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Articles from 2006 In January


U.S. Shut Out Of Japan, Again

Vertebral column found in an 860-lb. beef shipment from Brooklyn, NY, meatpacker Atlantic Veal & Lamb, Inc., to Japan has undone the partial reopening of that market announced Dec. 12. That agreement allowed the importation of beef and selected products from animals of U.S. or Canadian origin verified as 20 months of age and younger.

The material was found during a Japanese inspection following the shipment's arrival at Narita International Airport in Tokyo on Friday. And the Japanese government quickly ended all importation of U.S. beef product into the nation. A total of 1,500 tons of U.S. beef had cleared inspections since Japan partially reopened its market to U.S. beef on Dec. 12, Japanese officials say.

Today's edition of the Kyodo News quoted Japanese farm ministry officials as saying the backbone material was found in product a Japanese trading company imported as a sample product. The three boxes containing 121 lbs. of veal with backbones arrived at the airport Friday morning, they said, and were part of a shipment of 41 boxes holding 860 lbs. of U.S. beef.

Japanese officials say imports of U.S. beef will be suspended at least until the U.S. offers Japan an explanation about the incident's cause. No decision has yet been made, however, about whether and how trade will reopen after that. Japanese imports of Canadian beef, which also resumed on Dec. 12, are not affected.

USDA Secretary Mike Johanns said that, under U.S. regulations, the vertebral column is not a specified risk material because it was in beef under 30 months.

"However, our agreement with Japan is to export beef with no vertebral column and we have failed to meet the terms of that agreement," he said.

"I can also share with you that at least the documentation that I've looked at, it appears that somebody who is experienced with that documentation would understand that the vertebral column was still attached to the meat. And the person who certified it did certify it, and for whatever reason just did not connect to the fact that the vertebral column needed to be removed before it arrived in Japan, " Johanns told reporters.

Johanns was quick to point out that the situation was not a food safety issue. Nonetheless, he added, it is "an unacceptable failure on our part to meet the requirements of our agreement with Japan."

The Kyodo News reports the U.S. government has thus far authorized 40 processing facilities to export beef products to Japan. While Atlantic Veal & Lamb was one of the authorized facilities, it hadn't yet undergone inspection by a Japanese team that visited the U.S. last month.

In a statement released this afternoon, Philip Peerless, president of Atlantic Veal and Lamb, said:

"We sincerely regret that we shipped product not approved for export to Japan. Our company shipped this product in response to an order by a Japanese customer.

"The product we shipped is safe and is widely consumed in the U.S. marketplace. Were this product shipped to San Francisco, there would be no question about its safety. But because we shipped it to Japan, and because it contained bones that are not accepted by the Japanese, we have now been prohibited from exporting to Japan.

"We are absolutely confident that the product is safe. However, we regret that there was a misinterpretation of the export requirements and an honest mistake involving a very small amount of product that has led to this degree of concern. It is important to note that Atlantic Veal produces veal derived from very young animals -- animals that have never tested positive for BSE. We estimate that the veal we shipped came from animals who were less than 4 1/2 months of age.

"We will cooperate fully with USDA to provide any information they require to ensure that our company is in fully compliance with all inspection regulations and that our export programs going forward operate in a way that is fully consistent with export requirements."

Brink On Beef

As the beef industry enters 2006 and the last half of this decade, what lies ahead? Tom Brink of Five Rivers Ranch Cattle Feeding — the world's largest cattle feeding entity, with 10 feedlots in five states and a one-time capacity of 811,000 head of cattle — has these thoughts.

Angus evolution

Foremost is that the Angus breed will continue its popularity, says Brink, who oversees cattle ownership and risk management for Five Rivers Cattle Feeding (FRCF). FRCF was formed last May when ContiBeef made a joint venture with Smithfield Foods.

Brink says Angus' popularity will be driven by the many branded beef programs that now use Angus in their name.

“Packers, Sysco, and even Wal-Mart have an Angus beef brand. Although these are competition for the Certified Angus Beef program, it's extremely favorable because these large entities are heavily vested in the success of Angus beef. That puts the Angus community in a good position going forward,” Brink says. Brink is a former Cattle-Fax research analyst and market research director, and former executive director of the American Gelbvieh Association.

That being said, Brink also predicts another trend will be for more Angus beef to be produced from non-Angus parents — specifically, hybrid Angus bulls on Angus-based cows. One of the driving factors behind this is that no success goes unchallenged.

“The rest of the industry has watched the Angus seedstock industry's success. Other breeds are going to try to cash in on that. It's the ‘If you can't beat them, join them mentality,’” he says.

