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Articles from 2011 In December

Skip The Rhetoric & Debate The Merits

Skip The Rhetoric & Debate The Merits

I’ve always been a fan of Benjamin Franklin; he lived a remarkable life and helped shaped America in many ways. He certainly wasn't without major faults, as perhaps all men are, but he evolved in the right direction on most issues.

I've always been fascinated by the vast array of pseudonyms he wrote under in his effort to gain public support or destroy the support of his enemies. It was a common practice at that time to write under various names, with the most extreme positions almost always staked out under assumed names, which I think is a little cowardly.

However, one historian justifies the tactic, arguing dissenting political and religious writings at that time were rebutted on their merits rather than by personal attacks, when they weren't tied to an individual or specific organization/cause.

At this point in time, the various positions regarding our beef industry are so well staked out that there's probably no way one could hide the identity of those who hold various positions. Still, I was just thinking how refreshing it would be to actually see the positions debated on their merits, without the rhetoric. I almost automatically discount those who frame the arguments with statements like large, multinational corporate packers, and the like because I know they are trying to evoke emotional reactions rather than advance a position based on facts.

However, the fact that they have often distorted or ignored facts doesn’t mean that all their positions are devoid of substance. While I harbor no illusions about the ultimate intentions of groups like HSUS and PETA, that doesn’t mean I should summarily dismiss everything they say.

That's something that's always amazed me about Washington D.C. – everyone has their ideology and everyone knows what various groups' objectives are, but they're readily allowed to contribute to the debate to provide facts and context. Their biases don't preclude their involvement, but they have a strict code that they follow – as distorted as it might be.

For instance, everyone understands that a group will present only those facts that strengthen its argument and advance its agenda. The other side is expected to do the same. What isn't tolerated is presenting out-and-out falsehoods.

A lobbyist can go in and talk about fewer cattle producers or record production levels, both of which might be accurate and designed to reach opposite conclusions, but misstate the amount of decline, the increase in production, etc., and have crossed the line. In part, that's because the politicians have the potential to be embarrassed. Selective, but largely accurate, facts is the mantra for lobbyists. Politicians, on the other hand, aren't held by those rules; once they've decided on a course of action, the goal becomes achieving it however possible.

While power among lobbying groups always involves the number of votes, and the amount of dollars, one can bring to bear, it also relies heavily on integrity. The great irony for those who see the political process as sometimes unseemly is that integrity and trust are the foundation of politics that seems to embody a mentality of the ends justifying the means. It explains why, from an industry perspective, the power of the various groups representing the cattle industry is so much more divergent than even the large differences in members represented and dollars would suggest.

As our political races suggest, personal attacks and personal affinities are far more effective than actual policy positions. And, they usually carry the day over the merits of various positions or arguments. But it also explains the precarious positions we find ourselves in as a result of a myriad of policies that were obviously unworkable from the beginning, but were advanced nonetheless on emotional or philosophical grounds.

I'd love to see everyone's position clearly stated, without the rhetoric and simply debated upon their merits. I have to believe not only would we be more likely to find compromise, but that we would be far more likely to enact policy that would move us forward.

The Most Negative Election Of Our Time

The Most Negative Election Of Our Time

Newt Gingrich had been the most vocal in pledging to run a positive campaign. But the former Georgia congressman and Speaker of the House was hit with a barrage of attacks from other candidates as soon as he became the frontrunner for the Republican presidential nomination. Since the attacks, his numbers have dropped precipitously.

His advisors are saying he must hit back or he'll be finished. I'll give them an A+ for creativity, as they are calling it "responding" instead of "attacking." Two of my personal favorite non-attacks is that he accused Paul of "systemic avoidance of reality" in his advertisements, and assailed Mitt Romney as a "Massachusetts moderate."

Then, on the Democrat side, President Obama is expected to raise over $1 billion and unions are projected to break their record spending of the last election cycle. Political pundits say most of that money will be spent trying to destroy the opposing candidate.

