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Clearing up tall fescue misconceptions

Across the nation, tall fescue covers some 35 million acres making it one of the most popular forages in the country. Unfortunately, for many people the mere mention of tall fescue brings an automatic dismissal conjuring up bad experiences with poor animal performance or lack of persistence. There are a lot of negative feelings that need to be overcome before tall fescue becomes an accepted option.

The majority of tall fescue is infected with a fungal endophyte. This fungus lives between the cells of the plant in a symbiotic relationship. The plant provides the endophyte with shelter and nutrients - a place for the fungus to live and reproduce. The endophyte returns the favor by producing alkaloid compounds that provide the plant with insect and drought resistance, grazing tolerance and overall plant persistence.

Regrettably, some of the alkaloids produced by an endophyte-infected plant cause poor animal performance, including low average daily gain (ADG), rough hair coats, elevated body temperatures, etc., and are one reason producers developed a bad taste for tall fescue.

Endophyte-infected plants produce endophyte-infected seed that will produce other endophyte-infected plants. In the field, the only way that the endophyte can travel is through the seed. Researchers found that over time the endophyte can die in the seed, leaving the potential for growing an endophyte-free plant. This discovery led to the release of several endophyte-free varieties of tall fescue in the 1980s and early 1990s. These varieties were thought to be the answer to eliminating poor animal performance of livestock grazing tall fescue, and they were. Sadly, another problem arose - with the elimination of the endophyte, the symbiotic relationship, along with the plant persistence qualities, was lost. While the endophyte-free varieties gave good animal performance, they tended to persist only about five years or less. This left a lot of producers happy with animal performance, but very unhappy with lost stands.

This leads to a new generation of tall fescues. New Zealand researchers isolated naturally occurring endophytes that produced alkaloids associated with insect persistence, but did not produce alkaloids associated with poor animal performance. These "animal-friendly" endophytes are termed "novel." The first commercial release of novel endophyte-infected tall fescue was the MaxQ® endophyte inserted into the tall fescue variety Jesup and released as Jesup MaxQ. In trials at the Noble Foundation, Jesup MaxQ has shown greatly increased ADGs and better plant persistence than toxic endophyte-infected Kentucky 31+.

These new tall fescues look to be well adapted to clay-type soils east of I-35. However, west of I-35 where rainfall is lower, the selection for an adapted tall fescue becomes very important. How do we expand the range of tall fescue? A couple of options are being evaluated here at the Noble Foundation. A selection of tall fescue was chosen by plant breeder Andy Hopkins at the Pasture Demonstration Farm west of Ardmore and infected with a novel endophyte. This selection has proven to be better adapted than Jesup MaxQ in trials in our region. It has been planted on cooperator farms and is being evaluated in production environments.

Another option is tall fescues that go dormant during the summer and break dormancy in the fall. These types of tall fescues avoid summer droughts and, if production is similar to non-summer-dormant tall fescue, will further help expand the westward range of tall fescue. These are not the tall fescues of old. They will offer exciting opportunities for grazing managers in the future.

Read more about grazing in Pasture and Range

Legumes: More valuable now than ever

An increasingly common question asked by cooperators is "How many cows can I run if I don't fertilize anything"?

Legumes can provide an alternative to N fertilization, but they require a much higher degree of management to make a legume/grass system work compared to a grass/commercial N system. Depending on the species, legumes can fix anywhere from 50-200 lbs/ac N when grown in a pure stand. Grown in mixtures with grasses, nitrogen fixed will range around 20-80 lbs/ac dependent upon species and percentage of the legume making up the mixture. As a rule of thumb, target a percent legume composition in a grass of at least 30 percent in order to provide enough nitrogen to feed the grass.

To make legumes work, management must be focused on the legume and not the grass. Pastures will look different than they have in the past. Without the even distribution of fertilizer, pastures will look uneven and you may have more weeds. You must also understand the nitrogen transfer system in order to capture the full benefit of legumes.

