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Want the most value for your bull-buying dollar? Broaden your view

DeBruycker DeBruycker Toby Bulls

“Go into the sale with a bigger window of bulls and be willing to open up the price window,” says Mary Lou Bradley-Henderson of Bradley 3 Ltd. at Memphis, Texas.

That’s one way she suggests bull customers can get the most value for their dollar. In this case, she says focusing on a wider pool of bull prospects and a rolling price average that fits the budget can lead to more value than focusing on too few bulls and never crossing the line on a predetermined price.

There should be plenty of bulls for commercial cow-calf producers to choose from this spring.

Consider that seedstock producers populating this year’s BEEF Seedstock 100 sold about 5% more bulls in 2016 than the year before. Plus, many were expecting herd expansion to continue at a stronger pace than now seems likely.

Logic also suggests that bull prices will be softer this spring than last, given the slide in calf prices. But that’s on average. Before the record increase in calf prices the past few years, some progressive commercial producers already were showing a willingness to battle all comers for specific genetics that promised to fulfill specific herd goals.

So, the price spread among bulls, top to bottom, will likely grow extra-wide this spring: the proverbial cow fresheners on one side and herd builders on the other. A similar case can be made for bull customers cleaving a wider demand gap between seedstock suppliers.

Spun a touch differently, Bradley-Henderson’s advice also applies to genetic options overall.

Why wait? See the 2017 Seedstock 100 listing here.

So far, semen sales continue to hold their own, says Brian House, vice president and product manager for Select Sires Inc. at Plain City, Ohio. He explains sales from Select Sires and other major bull studs have increased significantly the last few years.

The simple math is straightforward. With semen and estrus synchronization costs remaining steady as bull prices increased, the cost difference between natural and AI service narrowed. Though bull prices are trending down — pushing the cost gap wider again — House says semen sales continue at the higher pace of recent years.

Yes, lag time could be part of it. Surely not all, though, when you consider the increased number of heifers that headed to feedlots this spring and summer, rather than being kept home to breed.

“Once producers take the first step, try AI the first time and see that it works for their operation, they usually continue,” House explains.

Effectiveness of the technology is proven. As House says, Select Sires can point to a number of commercial producers using fixed-time AI and getting a conception rate of 60% to 65% on a consistent basis.

Benefits of getting more cows bred — natural or AI — in a shorter period of time are proven, too: everything from earlier calves leading to heavier market weights and replacements cycling sooner, to increased uniformity, to name a few.

Incidentally, House points to inherent bull fertility as an additional AI benefit for some bulls.

Just as commercial producers using DNA to match calves to sires in multi-sire pastures have found, some bulls get more cows pregnant than others.

“We’ve learned that there are fertility differences in bulls,” House says. “We’re pursuing fertility data more extensively than we ever have and believe it will become more important in the future.”

It’s adoption that continues to be slow, often stemming from real and perceived labor challenges. Depending on the data you look at, AI continues to run about 10% to 15% for heifers and about 3% to 5% for cows.

MIDDAY-MidwestDigest-12-22-16

Fridays, Saturdays and Sundays are when most cargo thefts occur. Electronics and pharmaceuticals are top targets.

Former White House press secretary Dana Perino will be a convention draw for two ag meetings this winter: The National Cattlemen's gathering in Nashville in February and the Dairy Strong Conference next month in Madison, Wis. 

Obama made news through interviews on minor cable networks; Trump is making news with his tweets.

 

MORNING-MidwestDigest-12-22-16

Do you like college basketball? In the dead of winter watching games brings excitement. The road to March Madness can be fun.

An unusual shape showed up on the radar in Nebraska yesterday, smoke from a fire in the central part of the state.

The cattle industry convention and trade show is less than 6 weeks away. It will be held in Nashville and Max Armstrong will be hosting part of the program.

The bitter cold this month reminded some of us to have our vehicle cold weather ready. He talked about the winter survival kit his parents packed for him when he headed to Chicago to work at the radio station as a young man.

Farm Progress America - December 22, 2016

FarmProgressAmerica_FeatureIMG

Weeds are everywhere, and in many cases they cause more damage than a lot of people think. In this installment of Farm Progress America, Max Armstrong offers some interesting facts about weeds. He covers everything from their impact on crops to their contribution to forest fires. And he shares insight into a group that focuses on all things about weeds - the Weed Science Society of America.

You can learn more about the group at wssa.net.

