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2005 Alliance Listings

Alliance/Web Address Contact Year estab. Cattle in alliance in 2004 Average premium paid/head Cost Minimum head Grids geared to QG, YG or both (see key) Par point on grid Carcass weight on grid Harvest states Required genetics Practices required: S, W, P, N (see key) Electronic ID capable Retained ownership required Aligned with specific feeders, packers or retailers Cow-calf producer post-harvest premium
Consumer-Based Programs
Angus America, www.angusamerica.com Mark Nelson, 402/462-2057, [email protected] 1996 50,000 $8.50/hd $2-$4.50/hd 35 QG, YG Choice YG3 550-949 lbs. NE, CO, KS 80% USDA Angus (51% black-hided, Red Angus feeder calf tagged, or a combination of both) None Y N Packer — Excel Corp. N/A
Angus Gene Net, www.genenetbeef.com Dr. Ken Conway, 913/397-9100, [email protected] 1998 100,000 $26.18/hd $3/hd 20 Both Choice YG3 535-950 lbs. NE, CO, TX None Pay a premium for source verification Y N Packer — Swift & Co. Y
BC Natural Foods, LLC, www.colemannatural.com Scott Coakley, director cattle procurement, 303/884-7202; or Jim Coakley, VP of red meats, 970/466-7201 1979 100,000+ N/A None 1 Both Select — par, Choice — premium 600-900 lbs. steer, 600-850 lbs. heifer Midwest and Western states 50% need to grade Choice S, P, N N N Feeder — Small feeders throughout the West and Midwest N
Beef Advantage, www.ourcoop.com Keith Harrison, 615/793-8585 [email protected] 2001 7,000 N/A $1/head 1 N/A N/A N/A N/A N/A W, P, two round animal health program with MLV boster, bunk broke following a nutritionally sound co-op feeding program, castration and deworming Y N N/A N/A
Brangus Gene Net, www.genenetbeef.com Dr. Ken Conway, 913/397-9100, [email protected] 1999 100,000 $26.18/hd $3/hd 20 Both Choice YG3 535-950 lbs. NE, CO, TX 25% Brangus Pay a premium for source verification Y N Packer — Swift & Co. Y
Cargill Cattle Feeders LLC Ben Brophy, 806/371-3711, [email protected] 2000 65,000 $20/hd None 120 hd, one sex Both Choice YG3 600-900 lbs. TX, KS > 50% British, 0-50% Continental, 0-18.75% Brahman P, S Y N Feeder — Cargill Cattle Feeders LLC, packer — Cargill Meat Solutions, retailer — Safeway & Harris Teeter Y
Certified Angus Beef LLC (CAB), Feedlot Licensing Program (FLP) www.cabpartners.com Steve Suther, 785/889-4162, [email protected] CAB: 1978, FLP: 1998 215,000 Ch/Sel + $4.50/cwt. None 1 Both Vary with packer Vary with packer CO, IA, ID, IL, KS, MI, MN, NE, PA, TX, WA, WI, CAN 50% or greater Angus CAB Natural Program opened 2004 Y Vary with feedlot 80 feeders, 26 packers, 6,000 retailers, 7,000 restaurants and international distributors Vary with feedlot
Certified Hereford Beef LLC www.herefordbeef.org Jim Williams, vice president of supply, 816/842-3758, [email protected] 1995 322,000 $14-$16/hd None N/A Both Choice YG4 or less, Choice & Select 600-1,000 lbs. NE, KS 100% British, at least 50% Hereford Corn feeding Y N Greater Omaha Packing Co., National Beef Packing, LLC Y
Charolais Gene Net www.genenetbeef.com Dr. Ken Conway, 913/397-9100, [email protected] 2001 100,000 $26.18/hd $3/hd 20 Both Choice YG3 535-950 lbs. NE, CO, TX 25% Charolais Pay a premium for source verification Y N Packer — Swift & Co. Y
Consolidated Beef Products Inc. www.consolidatedbeef.com Bruce Cobb, 806/655-8955, [email protected] 2000, began operations in March 2001 210+ cattle feeding entities N/A Full member — $3,000 one-time membership fee, $1/hd marketed; Associate member — $3,000 membership fee (Paid out at 50¢/hd marketed), $1.00/hd marketed N/A All grids available to the market Choice YG3 650-900 lbs. TX, NM, OK, KS, CO, NE, WY, IA, MN, SD N/A N/A N/A N Cooperative owned by member feedyards and cattle feeders N/A