Legumes do not freely give away the nitrogen that they fix. The majority of nitrogen transfer comes from decomposition of dead legume plant material. Therefore, the greatest benefit to a grass will be following a legume crop, such as growing cowpeas during summer, which are turned under and followed by winter pasture in the fall. Next would be grazing a legume/grass mixture and the decomposition of legume plant material through feces and urine. This increases the importance of rotational grazing, which creates a more even distribution of nutrients across pastures than you will have with continuous grazing. In bermudagrass hay systems, the challenge will be even harder since removing legumes with the hay crop will greatly enhance hay quality, but you will greatly diminish the benefits of nitrogen fixation.

Consider fly control options

With the growing pastures and pleasant temperatures come some disadvantages as well - fly season is upon us.

Flies are a nuisance for humans, but an even greater nuisance for livestock. Additionally, flies can spread disease, from anaplasmosis to pink eye. They are also responsible for a tremendous amount of lost production in the form of decreased weight gain or lower milk yields. Rather than eating, cattle will spend time stomping and tail-swishing, lying down, standing in groups or in the middle of a stock pond.

It doesn't take a large number of flies to have an impact on your cattle's production. As few as 100 to 200 flies per side is enough to impact stocker gains by 50 pounds during the summer. This is greater than or comparable to the weight gain achieved through a growth implant program. If you can see more than a hand-sized patch of flies on each side, typically behind the shoulders, of your cattle, there are enough to be a problem.

There are many methods of fly control. Some of the more common methods are: pour-on, sprays, rubs or dusters, ear tags, feed-through additives and biological control. Some methods work better than others and each has its place. Using a combination of methods will afford you the most effective control. Also, remember to change the class or family of chemical you use periodically to reduce resistance.

The following are a few thoughts on the various control methods:

Pour-ons and sprays provide a good initial kill with two to six weeks' residual. Sprays will typically wear off faster. Rainfall or cattle lingering in stock tanks reduces the duration of protection.

Rubs and dusters are an effective method of control once the cattle associate the use of the applicator apparatus to a reduced insect load. It is best to place the applicator next to mineral feeders, water sources or an area that will force the cattle to rub up against it. Additionally, the chemical will need to be recharged once every one-two weeks or after a rain.

Ear tags are a very effective season-long treatment, but remember to cut the tags out at the end of the season. Leaving the tags in builds resistance to the chemical. Change the active ingredient from year to year. If you used a synthetic pyrethroid this year, change to an organophosphate or organochlorine tag next year.

Feed additives are effective in stopping the fly life cycle. But one of the biggest obstacles is ensuring consistent and adequate intake of the product to have effective control.

Biological control in the form of fly wasps, sometimes called fly predators, is also effective. Some feedlots have started using this method as the fly wasps are considered a natural, nonchemical method of control. Since they are weak fliers, the wasps must be placed in areas of high manure concentration, i.e., feedlots or horse stables. They do not reproduce so they have to be replenished monthly during the fly season.

Remember to follow label directions and applicable withdrawal times prior to slaughter. Getting in control of your fly problem will make your cattle more comfortable and your wallet happier.

Read more tips on controlling flies on livestock:
Fly Control Strategies
New Potent Pyrethroid
Fly Control Spray


King Ranch offers Advanced Ranch Management Certificate Program

Thanks to a generous gift from Texas AgFinance, the King Ranch Institute for Ranch Management at Texas A&M University-Kingsville will broaden the educational services it offers. With a $1 million commitment, the institute will initiate the Texas AgFinance Certificate in Advanced Ranch Management aimed at ranchers and landowners who want to expand their skills to keep up with the ever-changing ranching industry.

“The ranch manager and landowner of the 21st century manages a myriad of resources and business interests including energy, recreation, pollution mitigation, water, consumptive and non-consumptive wildlife management and food production,” said Barry Dunn, executive director of the King Ranch Institute for Ranch Management.

“Dealing with this complexity requires these individuals to have an exceptional set of managerial skills. The new certificate program will provide an organized method for ranchers and other interested parties to acquire these skills,” he added. “Upon completion of the program, participants will return with knowledge and skills that will enhance the management and stewardship of land resources across our nation and the world, and potentially, other large landscapes like state and federal lands.”

