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Articles from 2018 In November


Trump signs U.S.-Mexico-Canada Free Trade Agreement

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The leaders of the United States, Mexico, and Canada signed the U.S.-Mexico-Canada Free Trade Agreement (USMCA) on the sidelines of the G-20 meeting in Argentina on Friday, Nov. 30. The USMCA, which replaces the North American Free Trade Agreement (NAFTA), maintains unrestricted, duty-free trade for beef and cattle in North America. It also maintains science-based trade standards.

NCBA President Kevin Kester issued the following statement in response to the signing: 

“With the signing of the USMCA, U.S. beef producers are one step closer to knowing that unrestricted, science-based trade will continue in North America. The agreement brings the trading relationship with our neighbors into the 21st century – and clearly rejects the failed beef and cattle trade policies of the past.

“Open markets have helped U.S. producers flourish and created billion dollar markets for U.S. beef.  We look forward to working with Congress to get USMCA passed into law as quickly as possible.”

Opinion: It's a new game in Washington after 2018 midterms

American Farm Bureau Federation President Zippy Duvall said in a statement: “Today’s signing of the U.S.-Mexico-Canada Agreement continues the progress American farmers and ranchers have made since the North American Free Trade Agreement took effect in 1994.

“Agricultural exports to Canada and Mexico increased from $8.9 billion to $39 billion under NAFTA. That boost provided important markets for farmers and ranchers whose productivity has only grown since the agreement was signed.

“USMCA keeps all those gains and adds improvements in poultry, eggs, dairy and wine. In every way, this new agreement is just as good, if not better than, the one that came before. We thank the Office of the U.S. Trade Representative for all the hard work that went into this accord.

“As good as all this news is, farmers and ranchers still face retaliatory tariffs over steel and aluminum disputes with our North American neighbors and other trading partners. We urge the administration to redouble its efforts to come to an agreement on those outstanding issues so we can regain the markets we had not long ago.”

All three countries must complete their own domestic processes before the USMCA comes into force. In the U.S., Congress will need to pass legislation to implement the deal. The U.S. International Trade Commission is currently conducting an investigation into the likely impacts of USMCA. Texas rancher and NCBA member Kelley Sullivan participated in the public hearing to explain how the agreement will benefit U.S. producers.  

 

 

 

 

 

7 ag stories you might have missed this week - Nov. 30, 2018

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Farm Progress America, Nov. 30, 2018

Max Armstrong offers a look at the rising concern of farm bankruptcies. Chapter 12 bankruptcies are up in the Upper Midwest according to a story in the Minneapolis Star-Tribune. Max offers some insight on the idea of bankruptcy and how that’s not always the end of the line for the operation.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: TheaDesign/iStock/Getty Images Plus

Farm Progress America, Nov. 29, 2018

Max Armstrong offers insight on an Indiana farmer who is pushing automation to the point of planting 10,000 acres of soybeans with robotic equipment. Max shares some history about the farmer and his father.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Image: Ekkasit919/iStock/Getty Images Plus

Report reveals extent of loss from self-checkout

The ECR Community Shrinkage and On-shelf Availability Group (OSA) and NCR Corp. launched a new comprehensive report that assesses the potential impact of self-checkout (SCO) technologies on retail loss and provides best practices and guidance on how to address and balance risks. 

While the report “Self-Checkout in Retail: Measuring the Loss” found that levels of stock loss are higher at SCO than at staffed checkouts, it also points out that there are a variety of best-practice operational techniques as well as a range of existing and emerging technologies that retailers can use to keep shoppers honest and accurate.

“This is the first study that has been able to quantify the risks associated with SCO technologies and the evidence shows that they present a wide range of opportunities for customers to generate retail losses,” explained Adrian Beck, Emeritus Professor at the University of Leicester and author of the study. “It was surprisingly difficult not only to obtain reliable, robust and verifiable data on the losses associated with SCO systems, but also on the effectiveness of the approaches being adopted to try and manage them.”

Retailers count their stock loss typically as a percentage of their sales, which, according to a prior ECR report, is about 0.67% of sales in grocery retail. This new report suggests that a typical retailer can experience an increase in stock loss of 1 basis point for every 1% of sales that go through fixed SCO machines. For instance, a typical store with 25% of their sales value going through fixed SCO could see additional stock losses of 0.25% of sales value.