Country Natural Beef www.countrynaturalbeef.com, www.oregoncountrybeef.com Dan Probert, 541/473-3355, [email protected] 1986 32,000 Cost of production/return on investment Responsibility of being member of co-op, 11 days/year 120 Both High Select, low Choice YG1 &2 600-775 lbs. WA Cattle selected by biological type S, N, food alliance certification, no ionophores N Y Retailer — Natural Food Stores, packer — Washington Beef, feeder — Beef Northwest Cost of production/return on investment
Decatur Beef Alliance www.decaturfeedyard.com Warren Weibert, 888/675-2212, [email protected] 1994 40,000 Confidential App. $9/hd Load lot of same sex Both Choice YG3 550-950 lbs. KS < 25% Bos indicus S, W, P Y 50% Packer — Excel N/A
Iowa Quality Beef Supply Coop www.iacattlemen.org Gene Rouse — 515/292-7385 1999 125,000 Boxed beef-based pricing Must own or lease shares 30 Both Choice YG3A 550-950 lbs. N/A None Premium for S Y N Packer — Swift & Co. N
Laura's Lean Beef www.laurasleanbeef.com Don Knore, VP of cattle procurement, 800/392-9389, [email protected] 1985 70,000 $109.50/head average slaughter premium (Slaughter cattle with 700-lb. carcass including premium over market price, bonus grid, freight to slaughter) No cost to producers except weighing the feeder cattle No established minimum YG Select QG, 1.8-1.9 YG 550 to 800 lbs. NE, WI, MN 3/4 Continental or more, heavy muscled, lean bodied All-natural, 2 round vaccination program with a modified-live booster, 45 days weaned, bull calves castrated, wormed, dehorned Y N N/A For load lots of cattle, 35% of slaughter bonus
Montana Ranch Brand www.montanaranchbrand.com Terry O'Neill, 406/373-6016, [email protected] 1994 10,000 $75/hd Free 40 Both YG2.8 and Choice -, Select 600-900 lbs. NE 3/8 British, 5/8 Continental S, W, P, N Y N Sell directly to the retailer Y, under certain conditions
Montana Range Piedmontese Beef www.montanarange.com Terry Hause, 888/251-1847, [email protected] 1999 6,000 $0.10-$0.25 HCW $0 N/A No grid No grid 850 lbs. All Piedmontese sired S,W, P, N N/A Available Yes Yes
Nebraska Corn-Fed Beef Inc. www.necornfedbeef.com Jo McElwain, 402/475-2333, [email protected] 1997 32,000 $12/hd $4/hd 1 Both Choice YG3 550-1,000 lbs. NE No Bos indicus S, W, P, BQA guidelines Y N Feeder — Nebraska Corn-Fed Beef feedyard, packer — Swift & Co., Premium Protein Products, Excel N
Nolan Ryan's Tender Aged Beef www.nolanryanbeef.com Coy Meyring, 806/457-1389, [email protected] 2000 Confidential Varies (call for information) None 1 Yield Select, YG1 & 2 600-899 lbs. TX None, prefer Bos indicus N Y N Feeder (licensed feedyards in South Texas and Texas panhandle) packers (Sam Kane Beef and Swift & Co.), retailers (Kroger) Y
Performance Plus — Retained Ownership Don Cain Jr., 888/269-8387, [email protected] 1993 Confidential $32.90/hd $7.50/hd 1 Both N/A 500-975 lbs. IA, KS, NE, CO, MO, SD 50-75% British, 25-50% Continental MSI scanned Y Y N N
Performance Plus — Sale Barn Don Cain Jr., 888/269-8387, [email protected] 1993 Confidential $22.33/hd $8/hd 1 Both N/A 500-975 lbs. IA, KS, NE, CO, MO, SD 50-75% British, 25-50% Continental MSI scanned, S, Vac 45 Y Y N N
Power Genetics www.powergenetics.com Jason Anderson or Mark Tracy, 308/493-5604 1993 Confidential Confidential None 35 Both Confidential Confidential Confidential Power Genetics S, W, P Y N Confidential Y
Premium Gold Angus Beef www.pgabeef.com Ron Vanderboon, 616/361-2808, 616/485-4257 (cell), [email protected] 1993 100,000 $20-$30/hd $3/hd No minimum Both Choice YG3 600-950 lbs. NE 50% Angus S, W, P Y N Packers — Tyson Yes, with PGA approved bulls
