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Articles from 1997 In November

Bagging Big Game

If you're interested in exploring a fee hunting enterprise, there's no better place to look for examples than Colorado. In fact, according to the Colorado Division of Wildlife (DOW), three-fourths of all Colorado ranches with huntable acres provide some level of trespass fee hunting.

Rancher Warren Gore and his family, Glade Park, CO, are no exception. They've been in the fee hunting game since the 1950s. Located in western Colorado, the Gores specialize in big game - elk, deer, mountain lion and bear. Because of their high mountain location, nearly 10,000 ft., they can provide the wildlife and spectacular scenery that draws hunters from California to Florida.

"They (hunters) come here and it's not only a recreation experience, but a vacation. They like the idea of being on a working ranch," says Gore. "Most of the guys come from big cities and big corporate jobs and just want to get away. Once they get here, they fall in love with the country view."

Besides the panorama, Gore says, "You need to provide a quality hunt. That's what will keep them coming back year after year."

Typically, he claims their 700-cow ranch generates 10-15% in extra revenue a year with the hunting enterprise. For that, Gore spends about a month preparing and guiding. The downside to the venture, though, is that most hunts are in late October and early November, when they're moving cattle down the mountain and sorting.

"We depend on the hunting business to supplement our ranch income, especially during a down cattle cycle," Gore says.

Charging For Wildlife At any one time, he estimates that the ranch is home to more than 400 elk, plus mule deer, mountain lion and bear. From a hunting perspective, though, big bull elk are the ultimate trophy and where the big money is.

Hunting fees vary depending on what menu of services Gore needs to supply. In general, however, a guided bull elk hunt will run from $4,000 per hunter up to $8,000. That includes five to seven days of hunting, lodging and food. For a guided deer hunt with potential for a buck, the price runs $2,000-3,000 per hunter. Some ranchers in the area also add on a trophy fee for a bigger, Boone-Crockett-scored animal.

"There's no guarantee a hunter will get an elk or deer," Gore explains. "In fact, if they shoot a big elk one year, they may not even shoot another one for two or three years and still be satisfied. Often, hunters refuse to shoot anything unless it's pretty outstanding.

"If you can show hunters lots of game and provide them with decent shots, they're happy," Gore says.

Hardly Roughing It Gore's lodge, more like a house, was built in 1981 for $110,000 and has four bedrooms and three baths. It's heated, has a fireplace and electricity is provided by a generator now housed in the original cabin built in the 1920s.

Talk about scenery and plenty of it. If you drive from one end of the ranch to the other, you'll put on nearly 40 miles. The higher country area, where most of the hunting occurs, is mostly accessible by four-wheel-drive vehicles. However, if hunters want to use horses for the real back areas and canyons, Gore will provide that, too. Besides BLM and Forest Service lands, the Gores also have 18,000 deeded acres.

"You can work these hunts about a dozen different ways," he says. "You can provide all the groceries, a guide for every couple of hunters and their vehicles. But, you have some groups that do their own cooking and prefer their own vehicles. It really varies by group."

Currently, the Gores have reduced the number of hunters to 18 to provide a higher-quality hunt. "We want to bring in smaller numbers of hunters and charge them a little more," he says. That means they're now able to provide a higher buck-to-doe and bull-to-cow ratio.

Safety Ranks High Like most fee hunting enterprises, safety is a big concern for the Gores. "We insist on good hunters and don't want any accidents or safety concerns," Gore says. "Frankly, I'm at risk when I'm out with these guys. If someone isn't toeing the line, or drinking while they're hunting, he won't be back."

In case of accidents, hunters are required to sign a waiver to release the Gores from liability. In addition, however, the Gores carry an umbrella liability policy on the entire ranch in case of injuries. Warren also is certified for CPR and first aid, and is a registered outfitter in Colorado.

The Gores, like many of their neighbors, are now involved in the Colorado Ranching for Wildlife program, which began in 1986. Currently, there are 24 ranches involved statewide.

As part of that program, the Gores work at enhancing habitat areas, like cutting brush and fertilizing meadows for wildlife grazing.

In return, the Colorado DOW allows ranchers more flexibility in their hunting season and issues a guaranteed number of game permits. A big plus for ranchers, says John Seidel, statewide coordinator for Ranching for Wildlife, is that the extended season includes the elk rut - a premium hunting time.

The program requires a minimum of 12,000 acres to enroll. Ranchers can even form groups to meet the minimum numbers of acres, Seidel says. Ranchers must also submit a wildlife enhancement management plan that's evaluated every three years.

"For getting that flexibility and guaranteed permits from the program, we then agree to have a 10-day public hunt," Gore says. "It's a real specified hunt with a certain number of hunters allowed on the ranch. It's tightly controlled."

Gore says that several ranches in his area are now basing their whole management philosophy on wildlife promotion and habitat enhancement. "They're trying to make that go hand-in-hand with livestock management," he adds.

Another benefit of the program is that it encourages landowners to get involved in wildlife management. Gore says, "that's a good thing." Too often, he adds, the landowners and the DOW are at odds with each other.

The program has been "pretty successful," Seidel admits. "We've seen tremendous changes in rancher attitudes. For a lot of the ranchers, elk are no longer considered a pest."

For more information about Colorado's Ranching for Wildlife program, contact John Seidel, statewide coordinator, at 970/963-1976. l

Alternative to castration

It's now possible to immunize cattle against maleness, researchers at the University of California-Davis (UC-Davis) say. They use hormone-blocking injections as an alternative to castration.

"The process should be less stressful for cattle and producers," says Chris Huxsoll, one of the researchers on the project. "For the producer, the process is quicker and easier. For the animal, the process is less painful and doesn't produce an open wound," he says.

Huxsoll explains that a series of hormones are produced by cattle, each triggering the next, that lead to growth of the testicles and production of testosterone. Testosterone production triggers the aggression, sexual activity and tough meat that are common in bulls.

Huxsoll and UC-Davis animal scientist Tom Adams developed an immunization that prompts cattle to produce antibodies to one of the hormones, interrupting the entire process.