He says hybrid vigor is prompting this change.

“Hybrid vigor is still very important at the cow-calf level, and you can't get that by crossing Angus on Angus for multiple generations. But structured cross-breeding has been too hard to implement, especially for small producers. The hybrid bull is convenient and brings the muscle that Continental breeds offer to the table,” he explains.

He adds, “People are time-crunched and very convenience-oriented. Products that make their life simpler and still accomplish the same end goals are going to get some demand.”

Thus, he says whether Angus genes get into the commercial sector from a hybrid or purebred source really doesn't matter.

“I think the beef industry wins in either scenario. The whole movement and push toward more Angus genetics is very positive from my standpoint as a cattle feeder, because it will make our industry better and more competitive in the high-quality beef market worldwide,” he says.

Hybrid solutions

Already, the hybrid trend is moving quickly. The American Simmental Association reports 40% of its 2005 registrations were Sim-Angus hybrids. One-third of the Gelbvieh breed's registrations were the hybrid mix of Balancers, and Limousin, Chianina and Maine-Anjou are also seeing fast growth in hybrids.

Brink estimates Angus hybrid registrations in those breeds total about 50,000 head for 2005, and predicts 100,000 head in annual registrations by 2010. He expects both purebred and hybrid cattle will be increasingly sold side by side — from a ratio of about 6:1 to 3:1 in 5-7 years.

“There's no question the numbers of Angus hybrids are going to grow,” he says. “And this could be the second-largest breed behind Angus by five years. That's part of the earthquake aftershock the Angus breed has created by being so successful in building demand for Angus beef.”

From a feedlot perspective, Brink believes the hybrid Angus trend will be beneficial to the industry, particularly on yield grades.

“There have been cutability issues, and overly fat cattle that higher-percentage Angus cattle bring to the industry. Our buyers say the ideal Angus percentage is 50-75%. That's a tremendous endorsement from guys who feed a lot of cattle,” Brink says. “But it's important to recognize they see Angus as a main ingredient in making the ideal feeder steer or heifer. But they don't see Angus as the only ingredient or the total solution.”

Furthermore, Brink says the influence of more Angus genetics on southern cattle — purebred or hybrid — is needed to help improve quality grades.

“The southern end of the feeding belt has a chronic grading problem that costs the industry more than $160 million/year. Angus has the solution to this industry problem, and there's money to be made for everyone,” he says.

Kindra Gordon is a freelance writer and former BEEF managing editor based in Whitewood, SD.

Other trends

Tom Brink of Five Rivers Ranch Cattle Feeding predicts a few more trends cattle producers will see the next few years.

  • He expects more differentiation and added value between Angus brands in branded programs. For example, some different specifications already exist for live animal requirements, marbling and natural labels. He says there's also a strong push for brands to have a tagline, a story, or a set of values tied to their product to differentiate it from other programs. “We'll see more of this in the future,” Brink says.

  • Expect to see a few strong non-Angus brands surface. Brink explains it's common to have a leader in the marketplace with a handful of strong secondary brands positioning themselves as “Angus-other” type products. He calls this “classic marketing” and says, “I don't know who those will be, but they won't take over the Angus world.”

  • Fewer — if any — opportunities will exist to produce cattle and remain anonymous in the industry, Brink believes.

    “With more source-verification requirements there will be less opportunity to sit back and produce something that doesn't offer value further up the chain,” he says. He's also critical of producers who only focus on a single trait.

    “Be careful of any single-trait focus. Those cattle don't perform on up the system,” he says.

  • Brink also forecasts less profit potential on commodity cattle that don't fit any branded program.

    “This is already happening today and will be more important in the future,” he says, adding, “There is going to be less room for seedstock and commercial cattle that don't have any Angus influence. That's due to all of the Angus demand pull that is occurring.”

  • Lastly, Brink says to look for less of a hard-line distinction between the breeds — especially the Continental breeds. He predicts several of the Continental breeds will even be working together in the years ahead.

Opting For Options

With the reopening of the Japanese market in mid-December, recent foot-and-mouth disease (FMD) discoveries in South America and continued cheap corn, Bart Thoreson wants to leave his upside open for stockers ready for marketing this spring.

Thus, feeder-cattle put options, not straight hedges, were his choice for securing a comfortable floor price on feeders he'll move in May. With the puts, he can still recoup higher prices if they occur. And with a cattle market that's seen feeder futures remain in the lofty $100-$115/cwt. range for well more than a year, the Gruver, TX, producer isn't sure prices will drop any time soon.

