Decatur County Feed Yard2361 HWY 83 Oberlin, KS 67749

(785) 475-2212

“The Road to Sustained Profitability”December 8, 2014

Smarter Decisions. More Beef. Greater Profits

1980 - Made a conscious decision to work directly with ranchers on retained ownership of calves.

1977 - 1992

“How are you going to price my cattle next week?”

“What do you think they are

worth?

All of our fed cattle “top the market.” No premium. Pen

average closeout

Ranchers learn nothing about variability within the

cow herd or bull performance

• Introduction of Ultrasound Sorting in 1987

– Began the process of targeting an endpoint

1986 – 1989

Hosted the “High Plains Steer Futurity”

1991 – 1995

Home of Certified Angus Beef “Value Discovery Project”

Awarded theQuality

Focus Award 2010

1992 – 1993National Cattlemen’s Association (NCA) Strategic Alliances Pilot Project.

15 Ranchers DCFY Excel

Safe-

wayCarcass DataFeed Yard DataRanch Data

Integrated Systems Approach

Discovered there was a $300 Spread between animals in the same lot!

Finally, after 15 years of traditional feeding, getting average data and “Pen Average Closeouts…”

“Value Based Marketing in 1992”Imagine getting paid for what the cattle are worth!

“You cannot manage what you do not measure”

1994 Installed Micro Beef “AccuTrac System”: Individual Cattle Management

Precision cattle management: Data driven, results oriented, enhance productivity, improve profitability, evaluate information to implement change!

Farmers know all about precision crop production!

Why not Cattlemen? Decatur County Feed Yard did it!

Producerstend to

benchmarkproduction, butthis only paints

part of the picture!

Measure

Sort

Manage

Market

Benchmark

Implement

PrecisionManagement

Analyze

Improve

Many cattlemen have benefitted since 1994!

LU Ranch, Worland, WYMike Healy’s documented genetic

improvement, fed at Decatur Feed Yard

2009• Backgrounded near Worland. To

DCFY in Dec., harvest in Spring .

• FE: 5.41 HCW: 816

• Up CH: 25.6 CH:42.9

• REA: 12.5 DP: 63.10%

• ADG: 3.67 YG: 2.8

2013• Backgrounded near Worland. To

DCFY in Dec., harvest in Spring

• FE: 4.87 HCW: 862

• Up CH: 48.7 CH: 30.1

• REA: 13.4 DP: 64.42%

• ADG: 3.78 YG: 2.8

• Average Harvest Date: June 4

Plus the cows are more fertile and have greater longevity.

• Average Harvest Date: May 16

LU Ranch: How Value Has Improved(using current market prices)

*$4.75/Bu Corn and $140/CWT Fed Cattle

• Arrived 23 Days Earlier/4 lbs. lighter

• Cost $9/Head Less to Feed ($540 vs. $531)

• Added 11% Quality Grade (Choice and Higher)

• Added 3% Yield Grade 1’s and 2’s

• Added 46 lbs of Hot Carcass Weight- Gross Added Value $109.59

- Feed Savings $9.21

- Total Added Value $118.80/Head

- $29.70/Head/Year Improvement in Value

- Harvested 18 Days Earlier – (May vs June)

AVERAGE

Where does Your Herd Fit?How much genetic progress have you made during the

last three years? How do you know?

Bottom 15%: -$83 +$83 for Top 15%

Before After

DCFY’s feeding , sorting and marketing

program gives you clear feed back on a

consistent basis, year after year!

Same feeding program, same marketing grid, same packer, same

packing house, same day of the week, year after year.

PRECISION!

1 2

Video

Imaging

3

Weigh

Station

4

Ultrasound

Station

5

Processing

Chute

Automatic

individual

animal

sequencing

station

Ultrasound

measurements

of internal

tissue

characteristics

Individual

animal

processing

and sort

selection

Automatic

measuring

of external

dimensions

Automatic

integrated

electronic

scales

Sequencing

Station

ECM® MEASUREMENT STATIONS(Electronic Cattle Measurement)

Precision Cattle Management

Typical – 9 week Shipping Window(100 Head Example)

Decatur County Feed Yard

Week110 HD

Week 320 HD

Week 540 HD

Week720 HD

Week 910 HD

CloseoutSummary and Individual Animal Closeouts

You can compare/benchmark your cattle to the DCFY population harvested the same quarter

For years we encouraged everyone to look at the bottom 5 – 20% of their herd

and cull the cows – Progress was slow!

AVERAGE

Where Does Your Herd Fit?Decatur County Feed Yard: Value Comparisons

Feedlot & Carcass Value Differences for a 625 lb Steer

Bottom 15%: -$83 +$83 for Top 15%

You need to retain ownership of at least a portion of your calves each year to document

improvement, (or lack thereof)

AVERAGE

How do you know unless you are feeding your calves?

