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MIDDAY Midwest Digest, April 3, 2019

The freight rail system may be changing, scheduling railroad departures. 

Forty-five years ago was the super tornado outbreak across the heartland of America. More than 100 tornadoes broke out over the course of 18 hours.

 

 

Photo: Alexpunker/Getty Images

Opinion: Bipartisan bills threatens to undermine commodity checkoffs

dkfielding / Getty Images U.S. Capitol building

Allegations of wrongdoing without evidence and destruction under the guise of reform sum up legislation re-introduced by two U.S. senators, joined by two additional Democrat presidential candidates.

Unfortunately, the supposed need for legislation is built on “fake news.” 

Supposedly, the legislation is to fix two problems: agricultural trade associations violating the rules concerning keeping lobbying funds separate from research, education and promotion (checkoff) funds and alleged non-transparent financial control.

But discovering financial information, at least in the beef industry, is not that hard. Any NCBA board meeting or Cattlemen’s Beef Board (CBB) meeting makes financial information available openly. Committees openly discuss budgets and expenses. As for benchmarking, budgeting, tracking and evaluation of projects, few accounting firms could track moneys and results any better than the CBB.

Beyond an instance of reconciling accounts at the end of a fiscal period, no transgressions have been found with the beef checkoff. One group has been making Freedom of Information (FOIA) requests and poring over thousands of pages of documentation for years without finding any significant violations. The group that has been known as the Organization for Competitive Markets (OCM), dominated in recent years by the Humane Society of the U.S. (HSUS), has been examining records from the CBB and USDA for many months. Its lawsuits apparently have yielded nothing.

Sens. Mike Lee (R-UT), Cory Booker (D-NJ), Elizabeth Warren (D-MA) and Rand Paul (R-KY) have introduced a bill requiring changes to all America’s commodity checkoffs to insert financial controls and stop associations from “diverting” funds improperly. Lee and Paul also introduced separately a bill to make all agricultural checkoffs voluntary. 

Some history

Why did OCM sue USDA back in 2012? Because, in cattle for instance, while cattlemen’s groups or elections determine the nominees for the CBB, the nominees are officially appointed to the board by the U.S. Secretary of Agriculture. Beyond that, USDA-AMS has specific oversight to make sure programs run by cattlemen or other commodity producers stay within the specific parameters set up in any checkoff’s enabling legislation.

In addition to the discerning eyes of cattlemen themselves and their auditors—all decisions regarding research, education and promotion programs are made by cattlemen themselves—there are USDA-AMS officials designated to monitor programs and expenses.

The kicker: These farmer and rancher commodity promotion programs are not government-funded. Cattlemen, for example, not only pay for all checkoff programs themselves, they also reimburse the government for funds USDA-AMS spends for monitoring the Beef Checkoff program.

Thus, cattlemen designed the checkoff program themselves in 1985, voted the program into existence by voting in a nationwide referendum, pay for the program and share among themselves the important benefits of the program in increased beef demand.

The CBB has surveyed cattlemen nationwide for years on the merits of the checkoff’s work, always polling more than a 70% favorable rating. The latest survey found around 80% approve of the Beef Checkoff. 

Beef demand indexes have shown major increases since the checkoff programs began and cattle and retail prices have continued to set records, partially due to increased quality, better merchandising, health and nutrition research and new products developed through the checkoff.

Legislation that helps?

So, for doing all these things right for and by themselves; farmers and ranchers, especially livestock producers producing meat animals, are getting interference from politicians with dubious intentions, spouting misinformation and false allegations. They are trying to disgrace and destroy self-help farm and ranch checkoff programs partially responsible for the globe’s most productive, most efficient, safest and nutritious food supply.

Sen. Cory Booker from New Jersey has been a vegetarian since 1992 and a vegan since 2014. America’s meat producers don’t need a politician who abhors our product and would damage our livelihood trying to shut our organizations down. That is an attempted abuse of power, a politician trying to force his personal dietary beliefs on livestock producers and their citizen consumers.

Sen. Elizabeth Warren, like Sen. Booker, represents a state that has very little livestock production.

