:43.700 seeing right now in the springing heifer market 00:12:43.700 --> 00:12:46.320 is the direct result of breeding decisions made 00:12:46.320 --> 00:12:48.639 two or three years ago when the initial rush 00:12:48.639 --> 00:12:51.320 to beef release started. We are paying the price 00:12:51.320 --> 00:12:53.919 for past decisions that prioritized immediate 00:12:53.919 --> 00:12:57.100 calf revenue over pipeline integrity. And you 00:12:57.100 --> 00:13:00.139 simply cannot rush biology. Even if the entire 00:13:00.139 --> 00:13:02.600 dairy industry slammed the brakes on beef semen 00:13:02.600 --> 00:13:05.679 tomorrow, it would take two full years just to 00:13:05.679 --> 00:13:07.539 get those replacement calves into the milking 00:13:07.539 --> 00:13:10.500 herd. Analysts don't expect the national beef 00:13:10.500 --> 00:13:12.559 herd inventory to recover meaningfully before 00:13:12.559 --> 00:13:15.759 2028, which means this window of high calf premiums 00:13:15.759 --> 00:13:18.000 and crippling replacement costs is going to last 00:13:18.000 --> 00:13:20.419 for years. Which means the stakes of using the 00:13:20.419 --> 00:13:22.799 wrong strategy are higher than ever. I want to 00:13:22.799 --> 00:13:24.720 revisit that point from the UW research about 00:13:24.720 --> 00:13:26.360 the cushion because it scared me when I first 00:13:26.360 --> 00:13:28.720 read it. The models showed that even a thousand 00:13:28.720 --> 00:13:32.509 cow tier one herd, the absolute elite. 30 % PR 00:13:32.509 --> 00:13:35.190 operations, produces only one extra replacement 00:13:35.190 --> 00:13:37.769 heifer per month beyond what is needed to maintain 00:13:37.769 --> 00:13:40.529 herd size. One heifer buffer. That's like having 00:13:40.529 --> 00:13:42.889 one spare tire for the whole farm. It's minimal. 00:13:43.049 --> 00:13:45.830 Think about what one bad event does to that cushion. 00:13:46.330 --> 00:13:49.610 One mild outbreak of metritis during a heat -stressed 00:13:49.610 --> 00:13:52.169 summer, or a slight uptick in pneumonia in the 00:13:52.169 --> 00:13:55.070 calf barn, and you lose five calves in one month. 00:13:55.389 --> 00:13:58.070 Suddenly, you've erased five months of your replacement 00:13:58.070 --> 00:14:01.730 buffer. You're short. That fragility should make 00:14:01.730 --> 00:14:04.950 even the best managers cautious. So the recommendation 00:14:04.950 --> 00:14:07.549 from serious consultants, the guys looking at 00:14:07.549 --> 00:14:10.330 the data and not just the check. is non -negotiable. 00:14:10.389 --> 00:14:13.570 You must keep at least 25 % to 30 % of your breedings 00:14:13.570 --> 00:14:15.629 strictly allocated to replacement production. 00:14:15.929 --> 00:14:18.309 This is your insurance policy. And that 25 % 00:14:18.309 --> 00:14:20.970 to 30 % is a minimum recommendation. If your 00:14:20.970 --> 00:14:23.309 PR is lower or if your calling rate is high, 00:14:23.370 --> 00:14:25.889 say 40%, that percentage needs to be significantly 00:14:25.889 --> 00:14:28.350 higher. Or you need to use sex semen on those 00:14:28.350 --> 00:14:30.409 allocated breedings aggressively. You have to 00:14:30.409 --> 00:14:32.929 secure the pipeline first, period. We saw that 00:14:32.929 --> 00:14:35.269 cautionary tale play out in real time with a 00:14:35.269 --> 00:14:37.590 specific tie stall operation we've talked about. 