Beef Magazine is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Articles from 1999 In May

What is overgrazing?

What is overgrazing?

If you ask most people what constitutes overgrazing, they will tell you, "putting too many animals on the land." While that's not totally incorrect, it is misleading.

The reality is that it's possible to overgraze with only one animal. Having more animals will accelerate overgrazing; but overgrazing is not so much how many animals are present, but how those animals are managed.

What constitutes overgrazing is failure to move or rotate animals in harmony with forage growth. Proper grazing management is a matter of moving animals before they have the opportunity to regraze lush regrowth.

It used to be the "proper" stocking rate was determined by percentage utilization. (Unfortunately, this is still used in some government-controlled grazing management situations.) The goal was/is for range managers to determine how many animals it takes to reach that level of utilization. If you exceed that rate you are overgrazing; under that rate, you are not.

Unfortunately, that concept is fundamentally flawed. Grazing animals don't utilize a percentage of any given forage. They will eat palatable grasses down to the ground, while unpalatable plants are left untouched.

This concept (percentage utilization) will slow the amount or intensity of overgrazing, but it still permits damage to the more palatable and nutritious species. Similarly, it used to be believed that given the "proper" stocking rate, animals could continually graze in one pasture.

Not true. Continuous grazing ensures that the higher quality forage in a pasture will be stressed. If stocking rate is light, the changes in forage composition will occur gradually over time. If grazing pressure is light enough, the changes may be so gradual as not to be noticed and/or blamed on other factors (weather patterns, etc.).

It also used to be thought that grazing management was an art. Through experience and perception a manager would intuitively know the "proper" stocking rate. While experience is a valuable tool in grazing management, for the most part it is based on straightforward science.

Allow regrowth to rest

The most important aspect to understand is that when grass is grazed, the leaf area will regrow; utilizing energy reserves stored in the crown and roots. After regrowth, it takes three to six weeks for most species to replenish those reserves. If regrazed prior to replenishment, the plant will die. That's overgrazing.

Proper grazing management is rotating the animals before they can graze regrowth. This is why continuous grazing in the same pasture ensures overgrazing. Even if there is only one animal in the pasture, they will preferentially seek out lush green regrowth. Over time, the more nutritious and palatable plants will be replaced by less nutritious plants.

The question always asked is, "when should the animals be moved?" Unfortunately, there is no hard and fast answer for that.

The need for movement will depend upon the weather. During peak growing season, movements may be often. In winter, when there is no plant growth, one pasture can be used until spring.

winter wonderland gallery

Breathtaking photos of winter on the ranch
The first snow hit parts of the Midwest this week. Mentally prepare for the winter wonderland with these stunning photos. See photos here.


Likewise, during warm weather if drought is present, animals can be left for relatively long periods. Once it rains however, movement must be quick. If not, the pasture will be devastated.

Another common misconception, especially among environmentalists, is that only domestic livestock overgraze. That is most emphatically not true. In fact, many wild ungulates are more selective and therefore more prone to overgrazing than cattle.

As an example, the American buffalo is often said to be "easier on the land" than cattle. Absolutely not true. If you watch buffalo graze, they use their lips as prehensile organs; whereas cattle use the tongue. As a result, buffalo can be (and are) more selective than cattle.

Buffalo are, however, much more athletic, and will readily climb rough or steep terrain, thereby utilizing a pasture more thoroughly than cattle. But leave them in a pasture too long, and they will graze and regraze lush regrowth.

The bottom line is that there is nothing special about wild ungulates. It makes no difference whether the animals are buffalo, elk, deer or cattle. They will instinctively seek out the lushest, most nutritious forage available. Unmanaged and non-rotated, they will deteriorate range quality.

You might also like:

WHO backpedals on red meat/cancer link

65 photos that celebrate cowgirls & cattlewomen

5 tips for getting the most cash for your cull cows

3 steps to negotiating a great cow lease

15 favorite photos of hardworking American ranchers

Is ranching an art or a science or both?

Crunch the numbers before you buy those heifers

180 photos of ranch dogs

Hazard Vs. Risk

Call it over-reaction to a hypothetical problem or necessary intervention between man and nature. But the tempest raging over how antibiotics used in animal agriculture may contribute to increased antibiotic resistance in humans will likely change the way beef producers combat animal health challenges.

"I think the industry should expect a drought of new antimicrobial compounds being developed for food production," says Mike Apley, a clinical pharmacologist at Iowa State University's College of Veterinary Medicine.

"It's clear the Food and Drug Administration (FDA) has determined antibiotic use in animals is a cause for concern in human health. They've indicated antibiotic use will be controlled with this Framework (see below) or something with a similar format," he says.

That Framework is FDA's Proposed Framework for Evaluating and Assuring the Human Safety of the Microbial Effects of Antimicrobial New Animal Drugs Intended for Use inFood-producing Animals.

The FDA Framework In a nutshell, the FDA Framework, a potential precursor to new regulations, is billed as a conceptual risk-based framework for evaluating the human safety of using antibiotics in animals. Specifically, the Framework seeks to manage the risk of antibiotic resistance in humans by addressing the possibility of increased resistance transferred through food.