Sen. Rand Paul represents Kentucky, which has made huge strides partially using information and improved practices researched and tested by both NCBA and CBB to advance the genetic quality, health and shipping ability of their cattle.

Sen. Mike Lee is puzzling. The cattlemen’s groups in his state have repeatedly asked him to abandon this false issue. He insists on ignoring them, listening instead to fringe groups fixating on things they hope are there. The last time he brought up this bill, he even claimed taxpayer funds were being misused by the checkoffs, when no taxpayer funds are involved.

There are few businessmen financially tighter than farmers and ranchers, some by nature and some because of extremely tight margins and uncertainty in agriculture.  So keeping a tight rein on expenses in their associations and beef councils is second nature.

After all, the ultimate goal of commodity checkoffs is to provide higher quality, more useful, safer products for American consumers.

The bottom line is this: American cattlemen and cattlewomen designed the beef checkoff, voted it into existence by referendum, continue to pay for the checkoff, run the checkoff, follow the rules and have been very successful in their mission to please consumers. They don’t need Congressional nannies telling them how to do what they have done well for nearly 35 years. And they certainly don’t need their hard-won vote for the programs taken away.

We suggest farm and ranch families contact their member of Congress and ask them to oppose Sen. Lee’s “Opportunities for Fairness in Farming” Act and the “Voluntary Check-off Program Participation” Act. The bills have no numbers yet.

Editor's Note: To make things easier if you do want to express your opinion on the bill, here's contact information for the Senate and for the House of Representives.

Dittmer is a longtime beef industry commentator and executive vice president of the Agribusiness Freedom Foundation.

 

Cattle imports, beef production and COOL

Nevil Speer Domestic beef production

This column has highlighted international trade during the past month or so. Of all the topics Industry At A Glance has tackled, that issue tops the list when it comes to reader questions and feedback.  

The respondents clearly perceive COOL as price supportive. The general consensus within that feedback is best summarized as follows: 

  1. Imports have increased since COOL was rescinded. In other words, COOL was an effective non-tariff trade barrier.
  2. COOL helped boost the feeder cattle market. Stated another way, increased cattle imports are driving feeder prices downward.

Those concepts are encapsulated by this statement from a key COOL advocate: “Every time the [beef] supply is such that cattle prices start to increase, the meat packers simply substitute the domestic beef with imported product and they leverage the prices down.”   

Nevil SpeerDomestic beef production

This week’s illustration provides some data around those concerns. The graph depicts annual domestic beef production and cattle imports between 2015, the last year COOL was in effect, through 2018. Moreover, it also provides the average of both measures for ’09 through ’15, the entire period in which COOL was enforced. There are a couple of key take-aways from the data:  

  • Cattle imports have NOT increased since COOL was rescinded. Since 2015, live cattle imports, including both slaughter and feeder cattle, have actually declined compared to the COOL period.  
  • Beef production plunged to 23.76 billion pounds in 2015, 9% smaller versus 2008 which was prior to COOL, and has since surged 13% in just three years to nearly 27 billion pounds. 
  • Many COOL proponents reference 2014 and 2015 with respect to the feeder market. However, that perspective overlooks the entire COOL period. Feeder prices in 2018 were higher compared to 2016 and 2017, even with the increase in beef production and a slight uptick in cattle imports, and almost equivalent to COOL years despite beef production being almost 6% bigger compared to the ’09-’15 average.  
  • Last, the statement that, “meat packers simply substitute the domestic beef with imported product” misrepresents reality. It was domestic production that increased following the COOL era, not imports.

It also ignores the reality that the bulk (~70%) of all cattle imports are represented by feeder cattle – driven by feedyards and backgrounders – not meat packers. And, as has been pointed out, beef imports are largely of lower quality destined for the ground beef market, not the high-quality cuts the U.S. exports.

Based on the data and the trends represented above, what’s your perception of COOL with respect to market prices?