00:14:37.950 --> 00:14:40.889 They were seduced by the high calf premiums and 00:14:40.889 --> 00:14:43.590 shifted almost 80 % of their breedings to beef. 00:14:43.870 --> 00:14:46.669 They likely fell into that Tier 2 category, thinking 00:14:46.669 --> 00:14:48.529 they had enough of a cushion. They found out 00:14:48.529 --> 00:14:50.970 they didn't. When spring arrived and they needed 00:14:50.970 --> 00:14:52.870 to maintain their herd size to fulfill their 00:14:52.870 --> 00:14:55.049 milk contract, they realized they were short 00:14:55.049 --> 00:14:57.830 10 heifers. And when heifer prices spiked past 00:14:57.830 --> 00:15:01.389 $3 ,500, the cost to purchase those replacements 00:15:01.389 --> 00:15:05.899 just to stay even totaled over $35 ,000. That 00:15:05.899 --> 00:15:08.059 one purchase bill completely negated their beef 00:15:08.059 --> 00:15:10.659 calf premiums for the entire year. They essentially 00:15:10.659 --> 00:15:14.259 paid $35 ,000 to generate maybe $10 ,000 in net 00:15:14.259 --> 00:15:16.559 calf profit. The bottom line of this segment 00:15:16.559 --> 00:15:18.720 is that profitability is measured not by the 00:15:18.720 --> 00:15:21.220 calf check, but by the stability and long -term 00:15:21.220 --> 00:15:23.759 security of your replacement barn. Don't let 00:15:23.759 --> 00:15:25.980 the short -term rush create a long -term structural 00:15:25.980 --> 00:15:28.659 failure. It's a cash flow drug that can mask 00:15:28.659 --> 00:15:30.960 a deep inventory disease. All right, let's talk 00:15:30.960 --> 00:15:32.940 about the money in segment three, but specifically 00:15:32.940 --> 00:15:35.899 the demands of the downstream buyers. Because 00:15:35.899 --> 00:15:38.200 the margins are massive, but the market is becoming 00:15:38.200 --> 00:15:40.200 highly sophisticated. Well, we already covered 00:15:40.200 --> 00:15:42.840 the astronomical current premiums, $680 ,000 00:15:42.840 --> 00:15:46.559 to $11 ,160. What's crucial for high -performing 00:15:46.559 --> 00:15:49.019 farmers is that even if the market deflates significantly, 00:15:49.480 --> 00:15:51.840 the strategy remains sound if they are tier one 00:15:51.840 --> 00:15:54.720 or two. That's the structural advantage. Back 00:15:54.720 --> 00:15:57.740 in 2021, Cabrera's original model, when beef 00:15:57.740 --> 00:16:00.899 calves were only worth about $225, calculated 00:16:00.899 --> 00:16:03.159 the break -even point for high -performing herds 00:16:03.159 --> 00:16:06.519 at just $69 a head. Mid -range herds hit break 00:16:06.519 --> 00:16:09.659 -even at $100. That means current prices are 00:16:09.659 --> 00:16:12.200 10 to 15 times that original break -even threshold. 00:16:12.700 --> 00:16:15.779 Even if that premium dropped 50 % tomorrow. If 00:16:15.779 --> 00:16:19.620 that $1 ,100 calf suddenly sold for $550, the 00:16:19.620 --> 00:16:22.200 strategy remains extremely economically sound 00:16:22.200 --> 00:16:24.480 if you have the reproductive efficiency to back 00:16:24.480 --> 00:16:26.919 it up. The margin is huge. The market dynamics 00:16:26.919 --> 00:16:29.360 are strong, given the lack of native beef inventory, 00:16:29.519 --> 00:16:31.940 but the quality demands are rising fast. This 00:16:31.940 --> 00:16:34.559 isn't the Wild West anymore. No, it's not. We 00:16:34.559 --> 00:16:36.200 need to acknowledge the total transformation 00:16:36.200 --> 00:16:39.220 of the dairy steer. The traditional, discounted 00:16:39.220 --> 00:16:42.120 Holstein steer is rapidly being replaced by the 00:16:42.120 --> 00:16:44.960 body animal, the crossbred, typically Angus dairy. 00:16:45.279 --> 00:16:48.059 And the feedlots are paying because these crossbreds 00:16:48.059 --> 00:16:50.399 offer better muscling, superior feed efficiency, 00:16:50.620 --> 00:16:52.700 and importantly, they achieve higher quality 00:16:52.700 --> 00:16:55.379 grades than traditional dairy steers. They simply 00:16:55.379 --> 00:16:57.659 perform better on the rail. But that leads us 00:16:57.659 --> 00:17:00.960 straight to the big trap, the black hide fallacy. 