And now they're very close to setting the margins.

A financial group owns a pair of large upper midwest Dairy operations. Not far from me mennonite kids are rolling groups of their black F1s as fast as they can roll them. The company lays them in 300 at a time. The company has their own mix mill and sends their own drivers to bunk feed them daily. Half the time you'll see some candy bars or m&ms in the mix. The company sends a sorter and trucks to move them on to their finish lots. These kids are the mirror image of a modern "hog farmer". I'm not sure how many there are now, but it's 900 head a pop and they're building barns as fast as they can get holes in the ground to make water. 

These calves are black, polled, very healthy, and by my rough math they are eating machines. These aren't the stein crosses of yesteryear that liked to die if a cloud came over or disappeared to some steer stuffer and farmstead freezer. These are extremely productive animals under tight management in a completely vertical, and I assume captive, supply chain running with maximum heterosis all the way to the rail.

Run the math on all the new operations cranking up in the Dakotas and watch where those calves are going. Anyone who is still worried about the beef side going vertical hasn't met the real boogie man yet.