Risk Ahead

If you're expecting $74 to $75/cwt. prices for your slaughter cattle from April through July and possibly for all of 2000, better think again. That was the alert put out by economist and business consultant Bill Helming in his special Feb. 24 report to clients.

"Bottom line, there appears to be an excessive degree of optimism and unrealistic expectations regarding the fed cattle market for the year 2000," Helming warns. Risks exist this year, including the potential for significant losses. He predicts a $65 to $74/cwt. typical price trading range in the Texas Panhandle with prices not likely above $72 or $73.

The main culprit is continuing record high beef supplies, offsetting the generally positive outlook for domestic consumer and export demand for beef this year. Without this positive beef demand outlook, fed cattle prices would be significantly lower than they are, he says. Prices reflect both supply and demand factors with the supply factor being the most concerning, Helming believes. Here are highlights:

* Total beef production for 2000 will be at least equal to last year's levels and easily 1-2% above the 1999 all-time high of 26.39 billion pounds. This figure includes a 4.5% smaller beef and dairy cow slaughter accounting for 15.8% of U.S. commercial slaughter compared with 1998.

That trend continued the first five weeks of 2000, dropping 6.4% below a year earlier. Total cattle slaughter and especially total fed steer and heifer numbers should increase this year in order for the feedlot sector to stay current, Helming suggests.

* Average carcass weights for January 2000 were up 8 lbs., helped by favorable feeding conditions that have sparked higher carcass weights and more beef production so far this year.

* "Even though we have been liquidating the total cattle inventory since 1996, U.S. beef cow inventory numbers could be understated by 500,000 to 750,000 head, despite USDA's slightly revised upward estimates made last January 1," Helming says. A further upward adjustment may come between now and January 2001. This partly explains why feedlot placements have been so large from July 1999 through February 2000.

* More lightweight cattle and calves fed the last year tended to "spread out" fed cattle marketings. But Helming believes this advantage has been offset by a record 11% more cattle on feed Feb. 1, 2000 as reported in the USDA 7-State Cattle On Feed Report. This could mean significantly larger total beef supplies the first half of 2000, possibly for the year compared with 1999.

Economic indicators from the Denver yards

Call it voodoo economics or lucky happenstance, but during the last decade private treaty bull sales in the yards of Denver's National Western Stock Show - usually a fair barometer of the bull season to follow - predicted sub-cyclical peaks in the calf market 80% of the time (Figure 1).

In other words, most times when bulls in the Denver yards sold for a higher average than the trough preceding it, calf prices ended up doing the same. Rather than wait for calves to hit a new peak and then fuel the market, it seems that informed optimism weighs heavier in genetic buying decisions than revenues generated the previous year.

Although there's plenty of hide left to burn in 2000, this layman's index likely will prove right again this year. Bulls in the Denver yards averaged $3,287 this year, the highest since 1996. At the same time, most economists predict great prices for calves sniffing their first grass this year.

As an example, Cattle-Fax expects all classes of cattle to average above 1999 levels. Specifically, they peg average calf prices (500 lbs.) at $95/cwt., average feeder prices (750 lbs.) at $81/cwt., and average fed cattle prices at $69/cwt. Those would be the loftiest levels since 1994.

The point is: while supply and demand will always bend and shape the market, commercial producers themselves are still the ones who drive anticipation and reaction to the ebb and flow. Subconsciously or not, they have an uncanny ability to see a new window just as it is ready to open.

Ironically, as the industry creeps into the electronic age, the above reality should add even more value to the face-to-face interchange of information at places like Denver. Make no mistake, the seedstock producers who make the annual trek to the Denver yards go for the education as much as anything.

"When you go to Denver, you'd better have an open mind because if you walk away without learning something, you haven't done your job," says David Geffert of Geffert Herefords at Reedsburg, WI. He and his family have used the yard show as their annual production sale since 1983.

"When I leave here I know what the Red Angus, Angus and Hereford breeds (which Geffert raises) are doing. I can come here and have my finger on the pulse of the whole industry," says Geffert.

Likewise, Dean Churchill of Rocking Arrow Charolais at Valentine, NE, explains, "You have an opportunity to evaluate bloodlines and different breeders' cattle in somewhat of a volume situation." Plus, he says, you find perspectives that geography wouldn't allow otherwise. "We see people that come out of Washington, Idaho and Canada that we'll never see anywhere else we go."

Arguably, commercially-rooted venues like the Denver yards have lost some of their commercial appeal over the years. This is due to declining producer numbers and the fact that fierce competition means some of the bulls are priced as breeder bulls rather than range rovers.

"In the early years, I think we had more commercially-oriented people come through. Now, I think we see more breeder-oriented people looking for their next herd sire," says Rod Peterson of Pukwana, SD. His family's L7 Bar Limousin ranch has brought bulls to the Denver yards for 25 years.

Rather than shop for individual bulls per se, Peterson says commercial producers are more likely to use the show as a place to compare breeds and breeding programs. After all, the demographic melting pot an exhibition like Denver represents is really a micro-reflection of the industry transition itself.

"It used to be you'd talk to a lot of guys who had 100 or 200 cows at home. Now, it's more like 500 or 1,000 or more," he explains. With that in mind, producers coming through these days spend as much time talking about performance as they do studying skeletal structure and muscle.

