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Articles from 2001 In December


Scientists Devise Cattle-Friendly, More Accurate BSE Test

http://www.asahi.com/english/national/K2001121800307.html

Learn How to Write a Business Plan

http://aginsight.com/businessplan

Read the Harvard Report on BSE

http://www.aphis.usda.gov/oa/bse/

NCBA Opposes Proposed Bioterrorism Bill That Shifts Authority away from USDA

http://www.beef.org/newsroom/ncba/2001/ncba01_1129c.htm

Harvard Study Shows Very Low Risk of BSE in the U.S.

http://www.usda.gov/news/releases/2001/11/0241.htm

On Guard

There's no need to panic, but there is definitely cause to trade the comfort of indifference for keen awareness.

“To a large extent, the food industry has focused on protecting the food supply from incidental or unintentional problems. Now, we have to deal with the very real possibility of intentional, malicious attacks on the food supply system. That's a different level of protection entirely,” says Chet England. He's senior director of product safety and regulation for fast-food giant Burger King Corp.

Due to that situation, England says, outfits like his “have to expect more from our suppliers. None of us will be able to again conduct business the same way we did before Sept. 11.”

Scott Crain, DVM, from Mead, KS, and a partner in the Cattle Management Health Network, underscores the rural vulnerabilities.

“Because we live in rural areas, beef producers are living in the softest target area we've got,” he says. “It would be relatively easy to dispense biologic elements of mass destruction in these areas.”

Whether introduced intentionally or not, the threat of diseases like foot-and mouth-disease (FMD) has always been there, says Kevin Herglotz, a USDA spokesperson. “That's why we have implemented all the prevention and response programs to keep it out. But, we are asking all producers to be more vigilant.”

While the threat has always been present, producers have been bombarded with the potential of catastrophe the past 18 months.

  • First, public fears about BSE led packers to demand signed affidavits from feedlot suppliers verifying the cattle in their care were not being fed mammalian protein.

  • Next, a widespread global outbreak of FMD prompted USDA to step up inspection and emergency preparedness plans.

  • Then, terrorists attacked the Northeast, and anthrax was delivered through the mail.

  • Now, it's the threat of the intentional introduction of a foreign animal disease (FAD).

9/11 Changed The Threshold

“The vulnerabilities (within the nation) already existed, but we're certainly more aware of them now,” says Mark Mateski, operations manager for Jane's Consulting. “Things we might not have seriously considered before are being considered now, such as the use of biologic weapons for mass destruction.”

Jane's Consulting is a division of Jane's Information Group, which some consider the foremost consultant and publisher for defense, transportation and security issues.

Of course, mass destruction doesn't necessarily imply dying people and exploding buildings. There are two kinds of risk and liability, Crain says. One is anti-human, intended to kill people and create fear. The other is anti-animal or plant, intended to kill livestock or contaminate crops, and undermine consumer confidence in the food supply.

At press time, officials scrambled to track down the origin of anthrax shipped through the mail. According to the Centers for Disease Control, other likely candidates for use as anti-human agents include botulism, plague and smallpox.

These agents obviously can kill people, but Crain notes all biologic agents are highly unpredictable. That's why not everyone gets the flu, and everyone who does come down with it doesn't get sick at the same time.

When it comes to infectious anti-animal and plant agents like FMD — which don't infect people — havoc can be wreaked quickly. In a mock disaster staged by the Texas Animal Health Commission, a hog infected with FMD was marketed at a local sale barn. Because of the way the industry rapidly moves stock cross-country, 30 ranches in four states were infected within 24 hours via cattle unknowingly infected then purchased at the same facility.

“In Great Britain, it wasn't a cow sneezing over the fence that became the wild card,” emphasizes Crain. “It was the trucks hauling them, and the assimilation points at the end of that haul.

“With feedyards, it's not the fact that you have 40,000 head standing in one place that's scary. It's the truck and the assimilation point, the market channel — that's scary,” Crain adds.

With that in mind, Crain encourages feedlot clients to disinfect all vehicles before entry into the yard. A former veterinarian for one of the nation's largest livestock markets, Crain also advises assimilation facilities to allow only known personnel, buyers and consignors in the pens and to admit no one on non-sale and non-sale preparation days.

Figuring The Terrorist Mind

“You have to try to get inside the terrorist's mind and figure out their desired end result,” England says. “Then, take these potential motives and look at our own segments of the business and assess what someone might do to achieve their goals. Then, develop counter-measures.”

In the case of the food supply, England believes terrorist goals could include grabbing public attention with a devastating event that would destabilize consumer confidence in products previously accepted as safe — and/or destabilizing the economy through a hit on a key sector of the supply chain.

