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How do you find balance in your genetics? 4 commercial ranches share tips

Cow Calf Pair

Among the many excellent presentations at the recent Beef Improvement Federation (BIF) meeting in Brookings, S.D. was a panel of commercial beef producers who discussed how they use genetics to improve their cow herd. Here are excerpts from their comments:

John Moes, Moes Feedlot, Watertown, S.D.  The Moes operation includes a 350-head cow herd, 80 replacement heifers and a 2,000 head feedlot. They started using artificial insemination with their heifers 25 years ago and now AI their entire herd.

“We started synchronizing heifers because it was the easiest thing to do,” Moes told the nearly 500 people in attendance at the BIF meeting. “Now we synchronize everything.”

When they began AIing heifers, they used growth bulls. “What we found once we started marketing our own calves six, seven years ago (when they built the feedlot), we started seeing that there were certain bulls, when we got individual carcass data back on them, we weren‘t getting the marbling, we weren’t getting the Prime and Choice CABs.

So they started looking for marbling as well as maternal traits for longevity in the cow herd. “We’re 90% Choice or better, right at 50% CAB, and it’s all because of the genetics.”

Tylor Braden, area manager, cattle operations for the King Ranch  Braden oversees the day-to-day management of the cattle operations on the historic King Ranch in South Texas, which encompasses 825,000 acres in four different locations, a 1,500-head purebred Santa Gertrudis herd, 23,000 commercial cows and a 16,000 head feedyard.

“The impetus of our purebred program is to create our own seedstock bulls for our commercial cattle operation. We breed our purebred herd to primarily Red Angus to create an F1 bull to then go out on our commercial cows, which we call the Super Cruz,” he said.

Santa Gertrudis cattle are inherently growthy, so the ranch focuses on carcass traits and stayability. “Our carcass grading has dramatically improved over the last decade. And so what we feel is the biggest area of opportunity is extending the stayability of our commercial cows.”

He told the gathering that he’d like to report that their average cow age was eight, nine years old. “But the truth is we're in the five, six, age range. And so that's a huge area of focus for us in our operation.

“Also, I think the biggest area of opportunity for most cattleman to add value is from a heterozygosity standpoint. And so, within the confines of logistical challenges, we focus on trying to maximize the heterozygosity in our breeding program.”

John Maddux, Wauneta, Neb. The Maddux operation runs 2,500 composite cows with a breed makeup of 3/8 Red Angus, ¼ Tarentaise, and 1/8 each of South Devon, Devon and Red Pole. “We are stressing fitness and convenience traits and not putting pressure and focus on the production traits,“ he said.

“Udders are very important. Docility, fleshing ability, calving ease, mothering ability.” Those are the traits they stress. “And it all revolves around our philosophy that if you could draw a perfect profit function, or a cow, it is heavily, heavily driven by the ability of that cow to raise a calf.”

That’s not to say that the calves are not growthy. “The steer calves are not well suited as calf feds, but they make an excellent steer to go to grass the following year,” he said. They’ll sell yearlings this September that will weigh 925 to 950 pounds. “So they’re not no growth, but certainly moderate growth.”

That stems from their ideas about cow size. Their cows will weigh around 1,100 pounds. “Basic economics says if you're in a business like ranching, that is a high overhead business, the way you attack that high overhead business is you try to run as many widgets through that business as possible and spread those high fixed costs on as many animals, as many widgets, as possible,” he said.

“And so we feel like having those moderate sized cows allows us to run more widgets, to have more numbers. And I think that it's really been proven that stocking rate is one of the key drivers to profitability. And we feel like we can increase our numbers and run more cows by focusing more on these fitness and convenience traits and not trying to maximize growth, milk, all those other traits that are antagonistic to the most important trait, which is fertility.”

Trey Patterson, general manager, Padlock Ranch, Ranchester, Wyo. Padlock Ranch is a family owned, commercial cow-calf, feedlot and farming operation.

