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Articles from 2007 In June


The New Flavor Of The Farm Bill

In years past, most of agriculture was on the same page. Packers, processors, feedlots, cow-calf producers, corn growers, and even the competing protein products, were mostly on the same side of the fence when it came to the farm bill. In fact, there was almost an unofficial alliance among all these parties to cooperate in acquiring a workable farm bill, with the emphasis on reducing the impact of non-ag interests.

That's surely not the case in this year's farm bill, as the various segments within the beef industry, as well as the competing proteins, and farmers, are finding themselves in decidedly different "camps" when it comes to the upcoming farm bill.

With the various ag groups in competition this time around, non-ag interest groups see a tremendous opportunity to influence the outcome of the new farm bill. The bottom line is there are more special-interest groups involved in the process, and vying for farm-bill favors, than ever before.

A few of the most prominent items are a national livestock ID program, country-of-origin labeling (COOL), competition issues, animal welfare and ethanol.

The American Meat Institute (AMI) has been very active in confronting the populist claims that have gained support within the meat industry. Last week, AMI issued the requirements that its packer members plan to institute to market cattle in the fall of 2008 when mandatory COOL is scheduled for implementation. (See "AMI, FMI Make Waves With COOL Preparations" in last week's issue of BEEF Cow-Calf Weekly.) The supporters of mandatory COOL are screaming bloody murder over these announced requirements.

What AMI is doing is moving quickly to respond to the flood of populist agenda items that, while they aren't new, are expected to get more attention than they did in the last farm bill due to the change in political power that's since occurred within the Washington Beltway. AMI has begun what appears to be a well-thought campaign to address the packer ownership and marketing arrangement restriction proposals, comparing the beef industry to the wine industry (not letting winemakers grow grapes, for instance), etc.

The bottom line is that U.S. agriculture seems to be at a major disadvantage as it focuses on all the particulars of various initiatives and their short-term impacts, while the other interests are more focused on long-term agendas.

Can You Plan Around The Oil/Ethanol Bubbles?

Everyone realizes the recent surge in oil prices has been largely speculation-based, and ethanol even more so. What could be more speculative than a product that can't compete without huge government subsidies, and actually delivers little in terms of what it promises -- environmental benefits and reducing America's dependence on foreign oil?

It becomes even more difficult to assess because oil/energy prices are likely to remain hugely volatile; experts can make a very good case for an oil spiral either up or down.

Renewable fuels will play a huge role in the future. Yet, we have executives from the nation's largest ethanol seller saying the only certainty is that ethanol isn't the answer, and they're investing millions in what they call the second generation of renewable energy. At the same time, ethanol has created the largest financial windfall for corn growers in history, with hundreds of plants under construction, and ever-increasing production mandates coming out of the government.

In the short term, planning is simple. Fuel/energy prices will be high and likely to remain very volatile. Ethanol will keep corn prices artificially high, and having access to the byproducts will be essential to helping mitigate part of the losses that the beef industry will incur as a result of the current political environment.

However, it becomes trickier from a longer-term perspective. If the experts and scientists are correct, how long will the false ethanol environment last -- five years, 10 years, 20 years? Perhaps there's no good answer at this time.

It means counting on higher energy costs, and higher grain costs in the short term, and it means preparing for the countless related effects that this will trigger. But it also means that whatever strategies are adopted to take advantage of the new opportunities, or to overcome new challenges, can't be seen as fundamental structural changes. Instead, it means that, as producers, this is an area that will have to remain top of mind in every planning session moving forward. Be ready to adjust to new environments.

It All Began With An ID Tag

We began with the great unknown and a question -- what really is our end-product in this process we call ranching? Our family views raising commercial cattle as a handiwork but we had no idea of the feedlot growth, muscling or marbling that our genetics produced. To avail ourselves of new technologies that could help shape our herd, we first needed to know what our herd produced. So, in 1994, we made the plunge into retained ownership with the heavy end of our weaned steers.

The first harvest was sobering. The steers went 26% USDA Choice. "Sell the herd!" we thought. Could it be much worse for where we wanted to be? Could it be changed? How long would it take? At the least, we now knew the work we had before us.

To meet our objectives, we realized we needed to deal with our herd on an individual-animal basis. In addition to individual ID for each animal, we made use of EPDs for bull purchases and began tracking individual herd animal strengths and weaknesses for individualized artificial-insemination mating; information gleaned from our own ultrasounds of potential bull purchases, replacement heifers and feedlot cattle; and DNA parentage identifying herd outliers to further utilize or remove sires from the herd. Because of tracking we could see various specific genetic, processing plant, environmental and nutritional impacts that occurred along the way.

