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Are you cowed out?

Many ranchers, when they hit middle age, reach a point where they can hardly stand to look after cattle another day. I've heard it referred to as being “cowed out.”

Some friends told me about a ranching couple in Montana who sometimes talked about divorce when they had a fight. They don't anymore, however, because neither is willing to take the cows!

Suddenly being sick of your job or business is a common symptom among midlife men, prompting some to quit their jobs, sell the ranch or otherwise “kick over the traces.” Once in their 60s and looking back, these folks sometimes realize they acted too hastily; all they really needed was some time away — a sabbatical. A few weeks might have done the trick, but a few months would have been better.

I am indispensible

The problem, though, is most men don't think their businesses can run without them.

If you are your business — for example, an actor, professional speaker or maybe a concert pianist — you may not be able to have someone else run it for you. But if you are producing things, such as a ranching business does, you can take a break, and you may find it very worthwhile.

Business owners who get away for a significant period often come back with renewed energy and a new perspective. It allows them to run their operations with more creativity and less physical work.

Less physical work is critical because we men begin to lose stamina, libido and energy in our late 40s and early 50s. There's nothing wrong with this — it's a normal part of life. The mistake is in pretending it isn't happening and trying to carry on as usual. It's much better to adapt to the changes.

When Blake Holtman, who owns Shipwheel Feeders at Taber, Alberta, hit his early 50s, he began to lose energy. He keeps 6,000 cattle on feed and typically runs 700 yearlings on grass in the summer. His workdays used to start at 6 a.m., and end sometime in the evening. He's worked six and seven days/week for years, but he was getting so he could hardly keep up.

He wanted a sabbatical, but didn't see how he could get away from his business. Then he noticed how his friends — who owned several auction markets — would buy a business, hire someone to run it and move on. He reasoned that if they could have other people run their businesses, he could, too.

He realized he already had an employee who could probably manage his business well. He talked to her about it, put her in charge and prepared for his getaway.

Blake and his partner Bev bought a used motor home, had it wired for telephone and Internet hook-up and headed for Mexico.

If a telephone line was available where they stopped, he'd link in his laptop and keep track of the cattle market, buy and sell animals and hedge his dollars over the Internet, plus stay in touch with his office by phone or e-mail. If no landline was available, he used a digital cell phone, which connected to his computer to access the Internet. In areas where his cell phone didn't work, he found a payphone to check in with his manager.

They spent three months in Mexico the first winter, and have returned every year since. Blake says he's far more relaxed and easy-going than he used to be, and he doesn't get so uptight about little things. He still doesn't have as much physical energy as he used to, so he's willing to let the younger people run the business.

He says his manager doesn't always do things the way he would, but it hasn't affected his business. In fact, it's running as well as when he was working six to seven days/week.

Pay now or later?

Do you want to take a sabbatical but feel you can't? Chances are one in five you'll have to. After all, statistics show 20% of North American men have heart attacks. That will definitely take you out of commission for a while.

Whether you actually have a heart attack or not, it's simply wise planning to prepare your business to run without you. Once the plan is made, just put it in motion, take a sabbatical, and get rid of that “cowed out” feeling!

Edmonton-based Noel McNaughton lectures to groups on “Farming/Ranching at Midlife - Strategies for a Successful Second Age.” For more information, call 780/432-5492; e-mail [email protected]; or visit www.midlife-men.com.

Origin matters little to shoppers

Only 2-3% of shoppers say they look for country of origin when buying meat, produce or seafood, according to “U.S. Grocery Shopper Trends, 2005,” the latest annual trends survey by the Food Marketing Institute.

The survey found the top three features consumers consider important in a primary supermarket are high-quality produce and meats, and a clean, neat store. On average, consumers visit the grocery store 2.2 times/week and spend an average of $92.50/week/household.

In addition, the survey found supermarkets are still by far consumers' No. 1 choice for buying groceries, followed by super centers, conventional discount stores and warehouse club stores.

BSE testing would break even

The loss of export markets alone due to BSE cost the U.S. beef industry $3.2 billion to $4.7 billion in 2004, a Kansas State University (KSU) study commissioned by the Kansas Department of Agriculture reports. The study, released in late April and entitled “The Economic Impact of BSE on the U.S. Beef Industry,” also concludes voluntary testing of cattle for BSE, which USDA has staunchly disallowed, could have been a paying proposition for the industry.