Ranchers Renaissance, www.ranchersrenaissance.com Rose Hickert 303/662-1945, [email protected] 1997 100,000+ Confidential Confidential N/A Paid based on value created N/A Confidential TX, CO, Canada 50% British, 50% Continental W, P, Process verification Y Optional Feeder, packer, retailer Y
Red Angus Feeder Calf Certification Program, www.redangus.org Ann Holsinger or Blake Angell, 940/387-3502, [email protected], [email protected] 1995 100,000 Depends on location $1.19/hd 1 QG Choice YG3 550-950 lbs. CO, NE, KS 50% Red Angus, calves must have one registered Angus parent S N/A N Packer — Excel Corp. N
Simply Better Beef LLC, www.smithfieldfoods.com Al Perez, 970/304-2913, [email protected] 1995 150,000 Confidential No cost to producers for group data, $1-$3 individual & full data Load lots of steers or heifers Both Choice YG3 536-999 lbs. CO, ID, TX British cross and Continental x British feeder cattle S, P Y N Feeder — Five Rivers Ranch Cattle Feeding, Packer — Smithfield Foods N
U.S. Premium Beef Ltd., www.uspremiumbeef.com Tracy Thomas, 866/877-2525, [email protected] 1996 600,000 $20/hd average Membership and share access 20 Both 50% Choice YG3 575-1,000 lbs. KS Breeds with high-quality grade carcass traits None Y N Packer — National Beef Packing Co. Yes
Western Grasslands Beef Wayne Langston, 530/253-1193, [email protected] 2002 N/A Confidential $3/hd 1 N/A N/A 1,150 lbs. live weight CA 51% Black or Red Angus S, W, P, N, grassfed only, Born & Raised in the USA® certification N Y Confidential N
Calf-Based Programs
BUB Ranch Beef Alliance Don Bush or Holly Meyer, 417/867-3336 1998 3,000 $45/hd — Live $78/hd — Killed Buy BUB genetics, average bull — $2,450, commercial female — $1,350 1 YG N/A N/A MO, TX, AR Sired by BUB bull or from a BUB sired female S, Preconditioned at least 45 days, fully vaccinated Y N/A Joplin Regional Stockyards, U Lazy 2 Ranch, Flink Rock Feeders Y
Cooperative Beef $olutions — combining superior genetics and advanced management technologies to capture the most net dollars for your cattle! www.cooperativebeefsolutions.com Willie Altenburg, 970/568-7881; Tim Davis, 800/584-0040; Dan Dorn, 888/675-2212; Joe Young, 800/858-4330; [email protected] 2003 N/A $15-$25/hd management improvement $10-$12/hd 1 load 1 sex — will accommodate multiple owners N/A Choice/3B 550-950 lbs. KS None S Y Y Feeder — Decatur County Feedyard, packer — Excel, genetics — Genex, Herd, Management Programs — Midwest Micro Systems (Cow Sense) N/A
MFA Health Track Beef Alliance, www.mfahealthtrack.com Mike John, 573/876-5573, [email protected] 1998 42,816 $43.70/hd None for members 1 N/A N/A N/A TX, KS, NE, MO, IL Low % Bos indicus and dairy S, W, P, standardized nutrition Y N/A No N/A
Missouri Verified Beef, www.moverifiedbeef.com Brad White 662/312-1443, [email protected] 2000 1,100 + $39/hd See Web site 5 Both N/A N/A Multiple No dairy S, W, P, process verification Y N/A Confidential Y
Montana Beef Network, www.mbn.montana.edu Lisa Duffey, project coordinator, 406/994-4324, [email protected] 1999 24,600 N/A Source and age verification — $3/head, Source and age verification w/tracking and carcass data collection — $5/head 1 N/A N/A N/A All U.S. none S, W, P Y N N N/A
Piedmont Cattle Producers Association, www.pcmabeef.com Phil Slay, 334/864-0407 1994 2,150 8¢ over market $1.25/hd 20 N/A N/A N/A Midwest feedlots 50% Angus, 1/8 Bos indicus S, W, P, V (2 rounds) Y N/A Alabama Feeder Cattle Council N/A
KEY:
Grids: geared to QG = quality grade, YG = yield grade, Both = quality and yield grade
Practices Required: S = source verification, W = weaning, P = preconditioning, N = natural (i.e., typically prohibit the use of antibiotics and growth hormones)

