Wangus – A New Path to Profitability!
Published on Wed, 07/03/2019 - 10:51am
Wangus – A New Path to Profitability!
Article courtesy of Circle A Angus / Photos by Tara Hailey
Over a quarter century ago Circle A Angus settled on a motto for their company, “Quality Beef Is Our Business”. The Angus breed was chosen to be the foundation of their breeding program. Circle A’s role in the Angus breed has evolved over the last 25 years from a leader in the registered industry to an 8,000 head commercial operation focused on profitably and sustainably producing genetics that make them and their commercial customers higher profits.
Circle A’s reputation as a leader in the beef industry is well documented. In 2002 they were named the Beef Improvement Federation (BIF) Seedstock Producer of the Year. In 2006 they received the Certified Angus Beef (CAB) Excellence Award and they are a two-time CAB Quality Focus Award winner. Circle A is perhaps best known for their Angus Sire Alliance. Beginning in 1995 the Angus Sire Alliance has performed structured progeny tests on Angus genetics. It first started as a member-based organization including 51 Angus breeders from coast to coast and over the last two decades evolved into testing sires for ABS Global, one of the largest semen companies in the world.
Decades of performance testing left Circle A with a non-registered, Angus cowherd backed by many generations of AI sires. In 1998 they began measuring and collecting individual feed intake data and by incorporating proprietary EPDs such as heifer pregnancy, cow stayability, feed intake and average daily gain, Circle A began calculating profitability indexes on every animal in their cowherd. These profitability indexes have been the driving force behind their culling and mating decisions and yielded a cowherd uniquely adapted to thrive in a real-world production environment.
Over the last two decades, the Angus breed has evolved into the foundation of the entire United States cowherd, arguably making up as much as 80% of the genetic base. This Angus influence has yielded the highest quality grades we have seen in decades with percent USDA Choice and Prime totaling as high as 80% of fed cattle harvested. For years, cattlemen have been told that upper Choice is their target, as this degree of marbling provides a good and consistent eating experience and packers and retailers have been willing to pay a premium. However, that premium is consistently shrinking and rightfully so when an extremely high portion of the beef produced qualifies. Circle A could see the writing on the wall that Choice, maybe even upper Choice, could soon become the base price for beef and USDA Prime will be necessary for achieving higher premiums.
Nick Hammett, Circle A’s Marketing Manager, concedes, “there are certainly Angus genetics that grade a higher percent Prime than others. By using such genetics combined with proper nutrition a relatively high percent Prime can be achieved.” However, Hammett feels a straight-Angus commercial cowherd, highly selected for marbling may not be ideal in all situations. “With over-emphasis on any one single trait, especially marbling, we worried about how selection would change cow size, milk levels, fleshing-ability and reproductive performance. Not to mention that a straight-Angus commercial cowherd forgoes any benefits derived from crossbreeding and heterosis.”
Heterosis is a real and important factor in commercial beef cattle production. Heterosis provides a performance advantage above the mere average of the animal’s parents and has its greatest advantages on lowly heritable traits such as reproduction and health. For years commercial cattlemen have had to make a choice when choosing a breed to complement their Angus-base cowherd. No matter what route they choose to achieve heterosis, they almost always lowered percent Choice and Prime carcasses to accomplish it. Circle A thought there had to be a better way and has spent nearly the last decade proving there is.
Circle A looked to the Wagyu breed as a cross that could fill their needs. “We were originally just looking to increase our percent Prime,” Hammett says. “Wagyu looked like an obvious place to do that, but to our surprise, the cross has offered us so much more in areas we really didn’t expect.” Wagyu are a Japanese breed of cattle first imported to the U.S. in 1975, with the majority of genetics coming into the U.S. in the 1990’s. Wagyu cattle can be exceptionally high-marbling, but like any breed, Wagyu are not without their challenges. A single Wagyu steak from a properly finished fullblood can cost hundreds of dollars, with an entire carcass worth thousands. But, fullblood Wagyu can take a long time to finish compared to traditional cattle feeding and there is a lot of variation in the breed for most traits. “The relatively limited gene pool combined with a small database and sporadic genetic analysis, makes identifying and sourcing the right Wagyu genetics a challenge,” says Hammett.