Studies of the carcasses from immunized steers showed no difference in meat quantity and quality to that from physically castrated steers. UC-Davis animal behavior expert Ed Price studied aggressive behavior among the test cattle and compared the behavior of vaccinated males to bulls and steers. Aggressive behavior of vaccinated bulls was equal to that of steers and significantly lower than that of normal bulls.

Researchers have been looking at this method since the early 1980s. "We were able to do the job with two shots; one at weaning and another at entry into the feedlot," Huxsoll says. He believes the key to their success is a carrier protein in their vaccine that's more effective than those used earlier. Now, the researcher adds, "we need to keep the cost of the immunization low so that it's not only easier but also cost effective."

For more information contact Chris Huxsoll, University of California-Davis, at 916/752-2554.

Ponderosa pine needle ingestion can increase blood amino acid levels in beef cattle, and this may help explain why cattle eat pine needles, even though they can cause abortions in late gestation. That's according to Scott Kronberg, animal scientist at South Dakota State University.

Kronberg says pine needles contain high levels of tannins, which can increase amino acid absorption in ruminants. The cattle may eat the pine needles because they obtain positive feedback from the effect the tannins have on increasing ruminal escape protein. The improved amino acid levels also show the potential to improve the status of nitrogen and protein in the animal's blood.

Kronberg fed four yearling steers an identical diet of soybean meal and grass hay, with two of them receiving pine needles, as well. The data indicates that certain essential amino acid levels were increased by ingestion of pine needles.

Kronberg adds that a number of things may contribute to the motive behind the consumption of pine needles by cattle. For example, if an animal ingests high levels of crude protein (including urea), they may eat the tannins to reduce excessive and toxic levels of the ammonia in the blood. "They may eat them when they are hungry and there is little else to eat, and perhaps they eat them for something different to ingest," he says.

For more information contact Scott Kronberg, South Dakota State University, at 605/688-5412.

Sometimes, producers can afford to spend a lot to improve herd health. Sometimes not. A University of Missouri-Columbia study analyzed five years' records on a well-managed beef operation and found big differences in economic benefits of health care from year to year.

"From the best to the worst health year, mortality ranged from 4.7 to 12 percent and the morbidity (sickness) ranged from 15 to 85 percent," says Extension veterinarian Bob Larson.

"When we took those data into consideration and figured the going price for cattle and calves, there were some years and some levels of calf disease when the producer could only return investments of $4 to $8 per head. But, there were other situations when he could have spent $11 to $23 per animal and still have been ahead," Larson reports. On average, producers could afford to increase expenditures by $7 to $14 per cow if rates of calf illness and death could be lowered.

"By identifying the potential payback from a neonatal health plan and figuring its costs, veterinarians and their clients can develop a strategy that has the greatest chance for payoff," Larson says.

For more information contact Bob Larson, University of Missouri, at 573/882-7848.

One way to a cow's stomachs is through her nose, researchers suspect. That's why scientists at the University of Illinois (U of I) have developed a way to measure the impact of odor on feed intake.

"When we're trying to boost feed intake, either in early lactation or when we're offering less palatable feeds, we may be able to manipulate odor to get cattle to eat more," says Robert Corley, III, a doctoral student working on the project. He explains that odor, flavor, texture and other factors all have an impact on how well a cow likes a feed and how much she eats. "There just hasn't been a lot of work done on odor," he says.

Corley and other U of I students modified a machine, first researched in 1919, which blows various odors across identical feed options available to cattle. They developed carriers for the odors and a statistical procedure for ranking cows preferences for various odors.

"The test is similar to the taste trials used to test humans' preference for food products," Corley explains. Although preliminary results are inconclusive, they do suggest that odor does have an impact on feed intake.

For more information contact Robert Corley, III, University of Illinois, at 217/333-0093. l

E. coli 0157:H7 task force formed

A new industry-wide E. coli 0157:H7 task force has been formed by the beef industry to address food safety issues.

"We want to define a coherent strategy for attacking the food safety issue, all the way from the producer to the consumer, to make sure we take every step necessary," says National Cattlemen's Beef Association (NCBA) CEOChuck Schroeder. Schroeder has been named chairman of the task force.

The task force will focus on where money should best be spent to help eradicate E. coli 0157:H7, and is expected to include representatives from the packing and processing industry, marketing channels, the scientific community and state governments, as well as beef producers. The group, to be formed in the next few weeks, will consider research and consumer education needs and decide how to further advance priority initiatives, Schroeder says.

The task force will analyze various technologies, such as biotechnology and cold pasteurization, and consider their incorporation into beef production and processing as possible solutions to food safety issues, Schroeder says.

China has lowered its beef duties. Effective October 1, they released a list of new import duties that lowers many of the tariffs placed on imported beef. According to Joel Haggard, vice president-Asia Pacific for the U.S. Meat Export Federation, the new duties were put into effect with surprising speed.

Perhaps the biggest implication for U.S. exporters, he notes, was the reduction in offal duties from 45% to 23%. Chilled and frozen beef duties were dropped from 50% to 40%. The tariff announcement is believed to be related to China's efforts to gain worldwide support for its entry into the World Trade Organization.

The European Union (EU) is appealing the rule on the beef ban. The EU filed an appeal of the World Trade Organization's (WTO) rule that the EU ban on imports of beef produced with growth promotants is in conflict with free-trade rules. The WTO Dispute Settlement Body formally adopted the rules two days after the appeal.

"Using growth promotants in beef production is a scientifically sound and safe practice that has enabled U.S. beef producers to produce leaner animals more efficiently for more than 30 years," says NCBA president-elect Clark Willingham, Dallas.

The WTO has no more than 90 days to rule on the appeal.

E. coli sample efforts were released last month by USDA's Food Safety and Inspection Service (FSIS). "The third fiscal year of the FSIS sampling program for E. coli 0157:H7 ended with two positive results in fiscal 1997, bringing the total number of positive samples to nine in about 16,500 samples that have been taken by FSIS personnel in federal plants, retail stores, state-inspected plants and import establishments since October 1994," says Tom Billy, FSIS administrator.

Billy says reports of positive samples by the media should not detract from news of the important steps being taken by the industry to improve the safety of meat or relieve food preparers of responsibility to properly store and cook meat.

