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Tailgate Up Or Down?

Tailgate Up Or Down?

Nothing says “country” quite like a pickup truck. The age-old debate about which make is better – Ford, Dodge or Chevy – continues among ranchers. But no matter where your loyalty lies, all pickups have one key thing in common -- the tailgate.

When I’m running parts, supplies or lunches out to the field, I usually leave the tailgate down. It’s quick and easy to throw things in the back, and since it’s only a quick trip, I don’t worry about things falling out. On the other hand, when I’m headed to town, the tailgate is always up.

My husband, on the other hand, absolutely will not drive the truck unless the tailgate is up. He worries about gravel getting thrown up and chipping the tailgate when he drives. Plus, he's usually hauling quite a few things in the back, so he worries about things slipping out.

When we were kids, my sisters and I would often enjoy rides in the field or pasture in the back of the truck, but the tailgate always had to be up, or Mom and Dad worried about us kids getting bucked out.

An article on Fox News asked the very important question, “Tailgate up or down?”

“It’s an age-old conundrum among pickup truck owners: tailgate up or down? We’re talking aerodynamics and fuel economy here, but without personal access to wind tunnels, the evidence most owners have to support their position is anecdotal, at best. Many split the difference between form and functionality, and replace the tailgate with an open net that lets the air through, but not their cargo.”

Obviously this isn’t a vitally important topic, but I thought it would be fun to talk it out. So, when Editor Joe Roybal sent me the link to this article, I knew it would make an interesting blog topic.

So, let me know in the comments section below, tailgate up or down? Also, I’m curious about what kind of pickup truck you use to run around the ranch.

We use four pickups on the ranch – 1974, 1979, 2003 and 2009 models – all of them Chevrolet. I guess that pretty much attests to my dad being a Chevy man. Meanwhile, my husband drives a 2003 Dodge truck, and I have my eye on a new Ford pickup. Yes, my family butts heads on their favorite brands, but that’s what makes life interesting, right?

So, from your old beaters to your church-going pickup, what do you use personally? Share in the comments section below.

By the way, check out this photo gallery of ugly pickups from Farm Industry News.

 

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Mother Nature Keeping Beef Producers On Edge

state of beef industry survey results down

BEEF magazine’s latest survey of reader attitudes found decidedly less optimism about the short term in 2013 compared to 2012. In fact, the 2013 BEEF Reader Optimism Index, which had trended down slightly the last two years after surging by almost 100 points in 2010, shed 50 points in this year’s survey. Long-term optimism was also down slightly from last year.

Who can blame U.S. cattle producers for being a bit gloomy? The cattle business these days is a lot like the old “Batman” series I used to watch on TV as a kid. Every week’s episode ended in a cliff-hanger that left the caped crusaders on the cusp of some hair-raising scenario.

With fundamentals portending prosperous times for about the last decade, the industry has seemed to lurch from one expansion-dampening crisis to another. The litany is familiar — rising energy and feed prices, drought, etc. The industry has persevered, but each cliff-hanger claims a little bit more of the infrastructure.

Hopes were high last fall for some decent winter moisture to rescue the High Plains and Corn Belt. Indeed, 2013 is a make-or-break year for a lot of folks. One friend in northwest Nebraska characterized his operation’s situation to me in mid-February as “being on the edge for the next 90 days. We’ll see if we are supposed to be doing something else or not.”

That hoped-for relief was slow in coming, but finally barreled in with a vengeance in late winter and early spring. Conditions in the Central Plains improved greatly over a six-week period, but conditions overall were a long way from wet.

In fact, the Livestock Marketing Information Center pointed out in mid-May that nationally, 53% of beef cows reside in states with at least 40% poor or very poor pasture and range conditions. “Noting that last year only 20% of cows were in this situation quickly highlights the scope of ongoing challenges many cow-calf operators are facing regarding forage and water supplies,” says Glynn Tonsor, Kansas State University.

 

Enjoy what you are reading? Subscribe to BEEF Daily for more industry commentary Monday-Thursday.

 

Producers, however, are nothing if not optimists. You have to be to be in this business. Troy Marshall wrote in BEEF Cow-Calf Weekly recently that being in the cattle business is like loving a good woman.

“It’s fun, rewarding, and the strength of your love is determined by how hard you work at it and your attitude. Meanwhile, drought is like trying to convince a good woman to love you. It simply isn’t your decision to make; you do your best, you make the effort, and you pray. If the outcome isn’t what you’d hoped, you have to find a way to pick up and move on.”

 

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Virginia Cattle Rancher Is National "Farm Mom Of The Year"

The online votes have been tallied, and Betty Rosson, a Virginia grain and cattle farmer, is Monsanto’s 2013 America’s Farmers Mom of the Year.

Betty’s nomination, submitted by son Charles, was chosen by judges of American Agri-Women as regional winner for the Southeast.

Online voting was conducted in early May, during which time anyone could visit AmericasFarmers.com, read regional winners’ nominations, and cast a vote for one to receive the national title.

Betty received the most online votes, and she was notified of her national win on Mother’s Day.