The vast majority of American voters say they want a positive campaign based on policy positions. The irony is that negative campaigns work, and candidates largely let the PACs and special interest groups do the dirty work for them.

Both sides are promising this will be the most expensive and most negative campaign of modern times. Obama is expected to have a war chest that exceeds his last record-breaking campaign. Meanwhile, Republicans are also expected to eclipse their 2008 war chest en route to their goal of closing the spending gap to only 2:1.

Why will so many dollars be spent during such tough economic times? Every election, someone utters the statement that this is the most important election of our lifetime. Truth be told, this election is truly about the philosophical direction of our country, with the far left and far right being almost rabid about maintaining or stopping the current direction.

While moderate and independent voters will decide this election, as they usually do, they will likely be subjected to the most negative campaign ever seen. Both sides are promising it will be nasty, and with a total war chest among both parties approaching $2.25 billion, one can imagine just how nasty it will get.

Meat Matters
Adding More Value Is Packers' Only Recourse

Adding More Value Is Packers' Only Recourse

Grand plans and meatpacking are like oil and water. They don’t mix successfully.

Remember Future Beef Operations (FBO) completed in 2001, its plant in Arkansas City, KS, included the most technologically advanced beef processing systems in the world. There was only one problem. Some of them didn’t work. FBO poured at least $100 million into the plant. But after seven months of operations, it filed for bankruptcy and closed a few months later, having lost more than $200 million.

FBO’s fate is a cautionary tale for anyone dreaming of starting a meatpacking plant. Yet some people somehow still feel they can succeed where many others failed. Take a proposed beef processing plant in Aberdeen, SD.

Plans for the South Dakota facility first emerged more than five years ago; $70 million or more later and the plant is yet to open. Meanwhile, another entity a few weeks ago unveiled plans to build a $100-million, multi-species plant in Nevada.

The Aberdeen plant (Northern Beef Packers) is designed to process 1,500 head/day. The Nevada plant claims it will process up to 2,000 cattle, 2,500 hogs, and 1,000 sheep and goats/day. I have one question for those involved in both enterprises. Where on earth will these animals come from? Haven’t you heard that the U.S. cattle herd has declined by nearly six million head in the past five years and the beef-processing industry has shrunk accordingly?

These folks are also ignoring other realities. It’s one thing to find investors to finance a new plant. It’s quite another to generate the working capital required to pay for livestock and payroll and to keep the plant operating.

Do they realize a new beef plant loses money for at least two years before it breaks even? How are these plants going to bid away livestock from long-established packers? How are they going to sell their meat at a premium to pay for those livestock? How are they going to attract the labor and experienced management to operate the plant?

Also missing is any reference to what’s happened in the real world in recent years. After a flurry of concentration in the mid-1980s, the market share of the top beef packers has remained the same since 1995. There’s a simple reason for this –lack of expansion in cattle numbers.

Instead of growing, packers have consolidated their operations. In 2005, Tyson Foods had 10 slaughter plants with a combined capacity of 36,000 head/day. Today, it has seven plants and a capacity of 29,000 head/day. My annual survey of the top 30 beef packers reveals this group hasn’t changed its capacity (134,000 head/day) in the past year.

Another factor is the increased cost of doing business. Food safety costs head the list but everything from wages to energy to packaging costs has risen sharply. Beef packers have spent several billion dollars on food safety interventions alone since 1993’s Jack-in-the-Box tragedy linked to E. coli O157:H7. Now, they’ll have to spend even more money testing (starting in March) for six additional strains of the pathogen.

The only way existing beef packers will stay in business is to add more value to the fewer carcasses they process. That’s been the foundation of National Beef Packing’s success the past five years. Its value-added sales in fiscal 2011 were 36% of its total sales.

National’s owners in December agreed to sell 79% of the company to investment firm Leucadia. One issue for Leucadia is how National will increase its earnings. The shrinking cattle supply and lack of plants to buy likely means National will have to keep adding value.

