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Farm Progress America - December 20, 2016

Farmers turn to diversification when times are tough. Max Armstrong shares insight from Dr. David Kohl, well-known ag economist, about tactics to consider to better manage during diversification. A key is enterprise accounting to better keep track of the different farm businesses.

Dr. Kohl will be a keynote speaker during the Farm Futures Business Summit January 19 and 20 in Bettendorf, Iowa. For more information visit farmfuturessummit.com.

MIDDAY-MidwestDigest-12-19-16

Has your company held its holiday office party? Those can be great fun, but also career changing events. Be aware that a little food and a lot of alcohol don't mix well.

Our grain exports continue running at pretty good pace. China is the top buyer for soybeans. Mexico is a leading importer of corn.

Snowmobilers live for these days out on the trail, but be cautious.

A man in Columbus, Ohio, bought the entire inventory of a Christmas tree lot run by St. Mary's School to raise money for school supplies. The man bought all the trees, priced at $40 to $50 each for folks who couldn't afford a tree of their own.

MORNING-MidwestDigest-12-19-16

It's the most wonderful time of the year for counterfeiters. The U.S. Secret Service is warning that crooks work overtime at making and passing counterfeit bills this time of year, especially $20s. Agents say the bills look and feel different than real bills. 

That horse-drawn wagon that went out of control in rural Minnesota we talked about last week was driven by a man who suffered heart attack. The 80-year-old man died. Many of the passengers suffered minor injuries. The horses were unharmed.

Christmas tree growers expec to sell 26 million real trees this year. Christmas trees are grown as a crop and when one is harvested at least one more is planted in its place. And while it's growing, it provides habitat for wildlife and Christmas trees often grow on land not well suited to any other kind of agriculture.

Henry Heimlich died Saturday in Cincinnati. He was 96. He's the man who gave us the Heimlich maneuver.

There were two puppy incidents in Indianapolis over the weekend.

How to build a low-maintenance cowherd

How cold is too cold for calving

Throughout the past 33 years as a beef veterinarian, I’ve seen many examples of excellent management practices. While teaching at Purdue University, I often told students they would likely learn as much from their clients as they would from their professors. It is important to learn from progressive producers and share this knowledge with others who strive to do even better than they do today.

Beef veterinarians spend a lot of time analyzing problems and providing recommendations for improvement. Successful producers prove that exceptional health, productivity and profitability are possible. So, when asked about how improvements can be made on a farm or ranch, I share success stories from those producers.

One key area that the most successful producers continuously focus on is keeping low-maintenance females. Beef cows should thrive in their environment, whether that is southern Texas or North Dakota. My veterinary school externships were in western Nebraska, where cows needed to be much more resilient than those in my family’s small Midwestern herd. The cowboys talked about their cows’ hardiness, foraging ability and ease of fleshing. Their cows calved in large pastures with little human assistance. I learned that whether a producer has 40 cows or 4,000, having low-maintenance cattle is an advantage.

As a veterinarian, I have also worked with herds that require extra attention. “High-maintenance” characteristics include:

  • Assisting a cow or heifer at calving as soon as the feet show. In a well-managed herd, we expect less than 5% dystocia on cows and less than 15% on heifers. It’s important to remember the rule of “progress every hour,” with regard to knowing when to provide assistance to the animal. If you have dystocia rates above these targets, a change in genetics is likely necessary.
  • Tubing all calves with colostrum replacer soon after birth. Beef calves should be on their feet 30 minutes after birth. Once on their feet, they should be nursing within the following 30 minutes. If this is not the rule, genetics, ambient temperature at calving and cow nutrition need to be examined. A crossbred calf born in a desirable environment to a cow with a body condition score (BCS) of 5.5 to 6 is ideal for calf vigor at birth. Spending the time and money to tube calves at birth is normal for dairy calves, but should be rare with beef.
  • Every calf gets a shot soon after birth. Work with your herd health veterinarian to have the cows vaccinated according to his or her recommendations so calves will not need injections at birth. Injections at birth should be an exception rather than a rule. Work with your nutritionist to build a gestation ration that prepares the cow for success at calving and beyond. The real key to calf health is colostrum ingestion. Healthy cows produce the best colostrum for the calf.
  • Most all females calve in a building. While providing shelter to a newborn calf is admirable, our cattle are bred to live in nature. When we confine animals, we also confine and concentrate disease organisms. The next calf born in this environment has a much greater chance of getting sick, and the odds of disease escalate with each subsequent calf born there. It is impossible to do a thorough job of cleaning an indoor calving pen to remove these microscopic pathogens. Stop fighting nature, and calve at a time of the year that is conducive to calving outside with little risk of weather stress.