Among other things, it would classify new and existing antibiotics based on their importance to human medicine, set thresholds based upon acceptable levels of susceptibility of food borne pathogens to different antibiotics, then monitor susceptibility over time.

The Framework has drawn criticism from animal health professionals for being too restrictive to antibiotic use in animals. Some human health professionals say they're not strict enough.

On the animal side, critics say a lack of science makes it impossible for manufacturers, or anyone else, to define acceptable levels of susceptibility. They say subjective thresholds and the dynamic nature of bacteria, including changes in susceptibility to antibiotics over time, set the stage for less new product development.

The thinking is that manufacturers may be reluctant to invest years and millions of dollars to develop new products if, once approved, they could be removed from the market. Most every class of antibiotic used in animal agriculture today is common to those used in human medicine; ionophores are one exception.

At a time when he says more rather than fewer products are needed to combat animal disease, Lyle Vogel says the Framework will make it more difficult to approve new drugs and retain existing ones. He's director of the Division of Scientific Activities for the American Veterinary Medical Association (AVMA).

"AVMA is concerned with antibiotic resistance that could be transferred through the food supply, and its potential impact on human health. But, we don't know the magnitude of the risk to human health," he says. "Therefore, FDA's Framework may be an over-reaction to the problem."

From a public health perspective, however, Fred Angulo, medical epidemiologist at the Center for Disease Control and Prevention, says FDA's Framework is the only acceptable alternative to the current drug approval process.

"The only safeguard currently is when the drug is approved. That means FDA has to determine whether a new drug will result in resistance and cause a problem," says Angulo. Short of a declared emergency, he says there's no way to pull an approved drug off the market. He believes the Framework will provide this safeguard.

Is Resistance A Problem? FDA's Framework is just the latest entry in the debate that began when antibiotics were approved for animal use in 1951. No one questions that resistance is a documented consequence of the use of antibiotics.

"Clearly antibiotic resistance takes place. It also takes place outside of pathogens being exposed to antibiotics. These pathogens always look for ways to protect themselves. In that sense, there are hazards from using antibiotics in human and animal medicine because of the potential for bacteria to select for resistance," says John Keeling, vice president of legislative and public affairs for the Animal Health Institute.

"The question is, considering all of the variables such as usage and dosage, does the risk of using antibiotics rise to a level of being a risk to human health?" he asks.

The real debate revolves around questions like:

-- How much resistance do non-targeted organisms build as the result of attacking a target organism with antibiotics?

-- To what degree is resistance passed from animals to humans via the food chain?

-- At what level does resistance passed through the food chain become a public health risk?

-- How much does the use of human antibiotic use contribute to increased resistance? For that matter, how much does the use of antibiotics in animal agriculture reduce the number of bacteria humans are ultimately exposed to?

Given the science that exists, Apley says people have their heads in the sand if they believe bacterial populations in animals and humans are completely separate.

That said, Apley adds, "A lot of the predicted links between the use of antimicrobials in animal health and efficacy in human medicine are pretty loose. Regardless, we must be responsible stewards of antimicrobials in food animals, and that includes learning all we can about minimizing the development of resistant organisms."

But, Keeling says data from the National Antimicrobial Resistance Monitoring System indicates there's not a significant change to susceptibility taking place. He says recent studies by the World Health Organization and the National Research Council indicate that, while there's concern that resistant bacteria in food animals can be transferred to humans, more data is needed.

"There is no documented case where antibiotic use in animals has caused treatment failure in people," says Keeling. What's more, the system for collecting needed information, and the need for standardization between existing studies, which could provide more concrete answers, doesn't currently exist.

Angulo, however, says it is clear increased resistance is related to the use of antibiotics in animals. He points to one study showing a dramatic 34% increase (between 1980-97) of studied salmonella poisoning cases in which bacteria were resistant to five commonly used antibiotics.

Vogel, however, counters that the study Angulo refers to is misleading because it attempts to compare data from three different studies; data, he says, is not comparable.

Only one of the five antibiotics described in the study is commonly used to treat Salmonella infections in the rare cases where treatment is required, Vogel says. Plus, the percentages represent only a subset of Salmonella infections. In two other studies, Vogel says increased resistance of the same Salmonella isolates to antibiotics is 7-8%, rather than 34%.

What is the contribution of food animals to overall resistance? Angulo says that's difficult to answer.

"But, a more focused question is whether antibiotic resistance is increasing in food borne pathogens. And, it's clear the use of antibiotics in animals is increasing resistance in those pathogens," he says.

While not conclusive, a number of studies convinced FDA it had enough evidence to act. What's more, the threat of losing the latest and most popular antibiotic choice for combating food borne illness in humans convinced them time was of essence (see "A Chat With Stephen Sundlof," page 34).

"The kind of criticism we hear is that we haven't done enough to identify the impact on public health, so we shouldn't be doing anything. We've already made the statement in the Federal Register that there is sufficient evidence, that this is a public health issue that needs to be addressed," says Stephen Sundlof, director of FDA's Center for Veterinary Medicine.