Excel's Sterling, CO, plant will close effective November 29. The plant, which processes 700-900 cows per day, will close because it's not meeting financial performance expectations, says Mark Klein, public affairs official for Cargill, Excel's parent company. Excel also operates a plant in nearby Fort Morgan and plans to continue investing in that facility, Klein says.

A USDA administrative law judge dismissed a complaint against IBP charging the packer with giving undue preference to a group of Kansas feedyards. The formal complaint was filed by the Packers and Stockyards Administration in 1995, alleging that pricing agreements offered to select feedyards by IBP gave the feedyards an unfair competitive advantage.

"There is no evidence of any injury to competition in the fed-cattle industry in Kansas resulting from the agreement," says USDA Administrative Law Judge Victor Palmer in his decision. "So long as the methods of transaction used were not anti-competitive in nature, there is no reason for the government to stifle such innovation by interfering with business judgment and freedom to contract."

FFA chapters and members across the U.S. can now benefit from a new fund-raiser known as the Dectomax "Next Generation Program" offered by Pfizer Animal Health.

FFA chapters that enroll in the program will have the opportunity to receive $3 for every Dectomax bottle cap or Pour-On box top they collect and return to Pfizer.

In addition, participating chapters will receive a supply of rebate forms to give Dectomax users. For each of these validated rebate forms a producer submits, the designated FFA chapter will receive an additional $3. Producers can choose to designate any portion of their product rebate back to their local chapter.

For more information on this program and the new Next Generation Scholarship program, contact your local FFA chapter.

Planning Your Year-End Tax Strategy

If you're going to accumulate wealth, you're going to have to pay some taxes along the way," says Glenn Kennedy. "Your best bet is not to try to eliminate taxes, but aim to minimize them over the long haul."

Kennedy is a CPA and a partner with McGladrey & Pullen, LLP, Rocky Mount, NC. He has had plenty of experience working with farmers to save income and self-employment (Social Security) taxes.

His first rule is to realize that everybody's situation can be unique when it comes to income tax planning. He shared a number of good tax-planning ideas, but obviously not all of them will work for everybody, every year. They should, however, spark your ambition to do some tax planning.

Kennedy suggests you always run tax plans by your tax advisors. Better yet, sit down with a tax professional and do a good year-end tax plan.

Begin by tallying up your income and expenses for the year, to date, to get an idea of where your taxable income is likely to be at year end. Use last year's tax return to guide you in what has to be reported as income and what deductions you can subtract.

"I also like to do a comparison to the prior year or years," says Kennedy. "It lets you know if you're ahead or behind the same time last year and provides a good clue as to how this year might end in terms of taxable income."

Despite often being abused and over-used, Kennedy sees the cash basis accounting for taxes that is used by self-employed farmers, partnerships and S-corporations as one of the best, tax-planning tools available.

"The big thing is you can buy cattle feed and other farm supplies right up until the end of your tax year (December 31 for most farmers) and deduct it for that tax year," says Kennedy.

Say you pre-figure your tax in the last days of the year and see that your federal taxable income is going to be $71,200 on the joint return you will file with your spouse for 1997. (Remember, the figures are different for other filing statuses.)

The first $41,200 of that will be taxed at 15%. The next $30,000 will be taxed at 28%. The federal income tax rate jumps right from 15% to 28% - there's nothing in between. Your total federal income tax bill would be $14,580.

But if you are a cash basis taxpayer, you could buy $30,000 of feed or other farm/ranch supplies ahead - supplies you will use in 1998 - and keep your taxable income down to $41,200 and your federal income tax tab at $6,180 ($41,200 X 15%), using a joint tax return. You wouldn't pay any tax at the 28% rate; only at the lowest 15% rate.

Another cash-basis tax planning tool is to delay sales, says Kennedy. That's fine for a crop farmer who sells some of his grain. He can hold off some sales until the next tax year and reduce his income.

But that grain doesn't compile additional production costs the longer it is held. Cattle do. And, they're likely to get fatter, too. You might hold cattle for a few days, maybe even a week, to push the income into the next year. But make sure good management prevails over tax planning.

The income tax strategy of holding off sales and buying deductible items ahead of time can create a vicious cycle.

"Once you're caught up in it you have to keep doing it year after year," says Kennedy. "However, if you're in the cattle business long enough, you'll have a year when things don't go so well. In those lean income years, don't forget to play catch up," he explains, by not delaying sales or not buying ahead.

"The trouble is, in those low income years, it's mentally hard to work up to the top of that 15% tax bracket ($41,200 taxable income in 1997 if you file a married, filing jointly tax return) because then you have to pay more than $6,000 of income tax plus a pretty big amount of Social Security tax," says Kennedy. "That's hard to do when you've been through a low income year.

"I want to stress, however, that a successful operation that's going to average about $40,000 annual taxable income ought to be pushing up to the top of that 15% tax bracket every year," he adds. "If you don't, someday you will pay tax at a 28% rate on taxable income that could have been taxed at 15%."

Add about 15% for the Social Security tax and maybe some state income tax and you can be pushing toward 50% tax on the taxable dollars that fall into the 28% bracket.

Never Lose Free Deductions In 1997, the standard deduction for a married couple filing a joint federal income tax return is $6,900. Each personal exemption is $2,650. If you don't have enough income to use those, they're lost forever. There is no way to carry them over to next year.

Consider a couple with two dependent children. Four personal exemptions is $10,600. Add the $6,900 standard deduction and you can have $17,500 of income before you will pay a cent of federal income tax. You sure don't want less income than that because anything less is at least a 15% lost opportunity.

For example, if your income is only $7,500, you would lose $10,000 of deductions forever, worth at least $1,500.

Even if you plan to do most of your own income tax planning, consider asking your tax preparer to give you an update on depreciation. Tell him/her what you've bought and sold during this year and ask them to calculate the new depreciation figure for 1997.

If you buy at least $18,000 worth of machinery and equipment in 1997 - but less than $200,000 worth - you can deduct the first $18,000 as a current deduction, Kennedy reminds. Then you can take regular depreciation on the rest.

If you buy more than $200,000 worth, you'll lose the chance to currently deduct that amount at the rate of $1 for each $1 you go over $200,000. At $218,000, you can't currently deduct anything, says Kennedy.