If your herd could benefit from improvements suggested throughout this list, please contact your herd health veterinarian and make the proper adjustments to shift your herd from high to low maintenance. You’ll be very glad you did.

Cash fed cattle catch a tailwind on CME rally

Fed Cattle Recap

A pre-Christmas rally in the futures market lent strength to the fed cattle cash trade last week. The finished cattle trade was about $1-$2 per cwt higher and got better as the week progress on the heels of the CME rally. The rally in the futures market also influenced 57 loads of fed cattle to be tendered for CME delivery in South Dakota.   

The weekly weighted average cash steer price for the five Area region, which includes the major central feeding areas, was $111.39 per cwt, compared with $109.52 the previous week, which was $1.87 higher.

The cash dressed steer price was $174.13, compared with $169.92 the previous week.      

The Five Area total cash steer and heifer volume was 70,932 head, compared with about 61,000 the previous week.

Five Area formula sales totaled 171,818 head, compared with about 167,000 the previous week. The Five Area average formula price was $179.38, compared with $179.07 the previous week.  

Nationally reported forward contracted cattle harvested was about 60,000 head, compared with 49,000 the previous week. Packers have over 226,000 head of forward contracts available for December and about 215,000 for January. USDA mandatory price reporting showed 127,000 head increase in contracts through early 2018 that have been signed up during this last week.

The latest average national steer carcass weight for week ending Dec. 3 was 3 pounds lower at 913 pounds, compared with 913 pounds last year, which dropped 10 pounds.

The Choice-Select spread was $13.54 on Friday, 3.72 lower than the previous and that compares with a $7.79 spread last year. The spread drops fast this time of the year; demand and prices for the Choice rib dropped $27 in one week already while demand for the round and chuck increases. Those cuts are less dependent on being Choice.  What’s more, the round and chuck rally rocked and rolled earlier than normal this year, helping to keep the cutout from dropping.

 

Craig Uden: Incoming NCBA president is driven to succeed

Photo courtesy of NCBA Craig Uden, NCBA president elect, on his cellphone -- his most used tool every day
Whether he’s on the feedlot, in a meeting or at an airport, Craig Uden gives his cellphone a workout. As incoming president of NCBA and the past chairman of the Federation of State Beef Councils, Uden knows the importance of being available at all hours of the day to discuss industry issues and work toward solutions.

Craig Uden is a fourth generation-first-generation cattle feeder. And within that paradox lies a lesson that the National Cattlemen's Beef Association's (NCBA) incoming president tries to pass along to every young person interested in a career in agriculture.

That lesson? If you work at it hard enough, if you want it bad enough, if you use your mind as much or more than you use your hands, you’ve got a chance to succeed in the cattle business.

It also helps, he says, when you try to stay up to date on the issues facing our industry. “The best way I know is being active and involved in your local organizations, like NCBA,” he says.

He knows a little about that. Uden was raised in east-central Nebraska on a farming and cattle feeding operation. “I always like to say I am fourth-generation, but I got to start everything over again on my own,” he says. “The ’70s were tough, and I needed to look a different direction when I was coming out of school in the ’80s.”

Photo courtesy of NCBACraig Uden and his wife, Terri, make a strong team. With Uden volunteering much of his time on behalf of the cattle business, he says Terri is the stability that keeps everything running smoothly. Photo courtesy of NCBA

Craig Uden and his wife, Terri, make a strong team. With Uden volunteering much of his time on behalf of the cattle business, he says Terri is the stability that keeps everything running smoothly.

That direction was west. While a student at the University of Nebraska-Lincoln in the early ’80s, he landed a summer internship at a western Nebraska feedlot. And the die, as they say, was cast.

