Industry consultant Nevil Speer helps illustrate the story of the transformation of the nation’s cow herd during the last decade or so, and Oklahoma producer Jimmy Taylor shares his personal example. Rising to meet consumer expectations has been a self-fulfilling prophecy, where better beef begets more demand, but there are other considerations. 

Can you have the carcass and the cow? How have novel genetic tools allowed for a much faster pace of progress? What’s on the horizon? Answers to all that and more, in this episode that offers a peek at the priorities of the commercial Angus bull buyer. 

HOSTS: Miranda Reiman and Troy Marshall, American Angus Association director of commercial industry relations  

GUESTS: Jimmy Taylor and Nevil Speer  

Jimmy Taylor, an Elk City, Okla., commercial Angus producer, manages around 600 females on 12,000 acres alongside his wife, Tracy. In 2011 they were named the Certified Angus Beef Commitment to Excellence Award winners and in 2013 the Oklahoma Angus Association Commercial Breeder of the Year. Taylor has served on various local boards and recently served on the executive committee for the Cattlemen’s Beef Board. He is a strong proponent of using all the tools available to produce the highest quality beef possible.   

Nevil Speer, Bowling Green, Ky., started his industry consulting business after a career in academia and private industry. He earned a doctorate in animal science from Colorado State University and a Master of Business Administration (MBA) from Western Kentucky University, where he taught for several decades. He says he’s forever a student of the business and uses his combination of on-farm experience, academic training, and startup know-how as he consults, writes and speaks across the country. 

RELATED CONTENT:  

A Crucible for Quality  

Beef Market History and Status with Nevil Speer  

Miranda Reiman (00:02):
Welcome to the Angus Conversation. I'm your host, Miranda Reiman with a special guest co-host, Troy Marshall. Hey Troy, how are you doing today?

Troy Marshall (00:10):
I'm great, thanks Miranda.

Miranda Reiman (00:12):
So first I must start out this introduction by giving you a little bit of a hall pass. I guess I'd say Troy, we started out and we couldn't find Troy anywhere.

Troy Marshall (00:23):
I feel really, really bad about this, but I am glad that I made it and got to take part on a great second half of the conversation.

Miranda Reiman (00:33):
What Troy's not telling you is that we originally set it for half an hour later and he just didn't get the updated time. So I will give you, we'll write that one off, Troy.

Troy Marshall (00:44):
I appreciate it. I appreciate it.

Miranda Reiman (00:46):
So we get to talking today, and the reason that you joined us on the podcast here is that we at the Angus Journal would like to spend some more time in this coming year focusing on helping our Angus breeders know a little bit more about the things that are impacting their commercial producer customers. They're just, getting to know kind of the nuts and bolts of the commercial industry. So we had a good podcast for that.

Troy Marshall (01:07):
We really did. It's an exciting time in the business. I don't think genetics have ever been more, and you talk about combining genetics and management and marketing and a total systems approach, and I think this was a really good conversation.

Miranda Reiman (01:20):
We got done at the end and we said we spent so much time talking about genetics and the genetic tools that are available. We didn't hardly touch on the management aspect of making those genetics shine.

Troy Marshall (01:32):
Yeah, I think there's a lot of value in having uniformity and consistency and then not only is it knowing the genetics, but by knowing the genetics, you know how to manage those cattle. And we've learned more and more that the best management practices become more and more important when we're really trying to hit targets and the ideal endpoints for these animals.

Miranda Reiman (01:54):
And when we have those numbers on the genetics to see how much progress we've made, maybe that's just a good wake up call to us to take a look at those management practices again and make sure we got enough groceries in front of the cows. Those kinds of things

Troy Marshall (02:06):
Really is, we talked to afterwards about fetal programming and all those things to go into it, but we can upgrade bad genetics, but we can also downgrade some really good genetics if we're not careful with our management practices.

Miranda Reiman (02:20):
So in this episode, you will hear from Dr. Nevil Speer and you'll hear from Jimmy Taylor, our producer out of Oklahoma, and I think you're really going to enjoy this one. So I am sitting here in the Angus Convention trade show with two guests that are going to help connect us a little bit more to the commercial cattlemen. We have a lot of breeders on this podcast, but today we have invited Nevil Speer who is an industry consultant background in both animal science and egg business. So a little bit of both sides of that coin there. Nevil, and I just learned that you're actually from Colorado originally, is that right?