“Whether she is driving a tractor, feeding cows or caring for her family, Elizabeth (Betty) is 100% all-in for the job,” wrote Charles in the winning nomination. “Mom certainly doesn’t let grass grow under her feet, as she is always on the move for her family, her church, her farm and the community.”

To read the entire article, click here.

 

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If Nature Cooperates, Good Times Are Ahead For Beef Producers

cowherd price predictions for 2014

By the time that you read this, you should have a good idea of the summer rainfall in your area. Assuming that rainfall is sufficient to consider adding bred heifers to your herd, I’ll share my projections for the economic value of a bred heifer entering a beef cowherd in fall 2013.

The national beef cow inventory is at a 50-year low, and long-run corn prices are projected to trend lower. These are two positive indicators for today’s beef industry.

Today’s economic value of a bred heifer will be influenced by calf prices over the rest of this decade. Figure 1 presents last month’s suggested planning prices summarized in five-year segments. There are two key points about these long-run planning prices.

  1. We’re in a period of projected increases in beef prices due largely to the reduced national cattle inventory. I expect these favorable prices to stimulate expansion in the national beef cowherd.
     
  2. This expansion over the next three to four years is projected to weaken feeder cattle prices in the last part of the decade.

suggested five year planning beef cow prices

Value of a bred heifer

Let’s calculate the economic value of a pregnancy-checked heifer. The economic value of a bred heifer in your herd is the sum of the annual net cash incomes produced from all of the calves she weans while in your herd. In order to express this value in 2013 dollars, these future net cash incomes need to be discounted back to today’s dollars. Conceptually, this is a straightforward process; however, in actual practice, it requires a large number of calculations. Thank goodness for computers.

Figure 2 summarizes my calculations for the economic value of a bred heifer preg-checked in fall 2013. My basic assumptions are that these calculations are for a straight-bred heifer that has seven consecutive calves while in my example herd. The discount factor used was 3% — the lowest discount factor I’ve ever used in calculating the economic value of a bred heifer. The female is assumed culled and sold in year 2020 after producing seven consecutive calves.

projected economic value of bred heifer

Let’s discuss each column in Figure 2:

  • The “Herd average income/cow” is the projected net cash flow per cow and not the economic profit per cow. This number is adjusted for the annual projected calf prices and the projected annual net cash cost per cow. This is after a family living draw of $100/cow. No debt service is considered in these calculations.
     
  • An “Age adjustment” is used, suggesting that the “Adjusted net income” per female depends on the herd’s average net cash income per cow, and the age of the female for each year. This suggests that 4-, 5- and 6-year-old females have the highest annual net cash incomes. This age adjustment is based on my Integrated Resource Management work in the 1990s. For example, a first-calf heifer is assumed to generate a net cash income equal to 81% of the herd’s average net cash income. A 6-year-old female, meanwhile, is projected to generate a net cash income of 133% of the herd’s annual average.
     
  • A dollar today is worth more than a dollar next year — albeit, currently not much more, given today’s low interest rate. The discount factor used in this example calculation was 3% and each year’s “Discount factor” is based on published financial discount tables and varies with the years into the future.
     
  • The furthest-right column is the calculated annual “Discounted value,” which is calculated by multiplying annual net cash income by that year’s appropriate discount factor.
     
  • The bottom-line, left-hand number ($3,080) is the sum of the projected annual “undiscounted” or nominal total net cash income generated over the lifetime that the heifer is in that herd — including the cull value of the female.
     
  • The number to the right ($2,691) is the sum of the annual “discounted” values of the heifer’s lifetime calves produced while in that herd, plus the discounted cull value. 
     
  • A preliminary answer to the question “What is the economic value of preg-checked heifer in the fall of 2013?” is the $2,691 number. This is the highest economic value I’ve calculated in the last decade — even after adjusting for increasing annual long-run cash production costs summarized in last month’s “Market Advisor” column. In summary, this favorable $2,691 number is heavily influenced by favorable calf prices AND the low discount factor.

But there’s more to this story. If one were to purchase a package of 100 heifers, not all will produce seven consecutive calves; some heifers will be culled each year. The annual culling rate typically starts out high for the 3-year olds, and goes lower as the females mature, reaching the low around the fourth or fifth calf. The annual culling rate typically goes up slightly as females approach the end of their productive years.

My research suggests that by the end of the seventh calf crop, 62 of the original 100 heifers will have been culled. These 62 culled females can’t be valued at the above $2,691 — they will be worth less, depending on how many lifetime calves they raised. The fewer lifetime calves a culled female produces, the lower the value of that culled female

While I actually calculate the economic value of alternative lifetime calves from one through six calves, space doesn’t allow me to present these alternative tables. In summary, a heifer having one lifetime calf is valued at only $1,209; two calves,at $1,502; three calves, at $1,849; four calves, at $2,110; five calves, at $2,352; six calves, at $2,540; and seven calves, at $2,691. A heifer that is open for her second calf, but kept in the herd anyway, and then has five more consecutive calves, is valued at $1,854.

Now back to the purchase of 100 heifers. With the 62 head culled over the seven-year period, my calculated economic value of the 100 head purchased is reduced to $1,992/head. 