Thoreson and his wife, Alexa, run 1,800-2,300 stockers annually on their wheat/corn farm operation that also includes a 1,200-head grower yard. Cattle are bought at regional auction sales, usually at 300 lbs. Most are newly weaned Angus or English-cross calves.

“We start gathering calves in July and continue through Thanksgiving,” Thoreson says. “They go on irrigated wheat pasture through the winter and a grower ration of our corn silage. They're marketed as 8-9 weights in May.”

His marketing strategy often involves using forward contracts with regional feedyards and/or feeder cattle futures. Options sometimes play a part, as they do for stockers to be sold as feeders in May. That marketing strategy began in October, several months ahead the normal marketing period.

“We bought $104/cwt., March 2006 feeder-cattle put options to set a floor under our cattle,” Thoreson says, adding that the puts will likely be rolled into May when the opportunity arises. “In figuring our costs of the cattle and other expenses, that level of price protection was a solid one. And the puts enable us to be open to the upside in the event of a price rally.”

Feeders kept paying the price

Potential for a rally was looking almost slim to none late last summer (2005), when fed cattle were projected to lose $60-$80/head based on feeder-cattle prices hovering in the $110 range. The thinking was cattle feeders wouldn't keep paying those prices for replacement cattle.

“There just weren't any hedging strategies that would work in the summer,” says Derrell Peel, Oklahoma State University livestock marketing economist. He says that with the continued high price of calves, and feeder cattle futures just above $100, using early 2006 feeder-cattle futures would have locked in a $40+/head loss for stocker operators.

But in early fall, the fed market rallied several dollars. Speculation for a large corn crop (later forecast at nearly 11 billion bu.), along with anticipation of reopened beef trade with Japan, were cited as reasons for the upward move.

“We just weren't comfortable being locked into a contract or futures price,” Thoreson says. “That was part of our strategy the past two years, and it wasn't the thing to do. We wanted our topside open.”

He believes there could be additional market strengthening once Japan opens. Plus, the effects of the bird flu worldwide could impact the U.S. market, as could FMD problems in Brazil (the U.S. could capture part of Brazil's Russian market).

In his options program, Thoreson figured a $102 breakeven for 750-lb. steers. He bought the $104 puts for a $1.60/cwt.

“With the quality of cattle we usually graze, we can often put on an extra 100 lbs., get them to 850 to 900 lbs. and still sell for the same price as the 750-lb. animals,” he says. “That will mean additional revenue for those cattle.”

The deal looks sound

Peel says the cost of options have been notoriously high the past few years, so Thoreson's deal looks pretty sound. In late October, Peel noted opportunities for straight hedges had improved with the price increases ($110) range for January through May.

“There were better opportunities to hedge using the January contract,” Peel says. “Then those hedges could possibly be lifted and rolled into March or April options if you thought the market was going up. Cattle could also be hedged against the March contract, and accompanied by a call option to create a synthetic put (that had upside potential).”

Because of the steep prices for calves, Thoreson is set on protecting his risk.

“In 2004, we had about 2,000 head that averaged 363 lbs. and bought at $1.50/lb.,” Thoreson says. “I never thought I would pay that much, and we're paying that much or more this year. That risk has to be covered.”

Peel says there's still a threat for feeder prices to fall.

“Sooner or later, I expect prices to go down,” he says. “Feedlots will continue to need $90+ to break even. And current feeder cattle prices don't allow for that.”

Larry Stalcup is a freelance ag journalist based in Amarillo, TX.

Look at livestock risk protection

Even though there's often a need to protect price risk for stockers sold as feeders, or fed cattle sold to a packer, some cattlemen frown on using futures or options. The USDA Risk Management Agency Livestock Risk Protection (LRP) program is an alternative.

“LRP is especially good for the small operation,” says University of Nebraska-Lincoln economist Darrell Mark. From one head to 1,000 feeder cattle can be covered in a single LRP contract.

LRP is strictly price insurance. It's not designed to be a price capture tool, but is more useful in preventing potentially devastating losses if prices plunge, he says.

The LRP-insured coverage price is based on the cash market, not the futures price. It looks closer at the cash feeder index set by the Chicago Mercantile Exchange.

“There are possibilities of less basis risk when hedging with LRP, particularly for fed cattle,” Mark says.

There's no enrollment cost but the cost of price protection is similar to the cost of a put option. For example, a $105 insurance floor price might cost the producer $1/cwt. in premiums. No commodity brokers are used in the program. Producers work through their licensed crop insurance agent.