He impressed the owners with his drive, his determination and his ability to manage people. And it didn’t hurt that, through the state association, he and his dad were known and respected by other cattle feeders in the state. A year later, the partners called him, and even though Uden was still a college student, he got his break. “They called me at 5 o’clock in the morning and said, ‘We’ve got this new feedyard and we need someone to run it. Are you willing to give it a try?’ ”

He was, and he’s been at Darr Feedlot, Cozad, Neb., ever since.

Industry policy

Uden brings that work ethic with him as the 2017 president of the NCBA. The beef business, like every other economic sector, is dealing with many unknowns, as Donald Trump assembles his cabinet and works toward his term as the 45th president of the United States.

Uden is optimistic. “We look forward to working with this new administration,” he says. “Perhaps we can get some things moved through instead of being on the defense all the time.”

But he knows there are no quick fixes, especially with one of NCBA’s top priorities — trade. “Trade is always going to be an issue,” he says, especially given President-elect Trump’s campaign remarks regarding trade agreements. But he says trade is essential for beef producers.

“We have to continue to work toward increasing trade, because in order for our cattlemen and cattlewomen to be successful, we have to maintain [cattle] numbers, but we have to increase the price,” he says.

“We have to remember that 96% of [the world’s population] lives outside our borders. So consequently, in order to provide that safe, wholesome product that we do — the best in the world — we have to have access. So that will be key.”

Market volatility

While trade is key to the long-run health of the cattle market, the volatility and uncertainty that 2016 cattle markets produced is a much more immediate concern. Uden plans to ensure NCBA is front and center in working toward solutions.

Craig Uden spent many years as manager of Darr Feedlot at Cozad, Neb. As he got more involved in national industry organizations, however, he relinquished some of the day-to-day management, but is still active in working with customers and his business partners. Now his desk in the feedyard office serves as home base for much of his work on behalf of the National Cattlemen’s Beef Association.NCBA has been engaged with the Chicago Mercantile Exchange (CME) in some very productive discussions, he says. And an NCBA Working Group is delving into three areas to find focus — price discovery, contract specifications and volatility.

Uden says that will be an ongoing effort with NCBA and CME, and he’s optimistic that ultimately, solutions will come forth. And he believes that building relationships with other organizations will be important as the beef business looks ahead.

Take sustainability, for example. NCBA has led the effort to establish a baseline for beef sustainability. Then, working with other groups, such as the U.S. and Global Roundtables for Sustainable Beef, NCBA continues those efforts.

“The information required of cattlemen and women continues to increase, and that’s a trend that will continue in the years ahead,” he says. “We’re not going backward. That especially applies to consumers and the finished product. Consumers today expect more information about how cattle are produced, and we need to be comfortable with the idea of providing them with an open dialogue about our production practices and answering their questions.”

He says it’s equally important that beef producers concentrate on improving every aspect of the beef business. “We hear the word ‘sustainability’ tossed around a great deal, and it’s not a concept we might embrace at first — but the cattle producers in this country have been and continue to be sustainable, so it’s a conversation we need to lead. When it comes right down to it, sustainability is making certain we are looking for ways to produce beef tomorrow that are better than the methods we’re using today.”

And that’s not just rhetoric for Uden. It’s something he challenges himself and his employees with each day, and it’s paid off over the years as he’s built the cattle feeding and cow-calf operations he oversees.

In addition, the GIPSA (Grain Inspection, Packers and Stockyards Administration) rule has resurfaced, and the controversial Waters of the U.S. (WOTUS) regulations are still on the table, although temporarily stayed by a court order. But Uden, anticipating a new administration in Washington, is optimistic those issues will be resolved.

Better communication

What’s more, he hopes he can be a catalyst for greater communication within the beef business. He hopes, as the beef business looks ahead to 2017, that cattle producers can come together, build on the many strengths of the industry and see the big picture.

Photo courtesy of NCBA

Whether he’s on the feedlot, in a meeting or at an airport, Craig Uden gives his cellphone a workout. As incoming president of NCBA and the past chairman of the Federation of State Beef Councils, Uden knows the importance of being available at all hours of the day to discuss industry issues and work toward solutions.

“I think our key thing is information. We have to come together as cattlemen, come together as an industry because we have great challenges out there from different organizations that don’t want us at the center of the plate.”