Calf marketing outlook: This is the year to sell added pounds

The signals being sent by the feeder cattle market arenrsquot good ever since prices started to spiral downward beginning in June 2015 What is the best strategy going forward to regain profitability or at a minimum stop the bleeding of balance sheetsMany options are available A selected list includes strip and sell precondition 45 to 60 days and sell and retain ownership through spring For example assume that a bawling 5weight steer will net roughly 750 per head in early October If that c

Calves are weaned, corn is harvested and dry cows are grazing cornstalks. Now my study herd manager is focusing on marketing his 2016 calves. All the heifer and steer calves were still on the ranch as this was written in late November, and he was considering a comprehensive 45-day preconditioning program.

At the end of that 45-day preconditioning period, his proposed plan called for sorting out his replacement heifers and making the decision to do one of the following:

  • Market the remaining calves, or to background the remaining calves for a target marketing in mid-March at about 850 to 875 pounds.
  • Move feeders to a commercial feedlot to be grown and finished with a target June harvest.

Let’s look at market price projections for each alternative, with a goal in mind to generate a positive return after covering the beef cow losses with the 2016 calf crop.

Price analysis

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My November 2016 sale barn price analysis for eastern Wyoming-western Nebraska indicates a significant price increase over October 2016 prices for lightweight feeders (Figure 1). Indications are that corn farmers are going to market some of their lower-priced corn through cattle.

Sale barn prices in mid-November again indicated a large quality variation. There was a large discount for full or fleshy cattle. It appears that buyers rewarded quality and preconditioned feeders.

The highlight of this month’s price analysis is the fact that both feeder cattle and live cattle averaged near $8 to $10 higher in mid-November for each contract month, vs. mid-October monthly contract prices (Figure 2). Corn futures prices showed a slight price decrease for all contract months compared with mid-October.

The higher mid-November futures prices presented in Figure 2 are reflected in my November price projections for the rest of 2016 and 2017 (Figure 3). Basically, this month’s price projections hint that we may have bottomed out for this price cycle. I sure hope so!

I am projecting October 2017 weaned 550-pound steer calves at $147 per cwt — up $3 from October 2016. Not a very big improvement, but at least going in the right direction. The two red planning prices in the 2017 projections in Figure 3 suggest that next summer could be a good year to run short yearlings on grass.

 

Preconditioning projection

I turned to a Virginia Cooperative Extension budgeting model for projecting the economics of preconditioning the study herd’s 2016 weaned calves. Space only allows me to present a summary table of my preconditioning projections for the study herd (Figure 4).

If market prices stay the same from weaning through the end of preconditioning, I am showing only a $6-per-head gain. Clearly, my budget for preconditioning suggests that one has to get a market price increase to make money preconditioning 2016 calves.

The economic projection for preconditioning 2016 calves presented in Figure 4 is based on two critical assumptions. First, it is based on a projected $11-per-cwt marketing kick from mid-October 2016 to early December 2016. This is projected based on my November 2016 price analysis study.

Second, it is based on a $4-per-cwt price premium for preconditioned calves. Given these two assumptions, Figure 4 projects a $100-per-head premium this year for preconditioning October 2016 weaned calves and selling them 45 days later in early December 2016. The $100 per head seems high, but that is what the analysis suggests.

Postweaning projection

For several months now I have been presenting my updated monthly economic projections for backgrounding and/or retained ownership of this study rancher’s 2016 postweaned calves. Each month’s projections are updated with those latest planning prices. Figure 5 presents my latest projections for:

  • calves sold averaging 569 pounds at the local sale barn on their October 2016 weaning date
  • backgrounding 569-pound October 2016 weaned calves to 875 pounds on a high-gain ration and marketing in February 2017; even backgrounding at a 2.0 ADG projects a potential profit.
  • finishing those background calves in a custom feedlot with a scheduled harvest date of June 2017
  • or, retaining ownership by growing and finishing in a custom feedlot with a projected harvest date of May 2017. The key here is the May marketing date — a hard marketing date to hit. Harvest prices are projected lower in June 2017.

The two finishing programs have their final selling price hedged in the futures market to reduce the marketing risk associated with these feeding programs. The grow-and-finish custom program projects to be the most favorable, but probably is still the most risky of all the marketing programs.

Hedging the sale price of harvested animals should reduce some of that price risk. A professional marketing service is highly recommended. In most cases, the custom feeder will provide this marketing service.