"Sales in the yards are a year-to-year deal. The market is good now, and a lot of people are looking to buy bulls. Other years they don't," says Peterson. Just like the subsequent calf market the bull sale here seems to gauge.

Weed To Watch

Two common weeds in Western alfalfa pack a punch so powerful that even small quantities can be deadly to cattle and horses.

"Common groundsel and fiddleneck contain pyrrolizidine alkaloids (PAs)," says Arthur Craigmill, a University of California-Davis toxicologist. "The consumption of even small quantities of PAs causes severe liver damage."

"PA poisoning isn't a widespread problem. However, it does show up in different degrees every year," says Mick Canevari, a California farm advisor.

The alkaloids are resistant to heat and also maintain their toxicity in dry hay.

There are no cures or antidotes for PA poisoning, so preventing growth of PA-containing weeds in hay and pasture crops is crucial.

Fiddleneck is usually a big problem in new alfalfa stands and less of a problem in established ones. The opposite is true of common groundsel, Canevari says.

To control common groundsel in new seedings, Canevari recommends Buctril, Gramoxone or 2,4-DB; in established stands, apply Velpar. To control fiddleneck in new seedings, he recommends Buctril; in established stands, Gramoxone with Velpar or Karmex.

The alkaloids are typically concentrated in the weeds' small shoots and in the seeds at maturity. But the concentration varies from year to year. Craigmill says consumption of large amounts of groundsel or fiddleneck may kill animals in a few weeks or less.

"Other times, an animal can eat the weeds for several months before signs of poisoning actually become visible. When symptoms suddenly appear, it looks like something just happened. But it's actually a result of months of intake of the compound."

If a diagnosis is made in time, animals may recover, he says.

In cattle, common signs of PA poisoning include dull haircoat, dry muzzle, lack of conditioning, diarrhea and depression. Horses lose condition, stop eating, become depressed and wander aimlessly.

"There's a definite hierarchy in sensitivity among species to this particular toxin," points out Craigmill. "Horses are the most sensitive, followed by cattle, hogs and chickens, which are less sensitive, and sheep, goats and turkeys, which are the least sensitive. The young of all species are more sensitive than adults.

"If hay with PAs is fed to dairy cattle, the alkaloids are then excreted in milk. Humans are susceptible to PA poisoning."

Most animals find the toxic weeds unpalatable and won't eat them if better forage is available. Of course, animals can't select toxic plants out of cubes or pellets, says Craigmill.

The Eyes Still Have It

When John Edwards was a boy, he took his father at his word, especially when it came to cattle. Then, Edwards went and got himself one of those college educations.

"We'd always just keep the biggest and strongest heifers," remembers Edwards. "One day, I came home from college and told my dad, 'We can't really do that, you see, because I've been learning about adjusted weaning weights, and if we don't adjust for age, we're putting the younger heifers at a disadvantage to the older ones.'"

As all good dads do, John's listened intently, then quickly explained, "What we're doing is culling out the calves whose mothers either had them later because they bred later or because they're not raising as good a calf as the others. What's wrong with that?"

Indeed, for the merits of technology and objective measure, Edwards learned early on that common sense visual observation possesses a power no machine or calculator can replace, even today. For more than four decades, he has evaluated thousands of cattle in the pasture and the show ring and taught thousands of young people how to see cattle. Today, he's managing partner of the Key Bar Ranch in Glendo, WY.

"I think what we've done with all of this genetic evaluation data, which is such a valuable tool, is made it too easy for some to sit down with the numbers, the math and what seems like objective data, and neglect visual evaluation in putting it all together. And there are those who do the opposite and neglect putting the objective measures with their visual evaluation," says Edwards.

Bill Mies, professor of Animal Science at Texas A&M University (TAMU) and one of the nation's foremost cattle feeding experts, feels likewise. He says, "This would be a difficult business for a blind man to run. Over 400 years ago, a man by the name of Lemon said the eye of the master fattens his cattle, and that hasn't changed."

What We Can See In the breeding herd, Edwards says, "I think the whole question of form following function, or the relationship between form and function, is the underlying principle of what we can do with our eyes."

Specifically, Edwards says, "With our eyes we can evaluate the skeletal design of the animal, and a trained evaluator can do a good job of estimating subcutaneous fat and muscle. To a lesser degree, we can evaluate reproductive potential to the extent that we can detect dramatic imbalances in the hormone profile."

So, the estrogen that drives female reproductive promise is the same reason heifers should look feminine, rather than masculine.

Of course, Edwards points out there's a sure way to evaluate reproductive merit without discussing phenotype. He explains, "Typically, we keep the ones that are bred and cull the ones that aren't. That's how we determine fertility."

Even so, Edwards says, at least subconsciously, veteran cattle producers exploit their vision by sorting out stock that fits the same mold of predecessors who have flourished in the same pastures.

"Some guys may not be able to see specific differences, but they can tell whether or not the cattle fit their mental pattern of what has proven to work for them," says Edwards. "In most herds of cattle, if a rancher will study the most productive females in terms of those that breed and calve on time, they'll begin to see similarities in design and pattern for that particular environment."

As for other specifics that lend themselves to visual appraisal, Edwards says the easiest difference for people to see is size. He explains, "One advantage to frame size is that most people do a pretty good job of sorting the shortest cattle from the tallest." That's why, Edwards says, so many "master breeders" flash on to the scene when the industry gets caught up in a frenzy to chase frame up then back down.