My final answer to the question “What is the current economic value of a preg-checked heifer in the fall of 2013?” is $1,992/head.

In February 2013, I calculated it would cost $1,418 to raise a 2013 preg-checked replacement heifer. Is this calculated difference between the $1,418 calculated development cost and the $1,992 calculated economic value enough to stimulate a national herd expansion? For those with ample rainfall this summer, I believe it is.

Harlan Hughes is a North Dakota State University professor emeritus. He lives in Laramie, WY. Reach him at 701-238-9607 or [email protected].

 

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Vote For Your Favorite Ranch Sweetheart Photo Finalist

I hope you are all having a great Memorial Day and that you were able to spend the long weekend with friends and family. But, let’s not forget the primary reason for this day. Today, we salute the men and women who have served this country to protect our freedoms.

Memorial Day is a federal holiday that is celebrated the last Monday of May. It was initiated as Decoration Day, a day when the fallen of both the Union and Confederacy in the Civil War were honored.

www.usmemorialday.org reports that Memorial Day was officially proclaimed on May 5, 1868, by General John Logan, national commander of the Grand Army of the Republic, and was first observed on May 30 of that year, when flowers were placed on the graves of Union and Confederate soldiers at Arlington National Cemetery.

"The first state to officially recognize the holiday was New York in 1873. By 1890, it was recognized by all of the northern states. The South refused to acknowledge the day, honoring their dead on separate days until after World War I (when the holiday changed from honoring just those who died fighting in the Civil War to honoring Americans who died fighting in any war."

One of the most touching of remembrances to our fallen heroes is "Flanders Field," written by John McCrae in 1915.

In Flanders Fields


In Flanders fields the poppies blow


Between the crosses, row on row


That mark our place; and in the sky


The larks, still bravely singing, fly


Scarce heard amid the guns below.


We are the Dead. Short days ago


We lived, felt dawn, saw sunset glow,


Loved and were loved, and now we lie


In Flanders fields.



 

Take up our quarrel with the foe:


To you from failing hands we throw


The torch; be yours to hold it high.


If ye break faith with us who die


We shall not sleep, though poppies grow


In Flanders fields.

Named a three-day federal holiday in 1971, Memorial Day is now considered the kickoff to the summer vacation season. In that spirit, I want to announce the 15 finalists in the BEEF Daily Ranch Sweethearts Photo Contest.

Congratulations to our 15 finalists:

“Grandma Dvonne” by Emily Hansen

“The Proposal” by Leann Botkin

“Strength Is Beauty” by Marty Stingley

“Don and Jessie” by Sarah Anderson

“Rose And Her Herd Bull” by Rita McPhee

“Grace” by Melinda Baker

“Ella and Emri” by Kyle Mayden

“Kameryn’s Heifers” by Brian Stoltze

“Hugs” by Kaye Hansen

“Addyson” by Alyssa Williams

“Hudson” by Leslie Hamilton

“Pup” by Calli Pritchard

“Quincie” by Hayes Martens

“Quentin” by Shelby Shaw

“Morning Sort” by Rachel and Nikki Darnall

We need help selecting our two champions, so click here to vote. Voting will be open until May 31, and our winners will be announced on June 3. The champion photographer will win a certificate redeemable for a pair of Roper boots, and the reserve champion photographer will win a $75 gift certificate to Cowgirl Crush. To thank you for your help in selecting our winners, three voters will also receive a copy of my children’s book, “Levi’s Lost Calf.” 

Which photo is your favorite? Leave me a note in the comments section below or vote in the gallery. Thanks for your participation. You can view the complete gallery or reader-submitted photographs here. 

 

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Disaster recovery: When bad things happen to a good business

An industrial plant explodes in Texas. Bombs shut down the city of Boston. A hurricane floods the east coast with water. A tornado hits Oklahoma.

All those recent disasters caused tremendous human suffering. All of them, too, brought devastation to businesses large and small. From damaged buildings to wrecked inventory to disrupted supply lines, natural and man made disasters can tear a huge hole through profitability. In many cases businesses close their doors for good.

Plan for recovery

What lessons can we learn from all this? Here’s one: Business owners must design and implement disaster recovery plans designed to mitigate harm when bad things happen. With that in mind, now would be a good time to revisit your own recovery plans with a fresh look. Are you taking the right actions to minimize damage if you are hit with a wind storm, a lightning strike, a flood or a power outage?

Your answer might well be “no.” Too often the details of disaster planning get short changed for pressing matters such as issues with personnel or suppliers. That’s a mistake. No matter how successful your operations, everything you do can come to a halt if there’s no Plan B when Plan A gets derailed.

“A bad event can take down a company forever,” says Jeffrey Williams, president of Binomial International, a disaster planning consultancy in Ogdensburg, NY. “That’s why it’s so dangerous for businesses to keep disaster planning on the back burner.”

In approaching a redesign of your own plan, experts counsel taking a broad view, incorporating as many “what-ifs” as possible. “There are three types of disasters,” says Williams. “The first is natural. Think weather. The second is technical, when equipment fails.  The third is a human error, what people do to other people. That can be sabotage or a fire.” Advice from Williams: plan for all three.