The cows in the Padlock operation have to make a living on their own, with modest supplementation and feeding at strategic times. That’s weather dependent, “But we do ask those cows to make a living on native grass,” he said. “We are selecting our own replacement heifers, so maternal traits become very important to us as we’re watching genetics evolve over time.”

Cows and heifers calve later in the spring and summer, and the calves go on a sileage-based ration in the feedlot. “We’re making yearlings out of them with the corn silage diets and retaining ownership on some of those (finishing to harvest) and selling some of them. The retained ownership programs we’ve been a part of our quality grade based, so we’re very in tune with carcass quality, marbling in the cattle and growth in the feedlot.”

But when selecting their replacement heifers, they have to balance traits. “It’s finding that balance with the maternal traits to allow us to continue to accomplish what we want to do outside the feeding sector and the extensive system that the cows have to be able to fit into.”

And that’s a balancing act beyond just genetics. “If you look at anything from a singular standpoint, you’re missing another aspect,” he said. “And so being able to put a system together where we can obtain the heterosis that we want, the maternal traits that we want, the growth and carcass traits that we want, but not have to give up what we need to do to manage our rangeland and our labor and our costs. All have to come together.”

MIDDAY Midwest Digest, July 11, 2019

The Delphi, Ind., community is still looking for the person who murdered two girs a couple of years ago.

Buffalo County, Neb., got 9 inches of rain this week, undoing progress from spring flood repair.

Deputy ag secretary says the USMCA needs to be approved soon.

Antique farm equipment shows are going on right now.

The Wisconsin State Fair is offering some interesting food choices this year.

Another alligator has been found in the Midwest. 

 

Photo: wildpixel/Getty Images

 

Fed cattle market fraught with uncertainty

Summer marketing

The market is well into the throes of summer. That typically means a long, tough grind for cattle feeders. As a seller, there’s never much leverage this time of the year. Therefore, it’s generally a period of biding time and fighting to hold prices together along the way.   

Not surprisingly, seasonal pressure forced the market lower during June. The fed market finished the month with fed steers averaging $110 per cwt. That’s about $6 per cwt lower versus May’s closing weekly average. However, July opened on a positive note with fed cattle bringing mostly $111-112. 

Nevertheless, during summer it’s easy to get distracted by the trend of softer prices. But the halfway mark is a good time to look back and evaluate market performance from a broader perspective.  

That said, a couple of items for 2019 are important to emphasize: 

  • June’s closing mark is about $3.25 per cwt ahead of last year’s monthly close. 
  • The second-quarter average ran just a little over $3 per cwt better than 2018.
  • Year-to-date, the fed market has averaged $122.28 per cwt versus 2018’s average of $120.57.

Those year-over-year comparisons become even more meaningful when considering beef production trends. Year-to-date, weekly throughput has averaged nearly 505 million pounds in 2019 versus 501 million pounds in 2018. 

More significant, the weekly average during the second quarter bumped up against 517 million pounds versus 511 million pounds last year and just 484 million pounds in 2017 (Figure 1). And yet, as noted above, the 2019 market beat 2018 by $3 per cwt. The key question from here revolves around potential beef production seasonal peaks in the second half of the year. 

Monthly Market Outlook July 2019 Figure 1

Cutout continues strong 

With all that in mind, it seems the market has found some solid footing. That’s largely occurred on stabilization in the wholesale beef market. The Choice cutout finished June just under $220, while also pushing the Choice-Select spread up to nearly $24. Year-to-date, the cutout has averaged $222; the same level where the market has found some equilibrium going all the way back to last fall. 

The cutout has bounced about $10 on either side of the $220 mark since late October 2018 (Figure 2). That’s an important channel for the market going forward. If the cutout can reestablish support at $210-215, that’ll provide a target for a fed bottom/worst-case scenario from here.  