Nevil Speer (02:57):
I am, yes. I'm a graduate of Colorado State University. You thought that we always, when people ask us,

Miranda Reiman (03:02):
I thought you were in Kentucky,

Nevil Speer (03:02):
Right? People say, where are you from? Well, I live in Kentucky. I'm from Colorado, right. So yeah, my wife and I moved to Kentucky after spending some time in her family's place in 1995, and I worked at Western Kentucky University for almost 20 years and then had an opportunity to go out into industry with a startup and then ultimately just evolve that into a consulting business. That's been really fun and lots of being able to do lots of different kinds of projects and things along the way. So yeah, it's been fantastic.

Miranda Reiman (03:34):
And if anybody wants to know what Nevil thinks in the industry, he's a very prolific writer, columnist in several industry publications and

Nevil Speer (03:42):
Regular contributor to Drovers. Yes.

Miranda Reiman (03:44):
So you can find his work all over the internet. And we are also using him quite extensively here at Angus Convention. He is going to serve on a panel today and also present at Angus University tomorrow. So

Nevil Speer (03:54):
That's right.

Miranda Reiman (03:54):
We're making sure that we're using your travel dollars to the fullest.

Nevil Speer (03:57):
Fantastic. It's great to be here.

Miranda Reiman (03:59):
And across the table then we have Jimmy Taylor. Jimmy is a producer from Elk City, Oklahoma where he ranches with his wife. Tracy been very involved in the industry, served on the Cattleman's Beef Board, and also was a Certified Angus Beef Commitment to Excellence award winner in 2011. So Jimmy, glad to have you on.

Jimmy Taylor (04:18):
Thanks for having me on. Miranda,

Miranda Reiman (04:21):
We'll just start with you. Why don't you give us just a little bit of your background and tell us a little more about your operation.

Jimmy Taylor (04:27):
I'm on the older side, so I have experienced several changes in the industry. It started my career when I was probably about six months old. Started going with my dad feeding and got a little older. And I guess the first time that I thought that I was really part of the operation when I got about 12 years old, they said I was old enough to go on Roundup. Well, back then we didn't have a trailer, so that meant getting up in the middle of the night and saddling horses riding five miles and being at the far end of the pasture, not when the sun came up, but when it got light enough to see because it was going to get hot and we'd round the cattle, take them back. But what an experience for a young kid to be able to do that. So I had no technology back then.

(05:18):
We were commodity beef, and over the years, dad started with a Hereford operation, commercial Hereford and went to purebred Simmental. We had purebred Gelbvieh for a while, did the show steer thing. Then in 2005, I was trying to think of a way where every animal had the potential to get bonuses to increase the value of every one, and looked at several different things and came up with selling on a grid and trying to get bonuses through getting Primes. And so started the journey that I am still on. And over the years I went from, I guess one way you could gauge my success. The first group I fed out was in 2007, 2008. I went 12 and a half percent Prime. 2012, that was up to 19 point a half percent Prime. We had gained some, but this shows you what technology will do, what the difference in technology. Back then, I still didn't, I had more than I had when I was a kid, but still didn't have a lot. 2012, several things happened that we'll get into a little bit later, but from that point, I've had a couple of groups go 82% Prime using that technology. Yeah,

Miranda Reiman (06:43):
That's a fabulous journey, and I've got to pause just a moment here to recognize that I have a guest co-host with me today that I didn't know if you were going to show up. Troy, Troy Marshall, across the mic too.

Troy Marshall (06:54):
I really apologize for being late. Glad to be here.

Miranda Reiman (06:58):
We just decided that the best recourse would be to publicly embarrass you on the podcast and make you join anyway,

Troy Marshall (07:04):
I really appreciate that and I'm deeply humbled and I feel terrible.

Nevil Speer (07:10):
You're fine.

Miranda Reiman (07:11):
We're actually just getting started. Jimmy's told us a little bit about his story and when you were talking about jumping on a horseback and the country that you're in, I was telling Troy earlier the part of the country that you live in, the immediate thing that I think about is Dust Bowl era and all of that. It's not an easy place to raise cattle there. Just describe your environment you're raising cattle in.

Jimmy Taylor (07:34):
Most of our ranch is the Red Shale Hills of Western Oklahoma where we might have an inch of topsoil, maybe no top soil

Miranda Reiman (07:41):
If it didn't blow away in the thirties.

Jimmy Taylor (07:44):
There's some places there that did blow away because to be able to homestead that property, they would give them a quarter of land, but they had to farm 40 acres of it, and that land should never have been farmed.

(07:57):
And so as a result, some of it blew away. So our carrying capacity is around 20 acres per cow calf unit a year. I run around 600 females on 12,000 acres farmland. We have two to 300 acres of that 12,000 that would be farmable, but the land that's farmable, that's close to the headquarters, we have in Bermuda grass because that can take more numbers. So we use that for calving, AI, weaning, those type of things. So actual farming that we do out of 12,000 acres, it's about 110 acres to background our steers before they go to the feedlot.