Along with Nebraska, LRP insurance is available in 19 states: Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nevada, North and South Dakota, Ohio, Oklahoma, Texas, Utah, West Virginia, Wisconsin and Wyoming.

Rules for the government-run program can sometimes change, so Mark encourages producers to consult with their insurance agents or visit www.lrp.unl.edu for more information.

100% healthy calves in 2006

When I was growing up on our family farm, my father would have been embarrassed if the telephone rang during “working hours” and he was in the house. In his day, you had to be outside doing physical labor to really be “working.”

Times have changed. Today, most of us realize time spent in research and planning is as important as physical labor. In fact, the time spent on such tasks should reduce your workload later in the year.

With that as a backdrop, let's examine some issues to discuss with your family or crew in regard to having 100% healthy calves in 2006. Some research-based concepts for producing healthy calves can be transferred directly from research herds to your herd.

Eliminating calf scours

In 1995, Jim Clement, a North Dakota veterinarian, published an article on factors associated with calf diarrhea. It initiated a shift from identifying the “bug” to focusing on, “What is the largest risk factor for calf disease on our ranch?” As a result, great strides have been made.

Clement's work, and that of others, shows that in most cases, the largest risk factor is calf environment. Do your first-born calves survive the neonatal period with no morbidity, but later-born calves develop diarrhea, pneumonia or navel infections? If so, an environmental buildup of pathogens is the likely culprit.

“The solution to pollution is dilution” is a phrase I use with clients to sell the concept of spreading out animals as a way to minimize infectious disease. Much has been written about the Sandhills Calving System (see “Cleaner Pastures,” March 2005 BEEF), whose premise is if every calf has the chance to be born in a “clean” environment, the disease challenge will be minimal to non-existent. It's a concept that will work in any herd.

A practice that's received much attention since Clement's 1995 study is that calving heifers in a separate area from cows will reduce neonatal diarrhea incidence in both groups. Mel Pence, a Georgia veterinarian, also observed that wintering cows and heifers together was another risk factor for calf disease.

When first presented with this data, my clients weren't anxious to have another separate group to feed in the winter. But, as is often the case, an astute client came up with the solution.

In examining the winter rations for his open yearling heifers and his bred two-year olds, he found them to be very similar. By grouping open and bred heifers, he said, both groups get what they need and he doesn't have another group to feed.

The concept has worked well where we've used it, and I encourage you to try it.

Even if bred females and pairs are on a large acreage, environmental contamination can happen. Areas around the water source, feed bunk or hay ring can become a quagmire for calves. If you must feed in the same area, construct a firm pad so it doesn't become muddy. An option is to roll out hay on frozen ground each day in different areas.

Practice biosecurity

Practices to absolutely avoid during calving season are adding cow-calf pairs or buying a calf for a cow that lost hers. Producers don't intend to buy disease when they purchase new animals, but it often happens.

In one case, a calf was purchased to replace a stillborn calf, and the next six calves from this herd died of Salmonella. In all, the owner lost more than $3,000 in calves, and medication and veterinary costs as a result of that single purchase.

Another way to introduce disease is to purchase another farm's fresh or frozen colostrum. Such diseases as Johne's and Salmonella can be transmitted by colostrum.

Do you have purchased feeder cattle right next to your bred females or cow-calf pairs? If they share a water source, are in nose-to-nose contact or have their lot draining into the cow's lot, this can be a source of disease for your herd.

If you have bred heifers due to calve this winter/spring, I hope they're bred to known calving-ease bulls. Dystocia continues to be the No.-1 contributing factor to neonatal death loss.

I see too many herds where bred heifers and first-calf heifers with calves are kept in a very small area due to its proximity to handling facilities. It's nice to have heifers close to the barn in case of calving difficulty, but it's wiser to have them used to eating near the facilities and locked away the rest of the day. If a heifer needs assistance, she can easily be moved to the barn.

I encourage you to discuss your neonatal disease prevention plan with all members of your team. And be sure to let your herd health veterinarian review your plan for completeness. Remember that the environment is the key to disease prevention in young calves.

W. Mark Hilton, DVM, is a clinical assistant professor of beef production medicine at Purdue University in West Lafayette, IN.

Keys to neonatal disease prevention:

  • Winter and calve heifers separately from cows.

  • Reduce contamination areas as much as possible, particularly in feed and water areas.

  • Don't buy pairs or calves during calving season.

  • “The solution to pollution is dilution.” Spread the animals out at calving time.