In 2010, Circle A flushed a powerfully constructed and proven high-profitability donor using embryo transfer to the highest marbling Wagyu bull available at the time, JVP Fukutsuru 068. The mating yielded 4 sons which at a year of age were collected and used via artificial insemination on their commercial Angus cowherd. The resulting quarter-blood steer progeny were harvested and the females were put in the herd as replacements. Hammett explains, “we started out fairly small in the project with so many unknowns. We were not sure how much a quarter-Wagyu would change everything. We didn’t know exactly what it would do to growth rates, days on feed, feed conversions, yield grades or even percent Prime. The female side was even more of an unknown, we have spent years adapting our cowherd to our environment and management style and thought the Wagyu cross may have to be 100% terminal.” Somewhat to their surprise, the quarter-blood Wagyu have proven themselves to be beneficial in many areas that were unexpected.
In the feedlot, the results have been better than expected on overall profitability. The quarter-blood Wagyu run 70-85% USDA Prime, which is what Circle A hoped to achieve. Hammett attributes their grading success to the fact that they only use the highest marbling lines of Wagyu they can find. “To achieve Prime grades with one fourth Wagyu genetics, we’re certain that not just any Wagyu genetics will do the trick. We’ve received good advice and spent good money to use the best marbling Wagyu genetics we could find. This allows us to keep our Wagyu percentage relatively low while achieving Prime grades. The Angus breed offers great selection and consistency so we can continue to use Angus genetics and their massive gene pool for most of our genetic material.”
What Circle A didn’t necessarily expect was the other benefits that come along with the feedlot and carcass performance of the Wagyu cross. Feedlot health has been noticeably better in the Wagyu cross cattle and Circle A attributes that to the advantages of hybrid vigor. The Wagyu cross cattle will also stay leaner to heavier endpoints. “We take the Wagyu cross steers to 1600 pounds live weight,” says Hammett. We get fewer yield grade 4 and 5’s at 1600 pounds than we would with our straight Angus cattle at 1450 pounds. The added quality grade, fewer yield grade discounts and heavier carcass weights result in over $300 per head more for the Wagyu-cross steers.”
Perhaps the greatest surprise for Circle A has been the performance of the quarter-blood Wagyu females in their commercial production system. Dale Holtmeyer, a Manager for Circle A, has overseen the Wagyu-cross females and recognized their value. “As calves they’re not the stoutest or widest of the bunch, but by 1000 pounds you would be hard pressed to pick the Wagyu cross out of a bunch of Angus. The quarter-bloods look like a good, feminine Angus females. Their reproduction rates have consistently been slightly higher than the straight Angus, their mothering ability and udder-quality has been very impressive and they are slick haired in the summer. The females have been a pleasant surprise, I have no complaints about them at all.”
Working in the feedlot and on the farm is one thing, but for Circle A it’s always been about producing a quality beef product from the beginning. “The Quarter-blood Wagyu steak eats as good as any steak I’ve had in a long time,” says Fred Linz, owner of Meats by Linz. Linz is purchasing Circle A’s quarter-blood Wagyu beef through the Valley Oaks Steak Company in Lone Jack, Missouri. The resulting beef has the richness and flavor you would expect from a Prime steak combining the buttery deliciousness and more clear fat qualities of the Wagyu, with the consistency and eatabilty you come to expect from good Angus beef. “It really creates a perfect blend of quality and consistency for steak lovers,” says Linz.
It has taken nearly 10 years for Circle A to prove that their Wagyu program works, but with 5-year-old quarter-blood females in the pasture and 1000’s of head of carcass data, they are confident that the system has the potential to add real value for commercial cattlemen. “For producers retaining ownership or selling into a quality-based system that understands the value of these genetics, I’m not sure there is anything better out there,” says Hammett.
This fall Circle A will market their first half and quarter-blood Wagyu bulls, which they call “Wangus”, to the public. “It is going to take some education for everyone to understand the purpose of these genetics. It takes a half-blood bull to make a quarter-blood market animal when used on Angus cows. Half-blood Wagyu bulls are not going to look like top-end Angus bulls. They will not be as growthy, as wide or as stout as a good Angus bull. The proof is in the progeny, the value is what is does in the feeding and carcass phases of production and customers will have to be marketing into a system to reap those rewards for it to make sense. We know we will have to pay a premium for calves out of these bulls, but we’re more than willing to do that given our results, ” says Hammett.
Dave Gust, Circle A’s Owner, has never been afraid of trying new things. “At Circle A, we try a lot of things, some work out, some don’t, but they all teach us something. Our goal was to get more Prime, Wagyu seemed like an option to get us there, the entire program has worked out better than I could have imagined. After years of proving the concept, we’re willing to share these genetics with a few customers who share our vision. We know the Wangus product can add value to nearly all phases of beef cattle production and produces an outstanding eating experience and it suits our motto at Circle A where, ‘Quality Beef is Our Business’.”