You don't really lose any tax benefit that way. You just get to deduct it as regular depreciation over the years rather than all at once.

So, if you're counting on that extra deduction, be sure to watch the $200,000 limit, Kennedy warns.

Another depreciation quirk is to watch the timing of your depreciable purchases. If you buy most of those assets on or before September 30, you can use what is called a half-year convention, Kennedy explains.

But if you buy 40% or more from October 1 to December 31, you have to use a mid-quarter convention. The difference could be thousands of dollars worth of depreciation deduction.

"You can also depreciate livestock buildings pretty fast - at an accelerated rate over 10 years," Kennedy says. "However, that could be too fast for the best long-term income tax results."

For example, you could be hard pressed to have taxable income up to the top of the 15% tax bracket in the early years of a building's life. Therefore, the deduction may be worth only 15% in tax savings.

By the time the building is depreciated out, you may have a hard time keeping your taxable income out of the 28% tax rate, he explains.

While you're growing in your operation, you may be wise to elect an alternative depreciation method to allow for slower depreciation.

Another Possibility A "C" corporation - where the corporation becomes a separate taxpayer - is another possibility to consider when it becomes nearly impossible to stay in the 15% federal income tax bracket.

This corporation can deduct some things that you, as a sole proprietor or partnership, can't deduct. Some things that can be considered are all health insurance premiums and all medical expenses not covered by insurance, some meals for employees (including you) and some utilities and other expenses for the farm residence.

The other benefit is that the first $50,000 of corporation federal taxable income is taxed at 15%. That lets you have up to $91,200 taxed at 15% rather than just $41,200 on a joint return. But plan that out. There can also be tax on the corporation's after-tax profit when you later draw it out.

If any of that fits your situation, at least study the idea of a "C" corporation.

Cut Social Security Tax Adjustments you can make in your earned income will also affect your Social Security tax, Kennedy reminds producers.

Understand that, while income such as rent and interest is not subject to the Social Security tax, all net income from your self- employed business is subject to the tax. You can't reduce the taxable amount for the Social Security tax with things like standard or itemized deductions and personal exemptions.

"Young people often say they wish they didn't have to pay any Social Security tax because they don't believe Social Security will be around when they get to retirement age," says Kennedy. "But, I suggest make every effort to pay at least the minimum each year until they are fully covered for disability benefits and for widow/widower and children benefits in case they become disabled or die."

For well-covered farmers, those who have already paid at least a fair amount of Social Security tax for a lot of years, Kennedy's advice takes on a different tone. "Look for ways to pay less Social Security tax," he suggests. "One of the best ways is to incorporate either as an "S" or a "C" corporation.

"With either one, you, as an employee, can draw a reasonable salary," Kennedy continues. "That is going to be subject to the Social Security tax. But then you can take distributions from an S corporation as dividends or additional distributed profits for the rest of your income. Since that is considered unearned income, it is not subject to the Social Security tax.

"With either a C or S corporation, you would incorporate the business and continue to own land and buildings as an individual," he explains. "Again, you can draw a reasonable salary and get the rest of your income by renting the land and buildings to the corporation. So far, rent is considered unearned income that is not subject to the Social Security tax."

Of course, study this carefully with your tax advisors. It's a major decision.

Think Good Management First It's great to save income taxes, but never let tax savings take the upper hand over good farm management.

"In the past, farmers have bought machinery and equipment just for tax deductions," says Kennedy. "Often, it was primarily for the depreciation and investment credit to cut their taxes.

"One farmer even had two combines and was only using one because that's all he needed," Kennedy explains. "That didn't make sense. He would have been better off paying more tax and investing the money."

The same thing can be true when you buy things like feed needs in advance or try to reduce income by holding back sale of cattle that are ready for market.

If feed price drops after you have bought a big supply for next year to get the deduction this year, the extra cost can easily be more than the tax savings. Even with price discounts for buying ahead, if you have to borrow the money, that cost may be more than the discount and tax savings.

"Always balance tax savings with good farm management," Kennedy says. l

Calf and feeder prices stay strong

The Amarillo fed-cattle market hovered in the $65-66/cwt. range during most of September. Even though this price level was causing major cattle feeding losses, placements into feedlots continued to rise sharply. During the last four months, feedlot placements averaged 13% larger than a year ago. This indicates that cattle feeders were bullish about the future.

Feeder cattle and calves lost some of their luster in September, but gave up only a little in price levels. The feeder-fed price premiums still remain quite substantial. Light-weight calves were actually doing better than the heavier weights which, of course, are now in more abundance.

Who's First? When anyone tries to brag about their state being the leader in the cattle business, it often sounds like the old Abbott and Costello "who's on first" routine. Of course, it' s easy to place Texas on top of the list. After all, it's the largest state. Ironically, even states bordering Texas are not as cattle oriented. While it sounds easy to say that the big four or five cattle states lead in every phase of the business, the data does not bear this out. For example, here are some statistics about the importance of the cattle business, by states.

Texas does lead the nation in "All Cattle and Calves," "All Cows," "Beef Cows," " Calf Crop," "Heifers 500 lbs. and Over," "Cattle Operations" and "Fed-Cattle Marketed." If we look at the major states in each category, the picture changes dramatically. Here are the five most prominent states in each class in order of importance:

* The top states in "All Cattle and Calves" include Texas but also Kansas, Nebraska, Oklahoma and California.

* The major states for "All Cows" are Texas, Missouri, California, Oklahoma and Nebraska.

* Leading "Calf Crop" producers in the nation are Texas, Missouri, Oklahoma, Nebraska and California.

* Most of the nation's "Beef Cows" are located in Texas, Missouri, Oklahoma, Nebraska and South Dakota.

* The most important states for "Heifers 500 lbs. and Over" are Texas, Nebraska, Kansas, Colorado and Oklahoma.

* Foremost "Fed-Cattle Marketing" states are Texas, Kansas, Nebraska, Colorado and Oklahoma.

* The largest number of "Cattle Operators" are located in Texas, Missouri, Oklahoma, Tennessee and Kentucky.