See the full 68-page report at: www.agmanager.info/livestock/marketing/bulletins_2/industry/default.asp.

The study conducted by KSU economists James Mintert, Sean Fox and Ted Schroeder, looked at regulator costs, losses and consumer reactions after the Dec. 23, 2003, discovery of BSE in a lone Washington state dairy cow. The researchers say it would have cost $640 million to test all cattle harvested in the U.S. in 2004, disregarding the costs of equipping processing plants for the testing.

But the recovery of just 25% of the Pacific Rim export markets by testing 75% of U.S. cattle harvested would have been a breakeven proposition economically. And if the U.S. could regain half those markets by testing just 25% of its cattle harvest, the U.S. beef industry would have been up by almost $750 million, making an additional $22.84/head.

Alfalfa management after spring frost

Ranchers across a large part of the Intermountain and High Plains regions report alfalfa stands nipped by mid-spring frost. Alfalfa damage due to freezing temps isn't unusual but the mercury fell to record-low levels in some areas.

One rancher, who found the tops of most stems laid over, wondered if the plants would recover or if they needed to regrow from the crowns? The short answer is alfalfa's ability to recover depends on whether the plant terminals were killed.

Oklahoma State University (OSU) researchers say if plant terminals are killed by frost, it's best to cut or flash-graze the foliage already present to encourage new growth from crowns for later harvest. If most terminal buds look green and alive after 2-3 days, post-frost cutting isn't recommended. There may be some leaf loss, but stem regrowth will begin in about a week as warmer weather returns.

If nearly all terminal buds are killed, OSU data show regrowth begins from leaf buds and/or crown buds, depending on amount of foliar damage. If freezing kills most stems, regrowth will be from crown buds — usually 1-2 weeks later.

If only some top terminals are damaged, damaged stems still alive tend to inhibit growth of crown buds. As a result, recovery time before alfalfa would start growing again could be 2-3 weeks. Producers who cut or flash-graze damaged alfalfa in these situations encourage rapid crown bud growth and recovery.

One problem is there's likely not enough forage to pay for harvesting, though the hay quality and the recovery time resulting from removing the freeze-damaged forage would help offset some of the expense of taking a “short” harvest. It's unlikely frost during this time would have any drastic effect on stand life, assuming a vigorous stand with proper fertilization, good drainage, an adapted variety and proper fall management.

Any time forage is removed by grazing, take precautions to prevent cattle bloating.

For more on season-long alfalfa management, visit the OSU Web site at: www.alfalfa.okstate.edu/pub/harv943.htm#contents, or BEEF magazine's Web site for cow-calf production and management info — www.beefcowcalf.com.
Clint Peck

A small, hardy fly called a biting midge is suspected of helping spread vesicular stomatitis virus (VSV), which infects cattle, horses and sheep. The virus causes significant economic losses from sickness, quarantines and subsequent import/export restrictions.

Agricultural Research Service (ARS) microbiologist, Barbara Drolet, and her colleagues at the ARS Arthropod-Borne Animal Disease Research Laboratory in Laramie, WY, found VSV is capable of surviving and spreading through the blood-sucking midge, Culicoides sonorensis.

Without killing the midge, scientists had to show the virus ingested in a blood meal could survive in the insect's midgut, replicate and escape to infect other organs.

An artificial feeding system was used to feed the midges a viral meal and track the infections over time. They were able to prove VSV infects the midge's salivary glands and eggs and is shed in droppings.

After analyzing more than 1,600 whole-body sections of 144 insects, Drolet found three distinct pathways of VSV infection in the midges: digestive, circulatory and neural. These include horizontal transmission through biting, vertical transmission from adult midges to their offspring, and mechanical transmission where the virus excreted by infected midges can be passed to uninfected insects.
USDA-ARS news release

Biomedical research shows increasing the concentration of omega-3 unsaturated fatty acids in the human diet can enhance health. Flax seed is known to contain a very high level of these omega-3 fatty acids.

North Dakota State University scientists experimented to see if supplementing the finishing diet of cattle with flax could increase omega-3 content in beef. A total of 128 yearling heifers were allotted to four treatments: 1) control (no flax), 2) whole flax, 3) rolled flax, and 4) ground flax.