Have we been successful? At least by what our definition was, we have been. Using only the heavy end of weaned steers, which have been handled the most consistently over the decade, the graph below displays the progress possible.














In that same period, we were able to increase ribeye size/cwt., and carcass weight. We're also now delivering a product of 50% upper 2/3 Choice and above. In addition, our average harvest has been at a younger age and we have moderated our cow size.

Thirteen years after we began our improvement program, most of the packers are better set up to return data to producers. And the advent of various source-verification programs makes it possible to receive data without having to retain ownership of calves. Our quest (and yours) is much easier today.

To those individuals who have gone before us and prepared the way for us to be able to change a herd, those who shared their vision by finding ways to improve beef, those who dedicated their lives to the research that proved out those ways, and those who supported the research -- we thank you. None of what we have done would have been possible without you. And just think it all starts with an ear tag!

Editor's note: Art and Merry Brownlee's JHL Ranch was among nominees for the Beef Improvement Federation's (BIF) 2007 Commercial Producer Award. You can read more about JHL Ranch and other BIF nominees at:
www.bifconference.com/bif2007/Awardwinners.html or go to: beef-mag.com/mag/beef_dna/index.html.
-- Art Brownlee (www.jhlbeef.com)

Look For Increased Loss Of Mid-Sized Feedlots

Expect major and accelerated consolidation in the U.S. cattle-feeding sector in the next 5-10 years, says economist and consultant Bill Helming of Olathe, KS. Most at risk, he says, are middle-sized feedyards (5,000- to 25,000-head capacity), which will find it difficult to compete for capital and against the efficiencies of larger feedyards (50,000 to 100,000 head) in the wake of rising input costs driven by the ethanol-production surge and over-capacity in the feeding sector.

Cattle-Fax estimates that in 2005, the largest 2% of feedlot operators in the U.S. controlled 85% of the market. Helming estimates the largest 1% could control 75% of the market within the next 10 years due to accelerating consolidation.

The livestock industry has always had to contend with surges in corn price, but it was always weather-related issues that temporarily drove grain prices higher, Helming says. This time, the grain-price situation is demand-driven by the ethanol juggernaut and there will be no reprieve in the short term. The result, Helming tells BEEF, is the consolidation will largely be at the expense of mid-sized (5,000- to 25,000-head capacity) feedyards forced to merge, quit or sell out in the face of intense competition for cattle, capital and efficiency.

Helming says he's facilitated -- in a business consulting and financial advisory capacity -- the sale, purchase or merger of more than 50 large feedyards in the past 33 years. To underscore his contention regarding consolidation in the feeding industry, he reports 10 different operators in just the first three weeks of June sought his advice on selling their feeding operations. "That's never happened before," he says.

Helming says the cattle-feeding sector is currently running an annual capacity utilization rate of 70-75%. With a national cattle inventory that Helming expects to remain flat -- perhaps even shrink -- over the next 3-5 years, competition for available cattle will be intense.

"It's sad to say, but 5,000- to 25,000-head capacity feedyards are dinosaurs in today's economic real world. Just the hotel cost of operating at 75% capacity a 60,000-head feedyard is 8-12¢/head/day less than a typical 5,000- to 20,000-head feed yard," Helming says.

What's more, he says the well of outside capital in the feeding sector has changed. Where "customer" cattle made up 75-80% of feedyard populations in the 1960s through mid 1980s, the money has fled to other investments.

"Those customers have dramatically declined and continue to do so," Helming says. "Their exit places a major financial burden on feed yards formerly dependent on custom feeding, and the access to more working capital and bank financing is easier for larger operations.

"With elevated inputs for energy, labor costs and grain, and underutilized capacity, there's a real onus on feedyard operators to try of figure out how to become more efficient. The problem is that the excess-capacity situation in U.S. cattle feeding, if anything, will only get worse, given the grain situation and where we are in the cattle cycle. That further accentuates the driving force to consolidate. Someone has to go out of business," Helming says.

Watch For Poisonous Plants During Drought

Certain plants, like some weeds and ornamentals are toxic, and during times of dry conditions when no other pasture feed is available, livestock may be inclined to consume them, says Steve Boyles, Ohio State University (OSU) Extension beef specialist.

Toxic weeds are typically in the pastures all the time and livestock normally leave them alone. The concern is that such plants may be the only thing green still standing during drought situations, making them more desirable to grazing animals.

Producers should get to know the more common toxic weeds and plants and keep livestock well fed to ensure they aren't tempted to eat them, Boyles says.

