When we take a step back and look at the weaknesses in our beef industry, a number of things are immediately evident. The relationships along the production line are tumultuous, at best. A store buyer is looking for a bargain from a suckler farmer who needs top dollar. Slaughter-fit cattle come in gluts and thus processors only sporadically operate at full capacity. Farms are small and numerous and cattle come in all shapes and sizes. Feedback along the line is limited and often delayed.
Headquartered in Minnesota, the Wulf Cattle Company has put structures in place to overcome most of these problems from a US perspective.
The company was established in 1955 by Leonard Wulf, who saw beef as the best option for adding value to cropping land he had acquired.
Three of Leonard’s five sons now run the company, with multiple third-generation family members involved. There are seven locations in the Wulf empire today, including both feedlots and ranches spanning four states and encompassing 29,000 acres of crops and 56,000 grazing acres.
I spent a day with Jerry Wulf, son of Leonard and current president of Wulf Cattle, in South Dakota. Wulf’s model is devastatingly simple and, for me, based on three core principles: scale, efficiency and consistency. In essence the company is a large-scale beef finisher, slaughtering 75,000 cattle annually. But there are many more strings to the Wulf bow than just feeding.
Starting at the end
The easiest way to understand and appreciate the beauty of Wulf Cattle Company’s system is to work backwards from the end.
The US consumer wants beef, and lots of it – at 24.5kg per capita, Americans eat over twice the beef that the average European (10.6kg) works through in a year. They also want a much fatter steak – not so much chewy, unpleasant fat trim, more a marbled, dissolvable fat that gives meat a beefy flavour and soft texture. In the US, well-marbled slaughter cattle are paid premiums based on a score (see beef grading graph) much the same as our EUROP grid rewards yield, which is also worked into the American carcase grading system.
“We [Wulf] gotta number of trump cards when slaughtering cattle. Firstly, we work with Tyson Foods, the largest beef processor and marketer globally – employing almost 120,000 people at 300 facilities worldwide. Our 75,000 cattle come in a consistent stream throughout the year. On point of slaughter, the animals themselves are uniform in weight and bred to produce well-marbled beef,” Jerry told me.
The fact that Wulf is in a position to supply the world’s largest beef processor with high volumes of an in-demand product and do so consistently throughout the year gives the company power at the negotiating table. And it uses this power to achieve a premium price for what it delivers.
The feed yard
Fresh calves arrive at Wulf’s feeding facilities in October and November each year; the vast majority of suckler herds in the US calve in the spring and sell their weanlings in this window. Shortly after arrival at the feedlot, cattle are drafted into one of three classes:
The big draft is targeted for slaughter eight months later between June and September. They will move quickly toward a high-energy diet with target daily weight gain of 3.16lb (1.44kg) to slaughter. The medium draft will be initially fed to frame-up on a relatively high protein diet before they move on to the high-cereal mixture. During this growing phase, target weight gain is 2.1lb (0.95kg). The medium draft will come fit for slaughter 12 to 14 months later (October to December). Grass-drafted cattle are sent to stocker ranches to graze and lay down frame before coming back to the feedlot for finishing. Weight gains at grass will be modest at 1.25lb (0.57kg).
“Feeding these small, grass cattle hard straightaway would produce a really light carcase. Also, putting frame on cattle takes time and using up feedlot pens to do so is not economically right, especially when it can be achieved via cheaper ranch grazing – hence the temporary relocation. Cattle in the grass draft are targeted for slaughter 15-19 months later (January-May),” Jerry said.
Wulf’s feedlot pens are outdoor, dirt-based and typically hold 100-250 head. As much of Wulf’s carcase beef ends up in Europe with Ducth company Zandbergen – to which Wulf is the largest beef supplier – the vast majority of Wulf cattle do not receive hormones or growth promoters. This is admittedly rare in the US – indeed, it places Wulf’s cattle in a 5% minority – but the company must adhere to the demands of its customer.
Wulf’s segregation and feeding strategies ensure a tight spec range and constant flow of slaughter cattle throughout the year. The fact that no growth promoters are used could be costing the company up to 1kg of weight gain per head daily on finishing cattle. However, its market wants, and is determined to pay a premium for, hormone-free beef.
Bullish on the calf crop
While Wulf’s ability to buy its stock in two months, but produce slaughter-fit, in-spec cattle all-year-round is enviable, the most impressive part of the operation lies at the beginning – calf sourcing.
Wulf looks to the ranchers of Minnesota, Nebraska, North Dakota and South Dakota for its calf crop. Not just any ranchers though. Wulf has more than 200 dedicated, independent, mostly family-run ranches supplying its cattle. And, to ensure that the genetics that produce well-marbled beef (marbling is medium to highly heritable) are present in the incoming calf crop, Wulf actually breeds and sells particular stock bulls to these farmers.
Time machine
Here is where we momentarily jump back into the time machine. By the late 1960s, Leonard Wulf and sons had added an Angus cow herd to their beef and crop enterprises. In 1970, the first Limousin bull arrived in the US and with it, a big reputation. Mutterings from Europe were calling Limousin “the carcase breed”. The Wulfs artificially inseminated their cow herd with Limousin semen and followed the calves to slaughter. The dam’s Angus genetics led to well-marbled beef, but the sire genetics led to higher growth rates, younger ages at slaughter and better killout yields: Limousin and Angus seemed the perfect cocktail. In the following decade, the Wulfs began to breed and sell Limousin bulls. During the period, hybrid breeds were developed in the US – the Lim-Flex being one such example. According to the US Limousin society, animals registered as Lim-Flex must be 25% to 75% Limousin and 25% to 75% Angus or Red Angus, with a maximum allowance of another breed of 12.5% (1/8th). While this might seem crazy to some hardcore pedigree breeders here, most US breed societies piggy-back on the Aberdeen Angus. Heavy marketing has led Angus beef to be revered from a US consumer point of view – the only show in town.
Show me the money
“At present we sell 600 bulls to ranchers each year, aiming to buy back all suitable calves for feeding. Limousin and Lim-Flex are the main breeds sold, with some Angus too. These guys also receive consultancy in areas like health, fertility and nutrition from us and we give back important data pertaining to how their weaned calves perform in our feed yards,” Jerry explained.
The big question – what are they paid? Does Wulf give back its slaughter premiums to its farmers? The answer is yes, and the data mentioned above has a role to play in this.
“Of course – we grow together,” Jerry replied. “We rely on them just as they rely on us. We gotta work together.
“Our calf ranchers fall into one of three categories – A, B or C. This determines what they get paid. The category score is based on the performance of their most recent batch in the feedlot. Feed efficiency, health and carcase criteria affect the A, B, C rating. A is the top and will attract the biggest premium, but even a guy scoring C is getting more than the national average in commercial sales barns. It gives our guys the incentive to supply us with a healthy, well-produced calf.
IN THE COMING WEEKS we will go deeper into the workings of the Wulf Cattle McLaughlin Feedlot in South Dakota, comparing it with an enterprise using the full complement of growth promoters in Ainsworth, Nebraska.