Speer serves as an industry consultant and is based in Bowling Green, Ky. Contact him at [email protected]

It's time the beef business invests in social capital

Petmal / Getty Images Social capital

Fewer years ago than I’d like to admit, I still had trouble believing anyone of sane mind would ever seriously entertain any of the bald-faced fiction peddled by the anti-everything activists of the world. I figured logic and scientific fact surely must win out.

I was wrong, of course.

“It’s my view that the beef industry has an emerging social capital deficit that, for me, presents the greatest medium- and longer-term risk to sustainable growth and prosperity,” said Bill Cordingley, at the Cattlemen’s College in January during the Cattle Industry Convention.

“By social capital I mean the license to operate, the social license given to the industry by the community to do what it does: the moral and legal license the beef industry has to utilize the land, the water and the sunshine to produce beef for the community,” he said.

Cordingley is head of wholesale banking for the Chicago office of Rabobank North America. He grew up on his family’s cattle operation in Australia and has spent his life in and around the cattle and beef business. He estimates cow-calf producers and cattle feeders account for about 25% of Rabobank’s North American portfolio.

“The social license the beef industry operates under today is clearly under discussion, and in some quarters is being challenged. The issues have been there for a long time — whether it’s animal welfare, the impact on the environment or human nutrition,” Cordingley said.

“The difference now is that the community values continue to evolve, and there is a growing tide of opinion, widely expressed and backed by various academic institutions, and so on, that the beef industry is bad …” he said.

The challenge extends to everyone involved.

“The social license we need at Rabobank is becoming increasingly challenging to secure — not just in the beef industry, but across the food industry,” Cordingley explained. “There are many practices that have long been established that are increasingly scrutinized, and where we are increasingly asked to justify our role as financier. For example, palm oil production in Southeast Asia, irrigated cotton production in Australia, battery egg production all around the world; and the list goes on.”

Part of the challenge and opportunity with social capital stems from the information revolution spawned by the internet and fueled by social media.

Moreover, Cordingley emphasized more consumers link their food choices to such things as personal health, environmental impact and societal values.

“At least in principle, consumers are increasingly desiring to eat for good — good for themselves, good for the community, good for the environment, good for the planet. In other words, be a conscious consumer,” Cordingley said.

Arguably, more of the cattle and beef business — individually and collectively — is actively engaging consumers with beef truth than at any time in history. You don’t have to look far to see tireless efforts made to champion the truth. Everything from blogs to social media monitoring to consumer research and formalized advocacy training. Yet, Cordingley believes the social capital deficit is growing.

“This is a problem and presents a serious challenge to the future. We have to get our heads out of the sand, take this issue seriously and act,” Cordingley said.

“Engage in educating and informing. We can’t apologize for what the beef industry does — far from it. While there needs to be a recognition [that] some of these issues are sensitive for some people, the message must get out that this industry is engaged, individually and collectively, in the important work of providing safe, nutritious food that people love, in a responsible and ever-improving way.”

Manage the whole of your ranching operation

Manageing your operation

This title deserves a little defining. Other words (nouns) that provide some meaning are: total, entity, entirety, totality, everything and ensemble. 

When speaking of managing a ranch, we should think of managing the “whole” or every aspect of it and recognize that, when we change any part, that part is integrally linked to and affects the whole. Not only that, but each part affects and is affected by the others.

Most of our formal education conditions us to be linear thinkers—change this and you can expect that result. More recently we have been introduced to “systems thinking” which helps us begin to understand that there is not simply a single result from each action or change in our management.  And, in addition to those initial results or effects, there are “compounding and cascading” (terminology borrowed from Dr. Allen Williams) effects that continue on after the first effects. 

In complex systems or “wholes,” we need to learn to anticipate as many of the effects as possible before making changes in any part. Good decisions in areas like grazing management and animal breeding can initiate a cascade of good events that will compound well into the future. Bad decisions can do just the opposite.

In managing our farms and ranches, we must manage four areas: production; economics/finance; marketing and; people. Each of these can be divided into sub-areas; but all interact and become part of the same “whole” or system which is our ranching business. 