One concern may be the risk of cyanide poisoning. Symptoms include labored breathing, staggering, trembling muscles, convulsions and death. In Ohio, some sources of cyanide poisoning include twigs and leaves of wild and cultivated cherry trees and certain marsh grasses, such as arrowgrass. The grass contains a high salt content and lack of salt on the pasture may drive livestock to feed on the plant to meet salt requirements.

Producers can minimize livestock illness from poisonous plants by following the suggested guidelines:

  • Learn to ID poisonous plants.
  • Supplement feed with salt, minerals and other nutrients.
  • Avoid grazing animals in areas of abundant poisonous plants.
  • Provide adequate water to prevent non-selective grazing.
Here are links to more information on toxic plants: -- OSU Extension Beef Team newsletter

Precautions can prevent farming deaths

Farming is an extremely hazardous occupation. Yet, according to the National Safety Council, many farmers are not making use of safety equipment that could save lives or prevent disabling injuries.

Tractor-related incidents are not uncommon on the steep terrain and winding, narrow roads that characterize many rural areas. Tractor overturns, accounting for more than 60% of all tractor-related deaths, are the major source of farming fatalities in the state of Kentucky, says Larry Piercy, University of Kentucky (UK) College of Agriculture Extension farm safety specialist.

“Traditionally the death rates in Kentucky agriculture have been two to three times higher than the national average because of our high rate of tractor deaths,” he says.

The good news is the number of overturn-caused deaths has declined in recent years, partly due to an increased use of rollover protective structures (ROPS) that are standard on all tractors manufactured since the mid-1980s, Piercy says. The bad news is there is still room for improvement.

“We still have a number of older tractors that do not have rollover protection,” he says, indicating that one-third to one-half of the tractors in the state are equipped with rollover protection. That leaves a great many that are not protected.

Rollover protection is available for most tractors manufactured after the late 1960s or early 1970s. Piercy says protective systems usually can be retrofitted onto older tractors for $800-$1,200.

“Rollover protection is fairly inexpensive if you consider the value of a life,” Piercy says. “We try to encourage people to consider retrofitting, because it does only take one mistake that could result in what can be a very serious injury or death when the tractor flips without rollover protection.”

Piercy also strongly recommends getting in the habit of wearing a seat belt if the tractor is equipped with a rollover protective system. Seat belts ensure that the operator stays within the safety zone provided by the rollover protective system and protect the farmer from being thrown off the tractor and possibly run over. For those who might rebel at the idea of being strapped in, Piercy says there are other benefits to using the devices.

“Seat belts improve your comfort and reduce fatigue, especially when operating on slopes or rough field conditions,” he says. “Also, they may protect in a highway collision.”

If the tractor will be operated on a highway, some simple precautions can help prevent a collision with faster-moving vehicles. Any time farm equipment is operated on the highway, it should display the slow-moving vehicle emblem. Piercy also emphasizes the need for appropriate lighting.

“If it’s used at night, they need, at least, headlights and a taillight,” he says. “Most of our newer tractors do have the flashing warning lights. Some of them have turn signals. Even some of our towed equipment now has lighting. Always make sure that if you do have that extra equipment that it is in good working order before going out on the road.”

Another precaution Piercy suggests is simple and costs nothing. By eliminating or, at the very least, minimizing extra passengers onboard a tractor — particularly children — the risk for additional injury or death is greatly reduced.

Later in the season, when balers or other towed equipment are used, farmers should be aware of the importance of additional protective devices, such as power take-off (PTO) shields.

“There’s always that potential risk,” Piercy says. “It only takes one mistake.”

Next Tip: Late-calving cows can be costly >

Forage Focus: Summer water requirements for cattle

While we often talk a lot about nutrition, forage quality, and mineral needs during the summer grazing season, water is sometimes taken for granted, almost overlooked. Yet water is the most essential nutrient for livestock production. Cattle can survive for a number of days, even up to weeks without food, but will die within a few days without water. Assuming that the goal of most cattle producers is more than just cattle survival, it is important that cattle receive a sufficient quantity of water each day to maximize feed intake, produce milk for the calf, and maintain a healthy reproductive cycle.