The key to achieving that, he believes, is for cattle producers to see the big picture, to appreciate the industry from gate to plate. “I think people who see the larger picture are usually more able to respond to this ever-changing beef business.”

And change is what the industry is all about. “We always face challenges, and we always know there’s an issue out there. Addressing the issues and trying to find solutions for the issues moving forward is what NCBA is all about,” he says.

The road to the top

It’s that passion for the industry and the people in it that put him on the road to the NCBA presidency. But he comes to the policy side of the cattle business with a strong background in the checkoff.

Uden’s father not only taught him at a young age to run a cattle operation, he also instilled in him the necessity of being involved and giving back to the business that gives you so much. “My father, over 50 years ago, started our local cattlemen’s association and was the first and third president of a county organization that is still very, very successful. So I was raised on that.”

Craig Uden spent many years as manager of Darr Feedlot at Cozad, Neb. As he got more involved in national industry organizations, however, he relinquished some of the day-to-day management, but is still active in working with customers and his business partners. Now his desk in the feedyard office serves as home base for much of his work on behalf of the National Cattlemen’s Beef Association.

About a dozen years ago, he was asked to run for a director’s spot on the Nebraska Beef Council. He agreed because it wouldn’t take a lot of time. Or so he thought.

“I got elected and happened to be heading to Colorado to see customers. I stopped by the Beef Promotion Operating Committee meeting,” said Uden, and he spent a day watching how the checkoff dollars got allocated on the national level. “Well, that wasn’t going to take a lot more time, and I thought ‘That looks pretty unique: see all the proposals and help decide how the money is going to be spent on the checkoff.’ So I thought I’d interview for that position.”

He did and was elected to the Beef Promotion Operating Committee. And from that springboard, he became involved in the Federation of State Beef Councils, becoming vice chairman and eventually chairman. The federation represents the state beef councils, which are the collection points for the $1 beef checkoff and the source of part of the money that goes to the national Beef Board.

The Beef Promotion Operating Committee is where programs are approved for the beef checkoff. The Federation of State Beef Councils is the source of half of the members of the operating committee, which helps keep it grounded to the grass roots that supply the checkoff funds.

From there, he was recruited to consider leadership positions with NCBA. While he had plenty of work at home, he agreed and has progressed through the leadership ranks to become 2017 president.

Will the industry look the same 10 years from today? “Probably not, but we need to be part of that shaping and molding to whatever it’s going to look like in 10 years,” he says. And he plans to keep NCBA at the center, guiding and directing the beef business as it addresses its future.

Here’s what makes a good feedyard horse

Working cattle in feedlots on horses

Neither snow, nor rain, nor heat, nor gloom of night keeps these sentries from taking care of cattle. Indeed, a feedyard cowboy and his horses are one of the greatest examples of teamwork.

However, neither their horses nor the cowboys are groomed for the show ring. The perfect feedyard horse - durable, coarse, big-boned with big feet - won’t win any beauty contests. “But they’re good-minded, they’re solid, and they put up with a lot,” says Kevin Dwyer, manager of Sellers Feedyard at Lyons, Kan.

At any given moment, there are around 11 million cattle on feed nationwide being pampered so they’ll make consumers the tastiest hamburgers, roasts and steaks. Feedyard horses spend most of their time patrolling pens while their Wrangler-clad riders scout for and doctor sick or injured cattle. The rest of the time, they’re moving critters from one pen to another.

And feedyard work, at least for a horse, is fraught with noise and commotion—slamming gates on semi-trucks, the grinding gears of feed trucks and that annoying “beep-beep-beep” of backing trucks and tractors. The horses become acclimated to the noise and extremes.

So not only do feedyard horses need to know the basics - stop, back, turn around, sidepass - to be able to open and close gates, quietly sort a single steer from a pen or push a load of cattle down an alleyway, but they need to be able to handle the conditions a feedyard dishes out. They can be up to their fetlocks in mud or trodding on ground as hard as concrete.

“It’s asking a lot of a 2- or 3-year-old to do the kinds of things we expect,” says Dwyer. “You’ve got to have a horse that can stand getting poked in the ribs once in a while by a gate handle or steer and not come unglued.”