In summary, the preconditioning program appears to be a viable marketing program that is projected to generate a positive $25,000 maximum net return for the study rancher with his 250-cow herd. It does not, however, cover the $31,000 loss generated by the beef cow herd.

The ranked marketing alternatives, in my opinion, are:

  • Background the steer calves and heifer calves not needed for replacement and sell them as feeders: the lower-risk alternative, but $9,000 less projected net income.
  • Retain ownership in a custom lot. The higher-risk alternative, but with a projected added $9,000 net income.
  • Preconditioning the calves and selling them in December 2016 would be my third choice.

A side note: My budget for wheat pasture cattle projects a positive return this year. In summary, this is the year to sell added pounds!

A Rifle for Christmas

Christmas Wreath

Our family has a little tradition of reading the story titled the Christmas Rife, written by Rian Anderson, every Christmas. It really helps me to get myself in the Christmas spirit, and while I have read the story now probably 50 times, every time I do, I can’t help but get teary-eyed. In fact, we pass the story around and let the kids read it because I can’t read it aloud with getting choked up. 

I offer it here in hopes it will you, too, more deeply find the Christmas spirit.

Pa never had much compassion for the lazy or those who squandered their means and then never had enough for the necessities. But for those who were genuinely in need, his heart was as big as all outdoors. It was from him that I learned the greatest joy in life comes from giving, not from receiving.

It was Christmas Eve, 1881. I was fifteen years old and feeling like the world had caved in on me because there just hadn’t been enough money to buy me the rifle that I’d wanted so bad that year for Christmas. We did the chores early that night for some reason. I just figured Pa wanted a little extra time so we could read in the Bible. So after supper was over I took my boots off and stretched out in front of the fireplace and waited for Pa to get down the old Bible. I was still feeling sorry for myself and, to be honest, I wasn’t in much of a mood to read scriptures. But Pa didn’t get the Bible; instead he bundled up and went outside. I couldn’t figure it out because we had already done all the chores. I didn’t worry about it long though, I was too busy wallowing in self-pity.

Soon Pa came back in. It was a cold clear night out and there was ice in his beard. “Come on, Matt,” he said.  “Bundle up good, it’s cold out tonight.”

I was really upset then. Not only wasn’t I getting the rifle for Christmas, now Pa was dragging me out in the cold, and for no earthly reason that I could see. We’d already done all the chores, and I couldn’t think of anything else that needed doing, especially not on a night like this. But I knew Pa was not very patient at one dragging one’s feet when he’d told them to do something, so I got up and put my boots back on and got my cap, coat, and mittens. Ma gave me a mysterious smile as I opened the door to leave the house. Something was up, but I didn’t know what.

Outside, I became even more dismayed. There in front of the house was the work team, already hitched to the big sled. Whatever it was we were going to do wasn’t going to be a short, quick, little job, I could tell. We never hitched up the big sled unless we were going to haul a big load. Pa was already up on the seat, reins in hand. I reluctantly climbed up beside him. The cold was already biting at me. I wasn’t happy.

When I was on, Pa pulled the sled around the house and stopped in front of the woodshed. He got off and I followed. “I think we’ll put on the high sideboards,” he said. “Here, help me.”

The high sideboards! It had been a bigger job than I wanted to do with just the low sideboards on, but whatever it was we were going to do would be a lot bigger with the high sideboards on.

When we had exchanged the sideboards Pa went into the woodshed and came out with an armload of wood—the wood I’d spent all summer hauling down from the mountain, and then all fall sawing into blocks and splitting. What was he doing?

Finally I said something. “Pa,” I asked, “what are you doing?”

You been by the Widow Jensen’s lately?” he asked. The Widow Jensen lived about two miles down the road. Her husband had died a year or so before and left her with three children, the oldest being eight.

Sure, I’d been by, but so what? “Yeah,” I said, “why?”

“I rode by just today,” Pa said. “Little Jakey was out digging around in the woodpile trying to find a few chips. They’re out of wood, Matt.” That was all he said and then he turned and went back into the woodshed for another armload of wood.  I followed him.

We loaded the sled so high that I began to wonder if the horses would be able to pull it. Finally, Pa called a halt to our loading, then we went to the smoke house and Pa took down a big ham and a side of bacon. He handed them to me and told me to put them in the sled and wait.

When he returned he was carrying a sack of flour over his right shoulder and a smaller sack of something in his left hand. “What’s in the little sack?” I asked.