With that in mind, the eye is sometimes more accurate than the logic people use to interpret what they see. Edwards wishes he had a nickel for every time a breeder poked him in the ribs and said, "You know she has milk, just look at the udder." But, he'd rather have a dime for each time he responded, "I don't have any idea how much milk she has, but that's a swell delivery system for it."

Climb over the feedlot fence, Mies says, and managers can see plenty, too. "We can accurately see fat, muscle and frame size, and, depending on our ability, weight. All those are associated with end points that we need to manage cattle toward."

In short, trained eyes can run with technology when it comes to estimating yield, at least on an average basis.

"The thing we're learning is that more people in this industry understand cutability well enough to estimate pen yields, but fewer understand the relationship between fat and muscle well enough to estimate yield grades on individual cattle," explains Mies. Thus, different cattle with different potential continue to be managed toward a common endpoint, wasting time and money along the way.

The Blind Leading The Hopeful "Having said all of that, what we've learned is that beyond the hide we are able to gauge much less with our eyes than we thought we could," explains Mies. "We have looked at the outside and thought we knew what was on the inside. We have discovered that fat cover and days on feed have little to do with how cattle marble and how they will eat. On quality, we have given our eyes more credit than they deserve."

Edwards emphasizes, "We know that trained evaluators can be very accurate at estimating muscularity and fat cover. We also know those same evaluators are virtually unable to estimate marbling in the live animal, other than the fact that we assume fatter animals and black are more highly marbled, which are poor assumptions."

For perspective, Mies and Edwards participated in a TAMU study several years ago that compared the accuracy of their trained eyes to the most current ultrasound technology. Across thousands of fed steers and heifers their eyes proved as accurate as the machine for estimating fat and muscle.

When it came to marbling though, Mies says they would have scored higher by flipping a coin. He explains, "We were each standing there with 30 years of prejudices behind us about the type of cattle we thought could never grade and those we thought had to grade."

Moreover, Mies says, "One of the places our eyes get us into trouble the most is on feeder cattle. We buy based on management mistakes and the potential for compensatory gain, and we may be selecting against quality in the process."

The same shrunk, green calves traditionally coveted by some buyers are also the most likely calves to get sick and under-perform. This, of course, can drag quality grades into the gutter.

Conversely, if an order buyer wanted to identify a calf that would qualify for a program like Certified Angus Beef, for instance, Mies explains it might very well be a lighter, smaller framed, fatter, earlier maturing calf than tradition regards as the most valuable. Rather than bid those types up, he says eye-logic tells the buyer to get them bought for $6 back of the market.

"We don't have enough people writing the checks for feeder cattle who are also standing there when fed cattle are loaded on to the truck, or when those same cattle are hanging on the rail," says Mies. "The biggest challenge in the beef industry is that after we improve this value-based marketing of fed cattle, how do we improve value-based marketing in feeder cattle to match those fed targets?"

Seeing The Potential Oddly enough, eyes may be part of the solution. For instance, Mies worked with a value-added beef system looking to buy calves that fit inside a narrow window of specifications when they're finished. At first, buyers were sending too many cattle that fell short of the mark.

"The hardest thing for those buyers to do was not to buy the cattle their eyes traditionally told them had to be the great ones," says Mies. In order to see the world differently, Mies evaluated every head purchased with each buyer, explaining why this one would work and that one wouldn't.

Then, he took buyers into the packing house to illustrate how visual traits translated on the rail. Soon enough, those buyers were hitting the mark with 92% of their purchases.

"I had to do the same thing when I was feeding young bulls," says Mies. "Every order buyer thought he knew how to buy bulls. What he knew was how to buy cutter bulls, and in true niche systems every individual has to work, not just on the average."

Ahhh, calving is done

Our last 25 calves arrived in February. We're all getting more sleep but still taking turns going through the four fields of cows and calves at midnight. It's a task that takes one to two hours, depending on whether we need to treat any calves.

It's a long time between our 5 p.m. feeding and our 9 a.m. feeding. A calf can be fine in the evening and nearly dead by morning from acute gut infection if you don't find him in the night and treat him before he goes into shock.

We've had only five cases so far this year, but the muddy month of March will bring more. We had one yesterday - a five-week-old calf that was feeling good at morning feeding and in acute pain by 11:30 a.m. when Lynn found the calf throwing herself on the ground to thrash and kick.

We immediately got the cow and calf into a doctoring pen, where it's easier to corner and catch a calf. We gave the calf 6 oz. of castor oil and a teaspoonful of neomycin sulfate solution by stomach tube.

The calf was feeling much better within 30 minutes. Castor oil stimulates the gut to relieve the blockage, pressure and excruciating pain of a shut-down gut.

When you witness the extreme distress of a calf violently writhing in pain, then see the swift easing of pain (often within 30-40 minutes) and the complete return to normalcy, it really makes a person realize the benefit of castor oil. I've mentioned this treatment before in my column, but I mention it again because many people have asked about it.

We learned about using castor oil from the veterinarian we had 30 years ago. Most veterinarians don't recommend castor oil because they've never used it.

They generally don't have the opportunity to see it work. And, they don't get to see their patients at the beginning of the problem, when the calf is suddenly hit by extreme abdominal pain or suddenly starts to bloat.

They only see the calf after it goes into shock, (castor oil won't help at that point) and the rancher brings it to the clinic to try to save it with massive amounts of intravenous fluids (IVs).