Miranda Reiman (08:37):
Sure. Very good.

Nevil Speer (08:40):
I just want to jump in here because I was talking with Jimmy earlier and I think it, it's just very pertinent to what we're talking about here, and we go back to the thirties and he and I were just talking about how dry it's been basically since 2010 and we're struggling with it right now and how far this industry has come, just agriculture in general in terms of making advancements because we've gone through this period, you know how to manage the soil, you know what to do, what not to do, and we're such better stewards of everything that we own. And if we hadn't learned those lessons in the thirties, we'd be blowing away today. And that's not happening.

Jimmy Taylor (09:18):
And that's probably, my dad was a good cattleman, but probably the best thing he did for that ranch was put it in grass the way it ought to be and reduce the carrying capacity. He was running more like 30 acres per cow-calf just to let it come back, heal up, put in diversions, different places to stop the wind erosion and the water erosion. So Nevil one thing you've brought up that there's a silver lining in everything. These droughts that we have been having, we culled the cow herd in a way that improved it tremendously. No question. No question. I think that's obvious and one of the reasons that we have improved beef demand because we culled some cows that shouldn't have been in there and we've moved in a direction that creates that deep demand.

Miranda Reiman (10:13):
And you would say that's what's happened, industrywide. I mean, you're a great example of that, but

Nevil Speer (10:17):
That's Oh, that's precisely right. And really we saw the beginning of the sharp uptick in quality grading began in, right after 2015, right? Once we started culling all those cows out, 2011, 12, 13, 14, and then we started to rebuild, guess what? Everyone's pretty smart. We knew which end of the cows to get rid of. Not only are they we've improved in terms of quality grade, we're making them more productive. And just in general, the cow herd in the United States is so much better than it was just even 10 or 15 years ago.

Jimmy Taylor (10:50):
And you add on that to some of the tools that the Angus Breed has given me to work with. 2010 genomically enhanced EPDs came along. Now I've got, instead of a 5% accuracy, I've got 35%

Nevil Speer (11:05):
Absolutely

Jimmy Taylor (11:06):
Seven times what I had before that.

Nevil Speer (11:07):
So we can make progress so much more quickly, and now we're just on the front edge of really being able to gather commercial data in a way that we weren't even thinking about five years ago. So the advancements that this industry can make in the coming decade are huge. I think it's the most exciting time in our business of our careers.

Troy Marshall (11:29):
I agree with that. Yeah. I think we're going to have a quantum leap going into this, the next expansion phase in terms of the quality of cattle. And I think one of the cool things about your story is not only you're in a tough environment and we talked about the carcass quality that you produced and the terminal traits, but that you've kept a cow that works in that tough environment at the same time. And I don't think that would be possible without the tools we have today.

Nevil Speer (11:56):
Right. Yeah, that's exactly right. And actually, Troy, that's part of what I'm going to talk about tomorrow is that ultimately we've got to move from thinking about whether it's maternal versus terminal. No, it's got to be both, and we're increasingly going to have to work within systems and those cows are going to, and you may make some sacrifice a little bit on each side, but they're going to have to do both. And that's exactly what you've been able to do.

Jimmy Taylor (12:22):
I don't think you can make that sacrifice. I mentioned the genomically enhanced EPDs. The other tool that has moved me tremendously forward is the GeneMax® Advantage™. I started in 2014 with Focus, GeneMax Focus. I went back a couple of years and picked up those females that were born in 2012. That was a good tool and I call it Genemax Advantage. Enhanced happened in 2016. All of a sudden we were light years ahead. Now that one took it down to the percent of what that animal compared to in 10 different traits to all other animals tested. And now I've got something to work with. When you've got a number to work with, you can make improvements on that number. So I tracked over the years and we can get in into that.

Miranda Reiman (13:17):
Yeah, that's great.

Jimmy Taylor (13:18):
If you'd like to in a little bit, but tracked over the years, some of the advancements I made, it's not only moving forward, but I was able to work on antagonistic traits such as I would make great improvements in the growth traits.

(13:37):
Talking weaning weight, gain, carcass weight. I think those ranged improvements from 2012 to 2018, from 22% to 32%. And at the same time I improved my calving ease, which those two don't work like that. So I was looking for those curve-bender bulls, but the way I attacked that with GeneMax advantage, those traits, I'll put my parameters up at the top of each one and most cases it'll be 50%. If that female is below 50% in that trait, I'll circle it and go right across the board circling those that I want to see improvement that allows me to select the correct AI bull or pasture bull to put her with. And when you can target traits like that, that allows you to work on things that might be opposite that are antagonistic that you couldn't do otherwise. Another good example is that over those seven years I improved marbling by 24% in my keeper heifers and at the same time reduced external fat. That's tough to do.

