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America's Top Stockers Feted By BEEF Magazine

Hughes Cattle Co. -- owned and operated by John and Robert Hughes -- has been named National Stocker Award (NSA) winner for 2006 by BEEF magazine. Read all about their Bartlesville, OK, operation in the special November issue coverage at www.beef-mag.com. The award program is sponsored by Elanco Animal Health.

As overall winners, Hughes Cattle Co. receives $10,000 cash from Elanco Animal Health, and an expenses-paid trip to the 2007 Cattle Industry Annual Convention in Nashville, TN, Jan. 31-Feb. 3.

Two other finalists for the award Triple Heart Ranch at Wanette, OK, and D&H Cattle Co. at Collins, MS, each receive a $2,500 cash prize from Elanco.
-- Joe Roybal

Manure Superfund Bill Discharged From Committee

H.R. 4241, which clarifies that manure should not be regulated under Superfund laws, was discharged from the House Energy and Commerce Committee.

In response, Farmers for Clean Air and Water said, "This is good news for the nation's farmers and ranchers. HR4341 -- clarifying that natural manure doesn't fall under the severe liability provisions of the Superfund laws intended to clean up industrial, mostly abandoned toxic waste sites -- has successfully moved beyond the committee stage in the U.S. House of Representatives."

The bill now goes to the House for consideration. It isn't known whether the House will consider the bill before Congress adjourns this year. There are currently 190 cosponsors of the legislation.
-- P. Scott Shearer, Washington, D.C., correspondent

25x25 Renewal Energy Proposition Gets House Support

The House Ag Committee approved a House resolution calling for a national goal of producing 25% of the total energy consumed in the U.S. from renewable ag resources by the year 2025. The resolution was endorsed by 20 state governors and more than 280 ag, business, and environmental organizations.
-- P. Scott Shearer, Washington, D.C., correspondent

WTO Rules In Favor Of Biotech

The World Trade Organization (WTO) ruled in favor of the U.S., Argentina, and Canada in their WTO case against the European Union over its illegal moratorium on approving ag biotech products.

USDA Secretary Mike Johanns said, "Today's decision affirms what the world's farmers have known about biotechnology for many years. Since the first biotechnology crops were commercialized in 1996, we've seen double-digit increases in their adoption every single year. Biotechnology crops not only are helping to meet the world's food needs, they're also having a positive environmental impact on our soil and water resources."
-- P. Scott Shearer, Washington, D.C., correspondent

Rangeland Insurance Pilot Programs Available

Two new risk management tools for pasture, rangeland and perennial forage will be tested in select areas beginning with the 2007 crop year. The programs are primarily designed to protect against drought -- covering grazing land and perennial hay production.

Both are available for sale from crop-insurance agents through the closing date of Nov. 30, 2006. More detailed info on pilot programs is available at www.rma.usda.gov/policies/pasturerangeforage/.

The insurance products are designed to operate in a variety of range and pasture environments using innovative technology to determine when a producer has suffered a loss.

The Rainfall Index insurance program and the Vegetation Index insurance program are offered and subsidized by USDA's Risk Management Agency (RMA). The programs are designed to provide livestock producers the ability to purchase risk protection for losses of forage produced for grazing or harvested for hay.

"The RMA has been working for a long time to provide subsidized coverage for livestock producers similar to what crop farmers have enjoyed for decades," says Max Thomas, of Silveus Insurance Group, Lubbock, TX. "This is the first time RMA has rolled out a program that offers a buy-up, low-deductible coverage for rancher's basic crop, which is grass and hay."

The insurance programs are based on one of two different indices, depending on the state or region where the rangelands are located.

The Rainfall Index program will be pilot-tested in 220 counties in Colorado, Idaho, Pennsylvania, South Carolina, North Dakota and Texas and is based on rainfall indices as a means to measure expected production losses.

The Vegetation Index insurance program will be pilot-tested in 110 counties in Colorado, Oklahoma, Oregon, Pennsylvania, South Carolina, and South Dakota and is based on satellite imagery that determines the productivity of the acreage as a means to measure expected production losses.
-- Clint Peck

Japan Confirms 29th BSE Case; Import Rules Will Stay

Japan's Ag Ministry last week confirmed the country's 29th BSE case, this one a 6 ¼ -year-old dairy cow that died on Japan's northernmost island of Hokkaido. The cow was born in June 2000, before the Japanese government imposed its ruminant protein ban in 2001, the government says.

Meanwhile, Toshikatsu Matsuoka, Japan's new ag minister, recently said he won't lift the current restrictions on U.S. beef imports that call for only boneless product from animals 20 months of age or less. The U.S. is pushing for Japanese adherence to the internationally recognized 30-month standard.