Yellowstone grizzly to be delisted

The Interior Department is proposing removal of the greater Yellowstone population of grizzly bears from the federal list of threatened and endangered species. The delisting proposal was published in the Nov. 17 Federal Register.

“Thanks to the work of many partners, more than 600 grizzlies now inhabit the Yellowstone ecosystem and the population is no longer threatened,” says Secretary Gale Norton. For more info, go to www.mountain-prairie.fws.gov.

Heterosis.com gets a new look

The American Shorthorn Association's (ASA) commercial Internet presence has been updated as a resource for Shorthorn enthusiasts, and the general beef industry. Heterosis.com provides details on all Shorthorn commercial and genetics programs, such as Durham Natural Gold Beef, Durham Red and the Proof Positive Feedlot program, as well as information on ASA's genetic evaluation, breed averages and trends, pedigrees, EPDs and ultrasound collection. There's also a free listing service for Shorthorn feeder cattle and commercial females, a discussion board, article library and Beef Improvement Federation guidelines and fact sheets.

Manure a toxic substance?

Reps. Ralph Hall (R-TX) and Roy Blunt (R-MO) introduced H.R. 4341 last month, which would remove manure from a classification of toxic substances under the Comprehensive Environmental Response, Compensation and Liability Act, or Superfund. The purpose of the legislation is to ensure farms, ranches and other properties that apply manure will not become Superfund sites.

Blunt said, “Some attorneys are trying to rewrite scientific terms, like organic nutrients, calling it hazardous waste in an effort to milk millions out of the nation's ag economy. The intent of Congress, clearly was not to place organic nutrients in the same category as heavy metals and nuclear waste.”

Lessons Learned

When a once-in-300-years drought hit southwest Nebraska two years ago, Marlene Moore and Dwight Maseberg had a drought plan that required destocking the ranch. They followed it successfully, but their problem was in restocking.

The husband-wife team manages a 6,800-acre ranch nestled in a pocket of breaks and canyons between thousands of acres of cornfields south of Wallace, NE.

They are management-intensive graziers who are steadily improving their land and forage base, and thereby increasing the number of cattle they can run. When Marlene took over the ranch after her grandfather died in 1982, she began improving water supplies, fencing and her knowledge about grazing and business management.

By the time the drought hit in 2002, she and Dwight estimate they'd increased the ranch's production by 50% — a figure they say continues growing today.

When drought hit, however, none of that mattered. It was hot, there was no rain and they were quickly running out of forage.

They started the season with good subsoil moisture. On April 1, one of Marlene's “critical dates” for forage condition, they had good subsoil moisture to 48 in. They brought the cows home off cornstalks in mid-April like always, but in May a snowstorm and a hard freeze hit, followed by 100° F weather.

Destocking the herd

In short order, the forage quit regrowing after the cows left each paddock. They destocked 10% of the herd, selling pregnant and dry cows and any poor producers.

In early June, Marlene and Dwight were gone five days, and when they came home it looked brown as winter.

“I knew we were in trouble. The grass was completely dormant,” Marlene says. She does most of the forage budgeting and planning for the family-held corporation.

“If my normal regrowth was 100%, then I had 30% regrowth on a quarter to a third of the ranch. Maybe half the ranch had 15-20% regrowth, and the rest had no regrowth,” she says.

She began to calculate cow-days of forage left in front of the two herds. The target was to keep a marketable package of calves until fall. So again, the couple destocked, culling the youngest or smallest pairs.

As they were calving in late April and May, forage quality tested very high; the cows and calves would do well on the dormant preserved forage, despite the oppressive heat and lousy weather outlook. Because the grass was dormant, Marlene didn't think it would damage the grass if they harvested almost all of it.

By the end of June, they'd destocked 30% of the herd and were laying plans to cut even more if the weather didn't change. They weaned early and sold the calf crop in September, five weeks earlier than normal. They also sold the bulls and took the cows to cornstalks three weeks early — late October instead of mid-November.

By Jan. 15, they'd sold all the cows because the weather had continued to be dry and subsoil moisture was still void. Their cow herd averaged 10 years old and calf prices were only fair, so Marlene says adding the additional cost of rented grass or feed assured a loss — and there was no way to know how long the drought would last.

All decisions were made according to their drought plan, which they'd laid out years before. As graduates of the Stan Parsons' “Ranching for Profit” schools, they've long agreed that you can't profitably feed your way out of a drought, as there are no guarantees when the drought will end.