For example, Crain says that if terrorists could capture the livestock complex through the introduction of FAD, they also would capture the grain complex because 70% of the grain produced is fed to livestock. Combined, livestock and grain production in this country account for 18% of the gross national product. “Capture these two complexes and you effectively destabilize the nation's economy,” he says.

While there have been no reports of bio-terrorism in livestock thus far, some producers have already felt the threat more than others.

“For so long, we've felt insulated because we're out here in the middle of the country,” says Scott Anderson, manager of Texas County Feed Yard, Guymon, OK — a part of the Brookover organization. “Now, you wonder if that isolation makes you more vulnerable.”

Guymon is a number of miles and coyotes from anywhere, but the sheriff's office called Anderson in October to alert him that a suspicious truck had been crawling along night-darkened roads near his yard. A similar truck had been reported creeping near another county feedlot, as well.

The incident turned out to be a non-event, but Anderson says the phone call got him and his crew thinking of the world differently. Keep in mind, the Brookover yards had already heightened bio-security precautions in the wake of BSE and FMD concerns.

“Immediately, we visited about the security of our facility, made sure all the gates were locked and limited access to only one entry point,” says Anderson. “As an entire organization, we're now in the initial process of discovering what we can do, drafting an overall game plan for each of our yards because each one is unique.”

At the same time, he says, everyone's struggling with how you still can be a good neighbor and heighten security at the same time. It's a delicate balancing act, he adds.

He's not alone in the planning process. Soon after Sept. 11, Crain and his partners began drafting updated biosecurity plans for their clients, which include bioterrorism components.

Of course, the frustration is that for every safeguard you can conjure, you can imagine another hole in need of filling. Mateski emphasizes that no system is 100% secure.

“But doing our best is better than what we have been doing,” he says. For instance, he says airport security might still be vulnerable, but few would argue it hasn't tightened since Sept. 11.

Defending With Offense

Crain says common sense goes a long way in protecting any cattle operation. The fundamentals of disease prevention still work:

  • Soap kills about anything.

  • Know where incoming cattle are coming from and how they've been handled.

  • Prohibit anyone you don't know from coming on to the place.

  • Immediately report any suspicious activity.

  • Immediately report unfamiliar clinical conditions to your veterinarian.

“We've got to be watchful rather than accepting because we don't know the face of our enemy,” says Ian Stewart, a veterinarian and epidemiologist for USDA's Animal and Plant Health Inspection Service. “Be watchful and stay in tune with what's happening in your area in terms of disease. Stay in touch with the producer groups and the state and federal agencies. Be a good neighbor and watch out for your neighbors.”

Specific beef production biosecurity recommendations can be found at a number of places. Visit www.beef-mag.com for information and links.

England says the industry as a whole has to consider the security of its animals and facilities, whether you're talking about a barn, a feedlot or a transport vehicle.

“We have to make sure we have physical security so that a bad person can't tamper, tinker or compromise the product… And, that includes personnel. How confident is the industry that it has adequate personnel screening and clearance procedures in place?” he asks.

For their part, England says Burger King, which purchases 400-500 million lbs. of ground beef annually, has made security its number-one priority. “We have very capable people at all levels of the industry and government working diligently to solidify and enhance the protection methods we already have in place,” he says.

USDA says much the same. Along with $40 million additional funding received this year to boost FMD protection efforts, it's requested another $45 million to further enhance biosecurity. Herglotz says the money will be used for everything from additional inspectors to increased disease and disease diagnostic research. There are already 5,000 USDA inspectors and veterinarians prowling states and national points of entry, as well as 7,600 food safety inspectors.

Moreover, new necessities spawned by the September attack are growing innovation. For instance, Crain is also chief executive officer of Veriprime, a coordinator and auditor of process verification for consumer-based value attributes. He's currently canvassing the food industry, gauging interest in conducting an industry-wide risk audit to collectively identify the holes that may exist and possible solutions.

As the industry searches for questions, as well as answers, England says, “We all have to realize that we're in this together. If any one segment of the beef supply chain has a problem, we all have a problem.”

What cycle numbers don't tell you

The cattle cycle's influence on cattle numbers is a primary factor determining beef supply, but cattle numbers don't explain the total beef supply picture. After all, cattle numbers have trended down the last 20 years while beef production has trended upward.

In fact, since 1980 the U.S. industry has trimmed 10 million head from its total cattle inventory. Yet, total production has risen more than 5 billion lbs.

One key reason is the increase in beef production/cow. In 1970, each cow produced about 450 lbs. of carcass beef/year. That figure began going up in the early '80s. By 2000, it was 620 lbs. of carcass beef produced/cow/year. This 170-lb. increase amounted to an average annual productivity increase of 1.8%.

Several factors are responsible for the increased beef production/cow. Increased weaning weights are a major contributor.