“The King Ranch Institute for Ranch Management awards the only master of science degree of its kind in the world, making it a unique entity in higher education. This new certificate program singles them out again as they work hand-in hand with Texas AgFinance to continue the education of working ranchers,” said Dr. Rumaldo Z. Juárez, university president. “We thank Texas AgFinance for the opportunity to assist ranchers to keep up with many changes facing the industry today.”

The target audience for the new certificate program will not only be ranchers and landowners, but also others actively engaged in ranch management, loan officers from banking interests, accountants, attorneys, appraisers of agricultural land, extension educators, university faculty and teachers of ranch and farm management courses from high schools and colleges.

By involving loan officers and land owners, Dunn said, the program will be able to provide those constituents with a greater understanding of the nuances involved in successful ranching and has the potential to create a more meaningful partnership between lenders and land owners and managers.

In order to earn the Texas AgFinance Certificate in Advanced Ranch Management, a participant will be required to complete four lectureships sponsored by the institute and participate in two of the annual HOLT/CAT Symposia on Excellence in Ranch Management. All this must be done during the course of three years.

Some of the current and proposed lectureship topics include using managerial accounting in ranching, valuation and economic benefits of water, wildlife and other natural resources, the oil and gas industry and ranching, human resource management, a systems approach to ranch management, habitat management, current ranching issues, meat science and production and equine management for ranch managers.

For more information about the Texas AgFinance Certificate in Advanced Ranch Management, call the King Ranch Institute for Ranch Management at 361-593-5401 or visit their web site.

View more upcoming events on Beef's Cattlemen's Calendar.

Small cattle herds can benefit from crossbreeding

For the average cow-calf producer looking to increase the profit potential of his or her herd, the message is clear: Crossbreeding can produce a 20 percent increase in pounds of calf weaned per cow exposed to a herd sire.

Most of the increase occurs from improved reproductive performance; however, 25 percent to 40 percent of the increase is the effect of heterosis on growth potential of the crossbred calf and increased milk production of the crossbred cow.

Heterosis is the average superiority of a crossbred individual over the average of breeds involved in the cross. In other words, heterosis results in a better performing animal.

“An economic evaluation of crossbreeding showed that a 16 percent to 20 percent increase in net income after taxes could result through effective use of crossbreeding,” says Kent Barnes, Oklahoma Cooperative Extension Service area livestock specialist.

A number of crossbreeding systems are not feasible in small-sized herds of 25 animals or fewer with access to only one breeding pasture. Still, it is possible to maintain a high level of heterosis in a small single-sire herd.

“The easiest, though not the most economical, method for a single-sire herd is the purchase of crossbred females as herd replacements,” Barnes said.

Two-way cross females are mated to a bull of a third breed to produce three-way cross calves. Maximum heterosis is expressed in the cows and calves.

“This system is the simplest and easiest to manage when a good source of replacement crossbred females can be located,” Barnes said.

He said there are a number of herds that have 20 to 40 cows and only one breeding pasture, each of which can potentially benefit from three possible crossbreeding management options.

One system involves the rotation of two breeds, another involves the rotation of three breeds and, the most simplified system, use of a three-breed composite. In each system, a new bull is introduced every two years to avoid mating heifers back to their sire.

Barnes said the single-sire two-breed rotation is expected to yield 59 percent of maximum individual heterosis and 47 percent of maximum maternal heterosis. The single-sire three-breed rotation should produce 77 percent of maximum individual heterosis and 60 percent of maximum maternal heterosis.

“This compares to 72 percent of maximum individual heterosis and 56 percent of maximum maternal heteroris obtained from a two-breed rotation in a large herd or through artificial insemination,” he said. “It’s proven that single-sire rotations can increase productivity and profitability in small beef herds.”

Choice of biological type is important, in addition to obtaining the heterosis by crossing the breeds.

“Biological type and performance should be similar for all breeds being used,” Barnes said. “This is important because bulls will be bred to both heifers and cows for calving ease. Choice of biological type should match the most economical feed and production environment.”