Nevil Speer (14:48):
Yeah, but you could only do that because of information

Miranda Reiman (14:52):
Because of the numbers

Nevil Speer (14:52):
and making decisions objectively, right?

Jimmy Taylor (14:55):
Yes. You've got numbers to work with.

Miranda Reiman (14:57):
So when you look at those traits that you're wanting to improve, how do you then apply that to your bull selection? Are you finding maybe bulls that you wouldn't have otherwise looked at or you still sticking with certain families? What's the

Jimmy Taylor (15:11):
So going back to 2005, I've got to compliment the Angus purebred breeders Back then to get carcass traits. I would have to give up in other areas, as the years have gone along, they have improved the bulls they're producing in a way, I don't have to do that much anymore. So that's one comment I want to make. The other one is to your question, I can use bulls now that I couldn't use before. I'll give an example. Milk in our area,

(15:47):
It doesn't get along, a high milking individual does not get along in our environment. So with those numbers on those females, now I know which ones need more milk and I can pick a bull that might be in the upper thirties on EPDs for milk and use that animal that might be outstanding everywhere else that I couldn't use before. Now I can use that bull. Another one would be fat. I retain ownership all the way through sell on a grid. I don't want yield grade fours and fives. So a bull with a high fat I just couldn't use before. But now I've got those females identified that are lean and I can use that bull

Miranda Reiman (16:29):
So you're individually mating?

Jimmy Taylor (16:32):
Well, I was, I did timed AI on the whole herd until one year ago, and I've done that since 2012. So all the low hanging fruit is gone.

Miranda Reiman (16:49):
You've improved it enough that now,

Jimmy Taylor (16:51):
But that test, the GeneMax test is still valuable to me because now the bulls that I have, I circle what they're really good at and really bad at, and I sort my females to go to those breeding pastures to match 'em with those bulls, which that method would probably fit most commercial producers better than a timed AI program. You can make progress faster with timed AI, but there's still a use for it by using it in the pasture. Sure.

Troy Marshall (17:24):
Jimmy, when you mentioned the improvements made in 2016, and I'm throwing in a little editorial promotion for the GeneMax, they're going through a rebuild right now, Focus, and they're going to provide the indexes that we've never had before. And so it'll be on a common currency where you can utilize those directly on your bull selections and where it's just more of a common language. And I think that's going to be pretty powerful too.

Miranda Reiman (17:51):
Yeah, you've almost had to do the math or the, I mean make it even, isn't that in algebra where you had to make it all the same, you've had to do that and now that work will already be done for you.

Troy Marshall (18:03):
Yeah, I've always been impressed with, we made it really difficult for you by having three or four different scoring systems and having to pull that all together.

Jimmy Taylor (18:14):
Genomics is like speaking in a foreign language anyway, among cattlemen, but the numbering system on the purebred test, one is best, on the commercial test, 100 is best. So it's like thinking in a foreign language and thinking in French

Miranda Reiman (18:33):
And having to do math.

Jimmy Taylor (18:34):
... and German at the same time.

Nevil Speer (18:37):
I think there's an important point in all of this also is that there's more equity at risk in this business than ever. And everything you're describing is that you've invested some time inside to make these decisions and ultimately there is a return on that investment. And that's often very hard for producers. Typically it seems like it's the outside work that we like to do and it's very tangible

Miranda Reiman (19:08):
Because you can check it off too, right? Check. Did you get the tractor fixed?

Nevil Speer (19:11):
Or did I bale the hay? And all of that's important, but sometimes you're better off letting someone else do that and you do the work inside, right? Because otherwise all of these things that you've just been describing wouldn't have happened unless you did that.

Jimmy Taylor (19:29):
Right.

Nevil Speer (19:29):
Yeah.

Jimmy Taylor (19:30):
Right. And Troy, you mentioned the new test that's coming out and there's one in between there. I talked about the 10 trait test, since then you moved to 17 traits, and one of the things you added on that 17 traits was tenderness, which that's where all our dollars come from are the consumer, marbling and tenderness are very important to them to get a good eating experience. And I appreciated you getting that tenderness in there. I had worked on that before, but I had to backdoor it because the test didn't have that trait on there, but it identified those animals that were in the bottom 35%. So I would mark those and then I would go to the DNA test on the purebred bull and I could go, should

Miranda Reiman (20:20):
We hire him as a geneticist?