Research has shown that without a sufficient quantity of water, dry matter intake of cattle is reduced. This reduction in dry matter intake affects production, whether that is gain, growth, lactation or reproduction. The quantity of water needed by cattle is influenced by air temperature, activity level of the animal, lactation, and type of feed. As air temperature, activity level and lactation level increase so does the requirement for water. A ration low in moisture, compared to a pasture ration of young vegetative grass will require more water. The following chart provides an estimate of the gallons of water needed per day for various classes of beef cattle under varying summer temperatures:

Daily water intake (Gallons)1

Cattle Class

70 F

80 F

90 F

500 lb calf

6.5

7.4

10.6

800 lb growing heifer/steer

9.3

10.6

14.0

800 lb finishing cattle

10.8

12.3

16.5

750 lb pregnant heifer

9.0

10.3

14.6

Dry pregnant cow

10.8

12.4

17.6

Lactating cow

16.3

17.9

21.6

Mature bull

12.7

14.5

19.5

1. Compiled from 1996 NRC Requirements for Beef Cattle and Winchester and Morris, 1956. Water Intake Rates of cattle. Journal of Animal Science, 15:722.

Recognize that these figures are estimates. They take into account air temperature, and, to some degree, the production level of the animal, but activity level, humidity and, for pastured animals, moisture content of the pasture can all affect these numbers. I have seen tables that put the requirement for a lactating beef cow in 90-degree heat at 25 plus gallons of water per day. Still, the chart provides a starting point for the cattle producer to determine the water needs of his/her animals.
How this quantity of water will be delivered to the herd is an important consideration. Smaller paddock sizes with a water source in each paddock is the ideal because it minimizes animal energy expended walking to a water source and allows animals to come to the water source on an individual basis. In practical terms this means that the water system can be designed with lower flow rates and smaller water tanks. As a guideline, provide a tank that allows two to four percent of the animals to drink at one time and a flow rate that provides the total daily need in four hours. Larger paddocks, where a trip to the water source involves traveling out of sight of herd mates, generally means cattle will come to water as a herd. The result is that the water system must be designed to provide a larger quantity of water within a shorter time frame. The rule of thumb for this situation is to provide enough tank space for 10 percent of the cattle to drink at one time and a flow rate adequate to insure that all the cattle can drink in about 20 minutes.

While the quantity of water supplied is critical, the quality of that water is an important consideration as well. Poor and/or contaminated water supplies decrease cattle consumption of water, which affects dry matter intake and decreases animal performance. Additionally, certain contaminants can directly impact upon the health of cattle, and, in extreme cases, result in death.

Water quality for livestock can be evaluated in terms of salt concentration, nitrate levels, sulfates and sediment. Salt concentration is determined by the amount of dissolved inorganic salts such as calcium chloride, sodium chloride, magnesium chloride, sulfates and bicarbonates contained in the water. Generally a level of 3000 milligrams per liter (mg/l) or parts per million (ppm) or lower is the limit for a cattle water source. The nitrate level in water should be under 300 mg/l or 300 ppm. Sulfates in the water source are a concern because sulfur can tie up dietary copper, zinc and manganese. A general recommendation is that water sulfate concentrations not exceed 1000 mg/l or ppm. There are a number of labs around the state that can do a water quality analysis for livestock.

As a side note, any producer feeding supplemental grains or by-product feeds should be aware of the sulfur concentration of those feeds plus what the water source may contain. High sulfur levels in the total ration can lead to reduced gain, and, in extreme cases, result in sulfur induced polioencephalomalacia (PEM), a central nervous system disease that causes cattle fatality.

Rising costs drive need for Optimal Milk genetics

Cow-calf producers face the continued challenge of rising feed costs, according to a recent study conducted by the American Angus Association.

“Our research indicates that combined pasture, harvested forages and other feed costs have been increasing at the rate of $5 per beef cow per year since 2000,” says Sally Northcutt, genetic research director at the Association. “The typical U.S. cow-calf operation will spend $35 more per cow in 2007 to meet herd nutritional requirements compared to what they spent at the beginning of the decade.”

A sizable increase, it underscores the need for producers to optimize cow size and milking ability according to their operation’s own feed availability and feed cost scenarios, she explains. Estimating industry average feed costs per cow was the primary objective of Association’s analysis.

“We have now incorporated this updated feed cost information into our web-based Optimal Milk Module, which was originally constructed more than two years ago, when feed costs were lower,” Northcutt explains. “This easy-to-use, interactive program is designed to help commercial producers identify Angus milk EPDs that are appropriate for their operations.

“Feed costs and the variability of feed supplies are important in determining the right milk level,” she adds. “The Optimal Milk Module uses this information to estimate the right milk genetics for each individual user’s herd.”

To quantify trends in national feed costs, Association staff evaluated more than 40 cow-calf enterprise budgets published between 1994 and 2006 by land-grant universities from 23 states. These budgets revealed that pasture and feed costs were on the rise well before expanding U.S. ethanol production sent shock waves through world grain markets last fall.