Editor's Note: BEEF defines alliances in this listing as either consumer-based alliances — those that focus on finding, feeding and marketing cattle according to pre-defined consumer product specifications, or calf-based — those concerned with procuring calves that fit certain value requirements. These BEEF Yellow Pages provide the most comprehensive public listing of industry alliances to date. Some that were contacted declined to participate.

The California study

Video auctions are the new standard for cattle marketing. They operate much like a traditional auction taking place in a sale barn, but have a much larger pool of potential buyers. Thus, sale prices observed in video auctions are often more indicative of national prices than are local cash sale prices. This means we can learn what cattle markets really want by studying video auction prices.

In the course of our research, we used data from video auctions of calves. Western Video Market provided us anonymous information from 1,979 lots of cattle with average weights in the 500- to 625-lb. range sold in video auctions from 1997-2003. This weight range was used to focus on the price effects of the length of time since calves were weaned.

The number of lots sold per year increased from 153 in 1998 to 397 in 2003. Average lot size increased from 130 head during 1997 to 146 head in 2003. The cattle were sold from ranches across the western U.S.

The new analysis had more data available and used a complex statistical process to get a more current picture of the market value of preconditioning and other pricing factors.

Clostridium vaccine

Novartis introduces Clostridium Perfringens Type A Toxoid, a new Clostridium perfringens vaccine available under a conditional license from USDA to be administered to healthy cattle. C. perfringens is associated with gastrointestinal diseases in cows and calves, and can be fatal to calves. It's commonly found in cases where abomasal ulcers, abomasal hemorrhage and abdominal tympany are found. The vaccine is safe for pregnant or non-pregnant animals.
(Circle Reply Card No. 101)

Blackleg/pinkeye vaccine

Boehringer Ingelheim Vetmedica, Inc., has USDA approval for the first single-dose 7-way blackleg/pinkeye combination vaccine, Alpha-7/MB-1. It protects cattle against seven major Clostridia diseases and pinkeye. A companion product, Ocuguard MB-1, a single-dose pinkeye vaccine, also received USDA approval. The vaccines are both administered subcutaneously, adhering to Beef Quality Assurance guidelines. The single-dose vaccines help ranchers cut down on time and labor of administering additional doses.
(Circle Reply Card No. 102)

Angus offers RFID options

The American Angus Association (AAA) is offering Beef Improvement Records (BIR) tag in RFID matched-pair sets and RFID tag-only options.

AAA began offering an RFID matched-pair option with its AngusSourceSM marketing program in 2003. The BIR tag option is aimed at producers who want to capitalize on the advantages of RFID, but whose cattle don't meet AngusSource program requirements.

The RFID tags are $2.25 each, while RFID-matched pair sets are $3.25 (minimum order size of 20 on both).
(Circle Reply Card No. 103)

Performance work shirt

Gorgonz Performance Work Wear developed the Performance Work Shirt — a cooler, drier and more functional work shirt than regular cotton. The Gorgonz Evaporative Cooling Technology fabric dries, breathes and lasts four times longer than standard cotton t-shirts. Tough and durable, it features heavy-duty stitching, vented side panels, and an odor neutralizer built into the fabric. The shirt contains multiple pockets to hold smaller items that can't be secured with a tool belt.
(Circle Reply Card No. 104)

Spreader trailer mount

The Roto-Spread model 532-16 Spreader Trailer Mount offers variable speed floor belt that controls spread rate and hydraulic driven vertical beaters. A 1,000-RPM PTO driven pump powers it while the floor belt and rear gate is operated by the tractor hydraulics. Its features include high-density polyethylene on the floor, sidewalls and end gate to prevent rust. The belt and retention gate system, along with the beaters, gives precision application to all waste disposal.
(Circle Reply Card No. 105)

Hydraulic squeeze

A hydraulic squeeze chute — Rancher's Choice — from Stampede Steel, can be operated from just about anywhere because of its 340° pivot arm system. The squeeze also comes with a 20-in., built-in palpation door and top and bottom side panels that swing out for full access to the animal. The Rancher's Choice comes standard with a hydraulic pivot arm, 5-hp motor, sternum bar, neck extender bars and double-dutch side panels.
(Circle Reply Card No. 106)

Another Synch Option?

Cattle producers using artificial insemination (AI) know estrous cycle synchronization (ECS) is the most efficient way to handle and inseminate cattle. But which protocol to use is often a difficult decision.

Considerations of handling stress (how many times the animal must pass through the chute), time and labor, cost, protocol effectiveness and AI pregnancy rates all must be considered in the decision. But for producers desiring a progestin-based ECS protocol, only two agents are currently commercially available.

Melengestrol acetate (MGA) is the only orally active progestin available to producers with limited labor and a desire to minimize animal handling prior to AI. The most cited problem of those synchronizing females with MGA is the 29-31 days required prior to insemination. This can potentially increase a herd's postpartum interval and requires foresight and planning.

Recently, we evaluated the use of short-term exposure to altrenogest (Regumate®) as an orally active progestin in an ECS protocol for beef heifers. A feed-grade product, Regumate is commercially available for ovulation control and pregnancy maintenance in mares, and recently was approved for swine under the name Matrix®. It requires only seven days to time of PGF2α administration, compared to 31 days using the standard MGA protocol.