Bottom 15%: -$83 +$83 for Top 15%

Before After

If you do not have a baseline – You need to create one

“Four years of feeding (with Decatur County Feed Yard) has allowed us more precise culling and adjusting of our genetics program. DCFY is the most professional organization we’ve

worked with.”— Mark Turner, Rolke Ranch L.P., Franklin,

Texas

Every Herd Has A Distribution Curve and An Average for Each Trait

35

Net Dollars Return to Ranch $550 $1200

Typical Annual Rate of Improvement$3 / calf / Year

36

Net Dollars Return to Ranch $550 $1200

What If you Mated an Average Herdto top 1% Bulls? $32.50 / Calf

37

10 Years Progress in a Single Cross!

Net Dollars Return to Ranch $550 $1200

“We have used information we have received on closeouts to select bulls to increase quality grade and muscling. We try to identify weaker areas to emphasize improvement in when evaluating EPDs (expected progeny differences) in bulls.“Anyone who feeds enough cattle to meet the numbers requirement should feed and get individual performances to see where they are headed in the future and how to meet longer-term goals and improve the value of their calves.”— Don Musil, Musil Farms, Blue Rapids, Kansas

Satisfied Customers

“I have noticed after using Decatur over a three-year period that my closeout weights and quality have improved by 15 percent each year — which turns into dollars returned.“Using the data at closeout has made buying a better quality bull an easier check to write. I have advised friends to use Decatur and will continue. Their continuous contact and open-door policy is a great asset.”— Chuck Syfrett and Melissa S. Montes De Oca, Syfrett Ranch, Okeechobee, Florida

Satisfied Customers

“I liked the idea of electronic sorting and scanning to maximize salability for each pen full of cattle, also the closeout information. I also liked the facility — first-class, clean, neat, well-maintained. Dan, Kevin and Warren have gone out of their way to answer questions.”— Christopher Grubl, Grubl Alkali Ranch, Sturgis, South Dakota

Satisfied Customers

“If you want to make improvements in your herd, feed with Decatur County Feed Yard. You will know which cows are working for you and which bulls to be buying (or stay away from). You will be able to get away from the guesswork of phenotypical selection and be confident in knowing that the replacements you are selecting will move your herd forward.”— Kenneth M. Sears, Monte Vista, Colorado

Satisfied Customers

Decatur County Feed Yard

550-lb Calf Price ($/cwt)

J F M A M J J A S O N D J F M A M J J A S O N D

Choice Fed Steer Price ($/cwt)

Seasonal Calf/Fed Prices

Market Timing

Market Timing cont..

$(160)

$(140)

$(120)

$(100)

$(80)

$(60)

$(40)

$(20)

$-

$20

$40

$60

$80

$100

$120

$140

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

DCFY Average Profitability per Head 2011-2013

ST HF

Market Timing is the Best Hedge against Market Volatility and

creates Opportunity!

Alignment is the Industry's Future“Beef industry success stories will be about entrepreneurs who create practical,

Efficient, cost-relevant production systems that deliver consistent quality and Quantity year-round, and provide maximum protection to capital and risk”

James Herring, CEO, Friona Industries LP, Amarillo, TX

• The Cow-calf segment will need to respond to and align with up-stream demands for more consistent and valuable genetics.

Alignment is the Industry's Future“Beef industry success stories will be about entrepreneurs who create practical,

Efficient, cost-relevant production systems that deliver consistent quality and Quantity year-round, and provide maximum protection to capital and risk”

James Herring, CEO, Friona Industries LP, Amarillo, TX

• The stocker segment will need to create stable and predictable relationships that will allow forward pricing and consistent year-round demand.

Alignment is the Industry's Future“Beef industry success stories will be about entrepreneurs who create practical,

Efficient, cost-relevant production systems that deliver consistent quality and Quantity year-round, and provide maximum protection to capital and risk”

James Herring, CEO, Friona Industries LP, Amarillo, TX

• Feeders will need to align with the processing industry to create a predictable and sincere market that allows timely harvest at a predetermined consistent formula for value.

Alignment is the Industry's Future“Beef industry success stories will be about entrepreneurs who create practical,

Efficient, cost-relevant production systems that deliver consistent quality and Quantity year-round, and provide maximum protection to capital and risk”

James Herring, CEO, Friona Industries LP, Amarillo, TX

• Packers will need to successfully create predictable interface with the consumer through an effective and consistent relationship with the retail establishment.

Alignment is the Industry's Future“Beef industry success stories will be about entrepreneurs who create practical,

Efficient, cost-relevant production systems that deliver consistent quality and Quantity year-round, and provide maximum protection to capital and risk”

James Herring, CEO, Friona Industries LP, Amarillo, TX

• All of us in the beef trade will have to focus on thoughtful, consistent delivery of predictable eating experience to our eventual consumer!

Thank You!

www.decaturfeedyard.com 888-675-2212