Although traits with a low heritability respond very little to genetic selection, studies show they exhibit a marked improvement in a sound crossbreeding program.

“Commercial producers need to select sires carefully in order to improve traits with a high heritability and use a well-planned crossbreeding program in order to use heterosis effectively while matching biological types to the most cost-effective environments,” Barnes concludes.

Read more on Crossbreeding...

Beef

Katie Carriker Joins Central Life Sciences As West Coast Regional Sales Manager

Schaumburg, IL, June 5, 2008 – The Professional Agriculture Division of Central Life Sciences, whose founders invented insect growth regulator (IGR) technology more than 30 years ago, is pleased to announce that Katie Carriker has joined the company as Regional Sales Manager focusing on the west coast.

In this role, Carriker will be a member of the Feed Additive sales team, responsible for supporting feed additive fly control products nationally at key accounts. In addition, she will have geographic responsibility serving customers in California, Idaho, Nevada, Oregon and Washington.

“Katie brings more than 16 years of experience to this role and her knowledge and industry insight will allow her to foster strong customer relationships and proactively address our customers’ needs,” said Mark Taylor, Business Manager for the Professional Agriculture Division of Central Life Sciences.

Prior to joining Central Life Sciences, Carriker worked at a number of companies selling dairy cattle feed additives and organic trace minerals, with the past 10 years serving the western U.S. Prior roles included the Custom Farm Products division of The Pillsbury Company; Bioproducts; Kemin; and Chr. Hansen and Balchem. She also served in the U.S. Army.

Carriker received a Bachelor of Science degree in Animal Sciences from Cal Poly Pomona and a Master of Science degree in Ruminant Nutrition from the University of Nebraska. She also maintains her Professional Animal Sciences (PAS) certificate.

About Central Life Sciences

The Professional Agriculture Division is part of Central Life Sciences, a strategic business unit of Central Garden & Pet (NASDAQ: CENT). Central Life Sciences is dedicated to creating healthier environments and making life better for people, plants and companion animals around the world. As inventors of insect growth regulator technology more than 30 years ago, the founders of Central Life Sciences pioneered biorational pest control: using the insect’s chemistry as a means to reduce pest populations. For information about Central Life Sciences call 1-800-248-7763 or visit online at www.centrallifesciences.com .

Beef

Yamaha Releases New Rhino Side-by-Side Vehicle Educational DVD

DVD Showcases New Rhino 700 FI and Rhino 450 SxS Vehicles vs. Competition

Cypress, Calif. – June 2, 2008 -- Yamaha Motor Corporation, U.S.A., has released a new informational DVD featuring the company’s highly popular Rhino Side-by-Side (SxS) vehicles. The new DVD, available free online at www.yamahaoutdoors.com, provides a comprehensive review of the new Rhino 700 FI and the Rhino 450 SxS vehicles and delivers detailed head-to-head comparisons with competing models.

Viewers can choose from different sections of the DVD to “Explore Rhino” or watch “Rhino vs. The Competition.” The “Explore Rhino” section provides an overview of the extensive list of features and benefits for both the Rhino 700 FI and the Rhino 450. Features for both models include a four-stroke engine, fully automatic Ultramatic® transmission with dual-range drive and reverse and industry-exclusive three-position On-Command® in/out 4WD. The Rhino overview demonstrates how these features and benefits combine to create a tough, durable and dependable ride through different types of terrain.

Allowing consumers to see the Rhino in head-to-head action, the “Rhino vs. The Competition” section pits the Rhino 700 FI against competitors such as the Teryx, RZR, Prowler 700 XTX and the Ranger XP, and features the Rhino 450 battling it out against the Ranger 500, Mule 610 and 2-up ATVs. These direct comparisons provide a realistic, feature-by-feature evaluation.

“The new Rhino DVD provides in-depth information that will serve any potential SxS customer well – from hunters and farmers to weekend warriors and recreational riders,” says John Landre, Yamaha’s ATV/SxS business planning manager. “The detailed information and head-to-head comparisons show just how the Rhino dominates the competition as the most versatile SxS on the market. Anyone shopping for an off-road utility vehicle should check out this free DVD.”