For example, in 1995, the average producer spent $192 per cow on all sources of feed. Five years later in 2000, annual feed costs had risen to $209 per cow. By 2005, expenses had increased further to $234. The 2006 average jumped to $239. Extending this trend yet another year would push total feed costs to nearly $245 per cow in 2007. Actual costs may be even higher due to the spillover effects of high grain prices on forage costs.

“Cost inflation is inevitable to some degree,” Northcutt points out. “Controlling expense as much as possible, especially feed expense, is a requisite to long-term success in the cow-calf business. You can’t simply shrug and accept the upward pressure in feed costs and remain profitable,” she says. “Each producer must find creative ways to combat these inflationary trends. Part of the solution is making sure your cows have the right mature size and milking ability for your environment.”

Producers in areas with less-reliable, higher-cost feedstuffs obviously need lower milk EPDs compared to those with lower-cost, relatively abundant feed supplies. The Association’s Optimal Milk Module takes this concept several steps further by providing specific milk EPD ranges tailored to unique herd environments.

“Finding the right level of milk for your individual cow herd is critical to profitability,” Northcutt emphasizes. “Milk production is a powerful trait that has a major impact on calf sale weights and calf crop revenue. However, lactation also requires large amounts of feed energy, so it is important each producer identify the right milk genetics for their own situation.”

Visit http://www.angus.org/tools/optmilk/index.html on the Association Web site to access the Optimal Milk Module.

BeefTalk: Mushrooms - Success is in the details

It’s been a mushroom spring. Nature, for many, can be very broad and often times simply can be stated as brown or green, dry or wet, cold or hot, dead or alive. For those who succumb to such broad brushes, the fine points of nature often are missed and the joy of piecing together the detail simply is brushed aside.

Those thoughts come to mind while reading the recent publication “Priorities First: Identifying Management Priorities in the Commercial Cow-Calf Business.” The report, summarized and authored by Tom Field, Ph.D., Fort Collins, Colo., identified herd nutrition as the No. 1 priority for cow-calf operations.

The publication does an excellent job of stimulating additional thoughts. Cow-herd nutrition is a very large subject and much like defining nature. Feed can be yellow or green, wet or dry, present or absent, but it is more than that.

In beef production, as in most businesses, the “success is in the details.” Field notes cow-calf producers and industry specialists who responded to a survey prioritized defined subcategories of herd nutrition as well.

Field noted that annual cowherd nutrition during the last third of pregnancy, during calving to weaning and replacement heifer nutrition, were all relatively high on the priority listing.

The lower two subcategories were the middle third of pregnancy and bull nutrition. These primary and subcategories provide insight into how cow-calf producers think, strategize and react. Reviewing the survey results offers an opportunity for insight, evaluation and change in individual cow-calf operations.

The No. 1 priority, nutrition, is a good place to start. The allocation of nutritional resources is critical, more so than determining if feed is present or absent.

Even in the big picture, if one reviews the 2006 report of the North Dakota Farm and Ranch Business Management program (http://www.ndfarmmanagement.com), there is a $232.23 spread in net return over direct and overhead expenses in North Dakota cow-calf operations. The $232.23 difference certainly should point to a need to set priorities.
Jerry Tuhy, adult farm management instructor in southwestern North Dakota, said, “The difference in overhead expenses per cow between the high 20 percent and the low 20 percent of cow-calf operations ($310.21 versus $405.12) sorted on net return per unit was $94.91. More than 68 percent ($65.28) of that difference is in the difference in total feed between the same high 20 percent and the low 20 percent.”

Nutrition is No. 1

This is a mushroom spring. Lee Manske, Dickinson Research Extension Center range specialist, and I were checking for fairy rings in the grass. It didn't take long to find the fruiting bodies (commonly called mushrooms) of the chlorophyllum. The walk turned up a large number of hygrophorus, amanita, russula, armillarius, mycena, panacolus and cortinarius mushrooms.

We stopped looking because, in the world of the mycologist, mycelium is never noticed. For most of us, we are too busy painting with too big a brush. But nutrition and mushrooms have a lot in common, just like steak and mushrooms.

Success is in the details; not all steaks fit the grill and half the mushrooms we saw potentially were poisonous. Cow herd nutrition is a top priority and puts money in the pocket.

However, don’t forget, properly fed bulls breed more cows and cows in poor condition gain well after weaning.

Nutritional success is in the details. Pay attention to the nutritional needs of the herd, feed the bulls and thin cows and enjoy a good steak supper with a few mushrooms.

However, don't pick the poisonous mushrooms. They are best left to please the eye, not the palate.