Flax was supplemented at 8% of the diet. At harvest, loin muscle sections were aged for 14 days. Following aging, samples were analyzed for fatty acid content of the phospholipids and neutral lipids.

Overall, flax supplementation resulted in a highly significant increase (P<0.0001) in phospholipid content of total omega-3 fatty acids. Processing flax (rolling or grinding) significantly increased phospholipid content of omega-3 fatty acids over whole flax, and grinding further increased them over rolling. Similar increases in omega-3 fatty acid content were observed in the neutral lipids.

The authors note these data suggest a portion of unsaturated fatty acids, including omega-3 fatty acids, escape biohydrogenation in the rumen and are absorbed in the small intestine. The results clearly indicate feeding flax can increase the omega-3 fatty acid concentration in fresh beef (Maddock et al. 2005. Midwestern Section ASAS. Abstract 110).
Michigan State University Spring 2005 Beef Cattle Research Update

U.S. beef back in Taiwan

The U.S. exported its first shipment of boneless beef to Taiwan last month, the first shipment to Taiwan in 18 months. Under new rules, the U.S. can export boneless beef from cattle under 30 months of age. The U.S. exported $56 million in boneless beef to Taiwan in 2003 before the market closed due to discovery of BSE in Washington state in late December of that year.

The family feud

What often happens in long-running disputes is that over time the origin of the disagreement is forgotten. A good example of this is the beef industry's “family feud” over the national beef checkoff, which is currently before the U.S. Supreme Court. The nine Justices are weighing an appeal of a lower court ruling that the checkoff violates producers' First Amendment rights to free speech and association.

While the future of the checkoff is now cloaked in the legitimacy of a constitutional question, most folks have forgotten the whole mess began when the Livestock Marketing Association (LMA) was omitted from the Strategic Alliance Study conducted by the National Cattlemen's Association (NCA) in 1992.

This study, in which no checkoff dollars were used, was designed to learn what efficiencies a more streamlined beef production and marketing system could achieve. It ended up becoming a prototype for today's 40 or so value-based, beef marketing alliances.

In such value-based alliances, the various segments communicate among each other and coordinate efforts in order to deliver a more valuable end product, thereby generating more revenue for each segment in the chain. These value-based alliances, which generally involve some form of retained ownership, often bypass the auction market segment.

LMA's discomfort with the industry's direction finally boiled over in January 1998. That's when National Cattlemen's Beef Association (NCBA) President Clark Willingham in a BEEF magazine interview appeared to take a swipe at auction markets' role in a new value-based system — something he later said was a misinterpretation.

LMA responded by immediately calling for a referendum on the checkoff. In the end, it turned out LMA didn't have enough valid signatures of 10% of beef producers required by law for the USDA Secretary to call a referendum.

LMA then moved to the courts, suing USDA in District Court to force a referendum. When the U.S. Supreme Court in U.S. v. United Foods in August 2001 ruled the mushroom checkoff unconstitutional under the First Amendment, LMA amended its case to cite those principles. District Judge Charles Kornmann subsequently ruled the beef checkoff unconstitutional.

The 8th Circuit Court of Appeals later affirmed Kornmann's verdict, followed by a refusal by the full 8th Circuit to rehear the case. In February 2004, the U.S. Justice Department asked the Supreme Court to review the decision, which the Court agreed to last May. Oral arguments were presented last fall and a decision is expected any time.

Changes are coming

As Walt Barnhart writes in his page 34 article, “Go-Time For The Checkoff,” regardless of how the question is decided, changes to the program are likely. Even if the checkoff is upheld, the industry can't sustain this fierce infighting.

The sad thing is the checkoff is very popular among producers. Surveys conducted since its inception consistently indicate support levels of 70% or better.

Research also shows the more producers know and understand about the checkoff, the more likely they are to support it. One of the checkoff program's most nettlesome problems, however, is many producers are ignorant of the checkoff's workings and don't care to learn. That leaves some fertile ground for all kinds of myths and mischief, which anti-NCBA groups gleefully propagate.

One of the prominent myths is that the policy/dues side of the NCBA controls checkoff dollars. The myth is that if the checkoff dies, so does NCBA (the dues division), which is untrue since membership dues support the dues division — not checkoff funds.