Offsite data

Suppose you were forced out of your building right now. Maybe you are the victim of a fire, flood or wind storm. How would you continue your business? The likeliest answer would be “with great difficulty,” unless you have taken measures to assure the maintenance of a certain level of customer service and sales.

“Businesses can take a number of steps to assist in getting through a crisis before the next disaster strikes,” says Chris Hackett, director of policy development in the research division of Property Casualty Insurers Association of America (pciaa.net). Perhaps one of the most important, he says, is the determination of a temporary relocation site.

That temporary site might be a basement in your home, or a rented room in another city. Whatever the location, it must be one where you can access your critical files. That includes your accounts receivable so you know who owes you money. It also includes your customer lists to protect your future revenues. Keep a computer at this location with continually updated company data.

On the topic of alternatives, make sure you have a fallback Internet network into which you can plug your devices. And have a call forwarding plan prepared that will route incoming calls.

Finally, put together an offsite list of emergency responders. These are people you’ll need to call to help solve the problems the disaster has caused. Include the following:

* Your attorney, accountant, and insurance agent.

* Any firms which can accomplish recovery tasks such as removing water, cleaning, hauling rubbish, painting, repairing electrical and plumbing systems, replacing locks and getting computer equipment running.

* Real estate agencies that can help you set up a remote operational base while restorations continue.

The remote location is one thing: Having people who take the right actions is another. Identify the steps you’ll need to take when disaster strikes, then assign them to key personnel. “Things will go much smoother if everyone knows what they ought to do in a crisis,” says Williams.

Assign the following tasks to some key individuals: 1) Calling employees and customers to let them know what has happened. 2) Notifying suppliers and insurance companies. 3) Arranging for repair work by plumbers, electricians, and restoration contractors.


Review property insurance

Have you sufficient property insurance in place? What may be good one year may no longer be adequate several years later. So revisit your policies with a trusted advisor. “It’s always good to have regular session with your agent every year or so to review what you have,” says Hackett.

The number one insurance category is, of course, property insurance that covers fire. “As it relates to fire, policies should insure your structure for 100 percent of its replacement costs,” says Hackett. Replacement cost is the amount necessary to rebuild your structure using construction materials of like kind and quality.  If you are thinking of adding an addition, or making renovations, that will substantially increase the amount necessary to repair or replace your property you should inform your agent. If you have not done so the settlement under the policy will be based on the replacement cost information the carrier had on file at the time of the loss.

Consider, too your deductibles. “There are pros and cons to having higher and lower deductibles,” points out Hackett. “Lower deductibles mean less money out of your own pocket after a covered loss but cost more in premiums.  Higher deductibles mean lower premiums but more out of pocket costs when disaster strikes. You have to decide for yourself what you prefer. Ask yourself, if a loss happens tomorrow would I be able to come up with the deductible or not?”

Insurance is great, but be prepared to prove your losses. “It’s important to take inventory of the items in your business,” says Hackett. “Walk through your building with a camcorder and make a video. That will help expedite the settlement of your covered loss with the claims adjustor.” Store the video offsite in a safe or bank safe deposit box.

Protect your revenue stream

A disaster can interrupt sales, and that means your expected revenue stream can dry up quickly. Think about buying protection. “Business interruption insurance provides critical coverage for lost income—what your business would have earned but for the physical damage of a disaster,” says Hackett.

Purchasing interruption insurance requires thorough consultation with your agent. “It’s not as simple as an auto policy,” says Hackett. “The carrier will ask you questions about the nature of your business, your employees, your typical income in a month, and whether your business is seasonal in nature.”

You might also consider ‘extra expenses coverage,’ notes Hackett. “This insurance covers the higher expenses you might incur by moving to a new location, such as higher rents, and the costs of relocation.” You can also get coverage for payroll expenses. “Just because your business is shut down, that doesn’t mean people will not expect a paycheck,” says Hackett. “Paying them can be difficult if you are not taking in any income.” You can purchase such insurance just for the highest paid employees or for your entire staff.

Two more things. “Contingent business interruption insurance” covers the lost income that results when a supplier is unable to deliver. You can also purchase what’s called “extra contingency expenses insurance.” That covers the higher prices you might end up paying to an alternative supplier.

Should you get either? “It depends on the nature of your business,” says Hackett. “It’s particularly important for manufacturers which assemble products in one location but utilize parts from elsewhere. Retailers may also need the insurance if they depend upon suppliers in different locations to keep their doors open.”

Underwater

Standard property insurance policies generally cover water damage that results from pipes bursting. Not covered, however, is flooding from causes such as tidal surges, the overflow of rivers, or water flowing down from a mountain or along the ground.

“Damage from flooding can be catastrophic,” says Michael Sapourn, a Satellite Beach, Fla.,-based attorney who has dealt extensively with flood damage insurance and litigation. “Those who own buildings located in areas vulnerable to such events should purchase flood insurance.”

“Much litigation results from the difficulty in distinguishing between water damage caused by windstorm (which is covered by standard property insurance policies) or from other causes such a tidal surge. Carriers often litigate the gray areas where windstorm ends and tidal surge begins.”