Monthly Market Outlook July 2019 Figure 2

Let’s do some rough math. Assume a $210 Choice cutout value as the low-water mark. That translates to a value slide of roughly $75-80 per head from current levels. Further assuming all things equal, that means fed cattle would retreat about $5-6 per cwt from here. Putting it all together means the fed cattle market could likely find a bottom somewhere around $105.    

Several factors are in play that could swing that one way or another. These will be critical to monitor over the course of the next six to eight weeks. No surprise, they surround both supply and demand – but there a couple of key aspects to dial-in on.  

Beef demand

First, there’s the issue of beef demand. Overall, the economy remains in fairly good shape. The best indicator of that was June’s surprisingly strong jobs report (Figure 3). Solid employment numbers continue to underpin consumer spending.  

Figure3.png

More specific to beef, this summer may actually see better-than-average spending activity compared to normal seasonal patterns; there’s seemingly some pent-up demand to get outside and fire up the grill after a long, dreary winter. All that could help pull sales along during the summer.   

Second, though, there’s the perpetual presence of big feedyard numbers. While June’s Cattle on Feed report was largely interpreted as neutral, it also reaffirmed there’s a lot of cattle being held by the feeding sector. The June 1 inventory was pegged at 11.74 million head – the largest June number in the data series.  

Simultaneously, the 120-day population totaled 4.23 million head – about even with last year and 7% bigger than the five-year average. Nevertheless, on a more positive note, feedyards have proven to be disciplined marketers in recent months and will be further encouraged to remain so by rising grain prices.  

Grain uncertainty

That brings us to uncertainty in the grain markets and subsequent influence on the feeder cattle market. As noted last month: “…late-planting coupled with challenging soil conditions will also negatively influence yields. That, too, will be an unknown that lingers well into late fall. And finally, given the late nature of planting, total harvest percentage will also be vulnerable. Bottom line: This year’s crop is loaded with uncertainty. Markets hate uncertainty – thus volatility will be the rule, rather than the exception, through the summer.” 

All that was confirmed by USDA’s June acreage report. Most notably, the agency released the report estimating 91.7 million corn acres planted in 2019, versus the June WASDE estimate of 89.8 million acres earlier in the month. USDA subsequently announced a new survey would be initiated in July.

In other words, the final number isn’t the final number. That leaves traders grappling with some sort of solid estimate and anxiously anticipating the July WASDE report scheduled for July 11.    

The feeder cattle market will have to march uphill against that external noise into the fall. Meanwhile, cattle feeders have also had a tough year and not anxious to bet on the come (Figure 4). While the fall feeder cattle contracts have regained some ground from lows established earlier in the month (~$133 per cwt), they’re still a long way from contract highs established earlier in the spring. Cow/calf producers are advised to be careful marketers of this year’s calf crop.  

Monthly Market Outlook July 2019 Figure 4

All this uncertainty underscores the importance of objective information and considerations around risk management. Industry At A Glance has published a series of columns to provide some meaningful background on the nuts and bolts of futures markets. And as always, it highlights the importance of investing time and resources to acquire objective information. That’s a worthwhile investment! It leads to increased likelihood of good decision-making and laying the foundation for business success.

Monthly Market Outlook July 2019 Prices

Speer serves as an industry consultant and is based in Bowling Green, Ky. Contact him at [email protected]

MORNING Midwest Digest, July 11, 2019

Another child was forgotten in a back seat and died from the heat in the car.

The alcohol moving down the Ohio River has been dissipating. 

Crop yield estimates could be adjusted today when crop reports come out.

A retired Union Pacific steam locomotive will tour parts of the Midwest.

Missouri police found a criminal when they heard him as he passed gas.