Jimmy Taylor (20:22):
So that was not on the first test, but when it got on there, you could tell that I had very few in that bottom third. At that point, when I first started it, I had 33% of my herd in there just like you would expect with no genetic pressure. And I worked at it for however long that was, three, four years. And by the time that test got there, that told what I had. I was pretty well had all my cattle out of of that bottom third.

Troy Marshall (20:56):
Well, and I appreciate the fact that we know how valuable tenderness is, but we don't get paid for it. And I think

Miranda Reiman (21:03):
But you care about it anyway.

Troy Marshall (21:04):
Yeah. It's just that he's selecting for that and knows it's the right thing to do even when we're not getting paid for it and it builds overall demand for our product.

Jimmy Taylor (21:13):
Hopefully someday we will, but indirectly we are getting paid for it.

Nevil Speer (21:17):
I was just going to say that actually. That's exactly right. Indirectly we are through quality grade. Quality grade is a very good indicator of tenderness

Jimmy Taylor (21:24):
Will that and consumer satisfaction.

Nevil Speer (21:27):
Yeah,

Jimmy Taylor (21:27):
That good eating experience is worth quite a bit.

Nevil Speer (21:30):
You said, it's a mic drop. All of our dollars that come into this industry come because of a consumer. They are the business at the end of the day, and we have all this conversation about cattle and that's important. But at the end of the day, I always tell producers when I do meetings, we really are in the consumer business.

Miranda Reiman (21:53):
We saw Mark on stage show that graphic that we see about every meeting now where we like to get really excited about how dramatically the quality grade has increased and our bad eating experiences have went down, all of those kind of things. You talk about that the technology has really allowed you to do that, but you had to have a reason or a will to do that. Do you think that your, I guess fire for that started when you were feeding cattle because you were seeing directly the dollars and cents or did you believe in it before that?

Jimmy Taylor (22:24):
No, I think it's more consumer driven. One of the side things that developed for me feeding cattle is one of the perks of that is we would bring one home every now and then and put it in our freezer. Well, my friends and family found out what I was doing and they would put an order in and we worked that up just by word of mouth. My wife will put something on Facebook maybe once a year, twice a year, and we sell a hundred head a year like that quarters halves and wholes. So I coined a phrase to kind of go along with that is we develop every animal as if it's going to be served at our own table. So we want those people that buy our beef to be happy and have a good experience when they eat beef. And you put that on a bigger scale. If our industry does that, it pleases consumers. They have a good experience, they want to buy more beef. It helps drive demand.

Nevil Speer (23:26):
And we're seeing that in the real world, right in the marketplace. For example, last week cattle traded $190, $6 ahead of a year ago levels, and we have bigger production than we did a year ago in terms of fed beef, not total beef, but fed beef production. That doesn't happen by accident. That's really a signal of stronger demand because we're making a better product and people keep coming back to beef

Jimmy Taylor (23:53):
And Nevil, you add into that the headwinds that the consumers are facing right now with inflation. That's an amazing

Nevil Speer (24:01):
Jimmy, I always say that that's a great point because what's the number one complaint of consumers in terms of inflation? It's grocery prices, yet what's the one entity in a grocery store that's had more pricing power than any other? It's beef. It's amazing what's happened, especially in the retail case, we have more good beef to go around.

Miranda Reiman (24:23):
Right

Troy Marshall (24:25):
Along those lines, Nevil, what are you seeing from a big picture standpoint when you look out on demand that, I guess what's your perspective, what beef demand's going to be like the next four to five years and what do you see maybe shifting demand or being big drivers there?

Nevil Speer (24:39):
Yeah, it's a great question, Troy, because I think one of the things that's really interesting, and I think we've been hearing it really since 2015, is at some point the consumer is going to push back. We cannot continue to raise prices. Well, there's two things that are important in there is first of all, obviously disposable income continues to go up. And so it's really, you need to compare that as a percentage or a proportion of disposable income. But we've been saying that now for almost 10 years and has it happened yet? No. And once consumers get a taste of really good beef, they are willing to pay for it. And I think actually what's happening is we're just speeding up demand and it's becoming, especially at the retail level, it's a core component that drives customer traffic, right? A retailer, his biggest motivation is I want a return customer, I want Mrs. Speer to keep coming back to my store every week or twice a week. And what drives that is typically on the fresh side, it's produce and really good beef. And so I'm excited about where we're headed.

Jimmy Taylor (25:51):
And Nevil, another thing that's impressive, it's not just domestically that you're seeing that absolutely. It's internationally also in volume this year through the first eight months, we're down about 3% year over year. But in value, we're up 4%. We're on pace to maybe be second all time.