Proceed With Caution Still, animal health organizations like AHI believe the science is too tenuous, and the potential downside of the Framework too severe, to implement sweeping policy and regulations without further study.

"It is impossible for drug companies to predict 10 years in advance which Framework category a new drug would fall into," says Vogel. "Plus, future changes of human antibiotic susceptibility patterns will cause unpredictable changes in the human importance categories for animal drugs. Who would spend 10 years of research and millions of dollars speculating on whether or not they will be able to market it?"

If it's tougher for new antibiotics to gain approval, and the use of existing products is restricted, Keeling says, "a smaller array of products would put more resistance pressure on the products already there ... You could wind up with a food supply that has more pathogens than it does today."

What's more, with fewer weapons, Vogel says animal morbidity and mortality would increase. Along the way, one would think cost of production should increase and that the ultimate product cost for consumers would rise as well.

Angulo sees it differently. "If we want to be free of risk, then the solution is not to have any antibiotics used in animals, but that's not practical. We are trying to take a practical approach, enabling the use of antibiotics in animals without having a public consequence."

Rather than limit and restrict antibiotic approval, Angulo believes the Framework sets the stage for bringing new products to animal health more rapidly. "It provides a mechanism for even the most precious drugs in human medicine to be used in animals," he says. The Framework is just the current approval process with safeguards, he adds.

"The impetus for this is not coming from perceived misuse in animal medicine, but by a perception we're at the last line of defense in human medicine," says AHI's Keeling.

"The industry is committed to do the right thing, but to do the right thing, we have to have the data," says Keeling. AHI suggests a comprehensive risk assessment to determine the extent of the problem before creating a cure.

"There is no immediate human health crisis, so we have the luxury to address this in a way to produce a solution relative to the problem."

Closer to home, producers probably won't see the impact of this debate for a couple of years. In the meantime, the industry is increasing awareness among veterinarians and producers to optimize the use of antimicrobial products.

Judicious Use Principles Last fall, AVMA approved judicious use principles for veterinarians that are now being massaged into more specific species guidelines. Among other things, those principles promote preventive management and alternative therapies, where possible, to minimize the use of antimicrobials. FDA is involved in that process as well. Ultimately, they will probably endorse the guidelines.

As well, AVMA and others are helping fund the computerized Antimicrobial Decision Making System for veterinarians which is being developed by Apley and other clinical pharmacologists. Upon completion it will be a fast resource for veterinarians to use in determining optimum therapy. If antibiotics are called for it will lead them through product choices, which include known susceptibility of the organism to that product, along with its common use and any potential effects to human medicine.

"We don't want to dismiss the issue. We are concerned and are aggressively addressing the potential problem," says Vogel. We believe our judicious use principles and the supporting educational program go a long ways toward a potential solution."

Likewise, Keeling says, "We need to be vigilant, but we also need to be skeptical of people telling us the sky is falling ... Everyone from the producer to the housewife has to be sure to use antimicrobials properly so that usage doesn't jeopardize their long-term efficacy."

Put Hay To The Test

If you're like most producers, you probably have a pretty good idea what the quality of your hay is. But do you really know?

Less than 10% of beef cow operations analyzed feed samples in 1996, according to USDA's National Animal Health Monitoring System - indicating that the majority of producers are using their best guess when it comes to hay quality.

But guessing isn't good enough, says forage management specialist Hugh Aljoe with the Samuel Roberts Noble Foundation in Ardmore, OK.

Aljoe says knowing the crude protein content and energy levels of harvested feeds can help producers fine tune their feeding programs and cut costs.

"The best reason to test forages is to minimize the amount of protein supplements needed in a feeding program," Aljoe says. "If you have a higher quality hay, you can match it to the requirements of livestock that need higher quality nutrients."

Aljoe suspects many producers view hay as a filler and rely on feed supplements instead. "Hay's only a filler if you build it as a filler. Hay can provide a lot of nutrients if harvested at the right time. Feed supplements are great when used properly, but without a hay analysis, producers run the risk ofover- or under-booking supplements."

With assistance from their Extension agent, Reuben and Connee Quinn began testing forage quality nearly 10 years ago on their Pine Ridge, SD, cow/calf operation. "We needed to better match supplementation of our forage to the nutrient requirements of the cattle," Connee says.

For the Quinns, most surprising was how much hay quality can vary from field to field and year to year. Now that they have a better idea of their forages' nutrient content, they feed their better forages to the younger cattle and utilize standing dormant forages or lower quality hay fed with high protein supplements to older cows.

Know Your Needs For an efficient forage system, Aljoe says producers need to be aware of two things. First, know the production capabilities, both quantitative and qualitative, of the forages you use for hay. Second, know the nutrient requirements of the livestock that are to be fed.

Most hayed forages can supply all the nutritional requirements necessary for an animal's maintenance and some growth if managed properly, Aljoe says.

To capture the optimum nutrients in forages, Aljoe says, "Always target hay harvest about one week before you think it's optimal, because forage quality decreases rapidly once mature."