In addition, a total of 22 U.S. plants can now export beef to Hong Kong. Among the added plants are facilities operated by Schrieber Processing Corp., Skylark Meats, Smithfield Beef Group, and Tyson Fresh Meats.
-- Joe Roybal

Hughes Cattle Co. Named Stocker Award Winner

John Hughes of Hughes Cattle Co., Bartlesville, OK, remembers a university program almost 50 years ago where all the speakers, except the last one, described the progress possible through heifer and bull selection. The last speaker though, demonstrated how the production gains possible with 35 years of genetic selection could be had in a year. It had everything to do with brush management.

"Not to eradicate the brush," explains John, "but to manage the brush, utilize stocking density and grazing strategies to increase production... Land has always been too expensive for ag to pay for it, but if you can increase the production per acre on existing land, it can change the economics."

At the time, John and his father, A.M., were running the ranch primarily as a cow-calf operation. If John wanted to return to the ranch full-time they had to figure out a way to expand production.

Long story short, John has been applying herbicide to the ranch since 1958, along with using prescribed burning and other intensive grazing management practices to boost grass production, thereby increasing carrying capacity. In fact, John started his own aerial- applicator business back then in order to dilute the cost of spraying his own land, and to generate cash flow to expand his family's home operation to support him and his own family.

Genetics and Management Drive Production
"So our emphasis has always been toward grass production which increases beef production," John says.

More specifically, the focus here is on what John and his son, Robert, term the magical 100 days beginning between the first and middle of April. Turn cattle out then and you can net-gain 3 lbs./day; put 300 lbs. on them in 100 days.

That brings us to improving genetics, which cuts both ways at Hughes Cattle Co. On one hand, if genetics today were like those John started with, there's no way they could put 3 lbs./day on them for that 100-day period. On the other hand, those same genetics are making it tougher to find the lightweight calves of the quality they need at the time of year they need them.

"Ideally, we'd like to buy a 300-lb calf. Unfortunately, the quality of calf we need isn't usually available except in times of drought," John says.

The basic program here is buying calves weighing 450-500 lbs. in the late summer and early fall when calves are plentiful and prices seasonally favorable. Robert explains they'll sort these calves as many as five different directions based on weight. The heavy end will usually go to the feedlot by December. Another jag might find a home on winter wheat through the winter, then head to the feedlot. Most, however, will be marketed during one of three times during the summer.

Incidentally, sorting is one reason the Hugheses bought and installed scales beneath their chute a decade ago. That and the ability to dose cattle more precisely, as well as track treatment response by watching the weight of individuals.

Likewise, calf health and health-monitoring is one reason the Hugheses work so hard to get calves bunk-broke and eating early on. "Once they learn to eat, then don't, it's a good indication they may be running a temperature," Robert says.

Understand, the Hugheses do lots to settle new calves and get them acclimated during the 45 days or so of backgrounding before heading out to graze at one ranch or another. For instance, the Hugheses have misters set up beneath shades to entice walking, bawling calves to stop and smell the roses. They've also installed frost-free waterers below pond dams in order to help calves find the water and to have undisturbed, higher quality water to drink.

There aren't any self-feeders here, either. As John says, "There's no substitute for careful observation." With self-feeders there's no way of knowing when and how much feed is being consumed, or to know which calves are hanging back.

Besides documenting performance, the health of the calves overall, how long it took those needing treatment to respond and the like, the Hugheses also record cattle disposition.

"Those with a bad disposition are so much harder to handle," Robert says, explaining they defeat the investment made here in quiet, efficient, low-stress handling.

As an example, the Hugheses' facilities are designed with cattle sightlines and cattle flow in mind. They use rubber extensively to minimize the noise of metal parts. There's a matt of woven, used tires in front of the chute to provide cushion and footing.

"We used to not think that much about it if a calf jumped over the chute," John says. "But then we realized that if the calf was hurting and licking its wounds instead of grazing, his nutrition suffers, maybe enough that the bugs have a chance to get hold of him.

"Over the years we've learned tender loving care and animal comfort is uppermost to how successful you are backgrounding cattle... Good feed, good water and a comfortable place. You can't overcome poor handling and care with antibiotics," he says.

"Stocker cattle fit our country better than a cow-calf operation because winter-feed costs for cows are high because you have to supplement protein," John emphasizes. If the railroads had remained in the business of hauling cattle during and after World War II, the Hugheses probably would have switched to stocker cattle exclusively lots sooner.

"Historically, the Flint Hills and Osage were more stocker and cattle grazing country," John says. "When the railroads went away from hauling cattle after the war, and before the interstate highway system was built, we (producers in these parts) were more or less forced into the cow-calf business here, even though it wasn't the best use of our grass resources."

