With proven herd genetics and a chance to hit an $80 April market, Ron and Charles Henke decided to feed out their calves at home. A new feeding strategy made the job easy.

Like many cattle producers, Ron and Charles Henke spend some time in late fall reading cattle market tea leaves to decide whether to sell calves as feeders or feed them through the winter to finish. But the father/son duo have spent years improving their cattle herd's genetics and as a result, they approach their marketing options with the confidence that a proven, premium product provides--they can sell on the grid for trait premiums, or, by reputation, command a good feeder-calf price. This year they kept their calves, pushing them toward a finish weight by April. They used a new self-limiting ration to keep things simple. It allowed them to use a self feeder and keep the animals on pasture all winter.

The Henkes' operation epitomizes the approach modern cattle producers are taking to fight for positive margins in their operations. Over the years, they've concentrated on bringing into the herd the kind of genetic traits packers and retailers desire.

Charles, the son, is using the expanding herd as a way to work into the family farm. His encyclopedic knowledge of each animal's blood line shows what care has gone into breeding selections over the years. And, he and his father, Ron, have a strong plan for the future.

They have used carcass data to peg their herd's progress. In a feedout contest last year, the Henkes had 54 percent Certified Angus Beef (CAB) and hit 82 percent choice with their animals. They think that is an accomplishment in itself, but believe with the right genetic records, they can steer the herd toward 90 percent choice.

"To get to where we are, we bought A-grade bulls for about 10 years in a row. Then we started AI and selecting out of the top 10 percent of the breed. Now our sires come from the top 2 percent of the breed," said Charles.

They keep their best heifers for replacements and sell 30 to 40 replacement along with their top 25 bulls as breeding stock. The Henkes consider selling breeding animals as a way to help the beef industry move toward more quality genetics. The father/son team agree that the people they meet in the industry make this an enjoyable aspect of the enterprise.

With the amount of time and money they have spent on the genetic "front end" of the enterprise, the Henkes keep an eye on ways to reap dividends that the market rewards for quality. One way to do that is by retaining ownership and selling cattle on the grid where the top-level carcasses bring premiums.

"We know what our cattle are going to do on the grid," said Ron, as he explained their marketing strategy. He added that the marketing plan has to be a year-to-year process.

"If the feeder market is real strong going into the first of the year, that'll pretty much tell the market. If the December feeder-calf market is really strong, we'll look at selling feeders. But if the futures market is saying we're going to have $80 fat cattle again, we'll probably go that direction."

One aspect of this year's feeding experience has encouraged the Henkes. Using TrendSetter SLR, the new self-limiting ration from MFA, they were able to use existing equipment and facilities and feed their own corn.

"One reason to keep them here is that we've got to look at ways to capture value for corn. If we've broken even on the calves, we've at least captured some value in the corn," said Charles. "And I trust the way I take care of calves more than someone else would."

Charles said he likes the new feed because it meant he didn't have to pack so many buckets of feed. TrendSetter SLR limits intake of feed, keeping calves from eating too much and suffering bloat or founder. It allows the animals to stay on full feed. The TrendSetter SLR is mixed with corn in varying percentages during the feeding program. The more corn in the mix, the more the animals eat and gain.

"Basically, we couldn't do this without the self-feeding aspect. If there wasn't something like this available, we'd probably take them to a custom feedlot," said Charles.

Ron said that this was a good year to try the feeding program. They were interested in trying the self-limiting feed approach and the market gave signs of good prices this spring. It's the first time in recent history that they've fed out cattle on their own farm. After watching how the calves preformed this year, Ron believes there is a great opportunity for more producers to finish cattle in the Midwest.

"We drug a $50 feeder out of the fence row and it made us pretty darn good money," he said, referring to the ease of feeding with a self-limiting ration.

The Henkes were pleased with the performance of the calves, too.

"They did pretty good," said Ron, "just a little shy of what we'd hoped."

Of the 21 calves that made the first sort, 81 percent were choice with 15 percent qualifying for CAB." Ron said they would have to look at individual carcass data to determine the drop off in CAB qualification with last year's results.

"We picked them a little green this year because of the price," he said, noting that the lower percentage of CAB is probably a combination of a week or two less time on feed and some selection subjectivity among processing plants.

"As far as Yield Grades 1 and 2, we had 10 percent make Yield Grade 1 and 62 percent make Yield Grade 2. We made $1.31 on hanging weight. That was 80.52 [cents] on live weight," said Ron.

These calves were born in March and April, so it is fair to say that they pushed them a bit to get to the April market. They sorted the top end of the weights for the first sale, targeting 1,200 pounds. Actual average weight for the first sort was 1,171. Total average yield grade was 2.69. There were no Yield Grade 4 animals and no Standards.

Ron ran the numbers on the path to finish weight.

"What it boiled down to was that we started on TrendSetter [SLR] on the Oct. 16 and harvested the calves on April 18 for a total of 194 days on feed. Of course, that ration started out as backgrounding [mix] and ended up as a finishing ration. We had a [feed] cost of $214.88 per head. That came out to $0.39 per pound of gain. They gained 2.84 pounds per day. Those were in weights and out weights. I didn't add shrink on either end because there was no shrink coming in as feeders; these are farm weights."

Ron said another week on feed would have been good, but the market was falling. And, of course, hindsight offers the wisdom of the move: "The way the cattle were priced, one week would have worked good and two weeks would have been great."

These figures include all grind, mix and delivery charges from Salisbury MFA Agri Services. Ron said that part of the bill came to just over $1,000 for the October to April feeding period (to feed all 46 head).

Ron figured conversion rates for this year at 6.33 compared to 6.86 for calves they sent to a feedlot last year. He attributes the increase to the fact that, by staying on the farm, the animals had one less episode of shipping stress. And sickness wasn't a problem. None of the 21 calves in the first sort got sick during feeding. There was no expense for rescue treatments.

That's another savings compared to shipping to western feedlots, according to Charles. "The corn costs more out there. And there's more dust to make pneumonia more likely. This way, they stayed clean all winter."

The Henkes used a small fescue pasture for winter grazing, but mostly as a place for the calves to loaf.

"Normally, that pasture wouldn't have anything on it throughout the winter," said Ron. "We were able to utilize it, not so much for grazing, but for keeping the cattle clean."

Ron added that the cattle got to do what they wanted.

"If it was too warm of a day, you'd see the cattle in the shade of the trees. On a real cool day, they'd be in the open, soaking up sun."

He figures the 2.84 pound per day gain could be improved slightly with tighter confinement, but health may suffer because of it. Calves were brought into tighter quarters near the end of the feeding period to put on quicker final gain.

"The 2.84 gain from this year compares well with last year. And we had a lot better Yield Grades 1 and 2 this year, possibly because of that two weeks less on feed.

Last year our (pay weight to pay weight) average daily gain was 2.87 pounds on calves fed out west. But you'll always find that calf-feds have a lower average daily gain because they're pushed from day one, whereas yearlings have been out grazing for 6 months and have better capacity to gain fast."

Overall, said Ron, they were pleased with the feeding program and he believes that being able to finish cattle at home and on fescue is likely to be a boon for cattle producers who take the time to control their herd's genetics and target market premiums.

"I think it is an opportunity that Missourians are overlooking. It doesn't take very big of an area to feed these cattle. We can wean more than once per year and keep a feedlot going year round," said Ron.

But the bottom line rules all. Next year, the Henkes will be reading market tea leaves again.