Marlene and Dwight are also active in the Executive Link program that Parsons started amongst the graduates. The membership allows them to hobnob with some top, outside-the-box, ranch-management thinkers. They and most of the managers they know agree with Dave Pratt, current owner of the Ranching for Profit schools, that the only way to deal with ongoing drought is to destock. The worse the drought, the deeper the destocking.

These destocking plans always involve calculating days of forage left ahead of the herd, along with estimated rates of forage regrowth. Forage production is then weighed against expected consumption by herd size and typical days of grazing in each paddock in past years.

Restructuring the plan

After Dwight and Marlene sold the rest of the cattle, they used the extra time to rethink and restructure their business with a 20-year outlook. They traveled, attended several schools and seminars, visited other ranches, and discussed the issues of drought management and ranch structure with trusted associates.

Good rains came the next spring. The annual cool-season grasses leapt ahead of everything else, and the early growing season was a good one. By fall, Marlene and Dwight decided to bring in a fairly large number of outside cows and “flash graze” them in rapid rotation through the paddocks. They took approximately one third the normal annual forage off the ranch in that time, and then sent the cattle to corn stalks for the winter. In mid-November and December, Marlene bought back-bred cows. These cows also went to cornstalks for the winter.

They calculate the drought cost them about 20% of their net equity, which isn't a bad performance in such a severe event. Today, they're back on track and believe the forage looks better than ever, which is something few ranchers can honestly claim after a drought.

Yet the couple say they should have restocked sooner. The annual cool-season grasses grew too dominant. Alleliopathy set in, suppressing recovery of warm-season forages Marlene and Dwight worked hard to foster with good grazing management.

When it came time to restock, the logistical decisions weren't the problem. Subsoil moisture was recharged; the land and its forage were ready to recover almost fully because it had been rested instead of abused; and grazing and rainfall records from past years, together with current forage budgeting, indicated how many grazing days the ranch was producing. In short, they knew how many cattle they could run.

The restocking problem Marlene and Dwight suffered was twofold. First, they wrestled mightily with what the drought had done to their psyche.

“We were so debilitated by what we'd been through and what we'd seen that at first we couldn't bring ourselves to bring cattle back on the land,” he says.

The second part wasn't easily dealt with, either. Record fed-cattle prices and the BSE scare in Canada in spring 2003 shocked cow prices to new highs. That made the decision to restock more difficult, Marlene says.

“I was used to buying cows for $500. That spring, anything you bought, if it could walk, was bringing $700 or $800,” she says.

Interest rates were pathetic and the proceeds from selling out the herd weren't making any money; plus, the fixed ranch expenses kept on ticking. Those things were nagging the couple to repurchase cattle, in addition to IRS time limitations on proceeds from drought sales. They were in a hot pressure-cooker — afraid to take off the lid and add more fodder for fear of the effects.

In retrospect, the couple says, they needed a drought restocking plan to counter their drought destocking plan — something to help them put their feelings aside and just act.

Alan Newport is a freelance writer based in Carnegie, OK.

Tips for forming a plan

In the months following the drought, Marlene Moore and Dwight Maseberg came up with additional thoughts on destocking and restocking, and on additional management tips during a drought. They share these in the hope others can learn the lessons they gleaned.

  • Above all, get help from trusted associates who aren't in drought. Get off the ranch with these people and discuss issues, including destocking and restocking decisions.

  • Keep a positive attitude and make decisions early, according to your predetermined drought plan.

  • Don't stock your ranch totally with cows. Have a class of livestock, such as stocker cattle or dry cows, that you can send somewhere else or more easily sell. They should be perhaps 20-30% of your total stocking rate. Possible drought options might include trucking them to a non-drought area for grazing or sending them to backgrounding and/or a feedlot.

  • Consider options you normally wouldn't. An example for cows might be renting grass, grazing standing corn or other irrigated crops, or the feedlot. But, make everything a business decision. Seek profitability or minimize losses.

  • Once you destock, don't let your water tanks go dry. They may crack and leak.

“If you suffer the pain of a drought, you should also learn lessons from it,” Marlene says. “We know our grass is our future and our true wealth. Cows can be replaced, but damaged range could take years to recover.”

Destocking is nature's way

Though they believe they did the right things in the face of drought, Marlene Moore and Dwight Maseberg saw some ecological declines in their resource base.

Their goals had been to push grass succession upward toward the warm-season tallgrasses, and to increase the component of warm-season in comparison with cool-season forages, which once accounted for more than 60% of the total forage mix. They were succeeding at both goals.

Nonetheless, the drought thinned some plants and hurt certain areas on the ranch worse than others.