In the '80s, North Dakota beef cow producers added an average of 10 lbs. weaned/calf/year — a total of 100 lbs. of added weaning weight/animal during the decade. This documented increase in weaning weights is indicative of the overall U.S. beef industry. Meanwhile, Canada shifted to a higher percentage of exotic breeding programs and grew weaning weights even more.

Moreover, genetic improvements in both countries over the past 20 years have resulted in larger mature weights in beef cattle and, as a result, dramatically increased carcass weights over that time. Adding an average of 100 lbs./carcass generated an additional 3.6 billion lbs. of beef. Larger carcass weights accounted for 61% of the total productivity growth over this 20-year period.

Another 38% of this productivity growth came from higher calving rates, fewer non-productive cow days, better husbandry practices and improved health programs. In addition, a declining dairy veal calf slaughter has moved a higher percentage of dairy calves into the finished market.

Finally, there's the import issue (Figure 1, page 30). Most Mexican exports to the U.S. are feeder cattle. Canada's exports consist of slaughter cattle, cull cows and feeder cattle. In any case, U.S. live cattle imports are included in the beef produced/cow data presented here.

Management Implications

With the decreasing beef demand of the last 25 years, the increase in beef produced/cow meant fewer beef cows were needed to meet consumer beef demand. This need for fewer beef cows led to lower profit margins/cow.

North Dakota's Farm Business Management Records confirm that profit margins/cow have shrunk with each progressive cattle cycle. Thus, to generate a reasonable family living, ranchers have been forced to run more cows just to stay even.

A beef cow manager must evaluate the primary production impact and the secondary economic impact of any new technology being adopted by the beef industry. For instance, while beef production increases/cow is the primary production impact of improved genetics, animal husbandry practices, etc., the inelastic demand for beef ensures that decreasing total gross income to the beef industry is the secondary long-run economic impact.

The inelastic demand for beef ensures that the magnitude of the negative secondary effect is greater than the magnitude of the positive primary effect. The long-run net result of this output-increasing technology is a drop in the industry's long-run total revenue. This phenomenon is not well understood by the cattle industry.

Decreasing profit margins — during the last 25 years of decreasing demand — have driven the reduction in beef cow numbers. Shrinking margins have also led to fewer ranches and consolidation among the remaining ranch units. Decreasing profit margins have made it increasingly difficult to generate a family's total living from running beef cows.

The ranch units that remain are trying to revise business plans to generate sufficient family living from beef cows. Increasingly, more are looking at off-farm income as a remedy.

Thus, while increased beef production/cow has been a substantial production accomplishment, increased production/cow has also taken its economic toll.

Much of the beef cow producers' long-term economic stress has been blamed on the next level in the marketing chain. In truth, much of that economic stress is due to ever-increasing productivity during a prolonged time of decreasing demand.

The others in the marketing chain have faced this same prolonged decreasing demand forcing them to also consolidate. No one in the beef marketing chain has escaped the impact of this decreasing demand.

Decreasing profit margins/cow is a primary force motivating the beef industry to divide into either a commodity beef segment or a value-based beef segment. In either case, knowledge through data is the key to profitability. Today's profit margins have reached the point that those beef cow producers who don't collect data may well not survive the next cattle cycle.

In a nutshell, the problem is that the amount of beef produced/cow is rising 1.8%/year. Domestic and foreign demand for beef products, however, is only rising 1.3%/year. Since productivity will probably continue to outpace demand growth, cow numbers will probably continue to fall.

That means consolidation in the ranch sector will continue. So will the economic pressure on ranch operations to change.

Harlan Hughes is a Professor Emeritus of North Dakota State University. Retired last spring, he is currently based in Laramie, WY. He can be reached at 701/238-9607 or [email protected].

Evaluating Market Alternatives For 2001 Calves

These planning price projections (Table 1) are based on both the futures market price and Western North Dakota sale barn prices for the current week. The price projections in Table 1 were used to evaluate six marketing alternatives for year 2001 calves shown in Table 2.

The “buy/sell margin” in Table 2 is the buying price of animals going into a lot subtracted from the selling price of animals coming out of the lot. Since selling price is normally less than purchase price, the buy/sell margin is normally negative. The negative buy/sell margin represents the marketing loss/cwt. on the purchase weight of the animals. The cost of gain (COG) represents the cost of the added weight while in the lot. Profit/head represents the combined marketing losses and profits from gain.