In reality, the whole of our ranching business extends to our community and business and social relationships. Managing people is not so much about being a good “boss.” It’s more about building and managing relationships both inside and outside of the business that will improve our profitability, enhance our reputation, help us gather managerial information, and allow us to contribute to the community and create friendships.

As Dave Pratt has so often pointed out, there are three ways to improve profit: increase turnover, reduce overheads and improve gross margin. Everything you will propose for profit improvement will fit under one or more of these. 

If you do something that will increase turnover and improve gross margin, it may also require an increase in overheads; so be careful in your analysis. You can’t just look at one and ignore the others.

For as long as I have written this column, I have talked about “Five Essentials for Successful Ranch Management.” These are attitudes and processes for “managing the whole” to improve profitability along with resource health and productivity:

  1. Our approach to management must be both integrative and holistic.
  2. Always strive for continuous improvement of the key resources—land, livestock and people.
  3. Acquire and use good tools for analysis and decision making.
  4. We must wage war on cost.
  5. We should place an emphasis on marketing.

If you and your team can get good at each of these “essentials,” you will be profitable unless you begin with an impossible debt load. In which case, you must first take care of the debt.

There are several major determinants of profit:

  • Enterprise mix and choice
  • Overheads (people, their tools and equipment plus land and things attached to it—buildings, facilities, etc.)
  • Stocking rate
  • Cow size and milking ability
  • Grazing management to improve soil health
  • Fed feed vs. grazed feed
  • Calving season
  • Realized herd fertility—conception and subsequent survivability
  • Wise input use for optimum production. Be careful. Optimum is always less than maximum—sometimes considerably less.
  • Marketing

I have written about each of these—how they can be managed and how they affect profitability. It is important to recognize that there is much interconnectedness between them.  They can have an effect on each other and then collectively on the “whole.”

We must remember that we are most concerned about whole ranch profit and not about profit per animal. Profit per cow can be highly distortive of whole ranch profit or profit per acre.

A systems thinking perspective leads us to conclude that we should reduce overheads, market well and improve three key ratios:

  • Acres per cow.
  • Cows per person.
  • Fed feed vs. grazed feed.

I hope that you can see how these ratios are linked to the determinants of profit and see what economic power they have. As one example, if you could reduce the acres per cow by one half, you would essentially reduce the overhead costs per cow by one half without changing the total overheads. Striving for continuous improvement of land leads us to good grazing management which can greatly increase the stocking rate or reduce acres per cow.

So, for profitable decision making and managing ranch resources, become a “systems thinker.”

Teichert, a consultant on strategic planning for ranches, retired in 2010 as vice president and general manager of AgReserves, Inc. He resides in Orem, Utah. Contact him at [email protected].

“Scenes from Spring Calving” contest winners announced!

PC-Bonding-by-Louise-Hall.jpg

Earlier this week, I blogged about springtime on the ranch and how we were enjoying the recent and long-awaited sunshine and beautiful weather in our area. No sooner had I clicked “publish” on the blog post, and it started snowing!

Thankfully, it was short-lived and hopefully the spring season offers more sunny days than dreary ones. It definitely makes calving, planting and breeding season a little more pleasant around here!

I know you all are anxiously awaiting the results from our recent contest, “Scenes from Spring Calving.” Voting officially wrapped up yesterday, and I’m excited to share our champions!

You can view the complete gallery of entries by clicking here.

Browse the finalist’s gallery here.

Congratulations to Cathy Brown, Louise Hall, Amanda Townley and Ella Callicott for receiving the most votes in the contest. These four will receive 10 Igenity Beef DNA tests, valued at $290, courtesy of our contest sponsor, Igenity.

PC-You-Are-My-Sunshine-by-Cathy-Brown.jpeg

"You are my sunshine" by Cathy Brown

PC-Bonding-by-Louise-Hall.jpg

"Bonding" by Louise Hall

PC-Peak-A-Boo-by-Amanda-Townley.jpg

"Peak-A-Boo" by Amanda Townley

PC-Hereford-Baby-Ella-Callicott.jpg

"Hereford Baby" by Ella Callicott

Honorable mention goes to Carol Greet, who just missed the top four by a few votes! Carol will receive a copy of my new children’s book, “Can-Do Cowkids.”