In our study, a total of 144 crossbred (Simmental and Red Angus) heifers, 14-16 months old and 760-985 lbs., were randomly allotted to either a standard 31-day MGA ECS protocol (75 females), with MGA being fed for the first 14 days of the protocol; or to a short-term altrenogest ECS protocol (69 females), with altrenogest top-dressed at ~20 mg/head/day for seven days.

All animals received a 25-mg intramuscular dose of prostaglandin F2α (PGF2α) (Lutalyse®) 17 days after the end of oral MGA treatment, or at the end of the seven-day oral altrenogest treatment. Of MGA-treated heifers, 50% exhibited standing estrus and were inseminated once with a unit of frozen-thawed Red Angus semen, compared to 70% of altrenogest-treated heifers inseminated with semen from the same bulls.

More altrenogest-treated heifers exhibited standing estrus than MGA-treated heifers. This may have resulted from some MGA-treated heifers not consuming the recommended daily dose of MGA, however, as indicated by evidence of lowered palatability in young heifers when using this progestin agent. The interval from PGF2α treatment to onset of standing estrus was 55 hours for the altrenogest-synchronized heifers, similar to the 53 hours for MGA-synchronized heifers.

At 30 days following AI, pregnancy rate (via ultrasonography) for both treatments was 66%. Calving rate (heifers pregnant from AI that calved) was 87% for MGA-treated heifers and 85% for altrenogest-treated heifers. Heifer calves produced from altrenogest-treated heifers had normal growth rates, reached puberty at the same age as contemporary herdmates, and were fertile following AI.

The results demonstrate altrenogest can:

  • Effectively synchronize estrus in crossbred beef cattle.

  • Result in AI pregnancy similar to a standard MGA protocol.

  • Result in normal, healthy calves.

  • Result in heifer calves that develop and reach puberty similar to herdmates.

The potential use of altrenogest for ECS in beef cattle depends on regulatory approval, cost per animal treatment and the need by producers who lack facilities, time and/or labor to corral their cattle multiple times for ECS and AI.

Using the seven-day altrenogest protocol, a producer would top-dress pre-breeding rations for a week and pen the females only twice — once for a PGF2α injection and once for AI. The recommended MGA protocol is 31 days — 14 days of feeding MGA and a 15- to 17-day resting period, followed by a PGF2α injection to induce estrus.

The results show altrenogest can be a viable alternative for beef cattle ECS, and suggest timed-AI following the altrenogest protocol is a management option for producers.

C.E. Ferguson and R.A. Godke are faculty in the Department of Animal Sciences, Louisiana State University Agricultural Center, Baton Rouge.

PETA workers nabbed

After discovering dead dogs and cats dumped in a shopping center dumpster each Wednesday for four weeks, police in Ahoskie, NC, staked out the location. In June, they charged two employees of People for the Ethical Treatment of Animals (PETA) with animal cruelty for dumping the euthanized pets.

Police say they found 18 dead animals in the bin and another 13 in a van registered to PETA. The animals were from animal shelters in Northampton and Bertie counties, police said. The pair — a man and woman — were each charged with 31 felony counts of animal cruelty and eight misdemeanor counts of illegal disposal of dead animals.

This month in brief

Cost control in a beef cow herd enterprise is in the details, says “Market Advisor” columnist Harlan Hughes. In the third part on his series on benchmarking, page 10, Hughes presents some benchmarking details for implementing a cost-control program for your herd in “Cost control is in the details — Part III.”

One doesn't hear as much about alliances these days. Perhaps that's because they've become a standard part of cattle management and marketing in the modern U.S. beef business. Wes Ishmael details the changes in such value-added cattle marketing programs, as reflected in the first five years of our BEEF Alliance Yellow Pages listings. See his comments in “Alliances impact is growing — sort of” on page 11.

The cattle market's recent great prices won't last forever, writes Mark Hilton, DVM, in his page 16 “Vet's Opinion” piece, “Develop a portfolio on your cattle.” The Purdue University assistant professor of beef production medicine says now's the time to track and document your herd's performance. A portfolio will allow your calves to command the prices they deserve when high calf price levels retreat.

Alan Newport details how a marketing pool of 50 southeast Missouri farmer-feeders consistently hits the “sweet spot” on packer grids. In “Making The Grid,” on page 20, Newport explains how their formula combines artificial insemination, EPDs, individual animal ID and a lot of data sharing.

When it comes to heifer development, producers should remember that calves on the ground still rule profitability, writes Penn State University's Dan Kniffen on page 32. In “Grab The Pendulum,” the Extension beef associate and assistant professor of animal science says too many folks don't take a long-term perspective in selection decisions.

