“Ranch-to-rail” is the friendly way to say vertical integration. The average commodity beef calf changes hands two or three times during its life — from the ranch of origin to the stocker/backgrounder to the feedlot. Some folks take pride in the beef industry not being vertically integrated. However, if an operation makes significant investments in developing the genetic base of its cow herd, why wouldn’t they vertically integrate?

Each year plenty of good cattle go through commodity markets, and someone else collects the premium — on the back of the cow-calf outfit’s work. Some operations have been turned off from vertical integration because of poor health or poor performance at the feedlot.  

We learned that lesson the hard way. The University of Missouri Thompson Farm has an Angus cow herd selected for exceptional carcass merit; it is common for steer calves from this herd to grade 50% Prime. Yet in the late 2010s, sending steers to feedlots in Kansas and Iowa didn’t go well. Health was a real concern. We lost more than 10% a couple of years in a row; with only about 80 head on feed, it doesn’t take many losses to wreck the closeout.

So in fall 2020, we built cattle-feeding facilities at Thompson and finished steers at home. Being in northern Missouri helps — corn often trades at a negative basis to futures — which gave us a cost advantage. That was a secondary driver for building the feeding infrastructure. Year 1 at home we lost one out of 80 and saved more than $6,000 in medicine costs vs. prior off-site years. Keeping calves in their home environment removed transport stress, the need to adapt to a new yard and commingling with outside cattle.

We started them on self-feeders because we didn’t have the budget for a total mixed ration (TMR) mixer, and the calves were still profitable. We’ve continued this approach for five years and don’t plan to slow down.

We also feed out open heifers — the ones that failed to achieve pregnancy after a timed AI protocol. We feed them from June to November and have consistently made money with them as well. 

That open heifer play matters. Typically, opens get hauled to the sale barn in small, odd lots and bring less than they’re worth, especially when coming from cow herds that make genetic selection for carcass merit a priority. Avoiding that discount generates additional revenue. If we can feed them, build enough head for a packer load, and sell on grade/out, we add value and improve the net. For some producers, finishing extra opens is a straightforward on ramp to ranch to rail.

The benefits go beyond closeouts. We now develop all weaned heifers on a low plane of nutrition as replacement candidates, expose once to timed AI after synchronization, and — rather than turning out a cleanup bull — put opens into the feedlot. That tightens the calving season on first-calf heifers and makes our heifer calves older at weaning. 

Labor needs have dropped. Development costs are down because we’ve reduced feed inputs. The heifer program now looks more like backgrounding: we focus on lowering cost per pound of gain. We still produce plenty of AI-bred heifers for replacements, and opens are sold at a profit. With herd rebuilding coming, it’s very possible we’ll go back to using cleanup bulls and sell those bull-bred heifers off the farm at a premium.
If you’re curious whether ranch-to-rail fits your place, start small. Keep the replacement heifers that don’t breed, finish them at home and sell freezer beef. We’ve seen that work very well for some farm families in Missouri.  

The dollars matter, but the system gains sealed it for us with tighter heifer calving, older weaned calves, and more revenue from weaned calves and open heifers. We bred for carcass merit; ranch-to-rail is how we stop giving that value away.