Mortgage lenders will require you to buy flood insurance if you are located in a flood zone, as defined by FEMA. “Businesses which have paid off their mortgage often drop flood insurance since they no longer have a lender who requires it,” says Sapourn. “That’s a mistake.”

Finally, don’t make the common mistake of being underinsured. “Don’t try to save money by lowering limits. Get the coverage limits you need to protect you from a total loss.”

Flood insurance policies are typically not available on a replacement cost basis, so you will need to estimate what you need to rebuild. If you have an older building, you may not be able to get the policy limit you want from FEMA, so you may end up going into the private market for excess insurance.

Once you have your recovery plan and your insurance policies in place, you are in a much better position to survive should you be hit with a disaster.  But don’t just toss your recovery plan in a desk file and forget about it. Advisors counsel reviewing the program annually.

“Disaster recovery planning is an evergreen issue that is never done,” says Williams. “People change jobs, functions change, mobile phone numbers change. Keep revisiting your plan.”  You don’t want to be caught without a lifeline when a crisis hits.

High Prices Push Consumers To Buy Less Beef

Last autumn, $130 cash fed cattle and $200 Choice cutout looked like mere speed bumps on the way to record-high prices.

Since November 2011, the Choice cutout has made four assaults on the $200 level. It punched through in late May, then topped $210. The Choice surge was due in part to Old Man Winter refusing to let loose his icy grip. That created pent-up demand for grilling when weather finally improved.

Unfortunately, the $130 cash fed cattle barrier held. One reason is that by time the wholesale price surge came, cash fed cattle supplies were expected to begin rising seasonally. Forward-looking futures markets, and to a lesser extent cash cattle markets, saw weakness ahead. Current June fed cattle futures are trading $5 to $6 below the bulk of the most recent cash fed cattle trade.

Retailers have begun easing beef prices higher because consumers don't like abrupt price hikes.

Another reason is that analysts and retailers expect consumer pushback against high prices. A key signal will be consumer interest in buying beef after Memorial Day. Grain farmers are familiar with the old market maxim that says the cure for high prices is high prices. High prices give users ample incentive to cut back. They do. Volume of grain moving falls. Prices drift lower. Corn is in what now looks like a typical short-crop, long-tail pattern.

To read the entire article, click here.

 

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Cow Fixer Vs. Herd Health Veterinarian? BEEF Vet Examines Production Medicine

herd health veterinarian as part of beef production medicine

Production medicine—melding animal health and veterinary care into animal production management—is beyond infancy, but it’s far from losing all its teeth.

 “The concept of cow-calf production medicine is still relatively young and still evolving,” says Terry Engelken, DVM, a professor of production medicine at Iowa State University, focusing on the cow-calf and feedlot sectors. “It requires paradigm shifts on the part of the producer and the veterinarian. The producer has to come to the realization that their veterinarian has more to offer than just being a ‘cow mechanic’ and the veterinarian has to understand how to collect and analyze economically important factors that impact profitability.”

Though Dr. Engelken sees slow, steady growth over time, it seems acceptance and use of production medicine is scattered, more client-dependent than size-dependent.

In California, for instance, John Maas, DVM, Extension Veterinarian at the University of California-Davis says it’s a mixed bag. There are progressive practitioners working with progressive cow-calf producers to improve profit potential. There are also producers who view veterinarians as folks who douse emergencies, and veterinarians content to provide only those fire-engine practice kinds of services.

“It’s been one of those things you would think common sense and good business suggest we would have evolved to by now,” Dr. Maas says.

Figuring out the business model of providing production medicine services continues to stall some.

Russ Daly, DVM, Extension Veterinarian at South Dakota State University, believes producers recognize the value of veterinarians and the information they provide. He also knows veterinarians who want to provide production management service to clients. For the most part, though, he says, “In this state, I’m not sure that we’ve found a good way for veterinarians to capture that value, which works for the client as well.”

As for W. Mark Hilton, DVM, it’s impossible to think about production management without considering the animal health side of it and vice versa. Dr. Hilton is a clinical professor in food animal production medicine at Purdue University. He also founded and owns Midwest Beef Cattle Consultants, which many regard as a poster child for how to work with clients in partnership rather than a buyer and seller of specific services.

 

Like what you are reading? Subscribe to Cow-Calf Weekly for beef industry updates every Friday in your inbox!

 

“Growing up, our veterinarian helped us. He fixed things, but he’d also show us something else that could help us,” Dr. Hilton says. “Production medicine is part of every-day veterinary medicine. As the veterinarian, you should always be thinking about the client’s total operation.”

Dr. Engelken concurs.

“I disagree with those who say that production medicine skills are separate from individual animal medicine, surgery, or palpation skills in a cow-calf practice,” Dr. Engelken says. “I think they are very intertwined in that unless you can exhibit a high level of competency in these areas, you probably won’t build enough trust with the producer to provide consulting services. These skills are also absolutely critical to being able to collect the baseline production numbers that you need to be able to provide consultative services to the client.”

“Are you a ‘cow fixer’ or a ‘herd health veterinarian’?” Dr. Hilton asks, “There is a big difference.”