“Shoes. They’re out of shoes. Little Jakey just had gunnysacks wrapped around his feet when he was out in the woodpile this morning. I got the children a little candy too. It just wouldn’t be Christmas without a little candy.”

We rode the two miles to Widow Jensen’s pretty much in silence. I tried to think through what Pa was doing. We didn’t have much by worldly standards. Of course, we did have a big woodpile, though most of what was left now was still in the form of logs that I would have to saw into blocks and split before we could use it. We also had meat and flour, so we could spare that, but I knew we didn’t have any money, so why was Pa buying them shoes and candy? Really, why was he doing any of this? Widow Jensen had closer neighbors than us. It shouldn’t have been our concern.

We came in from the blind side of the Jensen house and unloaded the wood as quietly as possible, then we took the meat and flour and shoes to the door. We knocked. The door opened a crack and a timid voice said, “Who is it?”

“Lucas Miles, Ma’am, and my son, Matt. Could we come in for a bit?”

Widow Jensen opened the door and let us in. She had a blanket wrapped around her shoulders. The children were wrapped in another and were sitting in front of the fireplace by a very small fire that hardly gave off any heat at all. Widow Jensen fumbled with a match and finally lit the lamp.

“We brought you a few things, Ma’am,” Pa said and set down the sack of flour. I put the meat on the table. Then Pa handed her the sack that had the shoes in it. She opened it hesitantly and took the shoes out one pair at a time. There was a pair for her and one for each of the children—sturdy shoes, the best, shoes that would last. I watched her carefully. She bit her lower lip to keep it from trembling and then tears filled her eyes and started running down her cheeks. She looked up at Pa like she wanted to say something, but it wouldn’t come out.

“We brought a load of wood too, Ma’am,” Pa said, then he turned to me and said, “Matt, go bring enough in to last for a while.  Let’s get that fire up to size and heat this place up.”

I wasn’t the same person when I went back out to bring in the wood. I had a big lump in my throat and, much as I hate to admit it, there were tears in my eyes, too. In my mind I kept seeing those three kids huddled around the fireplace and their mother standing there with tears running down her cheeks and so much gratitude in her heart that she couldn’t speak. My heart swelled within me and a joy filled my soul that I’d never known before. I had given at Christmas many times before, but never when it had made so much difference. I could see we were literally saving the lives of these people.

I soon had the fire blazing and everyone’s spirits soared. The kids started giggling when Pa handed them each a piece of candy and Widow Jensen looked on with a smile that probably hadn’t crossed her face for a long time. She finally turned to us. “God bless you,” she said. “I know the Lord himself has sent you. The children and I have been praying that he would send one of his angels to spare us.”

In spite of myself, the lump returned to my throat and the tears welled up in my eyes again. I’d never thought of Pa in those exact terms before, but after Widow Jensen mentioned it, I could see that it was probably true. I was sure that a better man than Pa had never walked the earth. I started remembering all the times he had gone out of his way for Ma and me, and many others. The list seemed endless as I thought on it.

Pa insisted that everyone try on the shoes before we left. I was amazed when they all fit and I wondered how he had known what sizes to get. Then I guessed that if he was on an errand for the Lord that the Lord would make sure he got the right sizes.

Tears were running down Widow Jensen’s face again when we stood up to leave. Pa took each of the kids in his big arms and gave them a hug. They clung to him and didn’t want us to go. I could see that they missed their pa, and I was glad that I still had mine.

At the door Pa turned to Widow Jensen and said, “The Mrs. wanted me to invite you and the children over for Christmas dinner tomorrow. The turkey will be more than the three of us can eat, and a man can get cantankerous if he has to eat turkey for too many meals. We’ll be by to get you about eleven. It’ll be nice to have some little ones around again. Matt, here, hasn’t been little for quite a spell.” I was the youngest. My two older brothers and two older sisters were all married and had moved away.

Widow Jensen nodded and said, “Thank you, Brother Miles. I don’t have to say, “‘May the Lord bless you,’ I know for certain that He will.”

Out on the sled I felt a warmth that came from deep within and I didn’t even notice the cold. When we had gone a ways, Pa turned to me and said, “Matt, I want you to know something. Your ma and me have been tucking a little money away here and there all year so we could buy that rifle for you, but we didn’t have quite enough. Then yesterday a man who owed me a little money from years back came by to make things square. Your ma and me were real excited, thinking that now we could get you that rifle, and I started into town this morning to do just that. But on the way I saw little Jakey out scratching in the woodpile with his feet wrapped in those gunnysacks and I knew what I had to do. So, Son, I spent the money for shoes and a little candy for those children. I hope you understand.”