00:17:01.440 --> 00:17:04.039 When this trend started, the feedlots just needed 00:17:04.039 --> 00:17:06.779 a black calf. And cheap Angus semen was sufficient. 00:17:07.140 --> 00:17:09.480 It just signaled the animal wasn't a pure Holstein. 00:17:09.640 --> 00:17:13.380 That era is over. Now, feedlots and packers are 00:17:13.380 --> 00:17:16.099 incredibly sophisticated. They're not just buying 00:17:16.099 --> 00:17:18.299 a color. They're buying a carcass with a history. 00:17:18.480 --> 00:17:21.440 They are demanding raising with intent. And intent 00:17:21.440 --> 00:17:24.559 means data. They want specific EPDs expected 00:17:24.559 --> 00:17:26.900 progeny differences for terminal traits. For 00:17:26.900 --> 00:17:29.140 the dairy farmer listening, EPDs are essentially 00:17:29.140 --> 00:17:31.440 the beef industry's version of your genomic report 00:17:31.440 --> 00:17:33.920 card. They are predicting how a bull's offspring 00:17:33.920 --> 00:17:36.289 will perform. They want high numbers for carcass 00:17:36.289 --> 00:17:38.309 weight, which tells them how heavy the finished 00:17:38.309 --> 00:17:41.009 animal will be, high marbling scores for better 00:17:41.009 --> 00:17:44.609 quality grades, and crucially, ribeye area EPDs. 00:17:45.349 --> 00:17:48.309 Generic, cheap Angus genetics just won't cut 00:17:48.309 --> 00:17:51.849 it. If you're using low -quality semen, you are 00:17:51.849 --> 00:17:54.769 creating a black holstein, an animal that looks 00:17:54.769 --> 00:17:56.549 the part but doesn't have the growth or yield 00:17:56.549 --> 00:17:59.250 potential. You're leaving $200 or $300 ahead 00:17:59.250 --> 00:18:02.049 on the table by choosing cheap semen. And traceability 00:18:02.049 --> 00:18:05.299 is now currency. Buyers are paying true premiums 00:18:05.299 --> 00:18:07.859 for farms providing vaccination records, detailed 00:18:07.859 --> 00:18:10.720 colostrum protocols, and verified weight documentation. 00:18:11.000 --> 00:18:13.220 They want to de -risk their investment from day 00:18:13.220 --> 00:18:16.079 one. Which brings us to the single biggest technical 00:18:16.079 --> 00:18:18.160 challenge in the supply chain, and the thing 00:18:18.160 --> 00:18:19.859 that could cause the entire market to revolt 00:18:19.859 --> 00:18:23.000 if we don't get it under control. Liver abscesses. 00:18:23.240 --> 00:18:25.240 This is a crisis point. It's estimated to be 00:18:25.240 --> 00:18:28.019 a $30 million problem industry -wide due to lost 00:18:28.019 --> 00:18:30.839 organs, slowdowns, and yield reduction. Research 00:18:30.839 --> 00:18:33.500 shows abscess rates can hit 50 to 70 percent 00:18:33.500 --> 00:18:36.319 in some large -scale beef on dairy groups. 50 00:18:36.319 --> 00:18:38.400 to 70 percent. I mean, compare that to 10 or 00:18:38.400 --> 00:18:41.720 20 percent in native beef. That huge discrepancy 00:18:41.720 --> 00:18:43.900 points directly back to our dairy calf management 00:18:43.900 --> 00:18:46.279 practices. Let's detail the mechanism because 00:18:46.279 --> 00:18:47.880 this is where the dairy farmer holds the key. 00:18:48.200 --> 00:18:50.799 The root cause is linked to the common goal of 00:18:50.799 --> 00:18:52.980 promoting rapid rumen development in the young 00:18:52.980 --> 00:18:56.400 calf. Farmers feed high -starch starter rations. 