Despite the smallest U.S. cowherd in 73 years and corresponding tight feeder cattle supplies, the largest cattle feedyard north of the Rio Grande is under construction in Nebraska. When complete, Blackshirt Feeders near Haigler in the far southwest corner of the state, will have a capacity of 150,000 head, all standing on a concrete pad covering a full square mile, replete with an accompanying biodigester.
None of that previous paragraph defies logic, provided you know the track record of the principals involved and understand the growing beef-on-dairy (BxD) phenomenon that has captured the attention of stakeholders throughout the chain — feedyards, dairies, backgrounders, seedstock providers, feed companies and packers. In short, the BxD segment has provided a new profit opportunity for cattle feeders and seedstock suppliers, a lifeline for some dairies, and promises to revolutionize the way the beef industry accepts, captures and uses animal ID and the data it provides.
CLOSED LOOP
The BxD production model offers a unique opportunity for innovators to utilize every available tool and management practice to foster improvement. Specifically, this new model links the semen provider to the dairy to the feedyard in what is called a closed-loop system.
“We’ve long dreamed about this type of system,” says Lee Leachman, CEO of Leachman Cattle, now part of the URUS group of companies. “We supply the semen, and Alta or Genex distributes it to a dairy, then the dairy signs a contract with GK Jim Farms to sell those calves either as day-olds or after a growing period, then they are shipped to the feedlot for finishing.”
Th e contracts stipulate that every calf is tracked from birth with sire, health and performance data. That information is used to determine future matings to improve performance and reduce undesirable characteristics.
“This is a game changer,” Leachman emphasizes. “This enables progress like what we’ve seen in poultry and swine. If you don’t have the loop with the data you can’t make the progress.”
The closed-loop system is already operational at several U.S. feedlots, including five operated by GK Jim Farms in Colorado and Texas.
Veterinarian Kee Jim, principal at GK Jim Farms, says as his company began expanding their beef-on-dairy model they sought to acquire feedlots, but none were available at the scale they desired.
“Three years ago we began investigating what we believe would be the best site to build a new feedlot,” Jim says. “We looked at availability of grain, the climate, proximity to available feeder cattle and proximity to packers.”
That led to the selection of the construction site near Haigler, Neb., in the southwest corner of the state that joins both Kansas and Colorado.
ENVIRONMENTALLY FRIENDLY
Designed to be much more than just a large-scale feedlot, Blackshirt Feeders has several unique features that will make it the “most environmentally friendly feedlot on the planet.” That is how it’s described by veterinarian Eric Behlke who is both a founding partner of Blackshirt Feeders and project leader for its construction.
First among the new yard’s unique characteristics is the compressed rolled concrete that will cover every feeding pen. The concrete offers several advantages but is essential to capturing the manure for the biodigester that will be built adjacent to the site.
“The concrete allows for the collection of the manure without contaminating it with dirt, which is essential for a digester,” Behlke says. “But the concrete is impermeable, which provides superior protection for both the groundwater and the surface water. All of the ponds will be lined with high-density HDPE liner, a synthetic liner which is also impermeable, to prevent leaching of nutrients.”
Behlke says Blackshirt Feeders is committed to leveraging the latest technologies and feedlot construction to make the new yard as environmentally sound as possible.
“These efforts will help change the narrative about beef production and make it a much greener process,” Behlke says.
All of which sounds good, but like most agribusinesses today, finding labor is likely an issue, especially in a remote area. The company is already working to ease that problem, Jim says.
“We have plans to construct housing in Wray, Colo., about 20 miles away,” Jim says. “The first 24 units are under construction now.”
DATA AND SCALE
It can be easy for observers to focus on the massive size of Blackshirt Feeders, but it’s much more than an effort by a large player to further capitalize on efficiencies of scale, though that is important.
“What makes our system unique is that our large and ongoing investments in data collection and analysis are what have allowed us to scale our business,” says Holt Tripp, DVM, MBA, director of cattle operations for GK Jim Group of Companies.
Tripp says the company has used rigorous, large-scale, field trials to better understand the biology of the animals they are feeding.
“In turn, we have been able to make consistent incremental progress that allows us to make calculated bets on how, when and where to deploy risk capital in our system,” he says. “We are not using data to describe a system that has already come to scale — we are using data to get to scale. In our minds, anything else would be putting the cart before the horse.”
It’s ironic that an offshoot of the dairy industry might be the catalyst that could drive the beef industry toward expanded use of animal ID and data capture.
“I think eventually these (beef-on-dairy) calves may be better than the average beef-on-beef animals,” Leachman says. “AI’ing millions of dairy cows is a big advantage. We get so much selection pressure. If we don’t have a data feedback loop on beef-on-beef calves, then it will be harder to keep up. If we don’t have data feedback, we won’t be able to make progress as rapidly on the most important traits. Having ID and feedback on economically relevant traits is critical.”
The closed-loop system will eventually find its way to the native beef-on-beef segment.
“Cattle feeders will likely increasingly want to adopt that sort of model,” says Nevil Speer, industry consultant based in Bowling Green, Ky. “Knowing more about the feeder cattle they purchase and subsequently also providing feedback (and payment incentives) based on cattle performance (both in the feedyard and on the rail).”
Data, of course, is the key driver. “There’s more opportunities all the time for beef producers who are willing to embrace participating in a specified supply chain,” Speer explains. “It means giving up some independence, and it requires more accountability, but ultimately willingness to do so will likely also establish new opportunity to maximize the value of genetic and management inputs made at the ranch.”