A free Rhino DVD can be obtained directly from Yamaha by registering online at www.yamahaoutdoors.com.

About Yamaha Motor Corp., U.S.A.

Yamaha Motor Corporation, U.S.A., (YMUS), a leading distributor and manufacturer in the motorsports market, builds the toughest, most capable and versatile ATV and Side-by-Side vehicles. The company’s ever-expanding product offerings also include motorcycles, outboard motors, personal watercraft, snowmobiles, boats, outdoor power equipment, race kart engines, accessories, apparel and much more. YMUS products are sold through a nationwide network of more than 4,000 dealers in the United States.

Headquartered in Cypress, Calif., since its incorporation in 1977, YMUS also has facilities in Wisconsin and Georgia, as well as factory operations in Tennessee and Georgia. For more information on Yamaha, visit www.yamaha-motor.com.

SxS Vehicles are recommended for use only by drivers age 16 years and older.

Beef

Hereford Enthusiasts “Roll Through Dixie;” Music on Mountain Raises More Than $200,000 for Youth

NASHVILLE, TENN. – A bus load of Hereford breeders from across the United States, Canada and New Zealand took part in the first-ever National Hereford Tour. “Rollin Through Dixie” hosts in Tennessee, Georgia and Alabama treated participants with southern hospitality and opened their farms and ranches to the National Tour guests.

“The purpose of this tour was to give producers the opportunity to witness quality Hereford genetics from some of the southeast’s most prominent farms and ranches,” said Andee Marston, AHA eastern region fieldman. “Great cattle were on display at each of the seven tour stops and participants enjoyed the chance to interact and discuss the Hereford breed.”

Tour stops included: Four L Hereford Farm; Triple L Ranch; Burns Farms; Leonard Polled Hereford Farm; JWR Land & Cattle Company; Debter Hereford Farm and Tennessee River Music Inc.

BioZyme Inc., and Gallagher were co-sponsors for the tour. Representatives from Gallagher gave a working fencing demonstration at Four L Herefords and BioZyme representatives addressed the tour attendees about how incorporating the VitaFerm product line can increase efficiency in the cow herd. Both companies have been great supporters of the Hereford breed and AHA programs.

Aside from visiting Hereford operations across the Southeast, participants enjoyed an interactive tour of the Country Music Hall of Fame and Museum and a reception in the rotunda where the Hall of Fame plaques hang.

Tour guests enjoyed Music on the Mountain as the grand finale event on Friday evening when Randy and Kelly Owen and their family hosted their 25th annual sale at their Tennessee River Music Ranch. Over $200,000 was raised for the Hereford Youth Foundation of America.

Contact: David Mehlhaff, [email protected] or (816)-842-3757

Obama Vs. McCain – What´s The Difference?

With the top of the two party tickets now seemingly fixed, we can now – from an ag and, more importantly, a ranching perspective – try to determine what their promised change is going to be. The answers may not be all that comforting, but it always pays to be proactive rather than reactive from a management standpoint.

First of all, the harsh reality is that ag is so far down the list of priorities of either candidate that we aren’t even on their radar screens. Some might consider such anonymity to be a good sign but the fact is their positions on many issues stand to seriously affect us.

With either candidate, we can expect increased taxes, though John McCain's top and overall rates will be lower than Barack Obama's, as will his exemption levels and rates for the death tax. Neither candidate seemingly has a plan to reduce the deficit, and both have advocated new programs, a bigger expanded government, and increased spending.

While Democrats are expected to add to their majorities in both houses, will their gains be sufficient to make them veto proof or capable of pushing through the more controversial parts of their agenda?

A McCain presidency with larger Democratic majorities in the House and Senate probably equates to a moderate shift to the Left on economic issues. An Obama presidency would bring much more substantive change. As one pundit said, “We’re not looking for the simple majority that’s dictated the politics of the last 50 years but a ruling majority.”