Stores using Scan-and-Go technologies could see an increase of between 0.7 and 10.4 basis points of additional loss for every one percent of sales processed. In the study, the average utilization rate for Scan-and-Go was 2.8% of sales value, suggesting additional stock loss of between 0.01% and 0.29% of sales value.

John Fonteijn, Chair of the ECR Community Shrinkage and On-shelf Availability Group summarizes: “Retailing is becoming ever more dependent upon a host of technologies, many of which are increasingly focused upon improving the customer journey. This report will help retail organizations to continue to reap the benefits that self-scan technologies can bring while doing so within a sustainable business model.”

The report goes on to consider ways in which SCO technologies can be controlled, including the use of effective guardians and a range of emerging technologies. The report also underlines the importance of monitoring data on the risk of loss relating to SCO as well as adopting a more joined up approach to SCO management and control.

“As the industry is moving at an ever-faster pace towards frictionless checkout, the various self-scanning technologies are a key strategic element in retailers’ store development plans,” added Dusty Lutz, Vice President & General Manager, Store Transformation Solutions at NCR Corporation. “The report shows that there is an opportunity to leverage emerging computer vision and artificial intelligence technologies as a more effective and less resource-intensive solution to simultaneously help improve both security and customer experience. For example, our latest security solutions can help detect when a shopper is attempting to substitute an expensive steak for the price of bananas, or tries to leave half of their items in their cart without scanning them.”

The report is based upon data collected from 13 major retailers operating in Europe and the US, including analysis of: 140 million Scan and Go transactions; 17 million transaction audits; video analytics of €72 billion of fixed SCO transactions; and comparative stock loss data from thousands of retail stores. It is the most comprehensive study to date on the scale and extent of stock losses associated with SCO technologies. It focuses on highlighting the risks and advocating a set of strategies that may help to minimize stock loss so that retailers can better achieve the operational benefits and improved customer journey enabled by SCO technologies.

The report is free to download from the ECR Community Shrink & OSA group website - Click here

 

Retail stores still important for holiday shopping experience

ShopperTrak, a Tyco Retail Solutions’ brand, has released a more comprehensive report of shopper behavior during 2018 Black Friday week through the busy weekend, the period spanning from Sun., Nov. 18 to Sun., Nov. 25. For the analysis, ShopperTrak compared daily store traffic versus the same days last year.

ShopperTrak found that store traffic for the Black Friday week in total resulted in a 1.2% decrease vs. last year. But this decline represents an improvement from 2017 when traffic was down 2.3%. Black Friday weekend 2018 (Thurs., Nov. 22 to Sun., Nov. 25) declined only 1.5% this year, compared to a 2.2% decline in 2017. With online shopping increasing and the early holiday store traffic trends starting to improve over previous years, the relevance of the store for the customer shopping experience is becoming evident. Black Friday festive store shopping is still important for today’s consumers.

“Overall, this year’s minor decrease in shopper visit performance indicates that Black Friday still remains one of the busiest in-store shopping days of the year and traffic is stabilizing from previous years,” said Brian Field, senior director of global retail consulting for ShopperTrak.

ShopperTrak also looked at the effect of Cyber Monday on brick-and-mortar retail traffic on Monday and found that this year’s traffic was down 7%. This is a larger decrease than in 2017, when Cyber Monday was down 2% and more in line with that year’s holiday weekend results.

“While most of the country is back at work and wouldn’t be shopping significantly in-stores on Monday, the difference between this year’s results and last year’s is surprising. Some of this could have been due to weather issues on Sunday and Monday as well as the lure of Cyber Monday. Regardless, consumers enjoyed their in-store shopping experience over the holiday weekend,” added Field. “Customers are finding their balance between in-store and online shopping strategies, and it will be important for retailers to be prepared for the remaining busiest days in order to compete against online.”

For more information on the 2018 top 10 busiest shopping days and holiday shopping trends, visit the ShopperTrak blog: www.shoppertrak.com/blog.

Turning common heifer development logic on its head

Replacement heifers in pen

From my earliest memories of reading farm magazines and attending cattle management conferences or seminars until now, there have been many ideas and opinions about how to develop and select replacement heifers. I am about to offer a perspective that will differ from most of what you have heard or read during these many years. I have interspersed much of it in these articles during my time as a writer. Now I will try to put it in this one piece.

Heifer development not only can be, but should be much simpler than we typically make it.  Selection and development go hand in hand. They facilitate each other.

Most of you, because of “expert” advice you have received, have been over-developing your heifers. You have selected the biggest and prettiest heifers based on biased and subjective criteria. I want to suggest that you change that approach.