That, however, takes enormous experience and skill. I wonder if the folks with plans to open the plants in South Dakota or Nevada have any idea how to do this.

Steve Kay is editor and publisher of Cattle Buyers Weekly ( Catch his weekly market roundup at every Friday afternoon.

A Mini-Controversy Brews In Nebraska

A Mini-Controversy Brews In Nebraska

It began this month when Nebraska’s Attorney General Jon Bruning made a controversial grant. The $100,000 grant went to a group that is a strong advocate for agriculture and is called We Support Agriculture. This group was created by the Nebraska Farm Bureau (FB).

The controversy has many sides, but the main point is that this money came from Nebraska's Environmental Protection Fund. While nobody denies that the grant as funded is geared to achieving the goals of the fund, the problem is that it was awarded to an agricultural group, and obviously agriculture and the environment are not two words that can be used in conjunction by many in the environmental movement. This goes against the general mantra, which is that activist groups hold and that is environmental protection and agricultural are seen as having cross purposes.

The main thrust of the opposition, at least from the environmental groups, is their general aversion to agriculture and their opposition to tying agriculture and environmental responsibility together. There, of course, is some interesting political dynamics going on.

The Farmer’s Union (FU) and FB have always been antagonistic. The FB is the larger, more powerful organization, and tends to be more conservative in its outlook than the FU. In the last couple years, the FU has increasingly moved to the left, making the chasm wider than ever before. FU, of course, is incensed about FB receiving funding, as are the groups that FU has increasingly aligned itself with. Then, you throw in the fact that Attorney General Bruning is running for the Senate, and you have the age-old Republican/Democrat debate.

The Republican vs. Democrat component is expected and really isn't surprising. Republicans would have tried to make an issue if a Democratic Attorney General would have made a grant to HSUS. The fact that our own industry has weighed in on the side of environmental and consumer groups aligned against agriculture because of internal power struggles is not new either, though this trend is disturbing and has been occurring frequently of late.

It's probably past time that producers reel in their organizations in this regard. We can disagree with others in our industry but we should never forget the big-picture issues of doing what's right for our industry.

Lastly, the fact that these grants have routinely gone to groups aligned against agriculture doesn't mean ag and a pro-environment stance are incompatible. In fact, what's telling is that this is an issue at all in a state like Nebraska. It's important to remember that nobody is questioning whether the money being granted is to be used for the purpose intended; it's merely that since the group receiving it was tied to the powerful Nebraska FB, it should be excluded from receiving it.

Watch Your Tire Feeders & 10 More Management Tips

Watch Your Tire Feeders & 10 More Management Tips

Inverted tires can make great structures to hold cattle feed and water, but regular maintenance is required. If the tires have wire in the walls, this wire can break off and be consumed by cattle, which can lead to a condition known as hardware disease.

Once wire is swallowed, it goes into the digestive system and often gets trapped in the chamber of the stomach called the reticulum. The reticulum is the chamber that has honeycomb-shaped structures on the walls and functions to trap foreign materials. If the wire punctures the reticulum wall, digesta and other stomach contents can leak through the wall and cause a condition called peritonitis. Peritonitis can lead to general unthriftiness and also may cause systemic infections.

Both of these conditions may be observed, and cattle with a continually declining health status eventually may need to be culled.

Metal, wire and other foreign materials in the reticulum also can lead to sudden death. The diaphragm is the thin muscle that divides the abdominal cavity (which contains the stomach, intestine, liver, etc.) from the thoracic cavity (which contains the heart and lungs). The anatomy of cattle is such that the reticulum and the heart are close to each other, separated only by the diaphragm.

In instances when cattle experience severe abdominal contractions (for example, while delivering a calf), foreign material in the reticulum can be forced through the reticulum wall and into the heart. If this happens, the animal will die shortly thereafter. Alternatively, the metal may pierce only the protective layers around the heart and cause inflammation and/or infection. Neither is a good situation.