As a guideline, he suggests harvesting introduced species within 30 days after being fertilized (assuming moisture is available to incorporate fertilizer into the soil), which can produce hay with a 10-14% crude protein. If harvested when less mature, even higher crude protein contents can be achieved, Aljoe says. "A solid fertility program plays a critical role in hay production."

On native grasses, to achieve a crude protein content of 10-12%, the forage should be harvested before July 1. "We recommend a one-time cutting per year on native tallgrass species to prevent range degradation."

Immediately after baling, hay samples should be sent in for analysis, Aljoe says. With the exception of areas that receive high amounts of rainfall, he says nutrient content doesn't change dramatically after the forage is baled.

Aljoe says testing forages early can help producers put enough high quality up, so they can bale for more quantity and less quality later in the season.

What To Watch Recommended tests for determining forage quality are: dry matter (DM), crude protein (CP), acid detergent fiber (ADF), neutral detergent fiber (NDF) and energy values. The analysis costs about $8-12/sample. For a few dollars more, macro and micro mineral analysis may also be warranted periodically.

Most producers are concerned with crude protein content, but Aljoe says energy (measured as total digestible nutrients [TDN]) is also important, especially with lactating and growing cattle.

"Medium to high crude protein forages can be low in energy," he says. "Anything with a TDN over 65% will meet energy requirements for most classes of livestock. If it's below 50%, you'll probably need to add some supplemental energy."

Over the winter, monitor body condition of livestock closely, if they start to lose condition, or if the weather is harsh, increase the level and quality of the feed.

Connee Quinn estimates it costs them less than 50 cents/cow exposed to test their forages each year. "It's well worth it. Some years we don't get it done and it ends up costing us."

A final economic consideration is the overall cost to harvest and bale your own hay. Aljoe says many smaller producers would be better off buying their hay. "In most cases, you need to be putting up 1,000 bales/year to consider owning your own equipment," he says.

To locate a certified forage testing laboratory in your area contact the National Forage Testing Association in Omaha, NE, at 402/333-7485.

-- Hay samples should be taken from the same cutting at the same stage of maturity from the same field. As a field is cut, keep first and second cuttings, or cuttings that have been rained on, separate.

-- Use a coring probe rather than hand grabs to get a representative sample. And remember, anything you pull out needs to go into the sample. Cows don't get to sort it. Square bales should be sampled from the butt end, large round bales cored from each side and not the flat ends.

-- The true quality of a hay cutting is best represented by a composite sample. Samples from six to 10 bales are representative of about 50 bales.

Semen Sales Stable

Total semen sales of beef sires remained relatively stable from 1997 to 1998, according to the National Association of Animal Breeders (NAAB). Over 900,000 units of beef semen were sold in the U.S. in '98, a 1% decrease in units sold in '97.

However, custom frozen semen production showed a 9.9% increase from the year previous and accounted for more than 2 million units. Custom frozen semen, which is returned to the individual bull owner, is used within herd and is also sold domestically and internationally.

This growing popularity in custom activity is a sign that more producers are buying semen from individual producers, says Gordon Doak, NAAB president. "We don't feel the use of artificial insemination (AI) is decreasing, producers may just be getting their semen from a different source." Doak estimates 6-7% of the beef population is using AI.

Among NAAB members, the top four breeds for the number of units sold within the U.S. were: Angus at 598,260 units (down 0.07%); Simmental at 83,352 (down 3.46%); Red Angus at 69,259 (up 5.38%); and Polled Hereford 52,284 (down 7.44%).

Beef semen export sales also remained stable, showing only a 2% decrease in the number of units sold in 1998 compared to 1997. That's on the heels of a 98% increase in export sales from 1996 to 1997 from 438,430 units to 869,306 units.

Red Angus, the export sales leader, reported a 20.91% increase, selling 361,165 units abroad. Of the other top eight breeds for export semen sales, only Brahman and Polled Hereford reported increases of 22.81% and 4.69%, respectively.

Argentina and Brazil are the leading export countries for U.S. beef genetics, Doak says.

A Chat With Stephen Sundlof

Why did FDA propose the Framework at this time?

"The Framework is the culmination of about 30 years of trying to deal with this issue from a regulatory point of view. It's very difficult to regulate. We know from experience that antibiotics will select for resistant bacteria. There is no question it occurs. We can't regulate that."

Sundlof explains a number of studies in a number of countries have examined how antibiotic resistance in animals might impact human health. Following a rancorous debate about the subtherapeutic animal use of penicillin and tetracycline in the late '70s and early '80s, FDA commissioned several of its own studies in an effort to find a definitive answer. Results were inconclusive.

"Fast-forward to the '90s, and we were going through the process of reviewing one of the newest classes of antimicrobials - fluoroquinolones. At the last stage of the review, we discovered these were the last of a new class of antimicrobials in development.

"The way we've dealt with resistance in the past is to develop new classes of drugs the antimicrobial world hasn't seen yet."

But, with a lag before any new products would come out of the pipeline, Sundlof says the public health community was concerned if fluoroquinolones were approved for animal use, and resistance developed, human medicine would be caught short handed. With strict safeguards, fluoroquinolones were approved for therapeutic treatment in poultry in 1994, then in cattle last year.