You will need to start where you are with the cattle that you have; so most of you will want to take a few years to get to the point I suggest. Each step will tell you how big the next step may be. 

I think nearly every herd has some good cows. My definition of good—those that get pregnant, deliver and raise a good, not necessarily excellent, calf every year without you ever touching them except for routine immunizations. The rest are inferior. In the long run, you want those cows to be the mothers of your replacement heifers; so raise more of them.

How do you do it? You keep nearly all of your heifer calves. You only remove the few that are obviously challenged or inferior. 

This will usually be less than 5% (maybe not at first, but keep most of them). You then shorten the heifer breeding season as fast as you dare until your bull and/or AI exposure is not more than 30 days, ideally 24. 

If you have calving dates from previous years, you can see what percentage bred in 24, 45 or 65 days and can get an idea of how many days to expose this larger group of heifers. Because you will be keeping some later-born heifers and not developing them to gain as rapidly in addition to shortening the breeding season, you will need to expect a lower conception rate.

Now, instead of trying to get the heifers to 65% of expected mature cow weight, 55% will be enough. You may want to take a couple of years to get to that point. However, many have done it quickly. 

I hope you see how this more moderate or “minimal” development plays into heifer selection.  With less input and size, the ones that conceive in a short season are truly the good heifers.  They are more closely adapted to your environment.

Now the arguments start to come:

  • I won’t be breeding the best heifers. You don’t know which ones are the best. Let the bulls and the environment tell you which ones are best. They are the ones that get pregnant. There are very few, if any, people that can look and tell which ones will breed.
     
  • I don’t want to keep that many heifers. Why not? Yearling operations are usually more profitable than cow-calf operations; and you should winter these calves like stockers going to grass. The only added expense is use of the bulls or AI. 

    Open heifers should be nicely profitable. Many people are hesitant to keep more heifers because of the cost of development. If the cost of development is high, that is a problem; and unless you can change that, you shouldn’t be raising your own replacements.

    Don’t tell me that you need to develop your own heifers because they are better. If they were better, you could get a good breeding rate with less development cost. The added value of yearling heifers should be significantly more than the added cost.
     
  • I would like to use the genomic tools to evaluate the heifers before breeding them.  Why? Those tools might give you some genetic tendency information, but it won’t tell you which ones will get pregnant in the first 24 days. The bulls will. 

    The average heifer calving in the second cycle cannot live long enough for her lifetime production to catch up with the heifers that calve in the first cycle regardless of other genetic differences.
     
  • That heifer’s mother isn’t good enough to keep the daughter as a replacement. You are selling the wrong one. Sell the mother. If you are using good maternal bulls, the heifer calf should have a good chance of being better than her mother. If you are not using good maternal bulls, you need to find them or raise them or become a terminal breeder.
     
  • I might soon have more pregnant heifers than I need. Good. Now you have a marketing opportunity. You may sell the excess bred heifers. Or my recommendation is to keep the bred heifers and sell enough late bred cows to make room for the heifers that are going to calve early. 

    Many areas have buyers for cows bred to calve later than your calving season. Also, as you remove late-bred cows, your calving season will get shorter and the latest born heifer calves will be older and more likely to breed. You can see how the positive effects begin to multiply.
     
  • I don’t think those “underdeveloped” heifers will make good cows. Research done by Rick Funston at the University of Nebraska and Andy Roberts at the Land and Range Research Station in Miles City, Mont., plus a bunch of personal practical experience says that they will make better cows than the ones I am calling “over-developed.” 

    If you want to help them along a little, do it from the time they are diagnosed pregnant as a yearling until they are checked pregnant as a 2-year old. That is the most difficult 12-month period of her life. You would much rather sell an open yearling than an open 2-year-old.

Now let’s ring up the pluses:

  • When you start putting many heifers into your herd that will all calve early in the calving season, you will soon be able to shorten the cow calving season by removing late bred (less efficient and less adapted) cows. As your calving season gets shorter, the latest born heifer calves will be older and more likely to breed. Weaning weights will also increase.
     
  • In future years, more and more heifers should be eligible breeders.
     
  • As more of these heifers come into your herd, you will be able to remove the less desirable cows. Soon you will get by with less supplemental feed and have an increased level of herd health.
     
  • New marketing opportunities will show up. Remember the ranchers who are terminal crossing or should be. They need your excess cows. Even though the late calving cows are a little inferior for you, they could work very well for the terminal breeders, especially after a few years into your program.