* In three areas, Texas is not the leader. The largest numbers of "Livestock Slaughtering Establishments" are in Pennsylvania, Iowa, Ohio, Texas and Illinois. The most "Milk Cows" are located in Wisconsin, California, New York, Pennsylvania and Minnesota. "Red Meat Production" is largest in Nebraska, Iowa, Kansas, Texas and Illinois.

Cattle Feeding The number of cattle and calves on feed, in feedlots with capacities of 1,000 head or more, totaled 9.12 million head on Sept. 1, 1997. That was up a strong 16% above a year ago, the same gain as a month earlier and continues the upward trend in feeding.

Fed-cattle marketings during August reached 2.03 million head. This 5% gain over last year represented the fourth month of over 2 million head marketed. Our forecast equations point toward just slightly fewer marketings in September. Recent weekly feedlot movement in the Southern Plains, however, suggest maybe even more cattle were sold in September.

Placements of cattle and calves into feedlots during August amounted to 2.43 million head.

This 7% gain over a year ago represents the fourth month of substantial gains in placements.

Ultimately, these larger placements will be realized as increased marketings later this winter.

All weight groupings of cattle and calves placed on feed rose except the 700-799-lb. class. Largest increases were recorded in the number of lightest weight calves, (less than 600 lbs.) and heaviest (800 lbs. or more). The proportion of each group to the total, however, was similar to those of a year ago with the two heaviest classes representing 62% of the placements.

Market Outlook Despite some very large marketings, the fed-cattle market has held up well. As feedlot sales slack somewhat this fall, fed cattle should be able to record slight price improvement.

The increased level of placements recorded during the summer months, however, will likely bring larger marketings this winter and again force price weakness.

Feeder cattle and calf prices are holding up well and are expected to stay fairly strong.

Increased fall seasonal movement of calves will probably push downward on the market during the next couple of months. Feeder prices, however, should still remain above year-ago levels for the rest of 1997 and into the new year. l

Calves and a baby

We finally finished haying. There were several wet spots we were going to cut, but they didn't dry out enough to ensure we wouldn't bog the machinery, so we left them. The cattle can harvest that feed.

The range got dry in late summer, but we had rain in mid-September and regrowth on the grass. Content with the new green grass on the mountains, the cattle didn't want to come home this fall. Andrea and I spent five long days rounding them up and really appreciated having horses with good endurance - in top shape from our daily range rides, checking the cattle all summer.

Jim's in the backcountry with Bighorn Outfitters - where he works every fall -packing and guiding elk hunters in the Frank Church Wilderness Area. We have too many elk right here at home and wish there was some way to keep their numbers down. Lynn spent several days fixing fence before we brought the cattle home. The elk flattened fences in several new places this summer as they came and went from our hay fields.

It's frustrating trying to save regrowth on our fall pasture for the cattle (after harvesting the hay) because the elk eat it. They also tore down the fence on our steep pasture we use first when we come off the range, and we had several stray cows and calves from the neighboring range in there.

On September 23, we brought our cattle down to the big pasture above our corrals. The next morning we did chores in the dark and gathered the cattle at daylight to soft off the calves and be ready for the vet. We had them preg-checked and vaccinated (8-way clostridial vaccine and lepto) before noon. After lunch, we vaccinated all the calves (8-way and modified-live virus vaccine for IBR, BVD, PI3) and Bangs-vaccinated the heifers.

Then we sorted out 50 heifer calves to keep and put them in a weaning pasture (well fenced, with good green grass) above the house. We also sorted out 45 cows we plan to sell to our son and daughter-in-law (Michael and Carolyn). They want to increase their little herd and we can sell them some good cows at a reasonable price to help them get a good start raising cattle.

This will help them out. Plus, we'll have fewer cows to calve out this January (125 vs. 170) since we'll be short on good help this calving season. Andrea is expecting her first baby in early February and won't be able to do as much with the calving. With fewer cows to calve, calving will be easier for the rest of us, but, by keeping the 50-heifer calves, we'll have our herd numbers right back up again the following year.

We weaned all calves and put the "sale" calves on pasture. First, they spent three days in the pasture above the corrals with four babysitter cows before being moved to one of the fields we didn't cut for hay. We prefer pasture to a dusty corral for weaning because it seems to be less stressful.

Before we put them on the big hay field, Lynn and Andrea spent three days picking burdock in the brush along the creek bottom so the calves won't be covered with burrs by the time we sell them. Picking the burrs also cuts down on risk of eye problems this fall and winter.

We started having unexplained cases of winter "pinkeye" in cattle on the creek-bottom fields and pastures about 15 years ago. Affected eyes would water, turn blue, become ulcerated and blind. We treaedt them like bad cases of pinkeye, injecting antibiotic and cortisone into the inner eyelid and sewing the eyelids shut for several weeks. The eyes healed but it was puzzling because pinkeye is usually a summer problem.

Then we learned about eye problems caused by microscopic slivers from the burrs of burdock plants that float through the air when the dry burrs are shattered or crushed. These tiny slivers sometimes get caught under an eyelid and constantly irritate the eye as the eyelid moves, scraping and the damaging the eyeball surface and allowing inflammation and infection to set in.

We only had the eye problems in cattle on the lower meadows - where burdock has established itself along the creek bottom and ditch banks. We've been trying to eradicate it by chopping, spraying and picking burrs. We're just beginning to make a dent in plant numbers. But by making sure there are fewer burrs for the cattle to get into, we've almost eliminated winter eye problems.

Build Better Heifers

In at least three states, the "value-added" concept is moving from retained ownership into another category - replacement heifers. Two special sales are planned the next two months in Missouri, while another is set for Kentucky. A third state, Iowa, is moving in that direction as well.

"Holding these heifers over and selling them as breeding animals looks good on paper as a way to add value," says Eldon Cole, area livestock specialist and one of the motivators behind Missouri's Show-Me Select program, a special heifer replacement sale. But, he cautions, "you do have to look at your financial situation and have an understanding banker or be financially able to hold these heifers over for another year."