Some ranchers are adept at giving IVs themselves, but others may have trouble. It's tough to get a needle into a vein on a shocked calf because there's no blood pressure.

Several liters of IV fluid will save a calf if you can get it into him, and if he's not too deep in shock with too much damage to the kidneys, brain and other organs from the circulating toxins. The bacterial toxins damage the gut lining and leak into the bloodstream. This is what sends a calf into shock. Once the kidneys shut down, the calf will die regardless of treatment.

But diligent calf checking and treatment with castor oil at the first sign of trouble - before the calves go into shock - will save them. At least it has here on our ranch, where we usually have 12 to 40 cases each year (for the past 34 years) in our herd of 160 cows.

Over the years, we have also had many types of scours, which we've learned to treat and which are not as life threatening after a calf is three or four weeks old. Many scours are minimized by calving when the ground is frozen and clean instead of wet and muddy.

The acute gut infection that causes colic or sudden bloat is a danger to our calves even up to three months old. It can kill a big, healthy calf before he shows any evidence of scours. It is probably caused by a strain of E. coli. That's what our vet suspects, though the causative organism has not yet been isolated. It is not C. perfringens (enterotoxemia).

So we try to see our calves often enough to detect a problem early - and treat them (very effectively) with castor oil. In many ways calving season is not the biggest challenge. Sometimes keeping those calves alive can require as much diligence and effort!

True Stewards

It's no secret the majority of agricultural professionals are the best stewards of Mother Nature's environmental assets. The feeding sector is no exception.

Professional feeders have taken environmentalism to heights that rival the tightest industrial standards. Ongoing research at Kansas State University with cooperation from the Kansas Water Office may help rid that state's regulatory bodies of the "one-size-fits-all" regulation mindset.

In a research series on animal waste lagoon water quality, researchers focused on three areas:

* What are the constituents in lagoon waste that pose a threat to water quality and public health?

* Input loading - at what rate does waste seep from a lagoon under field conditions?

* Aquifer vulnerability - how do soil properties, geology and water table depth affect the risk of waste movement from the lagoon to ground water?

During these studies, researchers discovered that a single set of requirements won't fit each region of the state. Differing soil types, effluent type and residential development, among other factors, have a definite influence on waste seepage and where lagoons should be located.

Other revelations show that most animal waste lagoons in Kansas have seepage rates of less than 0.1-in./day. This is well below the design standard of 1/4-in. per day used by the Kansas Department of Health and Environment. Lagoons with soil liners more than 18-in. thick seep at about 0.05 in./day.

Though these seepage rates are exemplary, researchers note that even at these low rates, significant amounts of ammonium-N can be deposited and stored in the soil under lagoons. This could pose problems after lagoon closure when the soil-bound ammonium-N could convert to nitrate and perhaps more readily move to ground water. Thus, researchers recommend developing best management practices for lagoon closure as well as site remediation.

More Research Needed But, the work isn't complete. As our food production system becomes increasingly scrutinized, we'll have to know more. Kansas State University says future research should focus on chemical and physical soil factors that affect transformation and movement of chemicals and microbes between lagoon bottoms and water tables.

Ideally, this type of research would lead to lagoon system models that consider toxicity, input loading and aquifer vulnerability. This would enhance site-specific waste management based on species, climate, soil types, environment and closeness to a water table.

Such research proves good feedyard stewardship is an ongoing fact, but regulations and management tools that develop as a result will not be a panacea to all environmental concerns. There are still matters of cost, how much individual site assessment is needed and the administrative tasks of making sure regulations are followed.

Site assessment for lagoons can run $2,000 for each review and several assessments are suggested before building. It may be there are better locations for lagoons, even on small parcels of land. For water quality peace of mind, several $2,000 hits are a small price to pay.

Environmental management has always been a priority of the feeding industry. With continuing research on water quality, air quality and soil quality, the industry can assure its end customers of a safe, clean product.

The Stink Over Ammonia

Dissecting the complexities of ammonia emissions may be as easy as milking profit from a realizer, but it could go a long way toward helping feedlots keep pace with tougher water and air quality standards.

"Ammonia itself is not a regulated pollutant, but we do use the atmosphere as a sink for ammonia when we build lagoons and apply manure to farmland, and it's not likely that will be sustainable for the future," says Brent Auvermann, assistant professor of agricultural engineering at Texas A&M University (TAMU).

Specifically, Andy Cole, a research animal scientist at the USDA Agricultural Research Service (ARS) Conservation and Production Research Laboratory in Bushland, TX, explains, "Ammonia emissions are a challenge in the feedlot from two perspectives." First, he says, data from USDA's Meat Animal Research Center (MARC) suggests 50-60% of all nitrogen fed in the feedlot is lost to the atmosphere. "So, when we scrape manure out of the feedlot pen, it's much lower in nitrogen than it ought to be," says Cole.

Rather than the manure containing the 5:1 nitrogen-to-phosphorous ratio required of most plants, Cole explains it winds up being 1:1. In states where nutrient management requires phosphorous-based application of manure to land that means more land is required to spread the manure, besides making it less valuable as a fertilizer.

Incidentally, although ammonia is often perceived as a chief contributor to the feedlot odors some folks might consider unpleasant, both researchers point out its role is minor compared to other trace gases.

The Dust Problem "The second challenge is the concern about nitrogen in the air and its effect on the health of humans and livestock," says Cole. This is where the track starts to get slippery, for more reasons than the fact that nitrogen can move around through the air and water.