As we’ve discussed in earlier articles, redistricting, along with consolidation in ag, have led to a situation where rural America and ag have lost significant political clout. That dilution has been even more dramatic for livestock production, which is more geographically diverse than farming in general. Thus, we’ll likely have to look to aligning strategically with other farm sectors.

The greatest difference between the candidates is probably on foreign policy and social issues. While these two issues will play large in the general election, they probably won’t shape ag.

But on the environmental front, we’ll see a big shift from the Bush Administration policy of supporting industry/jobs over global-warming concerns, as well as a shift from the well-placed skepticism about climate change and its implications. Again the differences between Obama and McCain on climate change are a matter of degrees, as are the environment in general and endangered species, but we expect a continued shift toward the Left and the activist agenda.

Neither candidate has talked about or shown interest in general ag policy, but an area of dramatic differences and big implications is energy policy. Both candidates have voiced support for ethanol and renewable energy, as well as reducing U.S. dependence on oil and its foreign suppliers. But there are dramatic differences regarding which oil reserves should be tapped, building capacity, nuclear energy, and the importance of energy development compared to conservation.

Trade and immigration are two more issues that promise a dramatic shift from the status quo.

We’re certainly going to get change in this next election cycle; the question will be which candidate represents positive change. Unfortunately, from a cattle industry standpoint, the decision most likely will be a choice between the lesser of two evils.

A Chat With Randy Blach On The Beef Economy

Summing up the state of the cattle business has never been easier: input costs are historically high and likely to climb higher, in a volatile manner that often defies logic.

Figuring a way to the other side has never been tougher: cow numbers are declining, the traditional cattle cycle is in hibernation, and dog-eared rules of thumb no longer apply.

“Though costs are at extreme levels, that doesn’t mean they’re as high as they’re going to get,” says Randy Blach, Cattle-Fax CEO. “None of us thought we’d see Minneapolis wheat selling on top of $20, but we have. None of us ever thought our economy could support oil prices at $120/barrel, but the market has marched right through it.”

So goes an historic period of relearning in the U.S. cattle business.

“We’re all in a situation where cost of gain is approaching $1, and exceeding it in some cases. There are big premiums in the deferred live cattle futures, and I suspect these premiums will continue until the market sorts out this cost squeeze,” Blach says. “We’ve seen cow carrying costs increase $100/head on average during the past few years. I expect we’ll see them increase another 10% this year.”

Salt in the wound comes with the fact that most of the increased cost has thus far been absorbed by producers.

“At some point, a portion of these added costs will have to be passed along to the consumer,” Blach says. In other words, he expects prices for fed cattle, and wholesale and retail beef to begin marching upward for the next couple of years.

Along the way, Blach adds, “Despite the higher costs, I think the market will continue to support calf and feeder-cattle prices at higher prices than traditional thinking would suggest.”

There were 32.6 million beef cows in the Jan. 1 national inventory, 28.5% fewer than the peak in 1975 and the fewest since 1971 when the National Agricultural Statistics Service began providing the current inventory reports. According to Blach, the number of beef-cow operations with 100 or fewer cows has declined 17% in the past 15 years. The total number of cow-calf operations has declined 25% since 1986.

Yet, by most estimates, cattle-feeding capacity has been overbuilt by about 25% for at least 10 years. Meanwhile, for all practical purposes, beef cow numbers have languished for a decade.

“We (Cattle-Fax) don’t see any beef cow herd expansion, nor will we for the next few years,” Blach says. In fact, he expects modest downsizing of the beef-cow inventory to continue for a few years. “I suspect we’ll continue to rely more on increased cattle imports from Canada and Mexico since we’re not growing the factory here,” he explains.

In April, the USDA Economic Research Service (ERS) estimated 2.65 million head of cattle would be imported to the U.S. this year, 6% more than last year.

Ultimately, that means further consolidation and concentration in the feedlot and packing sectors as they reduce capacity toward an economic equilibrium with domestic cattle numbers.