Table 1. Suggested Planning Prices
Lbs. Fall '00 Mar '01 Spring '01 Nov. 9, '01 Fall '01 Jan '02* Mar '02* Spring '02* Fall '02*
400 $119 $109 $119 $109 $116 $99 $98 $98 $99
500 $105 $99 $109 $99 $106 $90 $89 $93 $95
600 $96 $90 $100 $90 $97 $83 $82 $89 $90
700 $90 $84 $92 $84 $91 $78 $77 $85 $87
800 $88 $80 $85 $80 $87 $75 $74 $82 $83
900 $89 $79 $79 $79 $86 $73 $72 $79 $81
Slaughter $72 $77 $74 $66 $67 $69 $72 $71 $70
*Projected week of Nov. 9, 2001
Table 2. Marketing Alternatives
Marketing strategy Buy/sell margin Cost of gain (COG) Profit/head
Sell at weaning xxxxx $0.70 $113
Bckg. high ADG -$19 $0.45 -$31
Fin. bckg. steers -$4 $0.48 $47
Grow & finish -$23 $0.40 $64
Steers on grass -$1 $0.45 $58
Fin. grass steer -$7 $0.46 $67
Week of Nov. 9, 2001

Helping heifers perform

My favorite task as a herd health veterinarian is making herd consultation visits with my students. We look at the entire beef operation, and our goal is to find areas of the business to improve.

Recently, we visited a herd that is solving many of its business deficiencies.

“You found the weak links in the chain,” this operator told us, “but we're still having trouble with baby calf sickness and keeping heifers and young cows in the herd. And, I was really disappointed with the last set of bred heifers we purchased.”

While baby calf sickness is not a major problem on many farms, problems with heifers are almost universal. The two most frequent problems are dystocia in 2-year-old heifers and infertility in nursing 2-year-old heifers.

This particular herd had few problems with dystocia because purchased heifers were bred artificially to a calving-ease bull. Yet, 27% of the nursing 2-year-olds were open after the ideal 65-day breeding season. The owner asked our students why he was having such a tough time getting his heifers bred back.

After analyzing records, we concluded:

  • His heifers were calving in an average body condition score (BCS) of 5 (on a 9-point scale), while a BCS of 6.5 was desired (adult cows should calve at BCS 5-5.5).

  • The heifers open at pregnancy check tended to calve later in his 65-day calving season than heifers that were bred. Thus, these heifers had less time to return to heat and conceive.

  • The open heifers tended to be 75% or greater of a single breed, so hybrid vigor was sub-optimal.

Based on this, we advised him to:

  • Calve his heifers in BCS 6.5. Generally, a whole BCS is equal to 75 lbs. of body weight. If heifers need to gain 1.5 BCS, his heifers need to weigh 112 lbs. more at calving than they did in 2001.

  • Purchase bred heifers that will calve two to four weeks before his cowherd and calve over a period of 30-42 days.

  • Purchase crossbred heifers. For this particular herd, we suggested heifers of 50-75% British and 25-50% Continental genetics. The highest priority was to add genetics that would fit his environment and excel in fertility.

The owner was eager to implement our recommendations but asked:
“Wouldn't heifers in BCS 6.5 have increased calving difficulty compared to heifers in BCS 5?” Also, “What about the baby calf sickness the previous year?”

Our students found that when heifers calved in BCS 6.5 versus 5.0, the calves weigh about 4 lbs. more at birth. Research proves this small increase in birth weight should not increase dystocia.

Meanwhile, the benefits of heifers calving in an ideal BCS are:

  • Calf vigor improves.

  • Colostrum quality and quantity improves.

  • Calf survivability improves.

  • Days to first heat decline.

  • Conception rate increases.

  • Weaning weight increases.

As far as improving calf health, the owner was already doing many things well. He followed a timely herd vaccination schedule, bought his bred heifers from a “high-health” status herd many months before calving and calved in the driest areas of his farm.

Our investigation did turn up one potential problem: wintering and calving heifers and cows together.

Research in Canada shows calf morbidity increases threefold when heifers and cows winter and calve on the same ground. Separating the heifers for at least 50 days precalving should greatly reduce this and help get heifers in better flesh at calving.

A ration was formulated to get the current bred heifers in BCS 6.5 at least 50-60 days precalving because of the efficiency of adding this gain in milder weather. The heifers in this herd started on the new ration of 6 lbs. mixed hay, 16 lbs. dry corn gluten and 0.1 lbs. limestone/head/day 110 days precalving.

If the owner waited until 70 days precalving to increase their BCS 1.5 points, the ration would have to be 6 lbs. mixed hay, 20 lbs. dry corn gluten, and 0.1 lbs. limestone/head/day.

W. Mark Hilton, DVM, a clinical instructor of beef production medicine at Purdue University in West Lafayette, IN, wrote this article. Mike Apley, DVM, PhD, is an assistant professor of beef production medicine at Iowa State University in Ames, and also contributed.

Here Are the Contest Results!

http://industryclick.com/magazinearticle.asp?magazineid=13&releaseid=9693&magazinearticleid=136232&siteid=5