Nevil Speer (26:12):
And by the way, you talk about headwinds also with a really strong dollar that's happening. Yes. So it's really amazing.

Miranda Reiman (26:19):
So if we've got all this demand and it's optimistic for the future, how come we can't get cow herd numbers back up? How come we can't get, everybody keeps saying, when's the rebuild? Is it started? Has it started? Is it here?

Nevil Speer (26:33):
I think there's a lot of challenges out there. Jimmy and I were talking about right already the weather and this fall it's turned very dry. So if you're kind of on the margin of keeping some cows, you may send them to town, especially when they're worth a lot. That gooseneck trailer of 10 cows, that's a pretty nice little bonus check. And they're cows that we don't really need those and what have you. But I think there's a couple other things. Clearly interest rates and uncertainty, regulation, uncertainty. I think that certainly drives decision. But I would say the biggest challenge for a lot of commercial producers at this point really has been around equipment costs and can we justify making the next jump to a bigger tractor or just replacing a tractor? I mean, it's nothing to spend $150,000 on kind of a mid-sized tractor. And so I think that maybe gets in the way of some of the decision to rebuild, not rebuild. I'm one of those that I'm not convinced we're going to ever go back to 32 million cows or what have you, but that remains to be seen.

Jimmy Taylor (27:41):
I think in our area, the drought is still driving it. Just about the time I hear a few people are starting to retain heifers, the drought will,

Miranda Reiman (27:51):
It quits raining.

Jimmy Taylor (27:51):
will rear its head again and all of a sudden here they, they're going to market with 'em again.

Troy Marshall (27:57):
Well, and I kind of feel like we've had a perfect storm with COVID, the drought and the normal cattle cycle. And I look back at last three or four, and this one's really different. I mean, we've dug deeper into that herd. No question. So guys, I guess your thoughts, is this going to be a much slower rebuild?

Nevil Speer (28:14):
I think Troy, you bring up a really good point is that I'm not sure we're ever going to get back into that kind of normal cycle, those ten-year cycles that we've seen, especially as we think about the equity at risk, it's those trade-offs. This one's probably going to be longer and more protracted than any that we've seen. And I think that has a lot of implications as we start talking about supply chain networks and building supply and where do we go in terms of the marketing system and what have you. Because of that, I think we're going to see a lot of change in our business going forward in the next five to 10 years.

Troy Marshall (28:53):
You mentioned the supply chains, you retain ownership and do a lot of that, paint the picture of how we're going to change the way we market cattle and the impact of all these supply chains here in the next five, 10 years?

Nevil Speer (29:05):
Well, yeah, I think we're trying to figure that out, but clearly there is a lot of shuffling going on, a lot of conversations that I'm hearing about. We want to identify large groups of like kind of cattle that are going to ring the bell on a grid and then ultimately can we get them into a marketing channel, for example, a retailer and or food service and have some repeatability to that. And then ultimately you're going to have to produce into some specifications in that too. And that's challenging. And when you say, gosh, you're going to have to give up a little bit of your independence, can't just, but you're going to get rewarded for that on the other side too.

Jimmy Taylor (29:53):
And I think that's what will drive it, is the bottom line. Will they get paid for making those choices? I retain ownership, go all the way through, sell on a grid, and my bonuses range from 350 to $400 a head just on average. If you let 'em see that the people that aren't doing this, the producers that aren't doing this, that would drive them to maybe think about making some changes, maybe going from a commodity type situation to trying to produce quality like some are already.

Miranda Reiman (30:33):
As you think ahead to some of those changes, what do you think Angus breeders need to be doing to prepare or to arm their customers to be successful in the future?

Nevil Speer (30:44):
Yeah, Miranda, I've done a couple of meetings for seedstock producers where we talk about that. And I mean clearly you want to provide good seedstock, right? But I think it has to go beyond that in that you're working on providing value added services to your customers. Again, a lot of these are built on relationships. It's always about the cattle and people, but what are you doing to maybe find out that you can help your customers market into some kind of marketing channel supply chain, however you want to describe it, what have you. But I think ultimately seedstock producers are going to have to kind of take that next step working on behalf of your customers into supply chains. By the way, let me also say it may not even be just directly into supply chains. Maybe you're helping your customers group their cattle and selling them through a traditional marketing venue, but now you're going to work with the marketing venue, whatever, it's the local auction market or something like that. Yeah,

Jimmy Taylor (31:49):
I would agree. I think purebred breeders that sell bulls to producers are in an excellent position to help with that educational process.