"Ammonia is known to be a precursor to the production of PM 2.5 (particulate matter of 2.5 microns or less)," says Auvermann. He explains stricter air quality standards implemented the past two years take aim at PM 10 and the smaller PM 2.5 dust that can be created when ammonia emissions combine with oxides of nitrogen and sulfur, which are byproducts of combustion.

Keep in mind, this is dust you can't see. For perspective, Ben Weinheimer, regulatory manager for the Texas Cattle Feeders Association (TCFA), explains that a human hair is 70 microns wide and the human eye can only see things as small as 40-50 microns. At 2.5 microns, you can't see the dust but you can ingest it into your lungs.

"There are new ambient air quality standards for PM 2.5. If regional monitoring discovers these regulations aren't being met, those regions will be forced to implement PM 2.5 reduction plans," says Auvermann. "To the extent livestock agriculture is fingered as a source of PM 2.5, livestock operations could conceivably be required to reduce ammonia emissions. These types of requirements are pretty far down the road, but we need to be prepared for them."

Current Reality As it is, the state of Washington already set a precedent for feedlots being considered major pollution sources and liable for penalty fees. "Traditionally, fugitive emissions (such as dust from feedlot corrals) have not been included when regulators determine major pollution sources, but now they have that authority," says Auvermann.

Auvermann explains, feedlots contributing 100 tons or more of particulate to the air, including PM 10 can be liable to pay a $30 emissions fee per ton. "Feedlots as small as 8,000 head would be considered a major source," says Auvermann. "If you believe EPA's numbers, and we think their numbers are too high, a 50,000-head feedyard would produce about 600 tons of PM 10 each year." Or about $18,000 worth of emission fees.

What's more, Auvermann says regulators are re-interpreting ambient air quality standards. It used to be as long as the air surrounding a feedlot measured up, things were fine. Now, in general terms, they're starting to say the air at the property line has to be as clean as it is miles from the property line.

Bottom line, Auvermann explains, "Permits for livestock operations could be held up or not renewed because computer modeling shows that air quality at the property line of a feedlot doesn't meet the same standards imposed on large cities." In fact, he says, a cotton gin in the Southwest was denied a permit last year on these grounds.

Clearing The Air That's one reason TCFA helped fund a current ammonia emissions study being conducted by ARS, TAMU and West Texas A&M University (WTAMU).

"Because ambient air quality standards continue to change, regarding total suspended particulates of 10 and 2.5 microns, we believe it's important we have available to us the best science when we enter the rule-making process," says Weinheimer.

"We're trying to get a jump on those things and help feedlots find solutions to these regulations," says David Parker, assistant professor of environmental science at WTAMU. He explains, "The study looks at using different chemical amendments that could be added to the feedlot surface, which could reduce ammonia emissions." Chances are these chemicals either would be spread across the feedlot surface or mixed with water and sprayed on the pen floor.

At least in laboratory-scale experiments, research efforts have proven successful, reducing ammonia emissions by as much as 75% using calcium chloride (Table 1). Unfortunately, they peg the cost at $2-4/head, obviously not economically practical. So far, urease inhibitors show the greatest cost-to-benefit promise, reducing emissions 60-65% at a cost of 12-25 cents/head.

"I think these urease inhibitors have some of the best potential because most of the ammonia in a feedlot is created by urea in the urine," says Vince Varel, a MARC research microbiologist who helped develop them. He explains as much as 70% of the nitrogen excreted by animals is in the urine.

But chemical amendments are still an unknown distance from perfection. "If we do find an economic chemical amendment solution, the next question is if we put it on the feedlot surface, what will it do to the cattle themselves, if anything?" asks Parker. "And, what will it do to the environment if we apply this to a pen, then scrape the manure and apply it to farmland?"

Even if a safe and cost-effective chemical amendment eludes scientists, Parker says that knowledge is valuable in itself. It could help prove to regulators that what they want cannot be achieved without driving the cost of production through the roof.

Cole also has been aiming for reduced emissions at the feedbunk. As an example, he says, "Through different feeding strategies we're trying to trick the animal's system into recycling more nitrogen from the lower gut back to the rumen so we can use less nitrogen in the feed, and more of it will be excreted as feces (instead of urine)."

Management Still Key While researchers ferret out these and other answers, Auvermann points out common management practices can help reduce dust and ammonia emissions.

First, Auvermann says, "In the long-run, I think solid set sprinklers can be an effective tool for controlling dust." While he says the sprinkler systems are less expensive when installed as part of new construction rather than retro-fitted to existing pens, the cost of operation runs 30-50 cents/head marketed.

As well, Auvermann explains, "Today, manure harvesting is one way to increase the value of manure and reduce dust emissions by keeping the manure base moist and firm. One way to do that is to harvest the manure frequently so it is less likely to become dry and loose." He believes harvesting pens every two weeks would accomplish that reasonably well.

Plus, Auvermann points out, maintaining a 4% grade in pens for drainage and taking care not to gouge holes in the pen when harvesting manure helps prevent the anaerobic environment that spawns ammonia.

Looking outside the pens, Auvermann says some feedlots are using petroleum and resin-based sealers to reduce dust from the caliche roads in and around the feedlot. "Another approach we're looking at is higher stocking density in the pens," says Auvermann. The notion is that the urine from more cattle in less space can help keep the dust down. The method can't keep pace with the evaporative demands of summertime heat, but in certain parts of the country, at certain times of the year, stocking density can play a role in dust suppressions, he says.