Seth Gudmunson is BEEF magazine's summer intern. A first-rate creative talent, the Black Hills State University (BHSU) senior came our way via a top recommendation from someone also at the top of her game — former BEEF managing editor Kindra Gordon, who now teaches journalism at BHSU. Gudmunson fashioned the look for our 2005 Alliance Yellow Pages that appear on page A1 of this issue. The listing includes the contact info, specs and payoffs of more than 30 beef marketing alliances doing business in the U.S.

California launches Beef Spanish Web site

To better serve the fastest growing demographic in the U.S., which represents one-third of California's population, the California Beef Council (CBC) launched a Spanish-language Web site that includes beef recipes, nutrition facts and beef safety information.

Virginia Coelho, Fremont cattle producer and CBC chair, says Hispanic consumers represent a great marketing opportunity because they include more daily servings of meat than a general consumer.

“However, there's a shortage of beef-specific information in Spanish,” she says. “We felt that targeted marketing efforts, such as the Web site, will encourage Hispanic consumers to choose beef over other proteins.”

www.MeGustalaCarnedeRes.com translates as “I like beef.”

Yanking the rug on property rights

Who would have thought it possible? Throughout history it's been a favorite tool of thuggish despots like Robert Mugabe of Zimbabwe. But not in the good, old USA.

“No person shall be … deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” — Amendment V of the U.S. Constitution.

In an all-out, reared-back, head butt to American property rights, the U.S. Supreme Court ruled 5-4 in June that local government can force property owners to sell out to other private owners. Previously such eminent domain determinations were made only for “public-use” projects like roads and bridges, or land for schools and parks.

With this ruling, “public use” has been broadened to give local government the wink to redistribute private property — with compensation — if the government decides it's a good deal for — well, itself.

In Kelo et al v. City of New London, the city of New London, CT, condemned 15 private properties — in a non-blighted area — for private waterfront development. Officials said new ownership would provide more jobs and tax revenue for the community, thus constituting a public use.

News of the verdict was lost amid the din of the first native case of BSE in the U.S. Compared to BSE, however, the Supreme Court ruling probably is much more erosive on the fabric of agricultural life and livelihood because it decimates one of U.S. citizenship's biggest strengths — the right to one's private property.

Using the court's logic, it would seem theoretically anything could be twisted into being of benefit to “the public.” So watch out if you're not using your property the way local government — or its friends — would like.

Associate Justice Sandra Day O'Connor, who recently announced her retirement from the land's highest bench, voted in the minority. She summed up the situation succinctly in her dissenting opinion:

“For who among us can say she already makes the most productive or attractive possible use of her property? The specter of condemnation hangs over all property. Nothing is to prevent the state from replacing any Motel 6 with a Ritz-Carleton, any home with a shopping mall, or any farm with a factory.

“…The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations,” she added.

The 5-4 decision broke along ideological lines. Justices generally thought of as conservative — Clarence Thomas, Antonin Scalia and Chief Justice William Rehnquist — voted with O'Connor in the minority. Liberal-leaning Justices John Paul Stevens, Stephen Breyer, Ruth Bader Ginsburg and David Souter, along with moderate Anthony Kennedy, made up the majority.

More than just the poor should be unnerved by this verdict. After all, there are few private holdings that couldn't be improved to sweeten their “revenue value” for government.

For almost 200 years, the guarantee of property rights was the fulcrum on which American achievement has been hoisted. It was the guarantee that convinced citizens it was worthwhile to risk their hard-won dollars investing in property — and its improvement — in the hope they could better their lot in life.

Geographically, it's a long way from the U.S. to the African nation of Zimbabwe. Philosophically, however, we've just moved one step closer.

Cost control is in the details Part III

Benchmarking is comparing your beef cow herd's production, financial and costs of production measures to those from a set of benchmark herds. Last month, I illustrated how benchmarking your production and financial measures can help identify your management strengths and weakness. This month, I will present some benchmarking details for implementing a cost-control program for your herd.

Cost control is in the details, so I'll devote this column to a set of cost-of-production benchmarks ranchers can use in benchmarking the costs of running their beef cow herds. These benchmark values are the averages of selected cost variables generated by 124 North Dakota herds participating in North Dakota's state-wide Farm Business Management associations.

As these are averages, these benchmarks should be attainable goals. Ranchers' goals should be to match or beat these values.

Benchmark herds' cost summary

Let's first look at the cost components listed in Figure 1 for these 2004 benchmark herds.

  • Pasture costs. The Integrated Resource Management Guidelines for calculating economic pasture costs call for using an opportunity cost for the economic cost of pasture. Opportunity cost for rental pastures is straightforward — it's the rental payment. Opportunity pasture costs for leased federal and state lands are also straightforward — the actual dollar payments made.