"During the approval of fluoroquinolone for cattle, new information came to our attention. We were starting to see resistance develop to Campylobacter, the number one (pathogenic) cause of food poisoning in the U.S. The concern was that fluoroquinolone was the last good drug for treating this disease. FDA felt it couldn't let the problem go unaddressed."

What do we, and what don't we, know about antibiotic use in animals impacting human health?

"We know there are disease-carrying organisms whose primary mode of transmission is food (like Salmonella). We know that bacteria that develop resistance to antimicrobials can be passed between animals and humans. We can track that. We don't know the overall human health impact of that."

Is there enough conclusive evidence to support the Framework at this time?

"One comment we always get is that FDA shouldn't regulate until it has all of the information. We think there is sufficient information, and we can't wait until we have a problem before we start taking regulatory action."

As an example, Sundlof says there was uproar several years ago when FDA regulated the feeding of ruminant protein as a way to safeguard against the introduction of BSE to the U.S. In hindsight, he says getting in ahead of the issue may have saved the U.S. from a major disaster.

If the current Framework is adopted and regulations are developed from it, could it slow the development of new animal antibiotics or restrict the use of existing ones?

"We will do what we can to keep it from happening. I think the industry will find out what we're asking for isn't overly burdensome.

"The reason we've gone through this process is to provide a science-based mechanism that we could feel comfortable with in the approval process. We'll try very hard to keep the regulatory burden as low as we can while protecting the public's health.

"It was our intent to give guidance to the animal health product industry so they could say, 'I know the rules, now I can go forward with the approval application.'

"I'm sure there are a lot of nervous people out there who think this is FDA's way of saying it won't approve any more animal drugs. That's not the intent."

What happens now that the public comment period for the Framework is over?

"We will take into account all comments and make necessary adjustments to the Framework document. Then, we'll propose regulations, if necessary, to implement what's in the document.

"Bacterial resistance is an issue that doesn't go away. By implementing this Framework we hope to have a highly visible program the public can look at and say 'the livestock industry and government worked together and got this issue under control.' "

Sealed bids spread the dollars

Discovering the value of fed cattle today is an exercise of mind over matter. If you don't mind thousands of cattle trading each week for virtually the same price - even though their actual value differences represent hundreds of dollars - then it just doesn't matter.

"It's always mystified me why all cattle in the U.S. feedlots, regardless of quality, are worth the same price live," says Ben Thorlakson, president of Thorlakson Feedyard at Airdrie, Alberta and Cattle Land Feedyard in Strathmore. "It must be discouraging for those cattlemen who spend their whole lives trying to develop better genetics."

Indeed. The U.S. marketing system has evolved to entire show lists trading for the same price in a single marketing window so short each week that sellers miss out if they aren't near the phone. In fact, there are times when negotiation revolves more around which pens of cattle the packer will take at the price offered, than the price itself.

Feeders don't like it. "When you get to the point in the week you have to market cattle, you're not worried about price, you're worried about when the market happens," says Perry Owens, manager of Kan Sun Beef Inc. at Leoti, KS.

Some packers don't like it, either. "The packers would rather bid and buy cattle five days every week because the packer is selling beef every day of the week. It's a better hedge," says Tim Schiefelbein, manager of value-based procurement for Monfort.

Selling By Sealed Bid All of this is a mystery to Thorlakson because the system works much differently in Canada. "All cattle are not created equal. Unless a person is selling on a carcass basis, which is the best way to sell, there has to be an opportunity to move values up and down," says Thorlakson.

In a nutshell, better than half of the fed cattle in Canada are sold through a sealed bid system, according to Can-Fax market analyst Anne Dunford. It works like this:

Feedlots tell packers which cattle are on the show list. If interested, buyers place a sealed bid, via phone, by a time designated by the feeder. Bids are placed on a live or carcass basis. The seller can accept the bid or pass.

Besides giving feeders more control of when they market and packers a better sense of when they're buying, the system uncovers a range of value differences between pens because folks aren't standing around waiting to see who's bidding what. Across the industry, from Tuesday morning to Thursday night, Thorlakson says 1,000-2,000 head are traded every hour on some type of bid system.

"At least on this basis, we are trading cattle with different weight, quality, days on feed and history at different prices ... having a $5 range in prices on a day to day basis is no surprise," says Dunford. What's more, seeing a similar range between pens is commonplace (Table 1).

Of course, U.S. feeders used to enjoy pen by pen bidding. "When every pen had a different price, we probably had more range over the course of a day. That should have given packers an opportunity to match the bid to the pen of cattle, which should have improved price discovery," says Clem Ward, professor and Extension economist at Oklahoma State University. "When we sell at the same price, we still have some price to base the next transaction on, but it's not as good from a price discovery standpoint of matching the price with the quality," Ward adds.

Moreover, a system like this could improve other mechanisms ultimately dependent on live prices - tools like formulas and grids. For that matter, a sealed bid, live or hanging, could represent the negotiated grid base price many say is necessary for grids to take another step.