“We’ll likely see more consolidation and concentration in the packing sector. We’ll also likely see more cattle-feeding pens idled in the next 12-18 months,” Blach says. “When the dust settles, we’ll have fewer, larger, better capitalized operations than we’ve had in the past.”

A sustainability key. Fewer cow numbers and operations don’t mean less beef, though.

“Beef-production levels will continue to be supported at close to all-time high levels because of increased productivity,” Blach says. “Beef-production levels won’t fall dramatically here, though we may consume less of it here.”

He emphasizes producers need to understand that domestic beef consumption will decline over the next couple of years, but it doesn’t mean demand is declining. Cattle-Fax estimates domestic beef consumption will decline 1.5 lbs./capita this year and potentially another 1-1½ lbs. next year. That's partly because U.S. cow numbers will be stagnant to declining, but mostly because more of what’s produced will be consumed outside the country.

Exports are a chief reason for Blach’s optimism about the future of the business here, though he’s concerned about the current economic squeeze.

“Only 4% of the world’s population is in the U.S.,” Blach says. “There will be 1 billion new beef consumers around the world in the next decade.” Some of that’s due to population growth, but most stems from the growing economic power of foreign consumers who find themselves with enough disposable income to contemplate making beef a diet staple for the first time in their lives. This at a time when world market prices for major food commodities such as grains and vegetable oils have risen more than 60% in two years, reaching historic highs, according to ERS.

Yep, it’s the same global economic growth that’s helped create the current dilemma in the cattle business here – global commodity demand has increased faster than supply. Given the U.S. dollar’s weak value, U.S. grains have represented a bargain to global buyers.

Additionally, ERS analysts say short-term factors contributing to such steamy commodity-price inflation include: increased demand for bio-fuels feedstocks, adverse weather in some major grain- and oilseed-producing nations the past two years, and recent policies adopted by countries to mitigate food-price inflation.

For perspective, the entire U.S. population is currently 300 million. Global population grows by 78 million each year. There are 6.7 billion people today; by 2030, that will be 8 billion.

“The U.S. beef industry needs to have the opportunity to market globally, and then let the market sort it out,” Blach says. “If we allow the market to work, it’s very efficient at finding the right answer. Unfortunately, it hasn’t been allowed to work since 2003.” Everything from export markets being shuttered for non-scientific reasons, to government policies artificially inflating grain prices, have stymied the market’s ability to do its job effectively.

“At some point in the future, the economic factors that supported a cattle cycle in the past will likely return, but not for three to five years,” Blach says. There’s too much global demand and too little global supply of grain and other commodities for the current cost-price squeeze to sort itself out quickly.

Traditional wild cards played in the current business environment would be magnified exponentially. Grain production this side of predictions – or increased demand – could push prices up another steep slope. The same goes for other commodities such as oil. The federal government could intervene, too, as it did in the 1970s, with disastrous consequences.

On the other hand, Blach points out a sustained rally in the valuation of the dollar could curtail some U.S. grain exports.

Hedge against rising inputs. In the meantime, Blach says there are a couple of opportunities cow-calf producers need to consider embracing as a hedge against rising input costs.

“This is a period when cow-calf producers need to look at putting a couple hundred more pounds on their calves before merchandising them,” Blach says. The calf-to-feeder price spread continues to narrow as feedlots place more demand on cattle entering the lot at heavier weights. The lesson is to sell heavier cattle.

“There also continues to be tremendous opportunity to differentiate the calf crop,” Blach says. Price spreads for same-class, same-sex, same-weight calves and feeders in the same part of the world continue to be historically wide.

Whether it’s for source verification, natural label eligibility, or some other added-value attribute, Blach believes, “We’ll see wider price spreads over the next couple of years as the market has more opportunity to express itself based on differentiation. That’s a good hedge for cow-calf producers.”

On both counts, Blach says the further producers are from where the calf and feeder markets are made, the more they should consider adding weight and differentiating. At $4/loaded mile, discounts will continue to cut deeper the further cattle are from the market.

“We have to maintain an open mind as we move forward; it’s a new frontier,” Blach says. “I believe it will sort out and we will find our way.”