Nolan and Steve Kleiboeker at Kleiboeker Farms in southwest Missouri went through that paperwork last year. As a result, they made two decisions:

U To retain ownership through the feedlot of their 1996 spring crop of Angus-Simmental cross steer calves;

U To put 46 of their heifer mates in the Show-Me Select Heifer sale at Joplin Regional Stockyards on Tuesday, November 14.

These heifers are part of the 500 bred and open heifers to be sold that day in Joplin and at the F&T Livestock Market, Palmyra, MO, on December 12.

"These aren't commodity sales," explains Extension economist Verne Pierce. "We're selling a value-added commodity with more data attached than any other animal you've purchased in your life."

Will Heifers Bring Premium Prices? Considering today's bullish attitude in the industry, promoters hope bred heifers like the Kleiboekers' will bring premium prices over regular sales. That's been the case in the Kentucky Elite Replacement Heifer program the last few years.

Kleiboekers have two things going for them: Their heifers usually sell at the top of their weight range at Joplin, and their steer mates have performed well in the feedlot and on the rail.

Proof comes from the feedlot and carcass performance of steer mates sent to Supreme Feeders, Liberal, KS, early last November and marketed through the Farmland Supreme Beef alliance.

The steers gained an average of 3.29 lbs./day for 187 days and weighed 1,217 lbs. at slaughter on May 24. Grading Choice were 90%, while 93% yield graded 2 and 3 with 7% 4s, and 29% qualified as Certified Angus Beef.

The heifers were weaned last September, earlier than usual due to dry pastures. They grazed fescue through the winter, were fed MGA for 14 days and bred AI after cycling once. Heifers received 2 lbs./day of supplement through the summer.

These heifers met the Show-Me Select guidelines. Cole, fellow livestock specialist Al Kennett, reproductive physiologist David Patterson, and Extension veterinarians Richard Randle and Bob Larson (members of the Missouri Beef Focus Team) visited each farm to conduct reproductive and condition examinations to make sure heifers qualified.

On November 14, the 46 bred heifers will be sorted into three pens based on calving dates. Prospective buyers will have access to performance data on each animal. Kleiboeker will pay $20/head plus the $5 fee for supporting the Southwest Missouri Beef Improvement Association, sponsors of the program.

So far, the Missouri program is Extension-driven. However, Cole hopes area veterinarians will get involved as they have in Bourbon County, KY, the site of the Elite Replacement Heifer program that has been a model for the Show-Me Select effort.

"There's the potential for three to four additional sales in the state next year," says Randle. Patterson hopes 5,000 heifers will go through the program in 1998.

Much of the credit for starting the Missouri effort goes to Patterson, who helped organize the Kentucky Elite program before moving to Missouri a year ago.

Since its inception, some 8,000 bred and open heifers have gone through the Elite program. Two sales are scheduled at Paris Livestock, Paris, KY, - November 3 for bred heifers born in the spring of 1996; and April 3 for open heifers that calved last fall.

This program is sponsored by the Bourbon County Livestock Improvement Association. Its objective is to develop an elite set of heifers that will demand top dollar on the market, while offering an alternative market outlet to beef producers.

The bred heifer sale is limited to 500 head. "We feel that's all we can sell at one time," says Bourbon County Extension director Glen Mackie. Another 300-350 head will be sold by individual producers after the sale.

Iowa's MACEP Program The Iowa program is called MACEP (Midcrest Area Cattle Evaluation Program). It began in 1989 in south central Iowa with the help of Extension and veterinary workers. MACEP has no public sales, although the Iowa Cattlemen's and Veterinary Medical associations are talking about organizing sales similar to those in Missouri and Kentucky.

Currently, producers consign 5-30 heifers each that go into drylot at the Doyle and Connie Richards farm in southcentral Iowa until bred AI in the spring. They're put on pasture in the summer and pregnancy-tested in the fall, then returned to the consignor's farm, where they stay in the herd or are sold private treaty to other producers. A similar program is held at the Rocking 8 Cattle Company in central Missouri.

Missouri's Eldon Cole says one thing lacking in these programs, so far, is accurate data on just what it costs to keep a replacement heifer on the farm until she calves.

He believes growing them on the farm will cost less than the $304.65-$377.13 range it cost to maintain 89 heifers for 254 days in the 1995-96 program, as reported by livestock specialist Dale Watson. Or, the $320/heifer at the Richards commercial yard in Iowa, noted by Extension specialist Russ BreDahl, who is working with the program. This included feed, yardage, pasture, health treatment, pregnancy diagnosis, reproductive tract evaluation and pelvic area measurements, maturity and interest, but not semen costs. A consignor picks his own sire.

Interest is expanding in Iowa, says livestock specialist Darrell Busby, but he believes the big value is when individual producers begin raising bred heifers commercially.

"I'm excited about that," says Busby. "The ultimate Extension program is when we take an idea, start it out and someone in the private sector sees a profit and decides to copy it. Then you have something."

Cole believes there is more potential for this option in his area than many producers realize, although they do have to look at the situation differently.

It's Not Just "Looks" "We used to keep the biggest and best looking heifers," Cole says. "But when we, with veterinarian assistance, started analyzing them for reproductive soundness, age at puberty and genetic value, we found that at least 50 percent of the heifer calves in a lot of herds would make excellent herd replacements."

Patterson sees the potential impact of these programs not only in increased sales of replacements, but also in export trade. "The Mexican government is showing interest in buying heifers from this program," he says.

Another plus is the potential for such programs to significantly improve reproductive management of herds in the state. This has happened in the Kentucky program.

"With the use of improved health programs, nutrition management and practices like synchronization, you can see differences not only in heifers in the Elite program, but it's rubbing off on others who aren't involved," Patterson says.

Heifer development guidelines in the Show-Me Select program emphasize minimum requirements for body condition, health, reproduction, age at puberty and EPDs of sires. Here are some of the specific rules.

* Heifers consigned to the bred heifer sale must be owned a minimum of 60 days prior to breeding or bought in the spring open sale. Purchased heifers must be accompanied by an affidavit listing the name and address of the original breeder and approximate birth dates of heifers.

* A certification committee (Extension specialist or veterinarian) screens animals for frame, muscle, structural soundness and general sale acceptability. They rate heifers into one of five reproductive tract scores: 1) not breeding or a problem animal; 2) very immature non-cycling; 3) a bit more mature but still not cycling; 4) at puberal state and beginning to cycle; and 5) obviously cycling.