PC-Bringing-In-An-Early-Calf-by-Carol-Greet.jpg

"Bringing in an early calf" by Carol Greet

And as promised, three lucky voters were randomly selected to receive BEEF caps, courtesy of the BEEF team. Congratulations to Miriam Martin, Preston Hendrix and Roy Reed. Thanks to everyone who took the time to vote daily throughout this contest! We appreciate your participation in making this photography contest another huge success!

Personally, I love these contests because they are an opportunity for me to get to know you a little bit more through your images. I’m already looking forward to the next contest, which is scheduled for June. Stay tuned for updates on how to enter!

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.

And Fluffy shall lead us on the challenges of marketing beef

Kevork Djansezian/Getty Images pet wedding 1 Kevork Djansezian GettyImages-105636970.jpg

I got an email the other day from a major pet owner-focused retail chain that caught my attention from a couple of perspectives. After I recovered from the initial shock, I realized the email was a clear signal of the cultural norms we now are dealing with. I’m not going to mention the company because it’s not my intention to denigrate them in any way.

The email announced the company’s new pet wedding service called Forever Weddings.

Yes, you read that right. A pet wedding service.

According to the email, it’s a “Wedding planning service that turns happy pet couples into happily-ever-afters.” The service includes fur facials and makeup sessions; pettiquette training; formal wear fittings; “And so much more. If you can dream it, we can plan it.”

The email’s timing was ironic. Our neighbors were dog-sitting a female Labrador retriever that was in heat. I have a male Lab who was, well, in an animated state over the whole affair. I’m pretty sure that neither the nuptials nor the honeymoon was the first thing on his mind.

But more importantly, it’s an indication of where our consumers are, some of them at least. And that’s a clear indication of the challenges before us in marketing beef to these folks.

READ: We would sell more beef if consumers knew about its health benefits

This is not new. In fact, you may be getting tired of all the articles and blogs we’ve done on the subject. But it’s not just important, it’s vital to our long-term success. If we don’t or can’t meet our consumers where they are, our row will be even tougher to hoe.

A few years back, you may recall Gary Smith, one of the industry’s preeminent scientists, talking about how “story beef” would become an important part of marketing our product. I didn’t quite buy into the concept then; I’m now a convert.

RELATED: Meet the cow: AKA "The Great Upcycler"

There has also been a lot of talk about the need for transparency. And sustainability. And all the other hot buttons important to consumers. Telling your story and being transparent are two lovebirds in the same cage. But we can’t be partially transparent.

Look at everything you do from the perspective of someone who might be interested in a pet wedding service. If you’re like me and find it hard to make that jump, invite a friend from town to come out for a day.

Then think about how you would answer that person’s questions in a way that reassures them that what you do and why you do it is not just in their best interests, but that of your cattle. I’ll leave it up to you whether or not to perform a ceremony when you turn the bulls out.

 

Chute-side vaccine cooler a useful tool for cattle producers

Photo by Todd Johnson, OSU Agricultural Communications Services chute-side-vaccine-cooler.jpg
Coolers can be easily modified for syringes and are important in maintaining vaccine efficiency when chute-side working cattle.

A few simple steps can help cattle producers become more effective in battling respiratory disease in their herd, get full value of any vaccine they purchase and possibly increase their operational profit in the process.

Studies show respiratory disease in cattle – also known as BRD, shipping fever or pneumonia – may cost the U.S. cattle industry more than $2 billion annually. Management techniques can offset much of this cost and having a good vaccination program can maintain the health of a calf all the way through the production system.

“A vaccine can cost more than $3 per head, and if not stored properly the vaccine can be rendered ineffective,” said Bob LeValley, Oklahoma Beef Quality Assurance coordinator with Oklahoma State University’s Division of Agricultural Sciences and Natural Resources.

REFRIGERATION

Biological products should be stored under refrigeration at 35 degrees to 45 degrees Fahrenheit unless the nature of the product makes storing at a different temperature advisable. If vaccines are not stored within this temperature range, efficacy to the calf can and will be reduced.