“We lost a lot of grass infrastructure on the south-facing slopes,” Marlene says. “I thought we did it with cattle, but then I started looking in the ditches along the road.”

Perhaps above all, the couple didn't want to damage the water cycle by denuding all the forage and increasing runoff. Bare ground doesn't catch nearly the rainfall that covered soil does, nor can it support the biological life underground that feeds the roots and increases plant life.

The purpose of destocking isn't only to avoid excessive feed costs. It's to protect the resource base and be ready for a recovery when the drought ends. That is nature's way, too, since most herding animals leave a drought-stricken area. When rains return, so do the grazing animals.

Marking His Way

Mike John has come up through the ranks, and he's now on the brink of holding the most influential spot on the U.S. cattle industry stage. Early next month, the Huntsville, MO, cowman becomes president of the National Cattlemen's Beef Association (NCBA) during the 2006 Cattle Industry Annual Convention and Trade Show in Denver, CO.

It's John's chance to steward the U.S. cattle along a path blazed by others — hopefully making a few marks of his own along the way. He knows he doesn't have to go it alone, and has faith in the people traveling with him.

“The members are NCBA's lifeblood,” John says, adding that grassroots NCBA members drive policy — and he's very passionate about including every NCBA member in the policy-making and education process of the nation's cattle and beef business.

“We have an incredibly high level of integrity in the way we make our decisions,” he explains. “We're all about addressing the beef industry's issues — and protecting the industry from government intrusion or other interference that might make us less profitable or run us off the land.”

His vision is based on members' ability to adapt to change and continually work on making the cattle industry profitable for everyone involved.

“You need freedom to do so — freedom to employ your resources, freedom to choose how you market your production,” he adds. “And, you need somebody to protect you from people who want to challenge your freedom.”

His vision is also for an industry that speaks with one voice — that takes the small number of producers inhabiting the industry and maximizes their ability to effect proactive policies and regulations.

“I wouldn't have put myself in this position if I didn't believe there's a great future in this industry,” John adds. “Yet, it won't happen if we don't stay engaged and participate every step of the way.”

John knows he faces a plethora of contentious attitudes and misunderstandings as he approaches his year at the helm of NCBA. And, he's quick to stand up to those who come to him with pointed questions and preconceived ideas about the organization, its policies, processes and initiatives.

Contention: NCBA is run by meat packers working in concert with large and “non-independent” cattle feeders.

John: That contention is not based on fact. Under the governance structure of NCBA, approximately 60% of the board members are independent cow-calf producers, while 35% are feeders, backgrounders and stockers. The remaining 5% are split among processors, purveyors, retailers and importers. And, those 5% aren't there because they want to drive NCBA policy; in fact, they can't. They're involved because they have a vested interest in the success and growth of the cattle and beef industry as a whole.

Contention: NCBA policy always supports initiatives and programs that enhance big business, here and abroad, at the expense of small- and medium-sized U.S. cattle producers.

John: Nothing could be further from the truth. The discussions on subjects like captive supplies, country-of-origin labeling (COOL), grid marketing or alliances are never about the small guy vs. big business. If you believe those initiatives are packer-driven, then you've probably never participated in the policy process developed by producers who want to expand their own choices and opportunities in this industry.

NCBA members continually seek to enhance the free-enterprise system. That means limiting government intrusion in our businesses and giving producers a choice to participate in a system providing them the most return on their investment. It's always been that way, and will continue to be the emphasis of NCBA's policy process.

For example, if COOL can benefit people who want to develop it and profit from it, then it's the right way to go. There's nothing wrong with the concept; it's just that the COOL law passed in the last farm bill was a hideous instrument. It added costs that weren't shared equally with all competitive proteins, and couldn't realistically promise any return to producers.

It's a shame it became a political tool that weakened the unity needed in other areas such as environmental regulations and the endangered species problems all producers face.

Contention: NCBA is pushing for the globalization of the beef industry and supports trade policy that perpetuates the beef and cattle imports that are putting U.S. cattlemen out of business every day.

John: I'm convinced beyond a shadow of a doubt that the new frontier in the beef industry lies outside the borders of this country. When you look at what can be gained by exporting products that don't have a lot of value in this country, including offal products and variety meats, it makes absolutely no sense to limit our opportunities.

We also have some very high-quality, and therefore high-value, beef products that consumers around the world desperately want. We don't live in a vacuum — and we're facing intense competition from other proteins and other beef-exporting countries. We produce the best beef in the world and deserve the chance to compete fairly in the world marketplace.