* Open heifers less than 15 months of age must have a reproductive tract score of 2 or greater on sale day. If over 15 months old, the tract score must be 4 or 5 on sale day. The yearling pelvic measurement should be 150 sq. cm. or greater, 180 cm. if over 18 months of age.

Bred heifers must be bred to calve before May 1 and guaranteed safe in calf. Two pregnancy exams are performed, 120 days prior to gestation and within 30 days prior to sale to confirm pregnancy.

* Open heifers must weigh 600 lbs. or more if English crosses, or 700 lbs. for others. Prebreeding weights will be determined at the time reproductive tract scores and pelvic measurements are obtained. Spring calving heifers bred to sell in the fall/winter sales must have a minimum condition score of 5 and weigh at least 800 lbs.

* Show-Me Select heifers should be vaccinated with follow-up booster shots as recommended, treated for internal and external parasite control within 45 days of sale, be polled or dehorned and healed. They should also be fed MGA up to 14 days to synchronize estrus for AI.

* Bred heifers must have been serviced by bulls of known ID and breed with complete EPD information. The emphasis is on birthweight and calving ease EPDs as shown by the record of the Angus bull called Venture. (Venture was the service sire of the 46 Kleiboeker Farms heifers.) He had a birthweight EPD of -.5 and yearling weight EPD of +75.

* The Missouri program doesn't offer free delivery, although the Kentucky Kentucky Elite Heifer Sale does for purchases of 10 head or more up to 300 miles. "That option has helped attract buyers from seven to eight states," says Bourbon County Extension director Glen Mackie.

A Ranch Overhaul

You might say Rancho Sisquoc got hit upside the head with a 2x4. The board was drought conditions, and the wake-up was the realization the ranch wasn't a good money-making proposition in a down market.

So, in a general changeover, this California coastal range ranch is rethinking and redoing almost everything to do with range and livestock. That includes marketing strategy, calving season, management policy and range programs.

Ranch manager Ed Holt says this came about due to four years of severe drought in the 1990s, followed by a price downturn during their traditional June sale season in 1995. He was shocked by the amount of economic damage the ranch, owned by the Flood family of San Francisco, had to take.

"Now, we approach every day as a drought - because it's coming," says Holt, who also oversees vineyard operations on the 38,000-acre ranch.

Holt, along with other ranch operation personnel, began looking for help. They talked to a wide variety of experts - folks like Wayne Jensen of the University of California (UC) and range management specialist Stan Parsons. They also attended range and economic schools.

One of the first things they did was measure their feed supply, something they now do annually. Using a homemade, foot-square device, they clip and weigh feed, analyzing carrying capacity based on a UC Extension formula that evaluates the nutritional value of feed.

"We weigh it to one thousandth of a gram," says livestock manager Bob Schwarzkopf. The samples go to a laboratory for nutritional analysis that is used to calculate how many cows they can feed - and still have 30% of feed left over. That gives them a reserve in case of drought.

"It's a way of budgeting our feed," says Ron Davis, who runs the range side of the operation. He says their new calving season arose out of the information they got from feed analysis.

Second Look At Feed Supply They found they didn't have enough feed to support the cows they were running. That was also evident because they had to keep an active oat and alfalfa hay operation in place just to keep the cows going.

"We had pastures undergrazed and overgrazed," recalls Schwarzkopf. So, they began checking aerial USDA maps to determine where their usable pastures fit into the overall acreage. They were shocked again.

What surprised them was how little useable pasture they had on this rugged ranch where mountainous terrain and impenetrable brush only left them about 11,000 grazeable acres. In light of the feed quality variability from pasture to pasture, they began to see their range in a whole new way. Davis says it's impossible to do range measurement precisely, but it gave them "an accurate guess" about what they had.

"It just all made good common sense," Schwarzkopf points out, "and we're trying to put it together."

Soon, big overviews were leading to smaller hands-on decisions that helped their cows. For example, nutritional analysis of their grasses showed that they were deficient in copper and zinc. Now, their mineral blocks (the only supplements they feed) are custom made with extra copper and zinc.

Improve Nutrition At Calving Another observation they made during this introspective period two years ago was that their cows were in poor condition at calving. Their traditional calving season was September to November, but that was based on the assumption they needed a 550- to 600-lb. calf to market the following June.

In the past, they'd received good prices for those calves, and the calves were in good condition if sold by July 4. But, their calving percentage was down, in the low 70s because they'd designed an artificial calving season driven by the market, not by range conditions.

The rainy season on the coast is from January to April, and in the past, when calves were dropping three months earlier than that, cows were on poor feed and in poor condition. The ranch was squeaking by economically as long as the June calf price was high. Cows, however, weren't breeding back well.

In 1995 prices fell and the economic success of the ranch ran aground. A small calf crop combined with low prices showed them how close to economic disaster the ranch operated.

"I don't know if we'd have changed anything if we were still getting 90 cents for June calves," Holt admits. But, when prices fell below 70 cents in 1995, the ranch's entire economic and management scheme was shaky.

So, they moved the calving season back three months. Now, their objective is to drop calves from December through February. That's already raised their calving percentage 10%.

"We were putting the bulls out when there wasn't any green grass," Davis says of the old days. "That puts a stress on conception."

Holt maintains he should be able to achieve a 90%+ calf crop, especially since most of the past problems were nutrition related.

Now, they're almost certain of five months of green feed for wet cows if the rains come as expected. If they don't, they still have a 30% feed reserve. They've also stopped growing hay to force themselves to meet the demands of a sound economic system.

Change In Marketing Strategy "You can't feed out of a drought," Holt says. "And, if you feed out of an open range, you're abusing the range."

Obviously, this change in calving doesn't allow the ranch to meet the June deadline for a weaned calf, so the crew has completely changed its marketing strategy, too. They've shifted to more of a stocker operation than cow-calf.

"We're trying to hit the feeder market in April and May," Holt says. That means holding calves over 13-16 months on existing range and providing 800-lb. long yearlings to a lucrative feeder market.