Moreover, there is a silver lining to these efforts. Auvermann says, "Manure quality and air quality are closely related. The same management techniques that increase manure quality also improve air quality."

Look for great spring prices

The cattle market held steady in February. Fed Choice slaughter steers in the Amarillo feedlot area averaged about $69/cwt. for the month, almost exactly the same as in January. Feeder cattle and calves displayed a little weakness, averaging almost $2/cwt. less than January. Most of the price downturn came late in the month.

Special Feeding Data In its latest Cattle On Feed Report, the USDA provides detailed information on cattle feedlot sizes and importance. The statistics deal with cattle feeding during calendar year 1999. During that year, 2,119 commercial feedlots operating in the U.S. had capacities of 1,000 head or more. These lots accounted for 85% of the nation's cattle feeding of 27,780,000 head.

Further analysis of the data reveals only about a dozen states had feedlots with one-time capacities of 32,000 head or more (Table 1). These 107 feedlots accounted for 40% of all the cattle feeding in the nation. Only six of these states had 38 feedlots with capacities of 50,000 head or more and produced 20% of the total.

On Feb. 1, there were 11.58 million head of cattle on feed in feedlots with a capacity of 1,000 head or more. That's an increase of 10% more than a year ago and a slight gain over January. Each state reported at least the same or more cattle on feed than in February 1999. Kansas and Texas recorded the largest increases, both gaining at least 300,000 head.

Fed cattle marketings in January were 2.05 million head, up just 1% from a year earlier. Only six states recorded the same or more marketings than a year ago.

Cattle and calves placed into feedlots in January amounted to 2.23 million head. This 15% increase is the sixth monthly gain in placements. Kansas, Nebraska, Texas and Colorado reported the largest placement numbers. Only New Mexico reported fewer placements than a year ago.

Feeders placed on feed by weight groups indicate a shift toward the lightest and heaviest weight animals. The number of feeders less than 600 lbs. placed on feed was 494,000 head, up 30% from a year ago. Animals 600 to 699 lbs. rose 11% to 696,000 head, and the 700 to 799-lb. feeders reached 654,000 head - up 8%. The second largest increase was the 800-lbs.-and-more class, up 19% at 382,000 head.

Current feedlot profit levels, cheap feed and a fairly strong outlook for fed cattle prices are stimulating feedlot placements. Given this extremely large feedlot expansion, it could cause an over supply of fed cattle marketings just down the road. The ultimate result might be some real price pressure on fed cattle, probably by this summer.

Feeder cattle and calves will remain in a very favorable position. Strong feedlot demand, coupled with reduced supplies of feeder animals, is likely to continue on through most of 2000.

The spring months should provide ranchers one of the best in years for feeder prices. While the summer may bring some weakness, it is not forecasted to be at all severe.

Cash For Cleanliness

If you've been in business for more than 100 years, you're doing something right. A lot of that is anticipating changes and looking for ways to improve daily operations and the bottom line.

It's worked for owner William H. "Bill" Rhea and his predecessors at Rhea Cattle Co., near Arlington, NE. And, when it comes to environmental improvements, Rhea's found a mutually beneficial existence between the 6,000-head feedyard and the company's 4,000 acres of farmland.

"We've found that the environmental improvements have actually paid us back, rather than created costs for us," Rhea says. "More importantly, the work we've done has made us more conscious of the environment and its benefits."

That's not to say the benefits didn't come about without any effort. The company did have its environmental challenges. For one, a stream used to run through the middle of the feedyard. Drainage into the stream occasionally did occur.

"Twenty years ago, we had to divert that stream and stop all the feedyard drainage into it," Rhea says. "Then, we began to capture and use the water that drained from the yard."

This led to a basic reconfiguration of the feedyard. Rhea says it was really an advantage because the yard was so old, they needed to do something anyway.

"At that time, environmental issues in our industry weren't necessarily good things," he adds. "However, that's changed a lot. A lot of the credit for changing that goes to the Nebraska Department of Environmental Quality (DEQ). From the first contact years ago up to now, the personnel have been great. They've helped us figure out the best methods for drainage and have helped in other ways as well."

Just as initial environmental regulations were developing in the early 1970s, Rhea and his crew developed a serpentine waterway to help with the drainage concerns. That waterway now works in conjunction with drainage systems that have been added as pens have been continually revamped since then.

Designed For Dryness Not unique to Rhea's feedyard, but effective at keeping pens dry is the "running W" that stretches through the yard, complete with large, but lower than normal pen mounds. The slope variation that runs from 3.4 to 5.6 degrees lets rainwater run quickly to the waterway and then to settling basins.

Those basins are designed for easy maintenance, too. To avoid tearing up too much soil, a backhoe, instead of a loader or blade, cleans them. Cleaning with a backhoe offers more opportunities for stationary removal and the entire process can be accomplished in a single day.

"We didn't want high mounds, so we opted for lower mounds that have a larger surface area," Rhea says. "We compacted the mounds so water doesn't soak in and create a mud problem."

Keeping mud down and soil degradation low is helped by 20 and 24-ft. bunk aprons, depending on the age of pens. Rhea says the wider aprons, combined with 400 sq. ft. of pen space per animal, contribute to easier cleaning as well.