 

Farm Progress America, July 11, 2019

Max Armstrong offers a look at the plant-based protein hype wondering if these products are here to stay. Max shares that restaurant investors and trend experts are skeptical about the long-term trend for these products that attempt to replace meat in the diet. Max offers insight on the issue from restaurant experts showing rising demand and big investments into these products.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: Willie Vogt

Modern ag is the answer to climate change concerns

IMG_4623.JPG

If you’ve been following the candidates vying for the spot to run as the Democratic candidate in the 2020 presidential election, then you already know one of the biggest topics of conversation on the campaign trail is climate change.

A common theme for these candidates is to discuss how farmers and ranchers can address the growing concern about climate change and how we can best utilize our natural resources to feed a growing planet.

And while I don’t necessarily agree with the strategies presented by some of these candidates, I do believe the sentiment is in the right place. Because really, whether you’re Republican or Democrat or somewhere in between, we all inhabit this planet together. And the future of our environment isn’t a political issue, it’s a humanity issue.

The quote, “We do not inherit the earth from our ancestors; we borrow it from our children,” comes to mind here.

After all, a rancher doesn’t plant tree seedlings on his land for himself. He plants them to benefit the land and to be enjoyed by his children and grandchildren. He doesn't overgraze today because he knows it will impact his forages for next year. He doesn't take from the land without adding back to it in some way.

All of this to say, how we treat our planet today will impact our tomorrow. I think that’s something we can all agree on.

However, the challenge is that there are many opposing ideas on how best to approach climate change and manage our natural resources well.

Plant-based proponents would love for everyone to believe their latest tag line, that plants are the most “sustainable diet” to follow. Yet, science would disagree. Unfortunately, so much of what is being perpetuated in the news is simply not so.

For example, blaming climate change on cow burps is not only ridiculous, but it’s irresponsible and immoral. Every chance I get, until I’m blue in the face, I will continue to promote how cattle are truly upcyclers, utilizing marginal land and efficiently converting it to nutritional, high quality protein and life-enriching beef byproducts, all while fertilizing, aerating and promoting new growth on the land as they graze.

If anything, cattle are truly the Cinderella story of climate change — if only we could get our consumers to hear our story.

And while the naysayers are louder than ever, it seems like common sense isn’t completely eradicated. Here is a roundup of recent headlines that address how cattle are beneficial, not detrimental, to the planet. Read on and pass it along to those who might benefit hearing these messages.

1. “It’s the cars, not the cows” by Paul John Scott for the Star Tribune

Scott writes, “Beef, eggs and dairy are unquestionably superior to the refined carbohydrates and plant oils at the center of the American diet. But after a long run of blaming the butcher, these sorts of inconvenient details about animal foods remain banished, and it’s safe to say most Americans believe it’s healthier to eat less meat.

“You can think of it as our great vegetarian blind spot, and it has left us defenseless to the brassiest escalation yet in the cause against meat, the remarkable assertion that eating meat is bad for the planet. Talk about overplaying your hand. Where eating meat was once bad for a person’s arteries, now we are to do so with the shame that it’s bad for all of life upon Earth.

“The campaign underway to shame the world into giving up animal foods in the name of climate change is pure vegetarian projection, a low-calorie mixture of facts and assumptions. It piggybacks on our anxiety over rising seas, shifting a worthwhile fear of greenhouse gases onto an unfounded fear of meat.”

2. VIDEO: Allan Savory speaks at Groundswell 2019

In his original TED Talk, Savory explains how cattle grazing can reverse desertification. In his most recent video, he talks about how modern agriculture can excel at managing natural resources and providing for a hungry planet, if only the government would let producers do their job.

3. “Farmer’s open letter to skeptical consumers: We know science, glyphosate and GMOs are safe, and we need both to fight climate change” by John Gladigau for Genetic Literacy Project

Gladigau writes, “There are few in rural areas who would argue against the suggestion that the climate is changing. The conjecture is not around this, it is really around whether this change is man-made or not – and if reductions to use of fossil fuels, livestock emissions or taxing industries will have any impact on this.

“What is generally missed in the debate is that agriculture has made huge strides in the past 20-30 years as it has looked to preserve the quality of our soil, minimize emissions and produce high quality food and fiber in an increasingly challenging climate.”