Nevil Speer (31:59):
And so really that's a call to Angus breeders. You need to understand everything that is going on in terms of genetics, but it's also a call. Then you need to make sure you understand what's going on in the commercial side of this business, backgrounders, cattle, feeders, packers, so that you ultimately can derive and create value for your customers that way.

Miranda Reiman (32:26):
And Troy, you guys have done quite a bit of work over there in the commercial programs department to make that easier for Angus breeders.

Troy Marshall (32:32):
Well, we've kind of talked about the value of genetics has never been higher than it is today, and there's a lot of incentives, but I think the big stumbling block between the commercial segment and the feeding segment was we just didn't have an objective, reliable way of describing those cattle on a consistent basis. And that's with our Genetic Merit Scorecard and Angus Verified programs is giving those buyers the confidence and the courage to pay a premium for those cattle and know what they're getting and they want to do it and they see the value where Jimmy was talking $300 plus premiums on a consistent basis. We're seeing the value differences. We just needed a way of describing that, and that's what we're trying to do is provide those tools. So those producers, and I've always been frustrated with the commodity part of our business where the better cattle tended to subsidize the poor cattle in our system with the sea of black hided cattle too, with Angus Verified, it does give us opportunity to differentiate those cattle that are truly sired by Angus sired from just all the other cattle that are out there. And so we're hopefully fitting a gap and kind of giving those producers a tool to help describe those cattle more accurately.

Nevil Speer (33:47):
By the way, to that point, it's very easy to talk about premiums. I think the other thing that's really important, I'm going to show some data tomorrow that even as you have Genetic Merit Scores, the thing is can we reduce the variation in a group of cattle and in a lot of cattle, because I'll show some data tomorrow, just traditional commodity cattle, the difference in carcass value can be as big as 13, $1,400, which really is partly driven by weight and quality grade. As you look at some of the data that we're seeing with cattle at GM scores, that variation is being reduced pretty dramatically.

Jimmy Taylor (34:32):
So one thing to add to that, we talked about the bonuses and that's what would attract a commercial producer to maybe go down this road. But I think another role that purebred breeders can play is if you go down the carcass road, if you totally focus on that, it would be like single trait selection. Circling back to an earlier comment by Nevil, you've got to pay attention to that female side too, and the bulls they're producing today do that. But I think they can help in that education process short term, these dollars are great, but if you're in this business for the long term, you've got to pay attention to that other side.

Troy Marshall (35:17):
The cow is always the factory. It keeps us in the business,

Miranda Reiman (35:22):
But you've really been able to find that even works in such a tough environment.

Jimmy Taylor (35:27):
Yes.

Miranda Reiman (35:27):
You've been able to find those. Do you think it's more difficult for you than it would be if you were in Iowa?

Jimmy Taylor (35:34):
I don't know, every environment's different, you just adapt to that. Of course it'll be easier on the cow, but we've seen increases in growth in this test and at the same time, our heifer pregnancy percent has been better. We track that. One of the things that has helped me with that fertility outside the GeneMax test is a shorter breeding season. We gave them for years, gave them AI and one additional heat cycle. We pulled that bull at day 26 through 30 and did that until last year. Nevil, I'm always thinking and looking at what can I do different?

(36:22):
We would have a fallout rate of 15 to 25% opens using that system, but I got to thinking is all of that that heifer's fault? Because you've got to hit a window there with your bull. You run on the one end a chance, he's inexperienced and with one chance at getting that heifer bred, he might not have figured things out yet. Or on the other side, that bull gets six months to a year older and gets heavier, he becomes too heavy. And I think some of us and me included, push that limit a little bit. And that bull might be, his genetics are right to be a heifer bull, but he might be too heavy. So I don't think all of that was my heifer's fault. So this last time I went another cycle, I think I had like 12% open after 48 days. So yeah,

Nevil Speer (37:23):
That's fantastic.

Jimmy Taylor (37:23):
You're always thinking about what you can try new, but back to your environment question, Miranda, we pay attention to fertility too. It's a little tougher on 'em in Oklahoma than it might be in Iowa, but you can do it.

Troy Marshall (37:39):
Well, Miranda mentioned the environment and I got thinking with your comment about consistency and it's really about finding, and I think that's where seedstock guys have a role too, is finding that mix between management, genetics environment and the marketplace. And that is a complicated equation to solve. And so I think the seedstock guys that can come in and help producers and hit that uniformity and consistency thing because you can manage those cattle more effectively if they're uniform. And

Nevil Speer (38:11):
So Troy, I think that's a great point, and actually I was just thinking about that as Jimmy was talking. This is a really complex business, and by the way, it's the most complex industry in the world, no question about it. There's more dynamics and parts in play all the time. And I think sometimes for producers it can be very overwhelming, both seedstock and commercial producers and it's just, boy, there's too much coming at me. And again,

Miranda Reiman (38:35):
And there's more all the time.

