Drop Credit – What Is It?

Recently a cattle producer asked about the term “drop credit” as it related to beef value. Drop credit (or drop charge) is the value of nonmeat items such as blood, meat, hides, fat, bones, hair, etc. The term is also applied to pork values.

Today’s drop credit for a steer or heifer is approximately $14 per cwt. live weight. Much of this value is influenced by energy prices and those parts of the animal carcass which provide energy by-products such as tallow. The weighted average price of choice white grease is about $25-30 per cwt. Last year it was about $13. This choice white grease is used in rations for both pigs and poultry.

Besides the talon, other drop credit items of the animal include hide, tongue, head and cheek meat, tail, heart, lips, liver, lungs, bone and blood.

U.S. Food Production Efficiency Grows

Dr. Gary Smith, professor emeritusand MonfortChair of Meat Science at Colorado State University recently spoke during the International Livestock Congress held in Denver. He presented some starling figures about the advances U.S. farmers and ranchers have made in their ability to produce food.

I first met Dr. Smith at a Regional American Hereford Association Conference when he addressed the need for beef producers to think in terms of what the consumer wants. He held my attention and everyone else in the audience for the entire presentation. I think he spoke for over four hours and everyone came back the next morning to hear more.

Anyway, at Denver he noted that in the 18th century it took five acres of land to feed one person for one year. Today it takes about one-tenth of that or one half acre. He further explained that several studies have demonstrated that this increased production efficiency has reduced agriculture’s impact and improves sustainability by using less water and other resources per unit of production. When I heard this I remember the advances Rick Bieber’s farm has made in terms of bushels produced per inch of water.

The agenda of the International Livestock Congress focused on meeting the world’s growing demand for food. Dr. Smith noted there are 200,000 more people on Earth each day. To meet the food needs of this growing population, he outlined three options. The first is to increase the amount of arable land (tillable). The second is to increase grazing but not arable. The third, and probably the most realistic, is to increase efficiency of production on both types of lands.

From my vantage point, research in both plant and animal food systems is working hard to increase efficiency of food production. Currently the beef industry is striving to use molecular genetics to define animals that use fewer pounds of forage and grains to produce a pound of gain – the industry calls this “feed efficiency”. The corn industry is doing its very best to develop varieties which mature earlier and also have greater resistance to drought, while working to improve yields on lands that have a listing for corn production.

Both food systems have technologies which are waiting for consumer acceptance. If Dr. Smith’s population numbers prove to be accurate we will eventually need them and more.