To attempt to avoid hardware disease, perform regular maintenance on your tire feeders. Cut or grind off exposed wire and make sure to pick up pieces and remove them from the cattle-feeding area. This also highlights the importance of cleaning any wire, nails or other metal scraps from areas to which cattle have access; for instance, including powerful magnets in feed mixers can help prevent hardware disease in your cattle.

10 Tips For January

Beyond proper maintenance of your tire feeders, here’s a list of Top 10 management ideas to consider for January.

1. If cattle still are grazing, monitor pasture conditions, feed protein supplement when needed and remove the cattle when available feed supply is gone.

2. Consider stage of pregnancy when delivering cow and heifer diets; 90 days before calving, nutrient requirements start to increase.

3. Increase feed deliveries in cold weather and consider feeding in the afternoon; heat produced while cattle digest feed can help during cold nights.

4. Review 2011 calf performance and health, compare with previous years and set herd production targets for 2012.

5. Evaluate price protection strategies for feedlot and backgrounding calves.

6. Pre-calving vaccinations should be given according to label instructions up to two months prior to calving; heifers may need a booster one month prior to calving.

7. Secure seed and fertilizer purchases for planting in spring 2012.

8. Meet with bankers, financial planners, Farm Business Management program instructors, etc., for income tax planning.

9. Schedule date for carcass ultrasound sessions to scan yearling cattle.

10. Review existing bull inventory, reflect on 2011 calf crop and determine needs for 2012 breeding season because bull sales will start soon.

USDA Releases 2010 Non-Predator Death Loss Report

USDA Releases 2010 Non-Predator Death Loss Report

USDA’s Animal and Plant Health Inspection Service (APHIS) has released its Cattle and Calves Non-Predator Death Loss in the U.S., 2010 report. Produced by APHIS’s National Animal Health Monitoring System (NAHMS), the report provides a breakdown of cattle and calf death losses in 2009 for all causes by size group and by region, with special emphasis on non-predator (NP) causes. Funding for the study is provided every five years. Where possible, comparisons were made to death losses reported in 1991, 1995, 2000 and 2005. Here are a few highlights:

• During 2010, NP causes accounted for 97.7% of the 1.7 million cattle death losses. Overall, 2.3% of the U.S. cattle inventory was lost to NP causes, ranging from 1.5 % in the Northwest region to 2.8% in the South Central region.

• The percentage of total losses due to NP causes was smaller on beef operations compared with other operation types. NP causes accounted for 95.8% of total cattle losses on beef operations in 2010, and 99% of total losses on other operation types.

• Respiratory problems accounted for the highest percentage of NP cattle losses in 2010 (26.5% of total NP cattle losses). “Other” causes accounted for 13.8%, while unknown causes constituted 12.1%. Weather-related causes and calving problems each accounted for about 10% of losses.

• The percentage of losses due to mastitis was higher on dairy than beef operations (13.1 and 0.3%, respectively). Mastitis also accounted for 8.6% of losses on mixed operations. Respiratory problems accounted for over half of NP losses (64.3%) on “other” operations; many operations in this category were feedlots, which commonly experience problems with bovine respiratory disease.

• NP causes accounted for 92.0% of the 2.3 million calf death losses in 2010. Overall, 5.8% of the U.S. calf crop was lost to NP causes, with losses highest in the Northeast region (7.6% of the calf crop).

• The highest percentages of NP calf losses were due to respiratory (29.1%) and digestive problems (17.2 %). Respiratory problems accounted for nearly half of NP calf losses (49.4%) on “other” operations.

• Beef operations had a higher percentage of NP calf losses due to weather-related causes (21.9%), compared with all other operation types: 4.2% for dairy operations, 8.6% for mixed operations, and 6% for “other” operations.

• Beef operations had a lower percentage of NP calf losses due to digestive problems (10.4%) than all other operation types: 30.6% for dairy operations, 30.4% for mixed operations, and 23.2% for “other” operations.