00:18:56.700 --> 00:18:58.920 The intention is good, but if that ration is 00:18:58.920 --> 00:19:02.140 too high in rapidly fermentable starch and insufficient 00:19:02.140 --> 00:19:04.960 and effective fiber, you know, fiber long enough 00:19:04.960 --> 00:19:07.279 to stimulate cud chewing and saliva production, 00:19:07.839 --> 00:19:10.839 the calves develop subclinical acidosis. The 00:19:10.839 --> 00:19:14.619 pH in the rumen just drops drastically. And that 00:19:14.619 --> 00:19:17.140 acid is corrosive. It damages the lining of the 00:19:17.140 --> 00:19:20.099 rumen wall. Once the wall is compromised, specific 00:19:20.099 --> 00:19:23.460 anaerobic bacteria, primarily Fusobacterium necroforum 00:19:23.460 --> 00:19:26.319 and Truperilla pyogenes, leak out of the gut 00:19:26.319 --> 00:19:28.599 and get into the bloodstream. That blood flows 00:19:28.599 --> 00:19:30.599 directly to the liver where the bacteria lodge 00:19:30.599 --> 00:19:32.900 and swarm those puss pockets, the abscesses. 00:19:32.920 --> 00:19:34.920 And for the packer, this is a nightmare scenario 00:19:34.920 --> 00:19:37.549 that affects their entire bottom line. First, 00:19:37.630 --> 00:19:39.529 they have to condemn the liver, which is a lost 00:19:39.529 --> 00:19:42.430 salable organ. But much worse is the line speed 00:19:42.430 --> 00:19:45.089 slowdown. If the abscesses are severe, they cause 00:19:45.089 --> 00:19:47.430 adhesions, literally sticking the liver to the 00:19:47.430 --> 00:19:50.049 diaphragm or the spurt stake. That requires extensive 00:19:50.049 --> 00:19:52.869 carcass trimming, reducing yield, and massively 00:19:52.869 --> 00:19:54.829 slowing down a line that moves thousands of heads 00:19:54.829 --> 00:19:58.299 per hour. Cargill, JBS, they are extremely aware 00:19:58.299 --> 00:20:01.000 of this yield drag and slowdown. This is the 00:20:01.000 --> 00:20:03.119 kind of system failure that will lead to future 00:20:03.119 --> 00:20:05.160 industry -wide price discounts if we don't get 00:20:05.160 --> 00:20:07.359 proactive management in place. This is where 00:20:07.359 --> 00:20:10.059 the premium fades and turns into a penalty. So 00:20:10.059 --> 00:20:12.619 what are the actionable countermeasures for the 00:20:12.619 --> 00:20:14.859 dairy producer? It's all about nutrition and 00:20:14.859 --> 00:20:17.240 early intervention. We need to look at nutritional 00:20:17.240 --> 00:20:20.259 strategies focusing on room and stability. Yes, 00:20:20.319 --> 00:20:22.980 using 27 % protein milk replacers helps general 00:20:22.980 --> 00:20:25.259 health. But specifically, you need to manage 00:20:25.259 --> 00:20:27.940 the starch fiber balance in that starter. Ensure 00:20:27.940 --> 00:20:30.369 you have adequate physical fiber. not just ground 00:20:30.369 --> 00:20:33.190 hay, but fiber that forces rumination to naturally 00:20:33.190 --> 00:20:36.009 buffer the rumen. And we are seeing feed additives 00:20:36.009 --> 00:20:39.329 play a huge role. Incorporating specific probiotics 00:20:39.329 --> 00:20:42.049 helps stabilize the rumen microbiome. Furthermore, 00:20:42.230 --> 00:20:45.049 strategic use of feed additives like ionophores, 00:20:45.210 --> 00:20:47.710 which are common in beef feedlot rations, can 00:20:47.710 --> 00:20:50.009 directly inhibit the growth of Fusobacterium 00:20:50.009 --> 00:20:52.369 necroform in the rumen, reducing the risk of 00:20:52.369 --> 00:20:54.589 leakage and abscess formation later in life. 00:20:54.769 --> 00:20:57.130 If we don't fix the acidosis problem on the dairy 00:20:57.130 --> 00:21:00.319 farm. In that calf rearing phase, the packer 00:21:00.319 --> 00:21:02.220 will absolutely charge us for that management 00:21:02.220 --> 00:21:04.519 failure down the line. And speaking of yield 00:21:04.519 --> 00:21:06.839 drag, the dressing percentage, the amount of 00:21:06.839 --> 00:21:09.099 hot carcass weight relative to labe weight, is 00:21:09.099 --> 00:21:11.700 another key specification. It absolutely matters. 00:21:11.819 --> 00:21:14.200 The big packers have noted that dairy cross cattle 00:21:14.200 --> 00:21:17.940 often dress lower 60 to 61 percent compared to 00:21:17.940 --> 00:21:20.920 native beef, which averages around 63 .5 percent. 