I understood, and my eyes became wet with tears again. I understood very well, and I was so glad Pa had done it. Just then the rifle seemed very low on my list of priorities. Pa had given me a lot more. He had given me the look on Widow Jensen’s face and the radiant smiles of her three children. For the rest of my life, whenever I saw any of the Jensens, or split a block of wood, I remembered, and remembering brought back that same joy I felt riding home beside Pa that night. Pa had given me much more than a rifle that night, he had given me the best Christmas of my life.

-Rian B. Anderson from A Christmas Prayer

Here’s what really makes Christmas special – Do you agree?

Christmas on the ranch

This is the toughest week of the year to write an article. Thankfully, the election is over and the market has been rallying, but this is the one week of the year when industry topics or opinion pieces seem contrite and a little shallow. 

But then again, writing about God, family and love isn’t the easiest thing for a cattleman, either. I hate to admit it, because I abhor political correctness and its negative ramifications, but I get a little nervous talking about Christmas with too much of a religious overtone. I don't want to offend anyone, but it isn't the fear of offense that inhibits me. I hesitate when it comes to talking about the real meaning of Christmas for two reasons; one, I’m not a biblical scholar and two, that I’m such a deeply flawed person that I worry that I might jeopardize someone’s relationship with God simply because of my own mistakes and flawed example. 

I also know that those thoughts are not put there by God or even political correctness, but by the one who would love for Christmas to be only about presents, material things and Santa Claus. Don’t get me wrong, though, I really like Santa Claus.

Even talking about love and family gives me pause. Perhaps that’s because I could have been, I should have been, a better father, a better husband, a better son, a better brother, a better friend, a better business partner so many times.

But that is really what makes Christmas special. Christmas doesn’t ignore our sins, our imperfections or our mistakes. But it does, in a way, confirm the power of love and forgiveness. God knew who we were but he still sent his son into this world, knowing the pain, rejection and suffering he would incur just so we might have a personal relationship with him.  

Our families know our faults and our weaknesses better than anybody, yet they love us anyway. Our relationships with God, with family and friends are not weaker because they require forgiveness, but strengthened by that very fact. Love and acceptance by those who know you best is foundation for happiness and doing great things. It is that knowledge of their love and support, coupled with your desire to honor them, that inspires us to be the best version of ourselves. 

Our family has a little tradition of reading the story titled the Christmas Rife, written by Rian Anderson, every Christmas. It really helps me to get myself in the Christmas spirit, and while I have read the story now probably 50 times, every time I do, I can’t help but get teary-eyed. In fact, we pass the story around and let the kids read it because I can’t read it aloud with getting choked up. I thought I would share that tradition with all of you so we posted the whole story for you. CLICK HERE TO READ IT.

We are so fortunate to be Americans, to be involved in agriculture. I’m sure everyone who reads this would be considered one of the most fortunate people on the earth by just about any measure. While those blessings are wonderful, the family living in poverty, without freedom, without hope and opportunity but whom love each other and have a growing relationship with God, have no reason for envy. Perhaps it is us who should be envious because when they gather to celebrate the birth of Jesus Christ, it may be that they don’t have near the distractions we do. 

May you have a glorious Christmas holiday with family and friends, and may you take the joy of the season with you throughout the year. Markets, elections and Mother Nature will always deliver their share of surprises. But in the end, it is the relationships with God, family and friends that ultimately determine the value of one’s life.  Christmas reminds us of that simple fact. 

I’d like to wish you all a very Merry Christmas and a prosperous New Year! 

Weekly Cattle Market Wrap-Up | Typical holiday market with higher prices

Weekly Cattle Market Wrap Up

The feeder cattle market looks like a typical holiday week with mid- and late-week auctions closed for the holiday, but still three times the volume from last year. Prices were mostly steady and did not have as high of a tops, but there were definitely higher bottom end of prices because if a buyer started a load they had to push just to fill it.
 
Similarly, the slaughter cow market is looking like a typical holiday week with many auctions shut down until after the first of the year. There was 4,600 head at the test auctions, down quite a bit from last week's very big run of 11,000 head. Prices were mostly steady but the bottom end of the price ranges were definitely higher.
 

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