An umbrella organization

Many folks also don't realize “NCBA” is the umbrella organization. Under that umbrella are the dues division (whose members devise policy and whose staff lobbies to get that policy passed) and the checkoff division (which helps decide promotion and research direction and spending). The law forbids the use of checkoff dollars for lobbying.

This arrangement was devised when NCA and the National Live Stock and Meat Board merged in 1996. The idea was to bring the two organizations closer together for a more unified focus, as well as better coordination of programs and improved cost efficiencies.

That the plan worked well is attested to by the resurgence of beef's position in consumers' minds and on the dinner plate. But, having undergone years of internal warfare, perhaps it's time for the industry to do with a little less efficiency — if it will move the industry forward by resolving some internal conflicts. Perhaps it's time for the dues/policy division to distance itself from the checkoff side of the NCBA apparatus.

Perhaps it's time for the state beef councils — organizations that function within the states where the dollars are collected — to take on a larger role. This could remove some of the impersonality of a more nationally focused program and provide more home-state accountability, It would also buffer a major factor anti-NCBA forces like to exploit.

It's likely some efficiency would be lost with the revamping, but the industry would be farther ahead. A unified — perhaps slightly more inefficient — industry charging ahead with one message could likely outperform a disunited, but more efficient, industry torn by internal strife.

ILC fellowships available

The International Stockmen's Foundation is offering 25 student travel fellowships to the 2006 International Livestock Congress (ILC), March 1-2, in Houston, TX. Nov. 1 is the application deadline.

ILC focuses on major international issues impacting the beef industry and attracts key thought leaders worldwide to the meeting held during the Houston Livestock Show and Rodeo. The fellowships include airfare, ground transportation, hotel and scheduled meals during the ILC, and are aimed at students planning a beef industry career.

To learn more, call 817/443-0686, or visit www.livestockcongress.com and click on “Student Fellowships.”

Jilted & Jousting

When the European Union (EU) expanded from 15 countries to 25 in mid 2004, it brought more problems than expected. One was Russia's disillusionment with losing power over some of its former satellites, Poland being one.

For years, Russia sought a single veterinary certificate from the EU that would work for all 15 countries. Since EU countries share the same health and food safety standards, having separate certificates for the United Kingdom, Denmark and Germany would be similar to having a separate certificate for Utah, Idaho and Texas.

When the EU was making preparations for the new incoming member states, including eight former Soviet republics, the Russian government began demanding the EU agree to a single certificate for all EU countries wishing to export to Russia.

In exchange, Russia was willing to incorporate “regionalization” if a disease outbreak in the EU ever occurred. Russia would agree to ban meat imports from just the affected country, or countries, rather than ban all EU imports, possibly risking up to EUR1.2 billion ($1.55 billion) in annual livestock and meat trade.

When the EU still had not come to an agreement on the single certificate by the May 1, 2004, deadline, the same date the 10 new member states joined the EU, Russia instituted a temporary ban on all imports of European meat starting June 1.

That “suspension,” as the European industry called it, was enough to get the Europeans back to the table to hammer out the last details of the certificate that went into effect Jan. 1, 2005.

Playing hardball

The new single certificate may be in day-to-day use now, but more problems came along with the new agreement. Among them is Russia's refusal to acknowledge the health and safety standards of the new countries despite EU inspection and approval as part of membership.

Russia is playing hardball, especially with Poland. It refuses to give blanket approval to meat imports from new member states until a Russian veterinarian signs off on all meat processing and export establishments that want to do business with them.

EU health and consumer protection commissioner Markos Kyprianou told agriculture ministers from all 25 countries in February that Russia's process to approve health and food safety standards in the new member states was non-transparent, slow and expensive since Russia charges the costs of the inspection to each member state.

Though he's told Russia the meat facilities have been approved for intra-EU trade, “Russia has continued to insist upon the inspections and refused to commit to speeding up the process,” Kyprianou says.

But the Russians aren't making the single-certificate process easy for the “old” member states, either.

According to Jean Luc Meriaux, European Livestock and Meat Trading Union secretary general in Brussels, the Russians are requiring a paper trail that shows every country a steer, pig or chicken has passed through or lived in. That's fair enough, he says, because all meat shipments are labeled as part of the EU's extensive traceability program. The Russians, however, are insisting on a pre-export certificate that, in a sense, is a step back for the European meat industry.