00:21:20.940 --> 00:21:23.140 That difference creates a tangible yield drag, 00:21:23.299 --> 00:21:25.480 and it's a primary reason why they might temper 00:21:25.480 --> 00:21:28.349 prices compared to purebred beef. We need to 00:21:28.349 --> 00:21:30.869 focus on genetics that close that gap, emphasizing 00:21:30.869 --> 00:21:33.690 muscling and fat cover. So, to summarize this 00:21:33.690 --> 00:21:35.990 segment, the margins are incredible, but the 00:21:35.990 --> 00:21:39.170 market is rapidly becoming merit -based. Quality, 00:21:39.390 --> 00:21:42.309 genetics, traceability, and a verified health 00:21:42.309 --> 00:21:44.890 status are now non -negotiable requirements for 00:21:44.890 --> 00:21:47.769 capturing the full premium. Let's shift into 00:21:47.769 --> 00:21:51.170 segment four, strategic imperatives. If you're 00:21:51.170 --> 00:21:54.369 serious about capturing that $6 ,215 profit, 00:21:54.670 --> 00:21:57.450 you have to run a brutally honest farm audit. 00:21:57.769 --> 00:22:00.490 We have identified four non -negotiable numbers 00:22:00.490 --> 00:22:02.710 every farmer needs to know before placing the 00:22:02.710 --> 00:22:05.109 next bulk semen order. Number one is your actual 00:22:05.109 --> 00:22:08.109 21 -day pregnancy rate, not your target, not 00:22:08.109 --> 00:22:10.509 your best quarter. You need a rolling 12 -month 00:22:10.509 --> 00:22:13.049 average. This single number is your gateway. 00:22:13.210 --> 00:22:16.289 It determines whether you are in the $6 ,215 00:22:16.289 --> 00:22:20.430 tier, the $2 ,001 tier, or the $0 tier. If you 00:22:20.430 --> 00:22:22.130 don't know this number, you are gambling your 00:22:22.130 --> 00:22:24.769 herd's stability. Number two, replacement allocation. 00:22:25.210 --> 00:22:27.509 Are you dedicating a non -negotiable 25 % to 00:22:27.509 --> 00:22:30.150 30 % of your breedings to guaranteed dairy replacements? 00:22:30.349 --> 00:22:32.710 You need to audit your heifer supply by age group 00:22:32.710 --> 00:22:34.849 and compare that supply directly against your 00:22:34.849 --> 00:22:37.210 herd's 12 -month culling rate. That buffer is 00:22:37.210 --> 00:22:39.089 your cheapest insurance policy against that $4 00:22:39.089 --> 00:22:42.349 ,000 replacement bill. Number three, genomic 00:22:42.349 --> 00:22:45.319 cutoff. This is where we apply science to take 00:22:45.319 --> 00:22:47.759 the emotion out of breeding decisions. Genomic 00:22:47.759 --> 00:22:51.140 testing runs about $40 to $50 a head, but it 00:22:51.140 --> 00:22:53.960 allows you to identify the lowest genetic merit 00:22:53.960 --> 00:22:58.119 animals, say the bottom 10 or 15%, based on an 00:22:58.119 --> 00:23:00.400 index like the Wellness Trade Index or the Net 00:23:00.400 --> 00:23:02.519 Merit Index. So the practical application is 00:23:02.519 --> 00:23:05.529 this. You set a hard line. Every animal below, 00:23:05.690 --> 00:23:09.470 say, 120 GTI gets beef semen, guaranteed. Every 00:23:09.470 --> 00:23:11.930 animal above gets priority for sexed semen or 00:23:11.930 --> 00:23:14.190 high -value conventional dairy. You are breeding 00:23:14.190 --> 00:23:16.390 your best to dairy and your rest to beef based 00:23:16.390 --> 00:23:18.730 on objective data, not just what cow looked good 00:23:18.730 --> 00:23:20.450 in the headlock this morning. And number four, 00:23:20.930 --> 00:23:23.849 actual calf premium. Stop reading the optimistic 00:23:23.849 --> 00:23:25.869 auction reports from across the country. Look 00:23:25.869 --> 00:23:27.890 at your own checkbook. Is the premium you are 00:23:27.890 --> 00:23:29.670 actually receiving for your beef calves really 00:23:29.670 --> 00:23:33.349 $900, or is poor timing, weak marketing, or a 