    Owned deeded land, however, is more problematic. Opportunity cost on owned deeded pastureland is charged at the local going pasture rental rate. Be careful not to double-account — if the going rental rate you use places fence-repair on the landlord, don't add fence-repair costs to the opportunity pasture costs. If the going rental rate includes the tenant fixing the fence, then fence repairs should be included.

    Pastureland taxes shouldn't be added to going rental rates. In a future column, I'll explain how I calculate pasture costs — it's not as straightforward as it seems.

  • Winter feed costs. Winter feed costs consist of feed disappearance attributed to the cow herd, times the local going market price for each feed. Feed disappearance includes the quantity consumed by the breeding herd, plus wastage. Don't include storage losses.

    Calculating feed disappearance can be a challenge. I recommend a hydraulic oil pressure gauge mounted on the loader tractor and calibrated to measure the weight of each bale lifted. Other managers use scales on their feed wagon and typically tally feed disappearance on a regular basis.

    Winter feed costs are priced on an opportunity-costs basis in that farm-raised feeds are valued at local going market prices — not cost of production. If farm-raised feeds weren't fed, they could be sold on the local market.

  • Figure 2 shows the forage-feed disappearance calculations for the benchmark herds. Annual pounds of each forage fed/cow are reported in “as is” pounds, and then totaled. Each forage feed is then adjusted for dry matter (DM) content and a total DM disappearance is calculated.

    Finally, the total DM consumed is used to calculate the “tons-of-hay equivalent” that disappeared. Do this by dividing total DM pounds by the typical DM content of hay (90%) to obtain the total “as is” pounds of hay equivalent that disappeared (6,031/0.90)/2,000 = 3.35 tons).

    This 3.35 tons of hay equivalent can be used to benchmark ranch's consumption of different types of forages.

  • Figure 3 presents the benchmark herds' annual $240/cow feed cost. The total winter forage program cost an average of $125/cow with the total winter-feeding program costing $158/cow. The summer feeding program averaged $82/cow.

    As shown in Figure 1, this $240 annual feed cost is 47% of the total cost of operating these benchmark herds.

  • Vet and medicine costs averaged $14.50 on these 2004 benchmark herds.

  • Livestock costs. Figure 4 presents the cost details behind the $61 “livestock costs” for the benchmark herds. Each cost category includes only costs directly associated with the beef cow herd profit center.

    Again, be careful not to double-account. Don't charge opportunity/market price for farm-raised feeds, plus the costs of raising those feeds. And don't include such farming costs as putting up hay and raising cash crops.

    For example, fuel and oil costs for the beef cow herd is only for that portion of oil consumption directly associated with the beef cow herd — primarily what's used for feeding the beef cows, plus pickup fuel in checking cows in the pasture. Beef cow repairs are only those repair costs associated directly with the beef cow equipment, beef cow facilities and beef cow buildings.

  • Livestock leases cover the value of leased-cow payments when they're present. Most herds don't have leases. That's why this average lease cost figure is so low.

  • Overhead costs. Figure 5 presents the detailed average $55 overhead costs for the benchmark herds. These represent only the overhead costs associated with the beef cow herd.

    For example, utilities costs are only those attributed to the beef cow herd. Don't include household utilities and non-cow herd utilities. Machinery and building depreciation includes only beef cow-related machinery (not haying equipment) and only beef cow-related buildings.

  • Replacement heifer costs. The $128 replacement heifer cost in Figure 1 is the total cost of growing a replacement heifer (including the market value of the heifer calf at weaning 2002), plus the purchase cost of any replacement heifer. It covers all costs up through preg-check time prorated out to all cows in the beef cow herd.

    With a 15% replacement rate, the posted $128 heifer replacement cost/cow figures out to $853 for a preg-checked replacement heifer. This is based on a 2002-born heifer. Today's preg-checked replacement heifers based on 2003 and 2004 heifer calf prices will cost more than $1,000/head.

  • Costs total to $512/cow on the benchmark herds, given the $128 replacement heifer cost. This figures out to an $85 unit cost of producing a cwt. of calf (UCOP).

Ranchers should benchmark their production costs per cow to identify their business's cost strengths, and then apply management to capitalize even more on these strengths. Ranchers need to find their cost weaknesses and focus added management energies on removing them. Cost control is clearly in the details.

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

Border Reopens

At press time, the 4½-month legal skirmish over the importation of Canadian live cattle into the U.S. appeared to be resolved. If unimpeded, Canadian live cattle less than 30 months of age were expected to be moving into the U.S. “within days, not weeks,” said USDA Secretary Mike Johanns.