Rhea can't claim that environmental regulations per se have made him money. However, he can claim the processes he's implemented have made for a better feedyard and farm.

First, cattle in the newer pens, which were built in 1990, gain an average of 0.13 lbs./day more than cattle in older pens. Rhea attributes this to the better design, drier conditions and larger aprons.

Secondly, phosphorous isn't a regular farm purchase anymore. In fact, it's not purchased at all. By using the compost generated by the yard and irrigating with runoff, Rhea is able to keep phosphorous levels in the normal range as well as increase the level of other soil nutrients.

"We took a negative - or what we thought was a negative - regulation and turned it into a positive," Rhea says.

Same Rules "Bill Rhea isn't operating under any new rules but under regulations that have been in place since 1971," says Troy Bredenkamp, vice president of technical services for the Nebraska Cattlemen's Association. "What's changed, however, is that until a couple years ago, compliance of DEQ regulations has been complaint driven. This means that an operation would not be inspected unless a complaint against it was filed.

"Now, any feeding operation with more than 300 head must request an inspection by DEQ, which is consistent with federal regulations," he adds. "If a feedyard isn't already up to standards, it can be expensive getting there and getting permitted."

Bredenkamp cites the challenges faced in Nebraska, which has 5,500 feeders. Of that, the majority will fall into the less than 1,000-head capacity. He says feeders in the 300 and 1,000-head range have the most catching up to do and the economics of getting permitted could strain operations.

Just getting permitted can easily run $1.25/head, let alone the cost of improvements that must be made.

"It was only three or four years ago when permit applications ran about three to five pages long," Bredenkamp says. "Now, those permits can hit 40 to 50 pages really quick."

Components of the permitting process include an odor management plan, sludge removal plan, operation and management and abandonment plan to name a few. Consultants specializing in feedyard environmental management generally complete the plans for feedyard owners.

"Once successfully permitted, records must be maintained, too," Bredenkamp says. "And, the more detailed the better. Some people videotape activities when a holding pond is cleaned. Others take before and after photographs. Either tactic is appropriate since manure management records must show where the manure is going, the rate at which it's applied and residual soil rates."

It doesn't end there. Required nutrient management plans expressly define where the yard manure is delivered. And, if the manure is being spread on land not owned by the feeding operation, the receiving party must sign an easement.

Rhea and Bredenkamp agree the process can be cumbersome, costly and at times frustrating. Yet they realize it's part of the way business is done today.

"If you look at land as a resource, we're doing a better job of capturing our nutrients," Rhea says. "Fertility is building throughout our farm; cattle are performing better and the yard is a better contributor to the entire operation. We wouldn't have looked at it this way 20 years ago."

Message from the Middle

So what will it take to sustain the current momentum in beef demand? Some major shifts in market thought, inter-sector cooperation, commitment and plenty of dollars.

That's the message Bernie Hansen of Flint Hills Foods, Jonathan Rocke of RMH Foods and Chet England of Burger King carried to cattlemen attending the recent Range Beef Cow Symposium XVI in Greeley, CO.

But, the trio of food industry experts' message to cattlemen wasn't so much that "you're not doing enough" as an admission that "we all have to do more."

"If we don't understand and listen to what consumers are telling us, there won't be an industry for any of us," says Rocke, president and CEO of RMH Foods, Morton, IL, a firm specializing in convenience foods. Consumers, he says, are asking for convenience, consistency, taste and value. But, delivering convenient beef products carries challenges.

"Foremost is the recognition that this truly is a new category in the marketplace and must be viewed as such by all segments - producer, processor, retailer, and even the consumer," Rocke says.

"Until now, the money we've been playing with in this industry has been coming from within the industry," says Hansen, president of Flint Hills Foods. "When cattle were $80, the packers weren't making money, but you were. When cattle were $60, packers were making money, but you weren't. Where we have to get the money is from the consumer."

Busy schedules, a lack of cooking know-how and more disposable income are forcing and/or allowing consumers to look for something different. Determining exactly what consumers want is the first step, Hansen says. Following that, education, communication and cooperation among all segments are needed to build products that fit those desires.

"We have to stop thinking that price is how we sell our product," Hansen says. "Give them the convenience and consistency they're looking for and they'll pay for it."

Hansen says he's made a fortune his 30 years in the meat business by grasping opportunities and manipulating lower demand cuts to fill customer desires for consistency and value. He began by buying Kansas City strips and ribeyes from five neighboring packers in the 1970s and '80s and selling portion-controlled cuts to restaurants.

When packers began exporting those cuts to the lucrative overseas market, Hansen started looking again. He found chucks selling for 79 cents/lb., and spent $18 million developing new products - trimmed, pre-cooked, consistent and convenient.

"We now sell 17-oz. packages of pot roast in the store for $5.99. We include an 800 number for comments. We've never gotten one call about the price," Hansen says.

Rocke echoes those sentiments: "We all have to better understand that the consumer has a different price: value relationship than we do... You folks are not typical consumers. How you eat and operate at home is not how it's happening out in the world. The consumer of today does not have the time or the ability to deal with traditional product offerings."

Convenience Isn't New Convenience products aren't new, Rocke points out. TV dinners have been around for decades, but consumers generally have seen them as meals of last resort.

"What's new today is that we need to develop products that consumers want to eat, even if they had the time to cook," he says.