Herd-Specific Data is the Foundation

For one, Dr. Engelken explains, “Record keeping and data analysis must come into play if you are ever going to get this type of service off the ground. You can’t benchmark performance if the appropriate numbers aren’t being recorded, and that first step can be a real challenge. You have to think about what output parameters you want to evaluate and then make sure you are getting those numbers captured. Then, it becomes a question of identifying the magnitude of losses and what areas the client needs help with. Are those losses associated with cattle disease, herd management, or a combination of both?”

“Production medicine is more of a mind-set of how you do things, and the most important thing that we can do is find the weak links in the production chain,” Dr. Hilton says. “We want to find the most important factors that are hindering a farm’s success.”

In that effort, Dr. Hilton encourages veterinarians to focus on four production goals: decrease production cost; increase the value of production sold; doing both of these with less labor; and maintain or enhance animal welfare.

“I’m a fan of individual cow records,” Dr. Hilton says. “Producers are surprised how consistent individual cow production is from year to year.” With records, clients can see that a cow weaning a calf 25 percent lighter than the herd average this year will likely produce one of similar caliber next year, and the year after. Dr. Engelken points out that the records portion of cow-calf enterprises is less standardized and more challenging to ferret out than in other sectors like feedlots, stocker operations, dairy and swine.

“Your opportunities to generate production or economic numbers are really driven by specific events that occur during the annual production cycle,” Dr. Engelken explains. “These events include calving, calf processing, going to grass, weaning, pregnancy check, etc. You aren’t typically generating input/output numbers on a daily basis like producers in other animal enterprises. These events may be separated by several months (start of breeding until preg-check) or they may occur over a relatively long period of time (the calving or breeding season), which makes data collection and interpretation more difficult. Secondly, in cow-calf practice, veterinarians are often the ones collecting the data since they will be the ones on the ranch as these production events occur. This data may take the form of reproductive information, calf performance numbers, and animal health performance.”

The next step is at least as essential.

Once this data is collected, the important thing is that it is economically relevant to the operation and that it is converted into information that the practitioner and client can use to identify problems and make corrective management decisions,” Dr. Engelken says. “I believe that’s when information has economic value to the producer. This value is improved over time as economically important management changes are continually identified, documented, and benchmarked.”

cattle feed additives

Areas Of Impact

Any area of production that drives a substantial amount of production output or input invites examination.

For Dr. Engelken, three key areas jump to mind: data based evaluation and the benchmarking of reproductive performance over time; nutritional management to control the cost of supplemental feed; herd health design and maintenance.

“Reproductive performance drives the bus on the income side of the equation and has to be closely monitored,”

Dr. Engelken says. “However, when you look at the differences in profitability between beef operations, you will find much more variation in input costs than you do in revenue generated. Since the largest component of cash costs deals with supplemental feeding, it is only natural that our profession should be involved in evaluation of the nutritional program and cattle feeding practices.”

Likewise, Dr. Hilton says, “Nutritional consulting has provided our clients with the best return on investment. Feed costs are up tremendously over the past five years and our herds that have kept feed cost from rising at the national average are doing much better financially than those that are average or above. I have heard from veterinarians who have saved clients $30,000 in feed cost versus what they would have fed. Even simple ideas like allowing cows only 4-6 hours daily access to hay can save a producer over 30 percent of his hay cost, according to Purdue research.”

As for design and maintenance of the herd health program, Dr. Engelken says, “We are constantly bombarded with new ‘miracle cures’ that come from a syringe, in the form of antibiotics, vaccines, or mineral supplements. I think the practitioner plays a key role in helping producers understand what they need, and maybe just as importantly, what they don’t need. This also requires that diagnostic information be collected from both live animals and necropsies so that disease patterns on the farm can be monitored and herd health programs changed as needed. This is still at the heart of veterinary medicine.”

“Every herd has strengths and weaknesses, but if health is one weakness, it’s nearly impossible to have any real strengths,” Dr. Hilton says. “Think of all the problems that may occur subsequently if calves get sick at a very young age—increased death loss, lower weaning weights and rates, increased sickness and decreased growth in the feedlot, less replacement heifers for the herd, etc. Health is surely a huge impact on the total herd.”

Wrap it all together and Dr. Engelken says, “In our case, we continue to be involved in nutritional management, ration analysis, electronic record keeping, and evaluating reproductive performance. We also spend a fair amount of time evaluating options for our clients and using partial budgets to play ‘what if’ games and look at alternatives.

“Providing impartial science-based information is part of our job. Just simply due to the huge impact that reproductive performance has on ranch profitability, I guess it’s inevitable that we continue to look at estrus synch options, bull selection parameters, and the potential uses of gene markers. Having said that, we still do the traditional things such as palpations and disease management.”  

It’s Hard To Pigeonhole Client Interest

As mentioned at the outset, producers of a particular size or in a particular part of the world aren’t necessarily more or less likely to be interested in a production medicine relationship. But there are indicators.

Where he sees successful production medicine relationships, Dr. Maas says, “Number one, the ranchers are business people, no matter the size of the herd. They’re 110 percent vested in the cattle business for their income or they have come to ranching from another business. They understand inputs, outputs, shrink, all of the things that affect their bottom line.”