4. “Norman Borlaug: Nobel Prize winning agronomist saved a billion lives and almost banished hunger” by Alexander C. R. Hammond for Genetic Literacy Project

This second article from the Genetic Literacy Project is a good reminder about some of agriculture’s most important and earliest strides in improving productivity to feed the world.

Hammond writes, “Borlaug’s wheat, and the dwarf rice varieties that followed, are credited for ushering in the Green Revolution. After the Indo-Pakistani war, Borlaug spent years working in China and later in life, Africa.

“In 1970, Borlaug was awarded the Nobel Peace Prize for his accomplishments. He is only one of seven to have received the Congressional Gold Medal and the Presidential Medal of Freedom, in addition to the Nobel Peace Prize. It is said that he was particularly satisfied when the people of Sonora, Mexico, where he did some of his first experiments, named a street after him.

“Norman Borlaug’s work undeniably changed the world for the better, and in saving approximately 1 billion lives, he truly deserves to be our first Hero of Progress.”

At the end of the day, science is on modern production agriculture’s side. However, conversations about climate change are emotionally-charged.

So the question remains, how do we make our sound science palatable, relatable and easy to understand at a time where consumers are experiencing “eco-anxiety” and changing their dietary choices in an effort to save the planet?

That’s the question we must answer, and our work must continue in connecting with our consumers to discuss how cattle, and modern agriculture, are critical components to a healthy planet.

The opinions of Amanda Radke are not necessarily those of beefmagazine.com or Farm Progress.

Of boundaries and staying friends with your family in the ranch business

Scott Olson/Getty Images Ranching generations

We’ve all heard the old saw that good fences make good neighbors. Indeed they do. They establish boundaries and keep livestock where they belong. That allows neighbors, if so inclined, to fuss about something of less importance.

It’s also a good idea to establish boundaries between your work life and your family life. I am not qualified to speak to this directly, because I’m not very good at doing that.

For example, we spent a few days with longtime and very good friends last week. We’ve taken trips with them for many years and apparently my inability to stop working has become a subject of conversation amongst the women. I overheard them plotting against me, saying their main goal was to keep me from doing any work.

READ: Your identity is more than the farm

But they’re right—there’s a time to work and a time to enjoy doing other things. I’ve just never been very good at drawing that line. However, I’ve found that grandbabies make it a lot easier.

Then, this week, I get an email from the Network of Family Businesses on that very topic. “In a business family, boundaries, though often mental structures or commitments, are as real as tangible fences. Boundaries draw lines regarding what is acceptable and what is unacceptable within the family and the enterprise. Boundaries help family members balance personal and professional obligations; maintain family bonds; and develop emotionally and psychologically throughout their lives,” the email advises.

In fact, the Network says in a business family, it is as important to have a Boundary Policy as it is a Mission Statement. A Boundary Policy should include:

  • The balance between individual needs and business needs
  • Maintaining personal and interpersonal privacy
  • The elimination of burdensome family baggage
  • Avoiding domain ‘spillover’ – family, business, ownership, management 
  • Resolving conflicts in the appropriate domain (the family or the business)
  • Promoting growth, stability, and success of family business    

READ: Bear Grylls--4 pillars to apply to your family ranch business

While establishing a Boundary Policy will take time and input from all family members, there are several key items families need to recognize and can start working on immediately:

  • Recognize the need for clear boundaries. These boundaries exist in the family, in the business, and personally with individuals playing several roles depending on the context.
  • Talk about boundary issues. Communicate the concerns of each individual and walk toward the conflict. Avoidance is not a healthy option.
  • Then develop a written Boundary Statement for your family and business.

If you’re successful in your business, it’s because you’ve worked long, hard and with intensive focus. That’s good. But it can be harmful to your relationships with family and friends. So set boundaries. Then honor them.