The evolution in convenience beef items began in the food service and mail order segments in response to customers' concerns for more convenience and consistency. It then evolved in the mid 1990s to retail, Rocke says, driven by innovative companies like Flint Hills Foods, Burnettes & Sons and his RMH Foods.

The next logical step is widespread presence at the retailer level. Unfortunately, that's where some of the greatest obstacles to convenient beef products exist. Retailers largely haven't embraced the concept of serving the consumer, Rocke and Hansen claim.

Rocke says most retailers rarely base a decision on carrying new and innovative products on consumers' needs and desires. Rather, it's a matter of profits and politics that drive the retail industry.

"It wasn't long ago that the retailer made the decision on what to put in his case based on what the consumer wanted. Today, the decision is strictly and solely driven by what the manufacturer will do for them," Rocke says.

"They'll put anything in that meat case, literally anything, if someone will give them enough dollars to sell it," Rocke adds. "And that $2 million price tag per item is frightening for small companies to try to attempt to surmount."

The retailer has shifted the responsibility to make the sale to the manufacturer, Rocke says. The result is there's no incentive to retailers to make a product successful at the retail level.

Yet, Rocke expects to see radical changes in retail marketing of beef products in the next five years. For one thing, control of the final battleground - the dinner table - is about to be decided. It's the last meal still marketed as a commodity.

Rocke says we as an industry "expect the consumer, who is used to having their needs taken care of (with brands and convenience) at the breakfast and lunch table, to settle for some traditional value equation at dinner," Rocke says. "That just doesn't work anymore."

Major consumer brands - like Hormel, Sara Lee and Oscar Mayer - are coming to claim the dinner table, Rocke says. In addition, expect to see meal groupings, rather than individual meat product offerings, sweep into retail stores.

"The meat case is dead," says Hansen. "They just haven't announced the funeral yet." He says it will be aggressive companies with strong brand images, quality reputations and deep pockets that will affect the change.

Producers can help, Hansen says. While he admits there are some problem cattle, he doesn't believe drastic genetic changes are needed.

"Most of these cattle, if you just use good management practices, will make the grade and work," Hansen says.

A big need, however, he says, is research dollars. Producers can help with checkoff dollars.

"You need to double your checkoff fees," Hansen says, something Rocke also favors. "We as an industry haven't spent hardly anything telling consumers what we do for food safety, what we do for the environment," Hansen says.

Rocke says the credit for the positive changes that have come about so far in the convenience category of beef products can be laid at the feet of the checkoff program. He particularly credits the "Best New Beef Product In America" Contest held in 1998. It was a checkoff-funded contest that offered a $250,000 award for the best new beef convenience product.

"That contest really was the beginning of the recognition that this category is important for your industry," Rock says. "You have to remember that the predominant value of that beef animal is not in the loin or middle meats but in the end meats. If we're going to make a serious impact and not have to sell the entire animal except the middle section as ground beef, then we have to continue to make changes."

There's A Safety Role To Play Chet England, director of quality and food safety for Burger King Corp., Miami, FL, says food safety must be from farm to fork. Why?

Number one is liability. England cited the principle called "due diligence," which means an entity is doing everything possible to make and distribute a safe product. The principle has proven to be a successful tactic in many successful lawsuits of legal industries over alleged wrongdoing, he says.

"If you're not doing everything possible, then you're not following due diligence and you have a liability," England says.

More than half of the consumer food dollar today is spent outside the home, England reports. If beef producers want to protect market share and livelihood, it's imperative they make food safety a primary focus.

* To forestall regulation, which is creeping upstream.

* To protect the sales base - both foreign and domestic.

"Food borne illness outbreaks related to beef and beef products are bad for everyone," he says. "Outbreaks bring media attention, which leads to less confidence in our product by our export markets and our domestic public."

* To protect the product image. "The better our product image, the more likely consumers will buy it. Protecting our customers by managing food safety is the right thing to do. That's the bottom line and the ultimate reason we should care," he says.

England says Burger King has long taken a proactive approach to beef safety. HACCP (Hazard Analysis Critical Control Points) programs have been in place in Burger King's supply system for better than a decade, long before the government required it.

In addition, Burger King has put more rigorous in-restaurant safeguards in place and implemented extensive food safety training of all supervisors and crew. The company also has enhanced scrutiny of its suppliers through testing and audits.

"We have specification mandates for microbial interventions at the slaughter and fabrication levels. We use every piece of technology we possibly can to reduce or eliminate pathogenic organisms," he says.

England says producers have an important part to play in the food safety effort. Number one is education on food safety principles and a better partnership between production and retail.

"We need to keep E. coli 0157:H7 and other pathogenic microorganisms out of the meat chain - simple things like clean water troughs and clean water for cattle," England says. "You need to manage wet feeds and silage to limit microorganisms. Minimize contamination by not using loader buckets to clean the yard and then transport feed grains."

A huge need, England says, is just more research. "We need to learn more about sources and pre-harvest interventions."

He says industry work on minimizing hide contamination to prevent microorganism transfer to the carcass during the hide removal process is a must. Better, more practical ways to minimize stress, improved manure management practices, and innovative ways to bolster cattle's immune response or feeding regimes that minimize E. coli are other areas to consider.

"Burger King customers buy our products believing they are safe. We buy your products believing they are safe," England says. "If we breach that trust, consumers will go someplace else, like chicken. I encourage you to engage fully and completely in the area of food safety for your products."