Two more points:  I am convinced that the heritability of fertility, under minimal heifer development and reduced cow herd inputs, is significantly higher than the estimates of low heritability that we usually hear. You need to buy or raise bulls that will not undo what you are trying to accomplish with your heifer development and cow culling.

Teichert, a consultant on strategic planning for ranches, retired in 2010 as vice president and general manager of AgReserves, Inc. He resides in Orem, Utah. Contact him at [email protected].

Consider direct marketing of weaned calves

Loading cattle

By Bruce Derkson

Although preconditioning of newly-weaned calves remains popular throughout much of the U.S. and to a lesser extent in Canada, attempts to trim costs from the negative side of the ledger continue as more producers are viewing satellite and video sales direct from the ranch as a possible method to expand their profits.

Many feedlots still fill their pens purchasing small groups from the local auction barn sales. Since operations with less than 50 head hold 82% of the cows in the U.S., the value of auction barns for marketing calves will remain. But if you have enough calves to make a semi load, direct marketing is an alternative worth looking at.

These types of sales reduce significant amounts of travel stress along with avoiding excessive co-mingling with unknown-origin cattle. An unconfirmed report published years ago claims a single 5,000 to 10,000 head feedlot traced the cattle on site to over 2,000 previous owners. Even if this study is flawed, there is a huge amount of co-mingling of vulnerable cattle.

Cattle transport coupled with co-mingling of multi-origin calves increases stress, shrinkage and the incidence of respiratory illness. So it would stand to reason that these stressors should be reduced if possible, not only for the potential health of the weaned calves moving forward but for the producer’s bottom line.

With the ongoing prevalence of the consumer’s attention to animal welfare, producers cannot afford to randomly and without thought assume a generous on-going application of antibiotics is the answer. Concerns over antimicrobial resistance continue to grow and limiting transportation stresses can be an important first step in reducing their use.

Research sponsored by the Beef Checkoff showed a myriad of factors negatively impacting weaned calves that arise from trucking and shrinkage alone. They included loading and weather conditions, time in transit, co-mingling, segregation of different sexes and weight classes into separate trailer compartments, driver experience, animal nutrition, health status, and physical condition as aspects of concern. 

Above and beyond simple gut content shrinkage, the research claims actual tissue loss can exceed 60% of the total body weight loss. Rough handling and excessively high ambient temperatures can drive this number even higher. 

Besides eliminating extra transport stress and limiting co-mingling of calves, formal direct shipment satellite and video sales from the ranch can provide documented evidence of vaccinations, weaning dates, certifications of castration and other treatments. These detailed descriptions may help in the elimination of repeated procedures including deworming and lice control, endectocides, vaccination redundancy, and even implanting. If enough trust can be earned and established between buyers and sellers, information of specific vaccinations and implants can be exchanged to potentially reduce or even end redundancy and stacking of implants.

Even though these sales are run by the auction markets, they are internet based with generally lower costs to the seller than the services of the entire auction barn facilities.

If weaned calves designated for ranch video sales are preconditioned over an established period of time, there are even more positives for both sellers and buyers. Beyond the previously mentioned benefits of reduced stress and transport, these calves should have less propensity for sickness and move onto feed quicker with more efficiency. Many feedlots have introduced feed matching programs to make the transition even easier.

F.A. Thrift of the Department of Animal and Food Sciences at the University of Kentucky indicated that buyers in the U.S. paid premiums of $1.43 to $6.15 per cwt for preconditioned calves versus non-preconditioned calves in 2011 with the extent of the premium being varied by cattle appearance and seller reputation confirming there are definite premiums to be had by the seller.

Direct shipping using ranch-based satellite and video sales have the potential to build long term relationships between sellers and feedlot buyers. There is no doubt that calves will realize higher weight gains, plus potentially lower morbidity and mortality rates.   

An eleven-year Purdue University study of Illinois farms showed that 63% of weaned calf profits came from the added weight sold of preconditioned calves. Reducing the stresses of the volatile weaning season will undoubtedly increase the possibilities of this extra weight being available for sale.

In another Beef Checkoff-sponsored study, if following best management practices could result in a 1% decrease in shrink among the feeder cattle shipped at least once in the United States, the economic benefit would exceed $325 million. This is certainly something to consider when deciding how and when to market your weaned calves.

Derksen is a freelance writer and feedyard pen rider in Lacombe, Alberta, Canada

Is sales price of cattle the main determinant of profitability?

