The economics of raising ‘natural’ beef

Researchers are comparing conventional and other backgrounding systems and crunching the numbers

How much of a premium do producers need to cover the extra cost of backgrounding cattle without growth-enhancing technologies and can they offset some of that cost or improve carcass quality with other strategies?

Researchers are currently studying those very questions in a 2.5-year backgrounding study.

The backgrounding project is one of many feeding research projects at the Livestock and Forage Centre of Excellence south of Saskatoon, Sask. Researchers are looking at forage backgrounding calves using conventional and non-conventional (natural) beef production systems. Dr. Bart Lardner, Dr. John McKinnon and graduate student Janelle Smith are conducting the study. Kathy Larson is analyzing the finances of the systems. The study is currently in its second year.

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Lardner, who is with the department of animal and poultry science, University of Saskatchewan, says this type of research is needed because of the challenges and changes to technology coming to the industry.

It’s well-established that using technologies such as implants or ionophores is more efficient and cost-effective, whether in a feedlot or backgrounding study, Lardner says. But the industry still needs to look at alternatives. Some folks want other choices, he says, and the beef industry needs those options.

If producers choose to not use growth-enhancing technologies, they must be prepared to keep animals longer. That means more feed and labour to produce the same product at higher cost. Thus they need to be paid more for the product.

“When we began, there was a lot of interest in looking at natural feed production systems and moving away from conventional systems that use growth-promoting technology — without realizing the economic impact of such a transition,” says McKinnon.

Heavy steers are put on a full-feed finishing program at weaning, while the medium and lightweight steers initially went on a winter backgrounding program.
photo: Supplied

Researchers asked what premium would be needed if producers gave up technology that enhances growth and feed efficiency such as implants, ionophores and some of the medications commonly given.

“The first time we put in our application for a grant to look at this question, it was rejected because granting agencies thought we were promoting one production system over another,” says McKinnon. “So we applied again, a year later, emphasizing the economic aspects of the research, and added a twist. We proposed looking to see if we could enhance performance and quality of the animal by using extended backgrounding on grass prior to finishing.”

“We’ve been following a set of steers from weaning through slaughter, under three different management systems,” says Smith. Each year, researchers purchased a group of 240 black calves that had never received any growth-promoting technology. These steers were divided into heavy, medium and lightweight calves at weaning, and each group was further split into conventional or non-conventional management. The non-conventional groups had no growth-promoting technology.

At weaning, the heavy steers went directly into a finish program on full feed to slaughter weight, Smith explains. Medium steers went on a winter backgrounding program on a high-forage diet, preparing for spring feedlot entry to be fed to slaughter.

“The light calves were on an extended backgrounding program — winter backgrounding and then grass through summer, for fall feedlot entry,” she explains.

Within each weight group are a conventional and non-conventional group, Smith adds, creating six sets of steers each year.

“We’ve completed year one and have taken the first year’s groups to slaughter. We are now doing the same thing, with new groups of cattle, in year two,” says Smith.

Cattle in the conventional group are given the same growth-promoting technologies that are found within a conventional feedlot system, such as antibiotic treatment to control liver abscess, implants, ionophores and antibiotics on arrival. McKinnon says that while they don’t have many numbers yet, it’s fair to say those cattle gained faster, were heavier and spent less time in the feedlot than their non-conventional counterparts.

“That was an expected result, so now we are figuring out what the extra days on feed cost for the non-conventional groups, and what the loss of efficiency would be in terms of premium needed — looking at those differences between the two groups,” McKinnon says.

There has been similar work done in the U.S. addressing these questions, but there has not been much research under Western Canadian conditions, so this study will put some numbers on it. If producers want to go this route and raise “natural” cattle, this research could give guidelines and an idea how it might or might not work for their own operation.

Lightweight steers spent the summer on grass before entering the feedlot in the fall.
photo: Supplied

“There’s been talk of premiums available for ‘natural’ cattle in Western Canada, but this study might give producers more information to allow them to make informed decisions about how they want to market their cattle,” says Smith.