When Dr. Engelken was on faculty at Mississippi State University, he worked with folks in the agricultural economics department to survey beef producers in the state. The aim was trying to identify practices, demographics and characteristics that defined various levels of management.

“Obviously herd size made an impact. The larger the herd, the more time the producer devoted to herd management. These producers also utilized their veterinarian more often,” Dr. Engelken explains. “However, factors such as client age, education level, the number of extension meetings attended, serving as an officer for a cattlemen’s group and participation in seedstock production affected their level of herd management, as well as how they interacted with their veterinarian.

“That is a point that I try to drive into our students: If you want to come into contact with producers who would be willing to use consultation services, then you need to understand the characteristics of those producers. Our graduate veterinarians need to be involved with the local cattlemen’s groups, extension programs, as well as organized veterinary medicine. They need to be able to identify larger operations (especially seedstock) that are being operated by younger individuals who have an animal science or ag economics degree.

“Those are the producers who understand the impact that our profession can have on their bottom line. However, there are also smaller operations that want to do things the right way and will actively seek out this type of service, even though their cow herd is not their primary source of income.”

Conversely, Dr. Maas believes veterinarians willing to proactively forge new relationships and strengthen existing ones tend to have the most success providing consulting that goes beyond fixing problems.

“Clients call to ask questions. That’s the point at which veterinarians need to begin relationships,” Dr. Maas believes. “Maybe someone calls to ask about a particular vaccine. Also tell them how to handle it and how it should be administered. Ask them if they’re BQA certified.” Dr. Maas says.

“Then, figure out a way to follow up to see how they got along, at no cost to them. Maybe that leads to a chat about how they develop their heifers or what genetics they use and why,” Dr. Maas says. “Invest your time and energy into follow-up, so they understand that you’re the kind of veterinarian who is interested in their operation, not just someone who’s there when there’s an emergency or when they have a question.”

Some will grab the invitation immediately and do their part to establish the relationship. Others never will.

“Dedication to relationship is the important thing,” Dr. Maas says.

“The bottom line is that there may only be 15-20 percent of clients that will be willing to pay for a complete consultative type of program (nutritional management, record keeping, breeding season evaluation, economic analysis, etc.),” Dr. Engelken says. “But, they have been my best clients because without fail, they have all made me a better veterinarian.”

How You Go About It

“The key is to establish credibility and gain trust,” Dr. Hilton says. “The client has to trust the veterinarian to do what is right for the client’s business. That trust comes from time spent working together and having some successes along the way. If I can solve a client’s calf scours problem then I have earned some credibility. Once I have credibility I get asked more questions about the beef business. I want to be the ‘go to’ person in their beef business. Half the time they have a question, I won’t know the answer, but that’s not a deal breaker. I know the people who can help answer that question. They are already on my ‘team’ because I have asked them questions before.”

Likewise, Dr. Engelken says, “It takes time and trust. We work for a client base that tends to be very conservative and risk averse. They want to feel comfortable that you can treat a sick animal and have it get better, that you can handle a dystocia and end up with a live cow and calf, that you have accurate palpation skills, and understand the importance of reproduction to their bottom line.”

 A common characteristic Dr. Maas notes in the practitioners involved in these kinds of relationships is their passion for sharing information.

 “These veterinarians are educators. They love what they’re doing. They love to educate, to teach, and they don’t feel like they have to do everything themselves. They’re happy to share their knowledge and don’t feel like they have secrets to guard,” Dr. Maas says.

If you’re looking for a more specific game plan, Dr. Hilton suggests, “Go to the client who asks you the most questions. Tell him or her you want to make a deal. You want to do more production medicine and want their herd to serve as the pilot. You’ll charge less because you’re learning, too.”

Then, Dr. Hilton says, “Let’s look at the goals for your herd, identify something I can help you with in the next year, a problem I can solve or help prevent, something that will make your life easier.”

For example, maybe the client says winter feed costs have gotten out of control. Even if you don’t feel like you have the nutritional expertise to solve the problem, Dr. Hilton stresses you know folks who can.

At the same time, don’t sell yourself short.

“Some of our veterinarians have tremendous expertise in nutrition. Others are very savvy on added value marketing programs,” Dr. Daly says. “They might not realize they have enough expertise to provide advice to clients, but they probably do.”

Incidentally, Dr. Daly sees genomics as an area where there is currently a void of understanding that veterinarians could help clients bridge.

Getting Paid For What You Know

None of this works, of course, unless veterinarians are paid enough to make production medicine worth their while. As alluded to earlier, some folks feel uncomfortable charging for information they’ve likely given away in the past.

Plus, it can be difficult for producers to assign value to information when it seems to be everywhere for free.

"You can get information from your neighbor, from the Internet, from university extensions,” Daly says. “I try to impart to producers that local, farm-specific information is more valuable than information they can get anywhere else.”

One step Dr. Daly sees some veterinarians making in such a transition is charging clients by the hour rather than for providing a particular service.

That’s how Dr. Hilton has long charged clients.

Rather than be tempted to try selling a client another product or service, by charging hourly, Dr. Hilton says you can try to talk them out of buying things to save money and add value.