In fact, an undisclosed number of Canadian cattle crossed the border into Niagara Falls, NY, on July 18, USDA said. The cattle's origin and destination were not disclosed.

It was in early March, on the eve of USDA's intended border reopening date of March 7, that U.S. District Judge Richard F. Cebull in Billings, MT, granted R-CALF an injunction on the rule. But on July 14, a three-judge panel of the Ninth Circuit Court of Appeals in Seattle lifted Cebull's preliminary injunction. In ruling for a temporary stay, Cebull said reopening the U.S. border to Canadian live cattle would endanger the U.S. beef industry and present “a genuine risk of death for U.S. consumers.”

In announcing its decision July 14, the panel said it would issue the rationale for its ruling at a later date.

At press time, there was one potential obstacle to resumed live cattle trade yet to be hurdled, however — a scheduled July 27 hearing before Cebull. Analysts, however, thought the unanimous ruling by the Appeals Court panel — delivered within 24 hours of hearing oral arguments — might convince claimants to drop their case, or exert pressure on Cebull to change his injunctive view.

A long process

Trade in live cattle from Canada had been blocked since May 2003 when Canada announced its first case of BSE in an Alberta cow. In September 2003, the U.S. reinstated trade in beef cuts from Canadian cattle younger than 30 months. Reinstatement of trade in live cattle had proven more problematic.

Every time it seemed headway in reopening live-cattle trade was being made, a BSE-related incident would arise. In December 2003, it was the discovery in Washington state of a BSE-infected cow of Canadian origin. Then, on the eve of the border reopening in early March, Canada discovered its second case of BSE.

  • USDA Secretary Mike Johanns lauded the Seattle ruling, calling it: “great news for the future of the U.S. beef industry, specifically the many ranchers, feeders, and processing plants that have been struggling to make ends meet due to the closed border.

    “It also bolsters our position with other international trading partners by following the very advice we have given them to base trade decisions on sound science,” he said.

    Because the ruling is effective immediately, Johanns said USDA would take “immediate steps” to resume importing cattle less than 30 months of age. He said the Animal and Plant Health Inspection Service already was in contact with the Canadian Food Inspection Agency to prepare to certify cattle for shipment.

    “We've been safely importing boneless boxed beef from Canada since September 2003, and now we will use the scientific approach laid out in our minimal risk rule to once again safely import live Canadian cattle for processing,” he said.

  • Jim McAdams, an Adkins, TX, cattle producer and president of the National Cattlemen's Beef Association, said his organization is pleased the Court agreed with the science — beef is safe from BSE.

    “U.S. cattlemen are best served when international trade is based on science and we expect our trading partners to follow the science that BSE does not pose a public health or food safety risk,” McAdams said.

  • Meanwhile, Bill Bullard, CEO of R-CALF USA, said he was “disappointed” in the ruling.

“R-CALF USA remains confident that USDA's Final Rule was not justified, and that USDA did not provide significant justification for overturning a longstanding policy that protected both the U.S. cattle herd and U.S. consumers from the introduction of BSE.

“R-CALF is confident that when we have a full hearing on the merits of the case, we will demonstrate to the district court that USDA's actions are premature and unjustified,” he said.

Expect more volatility

Jim Robb, director of the Livestock Marketing Information Center, says the border reopening will likely add volatility to the U.S. cattle market. But, on Friday, the first day of trading following the Thursday evening court announcement, there was little downward movement in the livestock markets.

“Some of this had already been factored into the market,” Robb says. “We could have had this kind of movement without the court decision.”

Robb says analysts are in the process of revising their forecasts, as resumption of live cattle trade with Canada wasn't expected until late 2005 or early 2006.

“I'd advise cow-calf producers to focus on the Midwest corn crop as it will be more fundamental to pricing their cattle this fall than the border situation,” he said.

He says he envisions no relief for cattle feeders this fall.

“We're just getting into the real ugly time for cattle feeders,” he said. “By the time we get through August breakevens, feeders will be losing $100/head. Breakevens are 90¢ and we'll be lucky to get an 80¢ market in August.”

He says an interesting scenario to watch in Canada is how much Canadians will ramp up cow kill. With fed cattle now apparently able to cross to the U.S., he believes Canada might shift its resources toward harvesting cull cows and bulls in order to send more fed animals to the U.S.

Even then, Robb doesn't immediately expect a big run of fed cattle to the border. For one thing, Canada has added significant harvest capacity over the past two years. Plus, today's Canadian feed-yard placements won't be market ready until November, he adds.

Robb mentioned one other interesting fact: The just-concluded second quarter of 2005 will be the first quarter in history that the U.S. will have imported more than 1 billion lbs. of beef (carcass weight, not product weight).