This provides some variability in marketing since they can market earlier if prices are favorable. This year, for example, late-summer calf prices were good enough to sell 140 calves.

This kind of marketing flexibility allows them to take advantage of sudden market changes, but it may also leave them short of livestock. They try to run 1,000 animal units, 800-850 cows being part of that. They realize they may also have to be flexible in stocking philosophy.

But at least the ranch is moving out of what Holt calls a "cull cow business," illustrated by the number of dry cows sold after they'd failed to conceive. The ranch is now in an ongoing economic analysis, too, designed to tell exactly how they're doing at any point in time.

Their computer analyses - using Ranch Vision, Lotus and their own spreadsheet software - uses standard features such as stock flow plans, livestock evaluation and profit/loss analysis.

Holt often compares the ranch to a factory. He says they might have shown a profit in the past, but they were losing their manufacturing capacity (their cows) to do so. Economic analysis can project where they'll be at any time given any number of circumstances.

"We're profitable, but we want to be more profitable," Holt says. The computer can help tell them how to get there. The computer, and good communication among the three men regarding all these new concepts, can also tell them how to better deal with future droughts, he adds.

"We spend a lot of time on drought strategies," he says. Thus, if it doesn't rain by mid-February, options are clear: They can sell their stocker and other non-producer animals, wean calves early and sell them; and/or get rid of dry cows. Based on a feed analysis, they can also sell cow/calf pairs if the drought becomes too serious.

This kind of thinking alone is a breakthrough for Rancho Sisquoc, where in the past there was no clear direction or goal during drought.

Turn Grazing Into A Science In addition, their range analysis has given them new grass-growing techniques which should increase carrying capacity. Davis is also studying native plants in an effort to give the ranch better - although not necessarily more - feeding capacity.

"We can lengthen our green season with perennial grasses," Davis says. Species such as perennial rye, stipa, orchardgrass, gramas and poa can be managed. They stay green and nutritious longer than annuals.

The ranch is moving toward a modified holistic rotation system, too, that will utilize the natural pasture. Although the ranch does not lend itself to cell fencing, the managers think by using natural barriers, more manpower and water cutoff, they can rotate cattle to get more pounds per acre. Specifically, they hope to more intensively graze pastures and then rest them for long periods and better growth.

Holt says that since the ranch has a rosier economic outlook, morale is up and they have more positive feelings about their management options. l

Holiday turkeys - part II

It's time to recap the year's moronic, wacky and ironic enroute to bestowing our 1997 Turkey Award. Shine up that fork and let's get to probing these birds for doneness. Our finalists:

The "Gee, Ivan, I Guess Beef IS Dangerous" award goes to a Russian crew that stole a cow wandering a remote airfield in Siberia and loaded her on their military jet. In the air, the unrestrained cow went ape. The frantic crew opened the cargo ramp and the cow jumped out of the plane at 30,000 feet over open sea. The cow landed on a trawler, penetrated its hull and sank it. - Flying magazine.

Greenpeace gets the "Mmm, Boy, That's Some Mighty Good-Tastin' Crow" award. Greenpeace activists in England collected sand near a nuclear power plant to demonstrate nuclear power's dangers. They stored it in oil drums in their London offices. When this was discovered, Greenpeace quickly downplayed the environmental risk. "There is absolutely no health risk or danger to the public," a spokesman said. - Competitive Enterprise Institute.

The "Just Like Home, But Worse" award goes to local officials in Washington who forbade Czech immigrant Jaro Baranek from building a home because his property was on an "alluvial fan hazard section." Not only were there other homes in the same area, but Baranek was still required to pay taxes on his worthless property. "The communists used to take land without compensation," Baranek lamented. "Here, they take your land and you have to pay for it." - Land Rights Letter.

The "Fixing The Constitution" award goes to Jack Nordby, a Minnesota district court judge who struck a blow against the mischief created by those folks who penned the Bill of Rights. In a real headscratcher, Nordby ruled that the Mall of America, the largest shopping mall in the U.S., must permit free-speech protests in its building. He said the mall is not actually private property because government had heavily subsidized its initial development. So, the building lacks full property rights protection and must permit the exercise of free speech.

Under this lucid argument, if you buy your home or ranch with the assistance of some type of government program, watch out for sign-toting yahoos in furry costumes picketing your kitchen as you eat your steak and eggs.

The "Dirty Dollars" award goes to People for the Ethical Treatment of Animals (PETA) and the Humane Society of the U.S. (HSUS). A favorite fundraising hook for PETA and HSUS has been animals in underfunded local humane shelters. PETA, however, gave less than $5,000 of its $13.4 million budget to shelter or spay and neuter programs in the U.S., but did give $42,000 to defend convicted fire bomber Rodney Coronado. HSUS raises $50 million annually but gives shelters zip. - Americans For Medical Progress.

The "Science Vs. Popular Perception" award goes to researchers Christopher Murray and Alan Lopez. Their article in the May issue of Lancet, a British medical magazine, reported that their study of the causes of 50.4 million deaths worldwide in 1990 found that while heart disease was the leading cause of death, most people killed by heart attacks lived in the Third World. The report was prepared with help from the World Health Organization.

The "We Need Somebody, Anybody" award goes to the Des Moines Register. The Iowa newspaper continues to rely on Neal Barnard as a credible spokesman for the anti-meat side. Barnard is a psychiatrist who heads up the pseudo-science group, Physicians Committee for Responsible Medicine. Interestingly, in1991 the Register ran a story that called Barnard a fraud.

The "I Think Maybe Ken Missed The Point" award goes to Kenneth May, a spokesman for the National Broiler Council. Among other things, inequities in federal meat inspection allow the U.S. poultry industry to add as much as 9% water to its products. Red meat products, on the other hand, are allowed no water retention. In 1994 alone, poultry's water break allowed that industry to sell 2 billion lbs. of added water to consumers at poultry prices. When a group of beef producers and consumers sued USDA over the unfairness of the water retention issue, May called it "whining."

Now, it's time for our jury's decision. And, the 1997 Turkey Award goes to Š Judge Nordby Š for chucking out troublesome Constitutional guarantees that don't fit his personal agenda. Congratulations, Judge Nordby. l