“A buyer might tell producers, ‘Don’t use growth-promoting technology in your calves and yearlings and we’ll give you a $5-per-hundredweight premium,” says McKinnon.

Whether that $5 per hundredweight will actually cover their additional costs is the question. On a 500-pound calf, that $5 premium would be $25. On a 900-pound yearling, it might be $45.

Extending the grazing season

“Another part of our project is looking at including the use of an annual forage to potentially extend the grazing season,” says Smith. “We planted Hazlet fall rye for late-season grazing for the light group of cattle — the grasser steers.”

Unfortunately, both 2018 and 2019 were dry, and Smith says their plan to extend the grazing season hadn’t panned out quite the way they’d hoped. At interview time, the light steers from year two were still on grass, but they only had 82 grazing days in for the light group, says Smith.

McKinnon says they are tracking several other important things as well.

“We have seen that if you are using conventional technology, performance parameters like average daily gain, feed efficiency, rate of weight gain, etc. will be greater. But on the other hand we also need to be able to track carcass quality of these animals — particularly yield grade and quality grade.”

McKinnon says they are tracking whether the cattle that are not receiving the growth technology grade better than the conventional cattle. This also plays into the economics of these systems, because if the producer can provide better carcass quality, there may be a better premium for those animals.

“We will know more about this aspect of our study next year. By early 2020, year two will be wrapped up and we’ll have two years of data available,” says Smith.

Smith adds that most of the questions she gets from producers revolve around health aspects, such as numbers of treatments between the two systems. She says they’ll have data on those topics as well once the project is finished.


The forage advantage

The backgrounding study at the Livestock and Forage Centre of Excellence puts green forages back into the feeding equation, says Dr. Bart Lardner.

The study’s lighter-weight, smaller-framed calves are on a slow backgrounding process through winter, and then on grass all summer, Lardner explains. There are many high-quality pasture options for these cattle, he adds, and Janelle Smith is examining some of them. Specifically, she’s looking at perennial mixes of crested wheatgrass and alfalfa followed by meadow bromegrass and cicer milkvetch pastures. Smith is also studying annual forage options such as fall rye.

“We can put the gain and performance of these cattle into a grazing period using very productive perennial and annual forages that will still meet the same growth targets and hopefully reduce our cost of gain as well,” says Lardner.

It’s good to have an option that involves grazing as part of a development program for a given target weight, Lardner adds. During the backgrounding or feedlot finishing, a high concentrate diet will take an adjustment period to transition the cattle.

“Whereas if there is more forage in the diet the rumen can transition easier. There are multiple forage options,” he says.

There are a growing number of “natural” markets in North America, and European markets have always demanded non-hormone-treated beef. Many cattle are shipped to EU markets, so some producers want to fit that niche.

“We have many branded programs here, as well. It’s good to have options, for a profitable beef industry. Our project is probably just the start; there will be other research trials looking at various options,” he says.

The industry also needs to be more consistent in its definitions of natural and grass-finished or grass-fed, he adds.

“We need some standards and regulations if people are going to move cattle through this route.”

Lardner says they are also being asked to look at the level of effective fibre needed in the diet on a feedlot finishing program.

“We know that fibre buffers rumen pH and aids digestion. There are also some projects where we’ll look at having cattle on a high forage diet longer, reducing the typical high-grain diet to a shorter time.”

Lardner attended meetings for the American Society of Animal Science in Texas, and there were many conversations around these topics, he says. The industry needs to be flexible and address questions from both producers and consumers, he adds.

“If we can bring the grazing/forage component into a developmental program, it’s a good thing. We can utilize native rangeland and tame perennials plus many good cover crops. There are many high-quality forages that can do the job. We’re doing research with hybrid fall rye which seems to be higher quality and higher yield than conventional fall rye varieties, for instance.”

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