Time will tell if I’m able to take my own advice.

 

MORNING Midwest Digest, July 10, 2019

More rain fell across Nebraska and the Dakotas.

A lawyer for the family who lost their daughter when she fell from a cruise ship says the windows shouldn't have been able to open.

More rural americans are receiving health care via tele-care, using FaceTime, Skype or texting.

Be watchful for ticks this summer.

 

Photo: simazoran/Getty Images

 

Farm Progress America, July 10, 2019

Max Armstrong shares that operating margins for ethanol plants may be tighter in 2019 as the corn supply tightens. Max shares insight from CoBank on what may happen for some plants including the potential for shutdowns. There is a bright spot – exports – but the CoBank expert issues a warning there too. The demand picture does not show an increase.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: Joe Readle/Getty Images

Here’s why you should consider livestock insurance

Cows on pasture

Commentary; By Markie Hageman

Insuring your cattle can seem like a daunting task. From my experience as a crop insurance adjuster, many producers and growers don’t fully understand what crop insurance entails, and this can become stressful for an operation. This is understandable, as there are a lot of technicalities when it comes to insurance in any capacity.

For livestock producers, there are certain options available to you, and all are important to become familiar with. Two options available to producers deal with gross margin and decline in price; both funded through the Farm Bill.

Livestock Gross Margin and Livestock Revenue Protection are both programs that are offered by Approved Insurance Providers (AIP). Your insurance agent chooses a certain AIP to work with, and that company is responsible for providing indemnity payments. These two policies can seem quite similar on the surface but knowing which one benefits you and your operation is imperative.

Livestock Gross Margin (LGM) is a policy that insures against a loss of gross margin, or the value of the market livestock minus the cost of feed on cattle and feeder cattle. As stated on the USDA Risk Management Agency website (RMA), “The indemnity at the end of the 11-month insurance period is the difference, if positive, between the gross margin guarantee and the actual gross margin.” The expected gross margin and the actual gross margin are determined using futures prices and can vary between state- and month-specific basis levels.

It is important to note that not every producer in every state is eligible. Only cattle sold for commercial or private slaughter for human consumption in the specified states are eligible for coverage as well. These states are: Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Ohio, Oklahoma, South Dakota, Texas, Utah, West Virginia, Wisconsin and Wyoming.

Signups for this policy can be made 12 times in a year, which means there are 12 insurance periods in a year and each of those periods runs for 11 months. This policy can be tailored to fit any size operation and coverage typically begins one month after sales closing.

Livestock Revenue Protection (LRP) insures against a decline in market price during the insurance period. With this policy, fed cattle and feeder cattle are covered with a variety of coverage levels and insurance periods that match the time your cattle would be marketed.

This is available in many states and areas, depending on whether you run fed cattle or feeder cattle. To find these states, be sure to ask your insurance agent or head to the RMA website. Note that the annual limit for LRP-Feeder Cattle and Fed Cattle is 6,000 head per producer per crop year.

As a producer, you choose coverage prices between 70% to 100% of the expected ending value. If, at the end of the insurance period, the actual ending value is below the coverage price, then you will get an indemnity for the difference between the two prices.

There are multiple insurance periods and multiple length choices for this policy. This is determined by the “specific coverage endorsement” (SCE) you select. An SCE is just an option in addition to your base policy and increases your protection.

Producers can have various lengths of coverage that range from just 13 weeks up to 52 weeks. Unlike LGM, which adds coverage with the application, the LRP policy application doesn’t add coverage, only once an SCE is selected does it protect the cattle.

There are a lot of smaller details that differentiate the two policies discussed above, and there are many other questions producers will have on their journey to purchase specific policies. Be sure to contact your insurance agent, research questions on the RMA website, or even reach out to your AIP to get the answers to questions you might have. It is also important to note that neither of these policies cover perils such as death, disease or quarantine.

Hageman is a crop insurance adjuster for ProAg Insurance.