November 2018 Calf Prices vs. Cow Costs

Annual cow costs were the focus in last week’s Industry At A Glance. The focus was based on data from the Kansas Farm Management Association (KFMA), one of the largest farm management association programs in the country.

Most important, data derived from KFMA is very useful with respect to benchmarking and trends within the beef industry. Many of the participants represent mostly mid-size (including both diversified and full-time) operations and possess a long-standing track record enabling meaningful comparisons over time. 

As noted, last week’s discussion highlighted annual cow costs, both direct and indirect costs, categorized by profit segments:  low third, mid third and top third, respectively. Most pertinent to this discussion, the data emphasize that production and selling price obviously impact profit – but the largest component in segmenting the differences among these groups are differences in cow costs. In other words, the differences across other factors don’t impact profitability nearly as much as maintenance costs.   

For example, between 2005 and 2017, the average cow cost was $748, $858, and $1,046 for the top, middle and low profit groups, respectively. That represents a $298 difference between the high and low categories (or 40%). 

Meanwhile, the marketing rate varied only 2% among the three groups with the top third actually possessing the lowest rate (82% vs. 84% for the bottom third profitability group). And last, marketing weights were 593, 580, and 571 pounds for the top, middle and low groups, respectively.    

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To further emphasize the importance of costs, this week’s illustration highlights average sales price across the groups. The average sales price stood at $138.70, $140.25, and $135.70 per cwt for the high, mid and low profit groups, respectively.  

In other words, there’s no real difference between the groups when it comes to selling price – at least not one which would explain the large differences in profitability (more on that next week).  

How do you perceive the importance of cow costs with respect to profitability? Simultaneously, what’s your perception of the importance of production variables as it equates to the bottom-line? Leave your thoughts in the comments section below.  

Nevil Speer serves as an industry consultant and is based in Bowling Green, KY. Contact him at [email protected]

  

External pressures threaten next generation

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In the next few years, nearly 10% of the nation’s 93 million acres of farmland will change hands with much of it transferring ownership through gifts, will or trusts. For the Millennials and Generation Zers hoping to get into production agriculture, that means many will have to be “born into it” or will need to have a hefty load of cash to make the capital investments in land and agricultural properties.

To that end, yesterday a quarter of pasture was for sale 7 miles from our ranch. The grass would have been a nice investment for Tyler and I as we grow our cow herd, but alas, as the price per acre skyrocketed far beyond the depths of our pocketbook, I was reminded we better not quit our day jobs!

Later on in the day, I attended our state’s cattlemen’s convention where the agenda covered topics such as fake meats, agricultural property taxes, sustainable beef production and more. A scan of the room revealed, even in my early 30s, I was still among the youngest in the room.

Which begs the question, where are the young people? The reality is we are losing the next generation of farmers and ranchers at rapid speed.

And it’s not for a lack of desire. I have countless friends who maintain jobs in the city while pining to go back to the ranch. However, as inputs have skyrocketed and capital investments continue to increase, it can be extremely limiting and a slow-going process for the next generation to get started or advance forward in their production goals.

Not that I’m complaining. I’m always up for a challenge. I know where there’s a will, there’s a way. That’s why it’s so important to me to attend these meetings and be a lifelong learner of the beef cattle industry.

Yet, I was reminded recently of the other challenges that our parents and grandparents didn’t face in their agricultural careers.

Earlier this week, I was on a Zoom call with a researcher who specializes in how beef-centered diets can reduce the rates and reverse the symptoms of Type 2 diabetes and metabolic syndrome. The conversation veered toward my life in cattle country, and this researcher asked me if I was frustrated by the continued attacks on the beef industry.

He said, “It’s coming at you from every direction! The animal rights activists, the environmental groups, the nutritionists — they all attack beef every single day.”

He hit the nail on the head with that sentiment, and I couldn’t help but wonder how these external threats will shape the future of beef production in the upcoming years. With new protein products entering the retail space, we must continue to fiercely protect beef’s nomenclature and the reputation we have bought and paid for with our Beef Checkoff dollars.

I don’t mean to sound like a pessimist here, but I do write with a sense of urgency. Our industry is under attack, and we can no longer fully rely on our lobbyists in Washington, D.C. to keep the lions at the gate.

We must continue to engage, whether that’s on social media, in conversations within our respective communities or on a political platform such as making your opinions known on the issue fake meats before the end of the public comment period on Dec. 26.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.