Would It Work Here? Today, if a packer bids its top early in the week, few feedyard managers would take it because weekly opening and closing bids have been a few dollars apart for so long.

It is possible, though. Owens of Kan Sun Beef says, "It would be fascinating to do something like this ... If I had a sealed bid, and I thought I was getting good, honest bids, and we were getting fair value, I probably wouldn't market as many grid cattle because I think this would have the potential for packers to bid up more on the cattle."

Schiefelbein believes packers would be open to any workable system that allows them to trade cattle more than one day each week. "If cattle are worth X and they sell in the meat for Y, there are a number of ways to determine the margin in between," he says.

In fact, going full circle to the days of selling pens of cattle for different money rather than entire lists for the same dollar could be downright revolutionary. Owens says, "I think it could have some merit if it was mutually agreed upon by packers and feeders, where you force the industry into it. Over the long haul, it could be one of the best things to happen to this industry."

Placement figures are Worrisome

The fed cattle market showed a little more improvement in March. Choice Amarillo slaughter steers ended the month about $2/cwt. higher than in February.

Feeder cattle and calves continued to record modest but steady gains throughout the month. Heavier weight feeders received some slight price weakness while lighter calves were still recording good gains.

Let's Talk About Trends Several recent trends in the cattle and beef industry may be negatively influencing its survival. These can be classified into three broad areas: federal beef grades, demand changes and industry concentration. All these may, in fact, be interrelated. This month let's look at beef grades.

The USDA grades for beef were established to provide uniform terminology for price reporting. This not only helped producers and the trade but also offered an unbiased evaluation of the various supplies of beef available.

In the early 1950s, several research studies concluded that there was both a higher degree of consumer acceptability and less quality variability in beef cuts as you moved up in the federal grades. This information, plus the fact that the consist of the cattle population was changing, inspired the government to make some adjustments in the individual quality grades to make them a little more consumer oriented.

The general goal of the U.S. beef industry since that time has been to produce high quality beef for our consumers. Since these early days, the target for most of the industry was USDA Choice.

The fact this grade was provided by an unbiased federal grader and had a high degree of acceptability by the consumer convinced most retailers to jump on the Choice beef band wagon. This Choice grade became so popular that the federal grades have been altered almost every 10 years in order to allow more beef into the higher grades. Unfortunately, because of these many changes, retailers and consumers began to lose some confidence in them.

For example, a carcass which would only grade Commercial in the early '50s could now grade Choice. These changes also diminished the reliability of the grades for price reporting.

Further complicating the grade issue was a misinterpretation of some later national research done on consumer beef demands. While the studies did say "some consumers want leaner beef," the result was generally publicized as "consumers want leaner beef." This altered the target concept for many cattle producers.

Imports of exotic breeds became common, primarily because they yielded leaner and larger beef carcasses. Of course, producers also realized the new breeds would provide a larger calf to sell, more weight having always been a desired goal for cattlemen.

Even though such lean beef created some dissatisfaction among their customers, retailers soon discovered that the system was even more profitable for them. Retailers could obtain it much more cheaply, but had to lower retail cut prices to customers only slightly to move it. The result has been that while almost every major retailer previously handled only Choice beef, many have since shifted to Select or ungraded beef.

The ultimate result is quite significant. In 1990, almost 90% of federally graded quality beef was graded USDA Choice. Last year, less than 60% reached that grade.

U.S. beef exports have been rising rapidly and reached a record 2.3 billion pounds in 1998. This gain is due primarily to an increased preference for U.S. grain-fed beef. Thus, a large proportion of the Choice beef available is sent overseas.

The slaughter weights of U.S. cattle have been moving upward for the last several years, probably due primarily to new breeds in the industry. Last year, the average slaughter weight of cattle reached a record 723 lbs./carcass compared to the 1990 average of 686 lbs. This has, therefore, added much more tonnage to our beef production figures.

Consider this quote from USDA's latest Livestock, Dairy and Poultry Situation and Outlook:

"The beef market is being increasingly segmented with the highest quality cuts entering the export and hotel-restaurant market and the remainder competing against ever larger supplies of competing meats at ever lower relative prices. Beef supplies will be tightest over the next couple of years for high quality beef, with some less desirable cuts now being sold at retail being pulled into these more lucrative markets. The end result is likely to be a more variable, less desirable retail beef selection."

This whole grade issue, therefore, has had a strong impact upon our U.S. consumer demand for beef. We now give them less Choice beef, more lower quality beef, reduced consistency and reliability - all at higher prices.

Cattle Feeding Cattle and calves on feed for the U.S. slaughter market in feedlots with capacities of 1,000 head or more totaled 10.4 million head on March 1. That's up slightly from the year-ago level.

Marketings of fed cattle in February reached 1.82 million head, 1% below last year. Some states - Arizona, Iowa, Nebraska, Washington and South Dakota - recorded substantial gains.

Placements of cattle and calves into feedlots in February reached 1.79 million head, up a huge 20% over a year earlier. Together with the 11% gain in January, it could mean big supply problems for fed cattle later in the year.