Nevil Speer (38:35):
And guess what's the easiest thing, Miranda to go out and bale hay and just click the box. I think we've got to do a better job of saying it's okay to be confused. It's okay to be stressed out and continue to provide education for producers on either side of the line and trying to help them through that complexity. It's actually going to get even more complex in terms of a business going forward, but it's okay to be intimidated by that, right? It's understandable.

Miranda Reiman (39:09):
And I think that's something that you guys have both always done very well. You've been students of the business, students of the industry. I guess before we get to the random question of the week, which is how we always wrap up, is there anything else that you'd like to add if you think

Nevil Speer (39:22):
Well, to that point, and I used to write a monthly column and I always try to end with the most important thing you do is try to get access to objective information because the business is complex and it can be confusing at times. And so I also always tell producers, stay out of the coffee shop because you never feel better and you leave the coffee shop and you're not going to hear anything. That's probably correct there.

Jimmy Taylor (39:54):
I might add to that coffee shop. One thing I tell people is the coffee shop is not a source. If you're wanting to find the true facts about something, that might not be the place to go.

Nevil Speer (40:06):
That's right.

Miranda Reiman (40:07):
I mean you could probably add to that a little bit. Nowadays social media is somewhat too

Nevil Speer (40:13):
Facebook. The coffee shop was Facebook before there was Facebook.

Jimmy Taylor (40:16):
Right, exactly. So I guess if I had a last thought is just, and Nevil and I both touched on this earlier, is all our dollars come from consumers. That is the end of what we're all trying to do, and we need to keep that focus on there. We've got to please that consumer because that's what drives demand and that's what makes all of this work.

Miranda Reiman (40:41):
Amen. Alright, so random question of the week. You kind of preempted or naturally went there, but because you guys are such good students of the industry and always open to new ideas and trying a new thing, I want to know where you're learning about those new things. What are you reading right now? What do you listen to? How do you stay innovative?

Nevil Speer (41:03):
Wow, that's a hard question. You ended with the hardest question. Well, I don't know if I have a single answer for that, but I do know it is imperative to continue to try to stretch and grow. And oftentimes some of the best lessons that we learn are outside of our industry because at the end of the day, it is a business. And so what business principles can we learn outside and bring them into this industry?

Jimmy Taylor (41:32):
So what am I reading? Nevil Spear.

Troy Marshall (41:37):
Good answer.

Miranda Reiman (41:38):
That's good.

Jimmy Taylor (41:40):
No, he's one of my go-tos, but I guess I would answer that in all of the above. I read as much as I can. I keep my ears open as much as I can for new technologies. Angus website is an excellent source for what's going on, but just read all you can, listen about everything you can and it might not be in the cattle industry is where you're looking. You might, thinking outside the box, you might pick up a good idea in some other industry and bring it to your operation.

Miranda Reiman (42:16):
Troy, I'm going to make you answer the random question of the week. You're always reading or listening to something interesting.

Troy Marshall (42:22):
Well, and I'm a junkie too on reading business books and outside the industry side, but I really don't know if there's that much innovation. We just repackage things and it's been amazing to me just getting down and talking to people. And the best thing I've ever done is just steal other people's ideas and try to combine two good ideas sometimes and to your environment. I'm really excited about the future of this industry and the value of genetics I think is increasing our ability to make decisions. And I just really appreciated what Jimmy and Nevil's message was. Get the information and apply it in a sound way with economic principles and keep consumer focused, and I think it's a pretty exciting time in the business.

Miranda Reiman (43:02):
Absolutely. Well, we're looking forward to you guys both sharing that further in a commercial cattleman session later today. Of course, that will have already happened by the time this podcast airs, but be sure and check out coverage of that in our sister publication, the Angus Beef Bulletin. I guess keep reading the Angus Journal too. Thank you so much for taking the time to visit with us today, and thanks for all you do for our industry.

Jimmy Taylor (43:26):
You bet. I enjoyed this. Thanks for having me on.

Nevil Speer (43:29):
Appreciate it.

Miranda Reiman (43:30):
That episode was a great illustration of what's possible with the right tools. For more information on the tools available to your commercial cattlemen to help them be successful with their investment Angus Genetics, visit angus.org and click on the commercial cattleman section. As always, watch for news and coverage from the Angus convention@angusjournal.net. This has been the Angus Conversation, an Angus Journal podcast.