“Killed vaccines are especially susceptible to freezing temperatures,” LeValley said. “Freezing a killed vaccine will alter its delivery system. In turn, this negatively affects the immune response to the antigen in the vaccine.”

A 2013 study (Gunn, et al) shows modified live viruses – often referred to as MLV – are more stable but can be inactivated if they are repeatedly cycled above or below the required temperature range. Also, once activated by mixing, MLV’s effective life will be reduced to a few hours and need to be maintained at the 35-degree to 45-degree Fahrenheit range.

“This can be accomplished by only mixing the doses a producer will use at the time and using a cooler to maintain the proper temperature range while working cattle,” LeValley said.

Researchers from the University of Arkansas and Idaho analyzed the consistency of temperatures for different types, ages and locations of refrigerators over a 48-hour period. They found that only 26.7 percent and 34 percent of refrigerators were within the acceptable temperature limit 95 percent of the time, respectively.

TEMPERATURE VARIATION

Refrigerator location also can affect temperature. A 2009 study by Troxel and Barham found refrigerators located in barns – 35.6 degrees Fahrenheit – were colder than in mud rooms (41.72 degrees Fahrenheit) and kitchens (40.82 degrees Fahrenheit).

Temperatures within a 24-hour period also can be highly variable for individual refrigerators. The Troxel and Barham study demonstrated some refrigerators may take up to eight hours to cool down to the 45-degree Fahrenheit level required or, equally problematic, the temperature may drop below freezing; temperatures were found to range from 28.4 degrees to 44.6 degrees. Some refrigerators were found to remain too cold, varying from 24.8 degrees to 35.6 degrees Fahrenheit over the studied time period.

“Producers need to be aware of these variations so they are able to adjust refrigerator temperature as needed,” LeValley said. “Thermostats also can be variable from unit to unit, so keeping a thermometer inside works well to monitor and make adjustments as needed.”

THERMOMETERS

Simple indoor-outdoor thermometers work well to achieve this goal. The outdoor unit can be placed in the refrigerator while the LCD display can be hung with a magnet on the door. This allows refrigerator temperature to be monitored without opening the door. In addition, many models will record the high and low temperatures in a 24-hour period.

How a producer handles vaccine outside of the refrigerator also is important. Coolers can be easily modified for syringes and are important in maintaining vaccine efficiency when chute-side. Inserts can be made through the cooler by using PVC pipe and work well to keep syringes cool and out of light while in use.

“Either ice or freezer packs can be used as a coolant to maintain temperature for several hours depending on outside ambient temperature,” LeValley said. “Make sure enough coolant is used to maintain temperature while working cattle. Extra ice may be needed if working cattle all day or during warm days. Remember it may take up to an hour for the cooler to reach the needed 45-degree mark so producers need to plan ahead prior to processing cattle.

Detailed instruction on the construction of a chute-side vaccine cooler is available online at http://facts.okstate.edu by reading OSU Cooperative Extension fact sheet ANSI-3300, “Chute Side Vaccine Cooler.” The fact sheet also is available through all OSU Cooperative Extension county offices, typically listed under “County Government” in local directories.

Source: is Oklahoma State University, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

MORNING Midwest Digest, April 3, 2019

Most major automakers reported car sales down for the first quarter of 2019.

One-fifth of producers surveyed by the Purdue/CME group feel they'll do better financially this year than last. 

The company at Mandan, ND, where four people were murdered this week, has been in business for many years.

Election day in Chicago saw the first gay, black woman elected as mayor of the city.

A man and woman were too amorous in public, and were arrested in Cincinatti, Ohio.

A Kansas woman donated 200 pairs of shoes to flood victims.

 

Photo: torque/Getty Images

Farm Progress America, April 3, 2019

Max Armstrong offers a look by Congress to look into checkoff programs again. The move called the “Opportunities for Fairness in Farming Act” or OFF that was reintroduced by a bipartisan group of senators. The moves include an added measure that would allow farmers not to take part in checkoffs.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Image: Wipas_Rojjanakard/iStock/Getty Images Plus