Iowa, California, South Dakota, Texas and Washington all had placement gains of over 26%. Only two states - Arizona and New Mexico - recorded lower placements.

Placements weighing less than 600 lbs. totaled 333,000 head; those 600-699 lbs. were 492,000 head; 700-799 lbs. totaled 596,000 head; and the 800 lbs. or greater class totaled 367,000 head. That means every weight group was up significantly from last year and the lightest group recorded a 54% gain.

Looking Down The Road The fed cattle market should continue to move upward through the spring months and probably into early summer. Unfortunately, the large feedlot placements of January and February could cause a problem by mid summer. That will bring heavy marketings just at the time we normally have some seasonal price weakness.

The feeder cattle and calf market will reflect the fed cattle price gains this spring. Improved feedlot profits and reduced feeder calf availability should allow prices to hold at the better levels for most of the summer.

Fiscal Fitness --Five strategies to get your bottom line in shape.

Chances are you've probably already tightened your business belt a notch or two during the last five years of continual low beef prices. But are there still costs that could be cut or profits gained?

No one knows for sure what this year might bring, but predictions are for better beef prices. If such predictions become reality, beef producers should prepare now to take advantage of them, says Harlan Hughes, North Dakota State University (NDSU) Extension livestock economist.

"Predictions are for three good years ahead in the beef business," Hughes says. "Producers tend to spend time looking at last year's prices instead of looking forward. But if they don't start planning now for better times, it will escape them before they can take advantage of it."

Iowa State University livestock economist John Lawrence agrees. "I think there will be some profitable years ahead," he says, but he cautions that it may not be as rosy as past cycles. "I don't think prices will peak as high as we've seen in the past."

Dave Pratt, of Albuquerque, NM-based Ranch Management Consultants, also sees prices inching up in the future, but he, too, is cautious. "Prices are likely to go up, and that's going to make it easier to make a profit. But I've never believed prices determine profit.

"Now's not the time to rake in money," he adds. "This is the time to position oneself for the next down cycle. The easiest time to make changes is when prices are good."

So, what can you do to get your bottom line in shape and take advantage of higher prices? Here are five suggestions.

1. Push The Pencil. Before any business changes are made you first need to measure where your business is at.

"Most beef producers would rather be cowboys than businessmen," Hughes says. "But to continue being a cowboy, they've got to become a businessman.

"The perception is that we can run cows without doing bookwork," Hughes adds. "But the profit margin is getting a lot smaller, so beef producers need to pencil out expenses and profits."

"Since we are looking at profitable times, producers may look for opportunities to increase herd size, but don't go overboard," Lawrence says. You've got to run the numbers first, he adds.

2. Count The Pennies. Once you've put the numbers on paper, you can calculate what you need to know - right down to the penny.

Profit is revenue minus cost, says NDSU's Hughes. "If you don't know cost, then you don't know profit."

Hughes says producers need to know what it costs them to produce 100 lbs. of calf. To do that, he says unit cost of production must be calculated. Unit cost of production equals the total cost of the cow herd divided by total pounds of calf produced.

Once unit cost of production is determined, producers can compare it to market price and give themselves a management score. (Management score is the difference between unit cost of production and market price.)

"If it costs you 70 cents per pound to produce and market price is 85 cents per pound you know you'll make 15 cents per pound," says Hughes.

Pratt, who teaches the Ranching For Profit School, likes to know gross margin as well. "Breakeven cost is a useful indicator, but gross margin includes cull margin, weaning rate, calf price, etc. and it's easier to see exactly where changes need to be made."

As an example he says, "Many producers sell as many pounds of cull cows as they do calves. Thus, a 5 cents per pound swing in cull cow prices could really affect profitability. That wouldn't be reflected in breakeven costs, only in gross margin."

3. Do Less With Less. Productivity seems to be the goal of many ranches, but Pratt questions that objective.

"North American ranchers are the most productive, but they are also the least profitable," he says. "Sometimes being less productive is optimum."

Pratt admits being less productive is not a natural intuition, but he gives this example. "In California I worked with a rancher who was fall calving and weaning 600-pound calves, but they were feeding a ton or more of hay which was expensive to grow, harvest and feed. We scrapped it and moved to spring calving to eliminate having to feed hay. Now weaning weights are lower, but profit has increased $100/cow because we are doing less with less.

"Producers often learn how to be productive, but don't learn how to be profitable," he says.

To determine if you are a high- or low-cost producer, Hughes suggests comparing your unit cost of production to benchmark herd information from SPA (Standardized Performance Analysis), a program developed by the Integrated Resource Management committee of the National Cattlemen's Beef Association.

You want to find the areas you beat the benchmark herds and those are the operation's strengths, Hughes says. "Benchmarking helps decide where to focus."

In most cases, low-cost producers can do better with less, Hughes says. Generally, among high-cost herds the one that stands out is feed cost, he adds.

4. Know What It Costs To Make A Dollar. In times of financial stress, Hughes suggests a holistic approach to managing the ranch. "Ask yourself: 'What does it cost to produce a dollar's worth of income?' If it costs $1 to produce $1, then changes need to be made. You need to ask which cost am I going to decrease?"