It’s no place for a green-broke horse. Well, it used to be until horse-related workman’s compensation claims started piling up. Cowboys were getting hurt because they lacked good horsemanship skills or were using horses that didn’t have the basic abilities required to work in feedlot.

“These days, the guys that come to work in the feedyard are either good sick-cattle detectors or good horsemen, not both,” says Jerry Riemann, horse trainer and retired feedyard manager from Dighton, Kan.

Because of this, and to reduce workman’s comp claims, a lot of feedlot managers send their cowboys to special safety seminars to learn horsemanship principles and understand what’s safe and what’s not. These days, the feedlot - formerly a factory for well-broke horses - has become a consumer of well-broke horses.

Source: American Quarter Horse Association

Working capital—Do you have enough?

Working capital on the ranch

When I hit the road to speak, one of the most important slides I regularly use highlights how lending criteria has changed since the financial crisis. To illustrate that point, the slide includes a quote from Nick Parsons, head of research with the National Australia Bank: "So capitalism has changed…the owner or the custodian of capital [i.e. lending institutions] is much more careful about where they use that capital.”

To that end, most readers have likely experienced increased scrutiny from their lenders in this post-crisis world. And one of the key criteria that lenders use to make decisions revolves around availability of working capital within any operation; working capital being a function of current assets less current liabilities. It’s a measure of an operation’s buffer to meet its short-term obligations, hence the importance to lenders. 

Perhaps equally important, it’s a key indicator of cash reserve availability to meet unexpected emergencies. Thus, it is an important component of risk management to ensure business continuity within the operation without the need to borrow additional funds.

As an example, albeit simplified, a pickup is typically a critical operational asset for most cow-calf operations. What if it catches on fire and suddenly needs to be replaced, else the cows don’t get fed? After insurance provides some portion towards replacement, does the operation have sufficient working capital to meet the remainder of the obligation? This type of assessment has become more important to lenders since the financial crisis.

This week’s graph highlights USDA’s updated aggregate working capital estimates in agriculture. Clearly, as last week’s illustration depicts, declining revenue has taken a big hit out of working capital reserves for agriculture. Working capital has declined nearly 50% - the loss exceeds $82 billion in just three years. That’s a concerning trend – and if it continues, will clearly have implications in the coming years.

What are you doing to maintain strong cash and working capital reserves amidst declining revenue? What new expectations do you your lenders have during the past several years and going into 2017? How will you adjust going forward? Leave your thoughts in the comments section below.

Midwest Digest - Morning December 1 2016

New essay contest promotes advancements in beef production

Amanda Radke Modern Beef Production

Your kids will soon be on Christmas break, and with no school to keep them occupied, boredom could soon set in. After chores are done, how about engaging your kids with an essay contest?

Jared Decker, University of Missouri beef genetics Extension assistant professor, recently asked BEEF to be a part of the newly announced Beef Genetics Education National Essay Contest.

Geared toward youth participating in 4-H, FFA and junior beef breed associations, the essay theme aims to answer the question, “What does it mean to be a beef breeder in the 21st century?”

The essays must be at least 600 words long but no longer than 3,000 words. The entries are due Feb. 15, 2017, and can be submitted here. Judges will evaluate the essays based on how effectively the student encourages best practices, technology adoption and sustainability of these methods for the beef cattle industry.

The winning essay will be published and announced on the BEEF Daily blog this February and will receive a $500 prize. Additional prizes will be awarded, with $300 for second place and $200 for third, respectively. The first place winner will also receive 50 GeneMax Focus or PredicGEN tests.

Winning essays will also be published on “A Steak In Genomics” blog.

The contest is sponsored by BEEF, Zoetis and GeneSeek. According to a press release promoting the contest, “This educational program and essay contest is part of the "Identifying Local Adaptation and Creating Region-Specific Genomic Predictions in Beef Cattle" funded by the USDA-NIFA, Grant No. 2016-68004-24827.”

The possibilities are endless for the direction your kids could take in writing this essay. Help them brainstorm over the holiday break and encourage them to submit an essay to this new contest.

I look forward to reading the winning essay and sharing it with all of you here. If you have some ideas for the youth, consider sharing them in the comments section below. I’m sure the youth (and their parents) would appreciate the ranching community’s insight on this exciting topic!

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Penton Agriculture.