• On mixed operations, the percentage of NP calf losses due to calving problems ranged from 38.4% in the Northwest region to 5.0% in the Southwest region. The Southwest also had a lower percentage of calf losses due to calving problems on beef operations compared with other regions.

Cattle and Calves Non-Predator Death Loss in the U.S., 2010 is available at

Cowboys To Kardashians: The Best Blogs Of 2011

Author Bill Vaughan once said, “An optimist stays up until midnight to see the new year in, while a pessimist stays up to make sure the old year leaves.” As 2011 comes to a close, it’s a good time to reflect on the ups and downs of the cattle business, while looking ahead to a bright tomorrow in 2012. With a new year just around the corner, I’m choosing to be the optimist — confident that food producers will be rewarded for their efforts with increased beef demand, both domestically and abroad. Before we move on to another year, let’s reveal this year’s most-read BEEF Daily blog posts.

Top 10 BEEF Daily Blog Posts:

1. Blake Shelton, Miranda Lambert Represent Real Country Values

2. I’ll Get My Burritos Elsewhere, Chipotle

3. Don’t Mess With Texas, PETA.

4. The Truth About HSUS Might Shock You

5. Cowboys And Cattlemen Photo Contest Finalists

6. Don’t Support Hollywood Stars Who Are Anti-Agriculture

7. Announcing The BEEF Daily Calves And Cowboys Photography Finalists

8. Why Are Celebrities Khloe Kardashian, Miranda Lambert and Nina Dobrev In BEEF Daily

9. Who Cares About Cowboys Anymore?

10. It’s Our Turn, Oprah

Looking back on these topics, which one was your favorite? What would you like to discuss further in 2012? I would love to hear your ideas to better serve you and this blog community in the upcoming year.

Finally, it’s time to award the winner of the final give away in 2011. Congratulations to Joseph Scott, who has won $100 VISA Beef Bucks, courtesy of the South Dakota Cattlemen’s Auxiliary. Scott responded to yesterday’s blog question: What advice do you have for young ranchers?

Scott writes, “Having been in the cattle business for more than 20 years, I’ve had my share of good years, but there have been plenty of years in the red, too. My best advice is to be smart and realistic about money. Don’t try to have now what your folks have worked for their entire careers. Be patient and do your homework. Be prepared when you go visit the ag-lender and have good relationships with your neighbors. Work hard and do your best. Take pride in the land and the livestock you have, and always remember to thank God for His many blessings.”

Cheers to a great 2011 and best wishes for a wonderful start in 2012! Don’t forget to snap photos over the holiday weekend in preparation for a January photography contest. The theme will be “Winter Wonderland On The Ranch.” Get creative with your camera and stay tuned for more details! We have more $100 VISA Beef Bucks to giveaway to talented photographers and the voters who choose our winners!

A Succession Plan & An Estate Plan

Speaking from the perspective of a fifth generation rancher, Lucy Meyring says it's important for a ranch to have both a succession plan and an estate plan. That's because they're different and are designed to do different things when it comes to passing the ranch on to the next generation. She explains the difference and why it's important for cattlemen to do both.

Read more on succession and estate planning here.

Secretary Vilsack Announces Cattlemen's Beef Board Appointments

Agriculture Secretary Thomas J. Vilsack today announced 29 appointments to the Cattlemen’s Beef Promotion and Research Board. All appointees will serve 3-year terms.