“You do not have to sell something to someone to make a living,” Dr. Hilton says. “You do not have to do a procedure on an animal. Our most valuable asset is our brain. You have to charge for your knowledge.”

“We could argue about the definition of consulting as it applies to a cow-calf practice,” Dr. Engelken says. “I guess maybe the simplest definition is getting paid for what you know. That payment could take several forms such as a per head fee, a retainer, an hourly consulting fee, or even enjoying a high degree of client loyalty because you offer a higher level of service than other veterinarians in the area.”

Of course, there are few buyers for anything that dampens rather than grows the bottom line.

Veterinarians Must Bring Value

“In consulting, the goal is to always give the client value for the money they spend. If I charge someone $1,000 for consulting and it saves him $5,000, that is a win-win. If I charge $6,000 for that same result it is win-lose and the client will never spend money with me on consulting again,” Dr. Hilton says.

“The way that we marketed our program is that we explained to the owners that, really, this program was free,” Dr. Hilton says. “If, for example, the program was going to cost $8 per cow, per year, to be on the records and consultation part of our program, we would show them how they could make at least $8 more per cow in increased income. Then we would also show them how we would be able to save them at least $8 per cow in reduced expenses. We guaranteed the program would be cost effective to the owners IF they gave us their short and long term goals AND they implemented the changes we suggested.”

The program Dr. Hilton is referring to is the Total Beef Herd Health Program (TBHHP). He began it in 1988 when he started Midwest Beef Cattle Consultants. The program cornerstones are herd health, records, fertility, environment, marketing, genetics and nutrition.

“We examine the herd from a total herd view and make recommendations based on financial return,” Dr. Hilton explains. “Common concerns of herds I have visited in the past include: inadequate herd fertility, cows that do not fit their environment, lack of hybrid vigor, pasture conditions that are not optimum for production, excessive calf morbidity, etc. Although we see recurring trends in herds, each herd is quite unique in its strengths and weaknesses.”

Back to the beginning of the program.

“After looking at financial figures, many times the first year on the program produced significantly more than twice the client’s investment. We had herds that increased revenue up to eight times what they paid us for one year of the program, so that was very exciting,” Dr. Hilton says. “If you want to be a hero with your clients, in addition to helping them decrease their cost of production and increase the value of their product, have them do both with less hours of work devoted to the enterprise. Tell me who else has these goals for the producer? The answer is no one.”

Dr. Hilton cites other examples of veterinarians bringing added value to clients:

  • Vets host an annual calving clinic to remind clients about when to call for assistance (progress every hour), what supplies they should have on hand, and provide a review of techniques on how to assist in delivery.
  • Clinics help clients precondition calves with a uniform health program, then sort them into uniform load lots so client calves command higher prices.
  • Vets assist cow-calf owners in formulating rations, utilizing corn and soybean coproducts to stretch winter feed resources and save significant money on winter cow feeding.

One vet organized some of his very best client herds to sell bred replacement females. After pregnancy check, the secretary at the clinic records all data in a spreadsheet and provides this to producers looking for heifers. The spreadsheet gets updated throughout the fall and winter as heifers are sold and others are added to the for sale list.

“Recently, a beef producer had some calves for sale. Last year he received a horrible price, given the quality of the calves. He asked another producer where he sold his calves. That producer told him, ‘My vet lined up a couple of potential buyers for me and I got top dollar.’”

The producer who received the lousy price contacted the veterinarian. The veterinarian stopped by to see the calves and called two buyers. The producer received a price he felt his calves merited.

“The producer then called the veterinarian about his calf scours problem. Long story, short, the veterinarian proposed a very good solution to the scours problem, started asking about nutrition and will be formulating all of that producer’s rations now,” Dr. Hilton explains. “The same producer also wants to enroll his herd in the veterinarian’s records program. The veterinarian has become the ‘go to’ person for that producer’s beef herd.”

Dr. Hilton asks students the most effective way to have success with clients in the future. He tells them it’s having success with clients today.

“You have to provide value,” Dr. Hilton says. “It’s got to make money for them. I want to be an asset to the client, not a liability.”

Moreover, Dr. Hilton emphasizes clients must drive.

“Clients have to tell you what they want. You can’t tell them what to do,” Dr. Hilton says. He learned that lesson the hard way early in his career. “I give them recommendations, the owner makes the decision. If they want to keep a late-calving cow, for instance, that’s their business.”

“You really have to pick and choose your opportunities to start production medicine programming,” Dr. Engelken says. “Rarely do you institute this massive consulting type relationship at one time; at least that has not been my experience. It seems like I have been more successful in starting with an obvious weak point such as heifer development or an animal health issue and then working in the rest of the program over a number of years. Some herds are more willing to adopt this type of relationship faster than others, but it takes time to build that trust account with the client.”

Though none of this is necessarily quick or easy, Dr. Hilton emphasizes that’s it’s not complicated.

“Let people know what you can do. Do it. Follow up. Keep asking clients what their goals are and then help them reach them,” Dr. Hilton says. “Veterinarians need to be more proactive in asking clients what they need from them. Clients need to demand more from their veterinarians than fixing problems.”

 

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