Hughes says to look at two categories: direct costs (hired labor, feed, trucking) and overhead costs. Overhead is independent of the units you produce such as machinery, facilities, corrals, pasture, rent, etc.

"There is opportunity in overhead that traditionally has been overlooked," Hughes says. "Sometimes to lower these costs you need to add more cows."

"Often when we think of decreasing costs, we think it means spending less. Actually it may mean increasing numbers to fully utilize resources," Hughes says. "In the unit cost of production equation, you need to increase the denominator or decrease the numerator to increase profitability."

Pratt agrees that the biggest drain on profitability is overhead costs that are too high. One strategy to decrease overhead costs is to "get in sync with nature."

It can be as simple as taking cues from nature. "When do wildlife have their offspring?" he asks. "Not in January, February and March, but in May and June when the forage resources are abundant."

5. Plan Ahead. "The beef industry is one of the few ag industries that has much positive going for it today," says Hughes. To take advantage of better times, Hughes encourages producers to put together an action plan to increase profits over the next 12 months. Begin by using the benchmark comparisons to identify areas that need improvement.

"The goal should be to have a management action plan that will decrease at least one bottleneck to profitability for the coming year," Hughes says. "But the changes must be based on data."

Lawrence also says strategic planning and risk management will continue to be crucial business management tools. Producers need to look seven or eight years into the future to position their operation," he says.

Lawrence says one of the biggest mistakes producers make when planning for the future is putting too much reliance on what happened in the past. "It's important to have a historical basis to base decisions, but there's no guarantee things will happen exactly like they did in the past. Producers need to understand why things did - and didn't - work to make sound decisions for the future," Lawrence says.

But don't get comfortable when times are good, Pratt says. "I'm afraid producers will get complacent. They need to position themselves for the next downturn."

Turning the bulls out

Lynn and Jim spent a week at Mackay in early March, helping our son Michael and family move back to their place at Alder Creek. Lynn moved a lot of snow with a tractor and blade so they could get in there with semis and trucks to unload hay and 125 cows with calves. Their scour epidemic ended soon after they moved to the clean place.

After Lynn and Jim got back, we vaccinated and deloused the yearling heifers. The live virus vaccine (IBR, BVD, PI3) must be given to non-pregnant animals a couple weeks before they are bred, so it was time to get them done.

We sorted them into two breeding groups this year. Last year with 51 heifers in one group, the bulls got worn out in the first two weeks. We have a dependable older bull and two yearling bulls with them (we didn't gamble on having just one bull, since there's often three or four heifers in heat at once). But the older bull spent a lot of time and effort doing most of the breeding and fighting off the younger bulls.

We have a short breeding season (32 days) since our fertile crossbreds are mostly bred and settled within the first 21 days. It's easier on the bulls to have the heifers in two small groups (with fewer bulls) rather than one large bunch.

We're now 12 days into the breeding season (and nearly 3/4 of the heifers have bred) and it's working well. We have one older bull and one young bull with each group of heifers; the older one does most of the breeding but the younger one is there for backup if there's a lot of action at once.

Fighting Pneumonia The calf that had pneumonia so severely has finally recovered. He was born Feb. 10 in the barn on a cold night. When he was 45 minutes old, Andrea and I dried him with towels and fed him part of a bottle of fresh colostrum, then tried to help him nurse his mother, Dowdy.

It took all his effort to stand and he wouldn't nurse, so we fed him via stomach tube. He was still cold, but we thought he'd be OK since he had a tummy full of colostrum and Dowdy was licking him. We misjudged this one, however; he should have been brought into the house to completely warm up.

A few hours later he was still cold and had not nursed on his own. Again, we milked Dowdy and fed the calf via tube. By morning we realized he had a serious problem. Dowdy had finally shed her afterbirth and it was gray and unhealthy-looking. The calf had probably been deprived of blood circulation and nutrients before birth, which might be why he was so listless. He had a fever and was breathing fast and shallow.

We started him on antibiotics and medication to help him breathe easier. He still would not nurse, so we were milking Dowdy every six hours and feeding the calf by tube.

During his first week of life we treated him intensively and milked his mother; he was seven days old before he felt well enough to nurse her. Then after he'd been free of pneumonia symptoms for four days, we made the mistake of assuming he'd recovered, and halted antibiotic. He relapsed, so we put him back on medication. He was lethargic and had to be encouraged to get up and suck his mother, and sometimes we had to milk her and tube him.

He and Dowdy lived in the barn for five weeks while we treated him. Finally he started nursing well again and we let the pair out into a nearby pen, putting them back in the barn every time the weather got bad. We had so much time, effort and medication invested in him, we sure didn't want another relapse.

Was it worth the effort? It's like a poker game - we had so much in the pot already, we didn't dare quit. But our diligence was more than monetary. We have a commitment to our cattle to keep them fed and healthy, and we don't take it lightly.

We turned the pair out with the other cows at eight weeks of age since he seems fully recovered and Dowdy will need to get bred. Watching him running and play-fighting with the other calves gave me a great sense of satisfaction.