“Since the single (European) market, there are no more certificates when we deliver beef or pork from one member state to the other because all member states have to comply with the same rules,” Meriaux says. “If we want to transport a beef truck or pork truck to Russia, and we want to go through different member states, then we need a certificate. It's a burden without further improvement of traceability.”

Most problems with the new system revolve around the pre-export certificate, he says, with many complications arising due to language barriers. The Russians say they want a stamp but won't specify if it's a transport stamp or a veterinary stamp.

Beyond that, every EU country that exports to Russia must have a Russian veterinarian make spot checks on facilities or sign off on certificates. All this boosts costs and is just a result of Russian mistrust of the EU system, Meriaux says.

The European Commission says it's doing its best to iron out details on the new system with the Russians. Until that happens (perhaps years), European producers who want to be part of the lucrative Russian export market must play the Russian way.

Meghan Sapp is a U.S. journalist based in Brussels, Belgium, and writes about European Union agriculture.

Best Of Times, Worst Of Times

A couple of months back, Jim McAdams perhaps best summed up the current state of the U.S. beef industry. “We are currently in a defining time in the cattle business. Never have we had it so good, yet been so mad about it,” said the Adkins, TX, cattleman and president of the National Cattlemen's Beef Association (NCBA).

That characterization aptly describes the paradoxical times in which we live. On one hand, the U.S. beef industry is riding a wave of unprecedented prosperity, with prices for all classes of cattle, as well as beef demand, swelling beyond anything folks ever thought possible or sustainable. On the other hand, the industry is being torn by two widely divergent views of industry vision — one championing a value-based production and marketing system operating on free-market principles and robust foreign trade; the other espousing a traditional, commodity-based marketing system with a protectionist approach.

In the first quarter of 2005, the U.S. beef industry recorded its best first quarter of cattle prices ever. Despite beef supplies being up 2%, cattle prices grew 8%. In addition, marketing margins have narrowed, particularly the retail margin, enhancing farm-level cattle prices so far this year. What's more, beef demand has grown by 25% since 1989.

Still, like a Wagnerian opera, two competing forces are hurtling toward a showdown in the hearts and minds of producers, and in the courts and Congress — NCBA on one side, and the Livestock Marketing Association and R-CALF on the other.

There's plenty on the table

  • In the U.S. Supreme Court, the industry awaits a decision on the constitutionality of the national beef checkoff, which likely will come this month (see “Go Time For The Checkoff,” page 34). Meanwhile, a District Court Judge in Montana weighs arguments in late July on reopening of the U.S. border to Canadian live cattle.

  • In the 109th Congress, federal lawmakers are debating such issues as mandatory vs. voluntary country-of-origin labeling, as well as the seemingly perennial issue of who can — and who can't — own or control livestock prior to slaughter.

  • At the diplomatic level, the U.S. is struggling to recover the $4.8-billion in beef export markets it lost when BSE was discovered in a Washington state dairy cow in December 2003. Thus far, an estimated $1.9 billion of those lost markets have been recovered, but the big prize — the markets of the Pacific Rim — has proven more elusive.

Of the 112 countries that bought U.S. beef in 2003, 57 countries are currently open, reports NCBA. These markets represent 42% of the 2003 quantity, and 37% of the 2003 value.

Of the 112 countries, 23 have not purchased U.S. beef products but also don't have a stated ban. These markets represent 0.2% of the 2003 quantity and value. Of the 32 markets that remain closed, Japan and Korea represent $2.3 billion or 80% of the export business that still needs to be recovered, NCBA reports.

Japan moves closer

Japan moved a step closer to resuming beef trade with the U.S. in early May, when Japan's independent Food Safety Commission recommended the government drop its 3½-year-old requirement for 100% testing of all cattle at harvest for BSE. The proposal would exclude cattle younger than 21 months from testing.

As a result of the commission's proposal, Japan's Ministry of Agriculture, Forestry and Fisheries, and the Ministry of Health, Labor and Welfare, were to begin amending the blanket-testing ordinances, effective possibly in August, the Kyodo News reports. In addition, Japan still must deliberate the terms for removing the beef import ban.