00:23:33.349 --> 00:23:35.700 low... trust buyer relationship, reducing it 00:23:35.700 --> 00:23:38.859 down into that $350 to $500 range. If you're 00:23:38.859 --> 00:23:41.920 at $350, you are perilously close to the break 00:23:41.920 --> 00:23:44.160 -even point, especially if you also have to buy 00:23:44.160 --> 00:23:46.900 replacements. That leads perfectly into the contrarian 00:23:46.900 --> 00:23:49.660 take. This is the bullvine's core mission, challenging 00:23:49.660 --> 00:23:53.599 the hype. For herds below that 20 % PR, the tier 00:23:53.599 --> 00:23:56.440 three operations, the capital should absolutely 00:23:56.440 --> 00:23:59.259 not be spent on buying high fertility beef semen. 00:23:59.299 --> 00:24:02.170 I'm not buying that. No way. If I have $500 to 00:24:02.170 --> 00:24:04.230 spend, I shouldn't be spending it on beef semen. 00:24:04.269 --> 00:24:06.650 I should be spending it on fixing the reason 00:24:06.650 --> 00:24:08.609 the cow isn't getting pregnant in the first place. 00:24:08.769 --> 00:24:11.450 That capital needs to be redirected to improving 00:24:11.450 --> 00:24:13.569 reproductive fundamentals. So you're saying spend 00:24:13.569 --> 00:24:16.289 the money on transition cow management, better 00:24:16.289 --> 00:24:18.549 heat detection technology, maybe switching from 00:24:18.549 --> 00:24:21.589 tail chalk to a robust activity monitoring system, 00:24:21.690 --> 00:24:24.490 or investing in synchronization protocols like 00:24:24.490 --> 00:24:26.710 double off -synch. Exactly. That capital provides 00:24:26.710 --> 00:24:29.539 a far better long -term return. Think about it. 00:24:29.559 --> 00:24:33.099 If I'm at 18 % PR, every dollar I spend on semen 00:24:33.099 --> 00:24:35.299 is likely wasted because the cow isn't ready 00:24:35.299 --> 00:24:37.319 to settle. But if I spend that money on better 00:24:37.319 --> 00:24:40.259 fresh cow care and I go from 18 % PR to 22 % 00:24:40.259 --> 00:24:43.660 PR, I just move myself from the $0 category to 00:24:43.660 --> 00:24:46.900 the $2 ,000 a month category. Then the beef opportunity 00:24:46.900 --> 00:24:50.359 is there and it will wait for me. That is a massive 00:24:50.359 --> 00:24:52.799 return on investment in fundamentals. That is 00:24:52.799 --> 00:24:55.559 the responsible long -term approach that secures 00:24:55.559 --> 00:24:58.730 the herd's future. Now, let's discuss the strategic 00:24:58.730 --> 00:25:01.170 deployment based on the tiers, because it's highly 00:25:01.170 --> 00:25:04.210 nuanced. For the mid -range herds, those 20 -25 00:25:04.210 --> 00:25:08.190 % PR herds, you absolutely must use sexed semen 00:25:08.190 --> 00:25:11.309 on your first lactation cows. That primiparous 00:25:11.309 --> 00:25:13.609 cow is your critical high -value replacement 00:25:13.609 --> 00:25:16.990 buffer. You cannot risk a bad conception by switching 00:25:16.990 --> 00:25:18.970 straight to conventional or beef on that first 00:25:18.970 --> 00:25:21.950 service. Secure that high genetic future lactation 00:25:21.950 --> 00:25:24.609 first. And for the high performers, the 30 % 00:25:24.609 --> 00:25:27.410 PR herd, their focus should shift almost entirely 00:25:27.410 --> 00:25:30.490 to optimizing the beef side. They should be using 00:25:30.490 --> 00:25:32.910 the highest possible terminal indexes when selecting 00:25:32.910 --> 00:25:35.549 beef bowls. They need to prioritize carcass weight 00:25:35.549 --> 00:25:37.869 and ribeye area EPDs because their replacement 00:25:37.869 --> 00:25:40.180 needs are already securely met. And here's a 00:25:40.180 --> 00:25:42.900 critical nuance often missed. Even high performers 00:25:42.900 --> 00:25:45.380 should not cheap out on beef semen. Choose high 00:25:45.380 --> 00:25:48.299 