“These appointees represent a cross section of the beef industry and I am confident that beef producers and importers of cattle, beef and beef products will be well served by them," said Vilsack.
Newly appointed members representing cattle producers are: Leo C. Sutterfield, Jr., Ark.; Phyllis K. Snyder, Colo.; Sarah K. Childs, Fla.; Kimberly Brackett, Idaho; Stacy M. McClintock and Perry L. Owens, Kan.; Daniel C. Smith, Ky.; Leon Kreisler, Mo.; Lyle V. Peterson and Linda M. Nielsen, Mont.; Douglas A. Temme and Sherry A. Vinton, Neb.; Wesley L. Grau, N.M.; Patrick L. Becker, N.D.; Terry L. Wyatt and Barbara A. Jacques, Okla.; Joyce A. Bupp, Pa.; Gerald R. Sharp, S.D.; Ted A. Greidanus, Southwest Unit; Richard A. Winter, Paul H. Looney, Jr., G. Hughes Abell, Lavina G. Sartwell, and Thomas R. Alger, Texas; and Frank H. Maxey, Jr., Va.
Newly appointed members representing importers are: Andrew N. Burtt, Va.; Stephen K. Edwards, Va.; Cristobal J. Hutton, Ill.; and Joakim A. Holzner, Colo.
The board oversees the collection of $1-per-head on all cattle sold in the United States, and $1-per-head equivalent on imported cattle, beef and beef products. In addition, the board contracts with established national, non-profit, industry-governed organizations to implement programs of promotion, research, consumer information, industry information, foreign marketing and producer communications.
The 103-member board is authorized by the Beef Promotion and Research Act of 1985. The Secretary selects the appointees nominated by beef, veal, dairy and importers certified organizations.
USDA's Agricultural Marketing Service monitors operation of the board.
Top 10 Things Families Do To Break Up The Ranch

Top 10 Things Families Do To Break Up The Ranch

Research shows there are twice as many farmers and ranchers over the age of 65 as there are under the age of 35, and that 69% of ranchers and farmers want to pass the operation on to their children, says Lucy Meyring, who along with her husband Danny, operate Meyring Livestock Co., a fifth-generation ranch in Colorado’s North Park, near Walden.

Yet, she told cattlemen attending the recent Range Beef Cow Symposium in Mitchell, NE, that only 3-5% of farm and ranch families in Colorado have a completed estate plan. “Research indicates that 42% of first-generation family farmers haven’t discussed the subject of succession even with their own spouses. And 63% have not talked about it with their own children. Only 16% have included their sons and daughters in a succession plan,” Meyring says. “And yet, most people will tell you the farm or ranch will be their source of retirement income.”

There are several reasons that succession planning is delayed, she says. The older generation fear losing their identity, and purpose, upon retirement. In addition, there are anxieties about financial security and wanting to pay off debt before they hand the business over to the next generation. Then, there may be a lack of confidence in the next generation’s ability to run the operation and a desire to be fair to all the children.

Here, according to Meyring, are the Top 10 things families do to break up the ranch:

Assume all genetic relationships equal good working relationships . Just because people are members of the same family doesn’t mean they’ll automatically have the same ideas and values or want to do the same things. In some families, the best way to create harmony is to ensure family members don’t work together.

Believe the business can financially support any and all family members who want to join. Can the business support more than one family household? If it can, are the family members who intend to join the business suited to the business? If yes, is the business suited to the family member?

Assume everyone involved is willing to make changes. It’s natural for people to resist change initiated by others.

Presume that a conversation is a contract.

• Believe that mind reading is an acceptable form of communication . Learn to share the complete picture.

Fail to build communication skills and business/family meeting tools when times are good. It’s best to have these tools in place when times get tough, rather than reacting to a bad situation. If communication is lacking in good times, it doesn’t present much of a problem, but lack of communication can cause real friction within a family during bad times.

Ignore the in-laws, off-site family and employees. Individuals not involved in day-to-day communication may start to imagine all sorts of negative things are happening. These can be mostly imagined, but the absence of inclusion means exclusion and the imagination runs wild.

Forget to use common courtesy . Treat one another with love and respect.

Have no discussion about, and no legal management transfer plan or buy-sell agreement.

• Fail to celebrate.

“Things have changed in our country and our government,” Meyring laments. “If you leave the ranch for your heirs to fight over, and they end up selling it to settle matters, what kind of legacy is that?”

For more on Meyring’s thoughts on succession planning, view the video here. To see recaps and view PowerPoints from the Range Beef Cow Symposium click here.