Good genetics get a lot of credit for growing popularity of certified Angus cattle, said Mark McCully, director of supply development for Certified Angus Beef, at the recent Oklahoma Grain & Stocker Producers annual convention in Enid.

But McCully emphasized how management at the backgrounder and stocker stage can counter even the best genes. Changes in the cattle market will likely inspire more interest in retained ownership in the near term and quality premiums will become more vital to profitability.

“I think we'll begin to see more grid marketing of feeder cattle than we've seen historically,” McCully predicted. “We'll see more cattle marketed on individual merit.”

Even as demand for beef softens, demand for choice beef is on the rise. Those pressures coupled with industry trends—such as feeding cattle shorter rather than longer because of high grain prices—throws up a red flag for McCully, who says his program is already short of the cattle it needs to fill potential demand. On an industry-wide basis, only about 14 percent of cattle qualify.

“We're not going to feed a lot of five- to six-weight calves. That brings the stocker program front and center. I think we've had a gap there.”

McCully presented a set of graphs that showed lower marbling scores for stocker cattle grown on wheat pasture. Gerald Horn, director of Oklahoma State University's Wheat Pasture Research Program, who was involved with the Southeastern Colorado-based study, pointed out that the wheat pasture cattle in the study had been moved twice—to and from a wheat pasture operation several hundred miles away—and said that factor likely contributed to the lower quality scores. But it still pointed out how stress from transporting animals and forcing them to adjust to new surroundings puts downward pressures on long-term quality grades.

“Both sides of weaning are a key time that will determine whether a calf will live up to the potential of its genetics,” McCully said. “For the last 100 days on feed, an animal is just filling fat cells.”

Recent studies show that early stresses and setbacks diminish the fat cells available for filling later on. McCully, who is in charge of helping to raise acceptance rates so the CAB program can obtain adequate supplies, already has some concerns about what fewer days on feed will mean in terms of marbling and fat deposition industry-wide.

For stocker and back grounding operations, McCully offered two pieces of advice: keep average daily gains above two pounds per day and try to avoid putting cattle in any zero-gain situations, such as periods when wheat pasture is thin or excessively washy.

Health challenges also pose huge threats to later performance. “If you want to knock the quality grade out of cattle, get them sick and then treat them,” he said. Cattle treated twice end up worth $200 a head less, according to studies he cited.

McCully recommends effective parasite control programs. “De-worming has a pretty big impact on carcass merit,” he said.

Cattle that have never been implanted have become a buzzword in the industry as demand grows for natural products. In response to demand, CAB launched a natural beef line last year. For a producer who is already raising cattle without implants, McCully said they've already won the major part of the battle and may want to look at how to align with a natural program.

CAB's natural cattle come through either the Tyson-aligned Beef Marketing Group in Kansas or California-based Niman Ranch and all animals are finished at specific Kansas feedyards. Non-implanted cattle have much higher acceptance rates in CAB's exclusive procurement program: 40 percent compared to 14 percent among all other cattle.

But McCully also emphasized that properly managed growth implants can be used successfully without adversely affecting quality grades.

“Avoid aggressive implants during the growing stage,” he said. “Delay implanting when cattle are first adapting to a stocker program, while they are still in a zero-gain situation.”

He also recommends matching implants to genetics. He said stocker producers “upgrading” cattle are often dealing with a mixed genetic pool, and management strategies should be customized to optimize performance of different phenotypes of cattle.

The bottom line for McCully is simple: the future of beef lies in producing a high quality product. He quoted an executive with Sysco, the world's largest food service company, saying, “If I need USDA select grade or lower, I'll buy it from another country because it's half the price.”

“Our competitive advantage is not producing a select product,” McCully said. Management in every phase of the industry counts. “Twelve percent of cattle are sitting on the line between choice and select, and all it takes are just a few little tweaks to cross some of those economic thresholds. Also, as we continue to make more end claims on marketing labels, it affects the way we do business long term.”