  • Then, there's the specter of rising input costs on the farm and ranch. The cost of a gallon of regular unleaded fuel was $2.24 on May 2, a 42¢ jump from the same week in 2004. The price of diesel fuel hasn't increased as much but, with fuel being such a basic component in the cost of making and transporting virtually everything, costs of farm inputs have taken on a steeper incline, reflected in everything from equipment to commercial fertilizers.

In fact, 64% of cow-calf producer respondents to an exclusive survey of BEEF magazine readers, conducted in early May, indicated they anticipated their operating expenses to increase at least 5% in 2005. Of that 64%, 73% are expecting their input costs for fuel, machinery, etc., to increase by more than 10% in 2005. (See pie charts included with this story).

On a recent editorial trip into North Dakota, BEEF learned cow-calf producers in-tune with their cost-return situations estimated this year's rising input costs — ranging from fuel, fertilizer, seed and ag chemicals to vet supplies, machinery parts and outside services — will likely shave $20/head from their profits by the time they market calves this fall. For a 500-head outfit, that's a whopping $10,000.

Timing was fortunate

“It's a good thing these challenges have coincided with the peak of a cattle cycle,” says Harlan Hughes, North Dakota State University emeritus professor of economics.

And healthy it is. In fact, Chris Hurt, Purdue University Extension marketing specialist, says finished steer and calf prices set record first-quarter highs, as Nebraska-finished steers averaged $89 for the quarter — 8% higher than the same period in 2004. Meanwhile, average steer calf prices eclipsed $1.25/lb., while feeder steers cleared $1/lb. — both first-quarter records.

Hurt says the cattle-price strength is a result of both reduced supplies and strong demand. A 6% reduction in female harvest due to herd rebuilding was responsible for a 2% drop in first-quarter beef supplies.

“More females in the breeding herd mean U.S. beef supplies will grow in 2006 and later. But, for now, it means reduced domestic beef availability,” Hurt says.

He estimates the number of cattle coming from feedlots to rise 2% for the rest of 2005, with a decline in cow harvest as much as 7%. Thus, total slaughter will be only slightly higher, but heavier marketing weights will mean a 2% larger beef supply.

Hurt says these numbers assume a continued U.S. lockout of Canadian cattle 30 months of age and younger. If the border does open to live cattle, U.S. beef supplies would swell to 6%, he says.

Demand-wise, with 2% more beef in the first quarter, fed-cattle prices were up 8%, Hurt says, which indicates continued strength in beef demand at retail. And, a narrowing of marketing margins, particularly the retail margin, has enhanced farm-level cattle prices so far this year.

“This may be adding in the range of $4-$5/live cwt. and is helping to maintain farm prices above year-ago levels,” Hurt says. “The possibility of restoring beef exports to South Korea and Japan seems to be growing and may occur within a few months. Opening the Pacific Rim markets without opening the Canadian border to live animals could add an extra $3-$5/cwt. to already strong prices,” he says.

Hurt anticipates seasonal fed-cattle price declines in spring and summer. Current finished prices in the lower $90s are likely near yearly highs, he says, with early summer prices expected in the high $80s and late summer prices in the low $80s.

Look for prices to recover to the mid-to-high $80s in the fourth quarter, Hurt says, with calf prices retaining strength. Oklahoma City steer calves (500-550 lbs.) averaged a record $1.29/lb. in the first quarter.

“Some moderation in these prices is anticipated, with fall prices expected to be in the $1.10 to $1.20 range,” Hurt says.

“When we look back, I think some of the best years we'll see in the cattle business will have occurred in 2004 and 2005,” Hurt says. “And that could extend into 2006. The answer depends on what happens on the trade front in regard to Canada and Asia.”

For the cow-calf producer, Hurt characterizes the 2005 profit opportunities as “golden.” Given the sky-high feeder prices, cattle feeders need to take extra caution in protecting their downside risk, he adds.

“Overall, I see another year of very strong prices, probably record prices,” Hurt says.

Now, if internal industry harmony was just as rosy as the market prognosis, the industry would really have something to look forward to.

Eco-terrorist gets eight years

William Cottrell, a 24-year-old doctoral student in physics, was sentenced to eight years and ordered to pay $3.5 million for his part in a 2003 arson and vandalism spree. The California Institute of Technology student was among a trio of eco-terrorists who struck four Southern California dealerships and a few homes causing nearly $5 million in property damage. His accomplices are thought to have fled the country.