Eric A. DeVuyst, NDSU Department of Agribusiness and Applied Economics
Marc Bauer, NDSU Department of Animal and Range Sciences
David K. Lambert, NDSU Department of Agribusiness and Applied Economics
The goal of this research is to determine the economic value of leptin geno- typing of feeder cattle. Recently located in cattle by researchers at the University of Saskatchewan, a polymorphism in the “leptin” gene alters metabolism and increases fat deposition. Preliminary (unpublished and proprietary) data from Quantum Genetics, Inc. (Winnipeg, Manitoba) indicate that approximately 63% of cattle with two copies (L2) of the leptin gene will grade choice, 35% with one copy (L1) of the leptin gene will grade choice and 15% of cattle with no copies (L0) of the leptin gene will grade choice. While other genetic factors, management and environment are important, the presence or absence of copies of this gene appears to be a good predictor of quality grade. This leads to questions regarding how cattle should be fed and marketed based on this information and what is the value of this information to a feedlot operator and, ultimately, to the entire production chain (from seed stock producers through the feedlot).
We hypothesize that feed costs can be reduced by utilizing this information. As it is unlikely that L0 cattle will grade choice, it may be more economical to market these cattle earlier using a lean grid (i.e., a formula price that rewards for lean carcasses) and avoid higher feed cost and capital costs associated with diminishing marginal returns from added weight gain. With L1 and L2 cattle, a trade-off can be made between the probability of choice grade (i.e., higher sales price) and feeding costs. Specifically, each day on feed increases the probability of grading choice while increasing feed and capital costs.
For each genotype, an optimal finishing system is being developed to compare net returns under alternative feeding and marketing strategies. The specific objectives are: 1) Determine optimal feeding strategies in commercial feedlots when genotype information is both known and unknown; and 2) Evaluate the economic value of genotype information to commercial feedlots. To date, we have collected DNA samples from 200 cattle in a commercial feedlot.
Other data, such as weight, breed, ribeye area and backfat, have also been collected from these cattle. Approximately three weeks prior to projected marketing date, we will take ribeye and backfat measurements to establish a baseline marketing date. About 50 randomly selected cattle will be marketed 10-14 days prior to the baseline marketing date, another 50 marketed 5-7 days prior to the baseline marketing date, another 50 marketed at the baseline marketing date and finally another 50 marketed 5-7 after the baseline marketing date. The various marketing dates will allow us to measure the trade-off between increased feed and yardage costs and the increased probability of grading choice.
The second part of the study is being conducted at NDSU with the objective of measuring the effect of genotype on feed intake and efficiency. Seventy-two feeder cattle of varying genotypes are being individually fed. This part of the study will permit more accurate assessment of the costs of feeding cattle of differing genotypes.
In June, following the collection of carcass data, we will evaluate the expected profit associated with each genotype×marketing date. We then will be able to determine the optimal days-on-feed by genotype and assess the economic value of the additional information provided by genotyping feeder cattle.