fertility beef sires. A cheap straw of beef semen 00:25:48.299 --> 00:25:50.460 that fails to settle the cow is costing you massive 00:25:50.460 --> 00:25:52.980 dollars in lost conception days and extended 00:25:52.980 --> 00:25:55.079 days open. You want the cow pregnant quickly, 00:25:55.299 --> 00:25:57.319 whether she's carrying dairy or beef, fertility 00:25:57.319 --> 00:26:00.039 always matters. Finally, let's talk about biosecurity 00:26:00.039 --> 00:26:02.700 as an asset. Because this is where a farm can 00:26:02.700 --> 00:26:04.900 really differentiate itself and guarantee future 00:26:04.900 --> 00:26:08.059 premiums. This is about building trust with your 00:26:08.059 --> 00:26:11.079 downstream buyer. Buyers are terrified of disease 00:26:11.079 --> 00:26:15.180 risk, particularly BVDPI bovine viral diarrhea, 00:26:15.420 --> 00:26:18.680 persistently infected. If you implement universal 00:26:18.680 --> 00:26:21.339 ear notch testing on all your calves and you 00:26:21.339 --> 00:26:24.019 market your beef calves as BVD negative verified, 00:26:24.420 --> 00:26:26.819 you have immediately created a high trust asset 00:26:26.819 --> 00:26:29.099 that feedlots are desperate for and will pay 00:26:29.099 --> 00:26:31.779 a premium to acquire. And it comes down to consistency 00:26:31.779 --> 00:26:34.910 in care. Ensure your beef on dairy calves receive 00:26:34.910 --> 00:26:37.329 the exact same high -quality colostrum protocols 00:26:37.329 --> 00:26:40.029 and vaccine schedules as your replacement heifers. 00:26:40.369 --> 00:26:42.930 A calf with failure of passive transfer today 00:26:42.930 --> 00:26:45.690 is an abscess risk tomorrow, and that failure 00:26:45.690 --> 00:26:47.529 will hurt your reputation with your buyer far 00:26:47.529 --> 00:26:49.829 more than any short -term premium gained. That 00:26:49.829 --> 00:26:52.289 reputation is worth more than the $1 ,100 check 00:26:52.289 --> 00:26:54.650 you get this month. It secures the buyer relationship 00:26:54.650 --> 00:26:57.009 and your access to that premium market for the 00:26:57.009 --> 00:26:59.029 next five years. All right, that was a dense 00:26:59.029 --> 00:27:01.440 dive. A farmer just finished milking. They're 00:27:01.440 --> 00:27:03.660 driving to the feed store thinking about their 00:27:03.660 --> 00:27:06.059 next semen order and how they can access this 00:27:06.059 --> 00:27:08.440 market responsibly. What are the three things 00:27:08.440 --> 00:27:10.380 they need to remember from today's deep dive? 00:27:10.660 --> 00:27:13.839 Takeaway number one, know your tier. It determines 00:27:13.839 --> 00:27:16.160 your reality. What you need to do tomorrow, pull 00:27:16.160 --> 00:27:19.160 the actual 21 -day rolling pregnancy rate, be 00:27:19.160 --> 00:27:21.759 brutally honest with the data, and use that single 00:27:21.759 --> 00:27:25.019 number to decide if you belong in the $6 ,215, 00:27:25.440 --> 00:27:30.119 the $2 ,001, or the $0 profit category. The 90 00:27:30.119 --> 00:27:33.299 -day plan. If you are Tier 3, that's sub -20 00:27:33.299 --> 00:27:36.420 % PR. You need to halt aggressive beef semen 00:27:36.420 --> 00:27:39.039 purchases right now. Invest that saved capital 00:27:39.039 --> 00:27:41.339 into improving heat detection protocols, fresh 00:27:41.339 --> 00:27:43.980 cow management, or synchronization. Fix the cow 00:27:43.980 --> 00:27:46.480 before you breed her to beef. The long game. 00:27:46.579 --> 00:27:49.400 Only after your PR is consistently over 20 % 00:27:49.400 --> 00:27:51.160 and you've proven you can sustainably maintain 00:27:51.160 --> 00:27:53.740 inventory, should you design a limited, sustainable 00:27:53.740 --> 00:27:56.000 beef on dairy program, the market opportunity 00:27:56.000 --> 00:27:58.380 will still be there. Takeaway number two. Secure 00:27:58.380 --> 00:28:01.099 your pipeline first. The $4 ,000 penalty is real. 00:28:01.259 --> 00:28:03.829 What you need to do tomorrow. Count your heifers 00:28:03.829 --> 00:28:06.170 by age group and compare them to your culling 00:28:06.170 --> 00:28:09.730 rate. Ensure you are targeting 25 to 30 % more 00:28:09.730 --> 00:28:11.829 replacements than you need to maintain herd size. 00:28:12.230 --> 00:28:15.130 That margin is your safety net, especially with 00:28:15.130 --> 00:28:17.549 the industry running so low. The 90 -day plan. 00:28:18.029 --> 00:28:20.250 If you find you are short on that margin, you 00:28:20.250 --> 00:28:22.609 must allocate sex semen not just to heifers, 00:28:22.670 --> 00:28:25.329 but to your top genetics first lactation cows, 00:28:25.490 --> 00:28:28.250 especially if you are in that precarious 20 % 00:28:28.250 --> 00:28:31.069 PR tier. That is your most valuable female asset. 00:28:31.349 --> 00:28:34.099 The long game. Treat replacement heifers as your 00:28:34.099 --> 00:28:36.720 most valuable asset. The cost to raise an extra 00:28:36.720 --> 00:28:39.259 heifer around $2 ,200 is the cheapest insurance 00:28:39.259 --> 00:28:41.680 you can buy against having to pay $4 ,000 plus 00:28:41.680 --> 00:28:44.799 for a purchased replacement. Overproduce replacements 00:28:44.799 --> 00:28:47.140 and sell the surplus for guaranteed profit. And 00:28:47.140 --> 00:28:49.839 takeaway number three, get smart on beef genetics 00:28:49.839 --> 00:28:52.740 and health. Stop wasting capital on generic black 00:28:52.740 --> 00:28:55.359 hides. What you need to do tomorrow. When purchasing 00:28:55.359 --> 00:28:58.259 beef semen, stop buying generic black hide bulls. 00:28:58.279 --> 00:29:01.099 Use terminal indexes focusing explicitly on high 00:29:01.099 --> 00:29:04.059 carcass weight and ribeye area EPDs. Demand quality 00:29:04.059 --> 00:29:07.559 genetics, not just color. The 90 -Day Plan. Implement 00:29:07.559 --> 00:29:10.839 universal BVD -PI ear -notch testing on all calves, 00:29:10.980 --> 00:29:13.579 dairy, and beef. Market your beef calves proactively 00:29:13.579 --> 00:29:16.559 as BVD -negative verified to potential feedlot 00:29:16.559 --> 00:29:19.920 buyers. This health status is a massive premium 00:29:19.920 --> 00:29:22.500 opportunity and builds long -term trust. The 00:29:22.500 --> 00:29:26.200 Long Game. Utilize the free DairyMGT .info calculator 00:29:26.200 --> 00:29:28.680 to model your replacement needs and profit margins 00:29:28.680 --> 00:29:31.980 against various beef deployment ratios. Use the 00:29:31.980 --> 00:29:33.880 science to commit to the ratio that fits your 00:29:33.880 --> 00:29:37.220 specific PR before you sign that next bulk semen 00:29:37.220 --> 00:29:40.099 contract. Don't guess the stability of your future 00:29:40.099 --> 00:29:42.740 herd. This has been another Bullvine Podcast 00:29:42.740 --> 00:29:45.319 from the Bullvine Podcast. For more straight 00:29:45.319 --> 00:29:47.539 -talking industry analysis, including the data 00:29:47.539 --> 00:29:49.619 behind these fertility tiers and the full Cabrera 00:29:49.619 --> 00:29:54.200 report, head to www .thebullvine .com. Subscribe 00:29:54.200 --> 00:29:56.740 wherever you get podcasts. We're out with new 00:29:56.740 --> 00:29:59.279 deep dives every day, and upcoming topics include 00:29:59.279 --> 00:30:01.420 the rising role of artificial intelligence in 00:30:01.420 --> 00:30:03.500 monitoring feed efficiency and the latest on 00:30:03.500 --> 00:30:05.720 regulatory changes concerning whole herd testing 00:30:05.720 --> 00:30:07.940 and disease management. We'll talk to you next 00:30:07.940 --> 00:30:08.180 time.