John bought his first stocker cattle in 1958, what he says were called "plain" cattle in those days. Back then, after grazing, most of them would go to the early commercial feeding yards in California.

In the 1980s, the Hugheses began phasing out their cow-calf herd. As they did though, their dual focus never wavered: increase beef production per acre by improving the range and improving cattle genetics. That focus remains, but they're considering necessary changes to accomplish the goals.

"We love Southeastern calves but, let's face it, with truck costs at $3.10/loaded mile and rising, and a 28-hour trip between here and Lake Okeechobee or Ft. Meyers, FL, where we buy a lot of cattle, we're probably going to have to change," John explains.

Between fuel, distance and improved genetics, Robert emphasizes, "It's getting almost impossible to get calf weights backed up to the place we need to really utilize our grass."

In order to examine the possibilities, the Hugheses are involved in an innovative pilot study with a livestock-market owner and a feedlot. The notion is each partner in the arrangement purchases an equal share of ownership in the calves, pays one another for their services, and then splits any profit or loss once the cattle are marketed after the feedlot. The arrangement seeks to capitalize on the expertise of each entity and the ability to select cattle for specific markets earlier in the production process, while also leveraging geographic efficiency.

"If the guy buying the cattle is going to retain ownership, it stands to reason he's going to be paying attention to what he's buying," John says. The same goes for the all partners involved.

"It also solves another challenge for us, which is marketing," John explains. "I'm not an expert at it and there's no way to outguess the market. Selling fed cattle on a value basis, year in and year out, I think that's the best we can do. This is the kind of alliance that makes sense to us."

Peering down the road, John believes the future of the stocker business is anchored more tightly with corn prices than ever before.

"Cheap corn isn't a friend. It may seem like it for those selling stocker cattle, but long-range it's the enemy of the grass rancher because grass will always be cheaper than corn," John says. Plus, the cheaper the corn, the more competition there is from feedlots for stocker-weight calves.

More concerning, John says, "Let's say ethanol production and other alternate corn uses boost corn up to $3/bu. or more, grass would be worth more than we ever thought and would play a larger role in the production system. Conversely, if corn is going to knock up and down around $2, and if genetic performance increases weaning weights another 50 lbs., I don't know there would be much room for growing the stocker industry."

A similar concern revolves around manpower. "I think a limiting factor to people being in the stocker business is having help good enough to do the job consistently. We're very fortunate to have good help here."

However the stocker specifics pan out down the road, John and Robert are convinced the same resource that brought them all this way will lead them forward, and the resource is grass.

The National Stocker Award (NSA) competition was divided into three categories: Backgrounding/drylot stocker (feed-based); Fall/winter stockering (forage-based); and Summer stockering (forage-based). A single winner was chosen in each category, and the overall NSA winner selected from these finalists.

As overall winner, Hughes Cattle Co. receives $10,000 cash from Elanco Animal Health, along with an expense-paid trip to the 2007 Cattle Industry Convention in January.

Triple Heart of Wanette, OK, (winner of the backgrounding/drylot category), and Doug Rogers of Collins, MS, (winner of the fall/winter category), each receive a $2,500 cash prize from Elanco.

Profiles of these other two operations will appear in future issues of BEEF Stocker Trends.




Beef Demand Getting Softer

One of the more inspiring beef stories of the past decade has been the industry's ability to turn demand around after losing about 1% annually for the two decades before the slide began.

The Annual Retail Beef Demand Index (BDI) indicates beef demand grew in 1999 for the first time in 20 years, and has grown every year since, year-to-year, with the exception of 2002, which was only slightly less than in 2001. Even in the wake of BSE, the BDI grew in 2004 to a point where beef demand was roughly equivalent to what it was in 1991.

Unfortunately, the BDI lost a couple of points last year. According to James Mintert, the Kansas State University (KSU) ag economist who leads the industry effort to maintain BDI, this year will likely be softer yet -- the first two quarters have already fallen short of last year.

Speaking at the KSU Beef Stocker Conference last week, Mintert explained slowing consumer-income growth and the end of the low-carb diet boom are among the reasons domestic demand is losing ground again. Whether the softness represents a plateau before surging ahead, or a temporary damming of demand slide that could resume, is anybody's guess. Certainly no one suggests the bottom has dropped out or will, but it underscores the need for more research aimed at providing consumers more specifically what they want, more consistently

Seasonal Feeder Pressure May Be Less Severe

Add this to the teachings of what has been an extraordinary drought: there may be less pressure on feeder prices this fall than what's usually expected, simply because the drought already forced so many more into the feedlots earlier.