But, it's a fact of life we're going to have to import in order to export. Obstructing the negotiation process is not the way to assure fair access, but participating constructively in the process has proven beneficial many times. The beauty of our system, though, is that we can export higher-value products and import low-value products. If we weren't able to trade, I think we'd see a wider price spread between higher-quality and lower-value cuts, and overall it would drop the net value of beef in the country.

Contention: NCBA is just arrogantly trying to own and profit from animal ID.

John: NCBA has acted with integrity on the animal ID issue. We have approached this issue in exactly the same way we approach any issue that could have an effect on the beef industry.

Our membership debated and then created policy directing a new commission to look into providing a solution for disease tracebility that met the conditions of our policy on animal ID.

These conditions include confidentiality for producers and the ability for state animal health authorities to access the data under the exact same terms outlined in the U.S. Animal Identification Plan.

We are confident that the vendor selected through an extensive process is the best choice, and already many of the programs that currently collect the appropriate individual animal data are either participating in the beta test or have asked to do so. Once the entities that have a genuine interest in promoting a successful private database are identified, they will form the consortium that will own and manage the data repository — not NCBA.

Not only are we not going to make any money from this effort, we have no mechanism to regain any of our expenditures accumulated to date — which have been extensive.

Contention: The beef checkoff costs cattle producers a lot of money — some of whom don't agree with the messages and policies — and no one should be ordered to pay into it.

John: The Act and Order helps every single beef producer in the U.S — and everybody who plays, pays. The goal was to increase beef demand — a function of price and consumption — 6% by 2005. Since 1997, beef demand has increased 28%. It's an incredible success story from an industry working every day to promote, protect and serve itself.

The primary benefit to U.S. producers is that consumers everywhere are exposed to messages informing them beef is safe, wholesome, nutritious, and can be part of a healthy, balanced diet.

Case in point is that through all the BSE controversy, U.S. consumers never lost faith in beef. In fact, one of the largest spikes in demand came during the first quarter of 2004, immediately following the BSE case in Washington. That means consumers never lost faith in what ranchers are doing out in the country, nor in the beef products in the meat case or on the dining table.

Let me add that the retailers and food service industries invest very heavily in our industry through their own promotion, product and consumer research and food safety activities. There's no question their financial participation throughout the production chain, on their own, is adding value to beef and enhancing demand.

Contention: NCBA is an elitist organization of the rich and well-to-do. It's not a place where average cowmen can comfortably participate, politically or socially.

John: Anyone who thinks along those lines hasn't been to a national convention or a meeting of their local or state affiliates. I know there are people from very small operations who sit next to someone who may control tens-of-thousands of head of cattle. Those two peoples' voices carry the same weight in NCBA policy discussions. The only way to limit the participation of smaller producers is for them not to show up and rub shoulders — politically or socially — and find out how much they really do have in common with others throughout the industry.

Virtually every piece of NCBA policy starts from discussions and resolutions developed at the local level. The ideas generated locally usually flow through state affiliates. Then, producers with experience and expertise in those specific areas carry the resolutions to NCBA. They get input and help from staff with expertise in a broad range of subject matters.

There's plenty of opportunity for debate on the issue. In addition, every effort is made before the meeting to gather the pertinent information to assure informed debate.

I'll be the first to admit that while some ideas make it, a lot don't. You can't assume that just because you pay dues and participate in the process you're going to win, but you can be assured your participation will be valued equally. We're a democratic, grass-roots organization that takes our policies very seriously and pursues them aggressively once they're in the books.

Biography

Michael E. John is manager of John Ranch, Inc., a commercial cow-calf growing and retained ownership operation supporting a family. Since 2000, he's also been director of MFA Health Track Beef Alliance based in Columbia, MO, a feeder cattle source and process verification program.

  • John, 47, is a 1980 graduate of Kansas State University in animal science.

  • He's president-elect of the National Cattlemen's Beef Association (NCBA) and has served as chairman of the Membership and Association Services Committee and group chair of Industry and Producer Services. He has represented NCBA on the Meat Export Federation.

  • He's past-president of the Missouri Beef Industry Council, and still serves on the board of directors. He was also president of the Missouri Cattlemen's Association, and a board member and scholarship chair of the Missouri Cattlemen's Foundation.

  • He currently lives in Huntsville, MO, with wife Dara and children Hayley, Hunter and Paden.

NEWS CLOSEOUT

Product claims sought most often by American consumers:

Low fat 63 %
Whole grain 62%
Low calorie 52%
High calcium 51%
Low salt/sodium 48%
Vitamin fortified 47%
Source: “Shopping for Health,” 2004