Derrell Peel, Oklahoma State University (OSU) livestock economist, made that observation in a recent OSU newsletter. He also pointed out, "Fed-cattle prices rallied to a much higher level in August than many analysts (myself included) had expected. Typically, we expect a fourth-quarter rally for fed-cattle prices from seasonal summer lows. This year, the question for the fourth quarter is whether the fed-cattle market can maintain the current third-quarter rally in the face of this most recent buildup of feedlot numbers."

Shorter term, cattle feeders are doing an admirable job of holding their ground. Last week, for the second one in a row, they forced packers to pay more. For the week, fed cattle gained $1.50 to $3, selling mostly at $91.50-$92 in late trade.

Between a seasonal boost in calf offerings and the fact plenty of folks are tied up with fieldwork, the Ag Marketing Service (AMS) called last week's calf and stocker-cattle market steady to $3 lower.

"Order buyers are wary of any calves that haven't been away from their mamas for at least 30 days and preferably 45 or more," say AMS reporters. "Discounts on unweaned or short-term weaned calves are as stiff as ever, yet it seems there are as many on offer as ever."

The summary below reflects the week ended Sept. 29 for Medium and Large 1 -- 500- to 550-lb., 600- to 650-lb., and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

Summary Table
State Volume Steers Heifers
Calf Weight 500-550 lbs. 600-650 lbs. 700-750 lbs. 500-550 lbs. 600-650 lbs. 700-750 lbs.
OK 33,700 $124.58 $121.41 $118.634 $115.35 $112.69 $109.71
TX 31,500 $119.23 $114.48 $109.95 $113.32 $107.79 $109.614
MO 29,100 $127.85 $122.62 $116.90 $118.14 $113.28 $110.05
KY* 23,300 $115-125 $106-116 $11-1125 $104-114 $96-1063 $91-1025
AL 16,100 $113-122 $105-114 ** $105-114 $100-106 $93-100
Dakotas 13,900
South Dakota
North Dakota

$135.50
$128.42

$131.592
$126.66

$128.72
**

$126.37
$120.74

$122.292
$115.234

$117.17
$109.40
TN* 13,400 $115.05 $107.73 $101.06 $105.66 $98.79 $93.41
AR 12,200 $118.06 $111.33 $105.12 $108.77 103.32 $99.10
NE 11,500 $129.88 $129.35 $125.53 $123.90 $121.90 $112.89
GA*(***) 11,100 $101-121 $93-116 $90-105 $95-115 $89-108 $90-95
WY 10,500 $130.50 $127.532 $128.824 $119.63 $119.00 $113.24
FL* 9,900 $99-116 $92-104 $82-96 $93-102 $89-106 $85-984
IA 9,200 $134.19 $126.864 $121.07 $124.51 $117.14 $116.48
MS* 8,200 $110-1201 $100-110 $97-1004 $100-1101 $90-100 $85-904
CO 7,100 $125.97 $119.15 $114.066 $118.57 $109.58 $110.584
LAND 7,000 $106-121 $100-1172 ** $100-114 $95-1082 **
Carolinas* 7,000 $103-126 $90-1113 $84-1065 $85-106 $80-1023 $68-925
VA 5,100 $121.03 $112.51 $108.38 $106.44 $106.73 $103.28
KS 4,700 $128.412 $118.62 $117.28 $122.81 $113.35 $109.62
MT 4,600 $126.97 $120.772 $112.427 $119.29 $115.172 $108.306
NM 3,200 $116.83 $108.04 $108.994 $107.03 $101.314 **
WA* 5,900 $115.91 $107.264 $103.066 $108.44 $100.074 $97.12

* Plus 2
** None reported at this weight or near weight
(***) Steers and bulls
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.

Sign Up Now For BEEF Quality Summit, Nov. 14-15

Sign up now at www.beef-mag.com for BEEF magazine's 2006 BEEF Quality Summit. The Nov. 14-15 workshop in Oklahoma City's Clarion Hotel aims to provide attendees with the background, tools and the environment to make the connections for involvement, and the potential rewards offered, in the new beef-value chain.

The first day's program is devoted to outlining the opportunity available in the new beef-value chain, the second to how to link your production into that chain. Among the topics to be discussed are:

  • How U.S. beef consumers define quality.
  • Quality, profit and the cattle cycle.
  • International competition and opportunities for U.S. quality beef.
  • Current international beef trade opportunities.
  • Producers will discuss how they're paid for quality.
  • Selecting a marketing partner.
  • Evaluating costs, trade-offs and risks of various markets.
  • Linking up with a marketing partner -- an opportunity to meet with participating marketing channel reps.
For more detail, visit www.beef-mag.com and click on the " BEEF Quality Summit" box in the top right corner of the opening page.