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Articles from 2014 In September


5 Areas Beef Producers Should Assess This Fall

Fall is a time for beef producers to assess the past growing season and prepare for the upcoming winter months. Gene Schmitz, University of Missouri Extension livestock specialist, says evaluating the forage base and livestock performance can help identify changes that need to be made in upcoming growing seasons. Schmitz offers these 5 tips for fall planning:

1. Assess weeds.

Pasture and hay fields should be monitored for weed pressure and the presence of toxic plants. Identify and mark problem areas so they can be treated in a timely manner next year. Assess grass stands and identify areas for possible renovation to thicken the stand.

Soil test and identify nutrient deficiencies so fertilizer and lime dollars can be spent more efficiently to correct existing problems.

To read the complete list for fall planning, click here.

 

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7 Steps To Moving & Penning Cattle With Dogs

When it comes to moving cattle, some ranchers rely on horses, others use ATVs, and many utilize the skills of a working cattle dog. Whatever the preferred method, there are many considerations to moving cattle efficiently and with minimal stress. Although we don’t use cattle dogs on our ranch, I had the opportunity to be an announcer a few years ago at the National Cattle Dog Finals, and I learned to appreciate what makes a good dog vs. one that just gets in the way when working cattle.

A video by Charles Long, Texas A&M AgriLife Research and Extension resident director of research in Overton, TX, was recently shared with me. In the video, Long depicts and explains how cowboys use black-mouth cur cow dogs to move a group of cattle from a pasture into a pen. You can watch the seven-minute video below, but here are seven points I gleaned from the video regarding the herding of cattle using dogs, along with advice from Long, who is an expert on the subject:

1. Entering the pasture

“Keep the dogs close by the rider until arriving closer to the cattle,” says Long.

2. Gathering the herd

“Use a single quiet command to begin circling the cattle. The cattle will group together to avoid pressure from the dogs,” he says.

 

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3. The bay up

Long says that the “bay up” allows stragglers to catch up while the dogs maintain the group of cattle together. If the cattle are wild or not dog-broke, they may take the dogs or run away. It might take a little longer to make sure the cattle stay settled in the group.

4. Riding to the herd

“Approach the herd slowly,” advises Long. “In the case of wild cattle, make a large circle, so cattle don’t see or hear you until you are in the position to move them where they want to go.”

5. Starting the drive

Long points out that the dogs stay at the front of the herd to slow movement and prevent runaways, as the cowboys and horses apply pressure from behind the herd.

6. Continuing the drive

In the video, the viewer can see that the cattle move slowly and calmly. This is routine for dog-broke cattle, says Long.

7. Approaching the pens

“The cattle are able to move quietly into the trap, and the dogs stay to the rear to handle any animal that tries to stray away,” concludes Long.

Watch the video here.

Do you use cattle dogs when working your herd? Which breed is your favorite? What tips do you have for training or using these animals to move cattle? Share your advice and experiences in the comments section below.

The opinions of Amanda Radke are not necessarily those of Beefmagazine.com or the Penton Farm Progress Group.

 

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Doing The Land Price Boogie

Gleaner combine
<p>A Gleaner combine makes short work of a corn field</p>

“We think it’s simply inevitable that the row crop guys are going to face some very difficult times and we think it is simply inevitable that land values will be forced to decline and land prices will follow.”

That, says Don Close, one of a phalanx of ag analysts with Rabo AgriFinance, is the short story of the rise and fall of King Corn and the complex that surrounds it. Driven by drought and ethanol demand, corn prices ruled the ag complex for the last eight or nine years. The corn infrastructure rallied, too, with land and equipment, among many things, riding the tailwind of the corn market higher.

That has come to an abrupt and dramatic halt this year with what is expected to be a record corn harvest, assuming farmers can get it out of the field, coupled with a stagnant export market and a mature ethanol market.

And analysts don’t expect corn prices to come back any time soon. “Our expectation is we are very likely are going back to a period of extended below cost of production,” Close says. The result is the beginning of a price plummet in farmland.

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Ernie Goss, who holds the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business, conducts a monthly survey of bank executives in a 10-state region to keep a finger on the pulse of the rural economy. The most recent survey showed some concerns.

“The farmland and ranchland price index for September slumped to 33.7, its lowest level since March 2009 and down from 41.4 in August,” he says. An index rating of 50 is growth neutral—anything above 50 is positive growth; below 50 is negative growth.

And it’s not just land values. The September farm equipment sales index slumped to a record low 17.6, he says, and the index has been below growth neutral for 14 months.

While the average farmland price index came in at 33.7, there was a wide range in the 10 states surveyed. Nebraska reported the lowest number at 23.8, followed by Illinois at 31.1, Wyoming at 31.2 and South Dakota at 32.8. On the other end of the scale, North Dakota reported a robust 65.1, Colorado came in at 55.4 and Missouri came in at 54.1. The states in the middle were Kansas at 38.7 and Iowa at 34.1.

According to Close, we can expect land prices to continue to drop, but how much will vary widely. He says Rabo AgriFinance analysts think farmers need to take about 4 million acres out of production for the corn market to find a balance. “If you bought a farm at something in excess of $10,000/acre, you ain’t gonna be one of them,” he says.

I bring this up not to make corn farmers feel any worse than they already do, but to remind cattle producers to be wary of falling into the same trap.

Recreational demand for ranchland has skewed the market upward for many years and that’s not likely to change. But as farmland values continue to plummet, it’s likely we’ll see a similar dynamic in ranchland values.

With record high prices for bred cows and heifers, a drop in other input costs—feed, real estate, you name it—is welcome and essential if cattle producers want to keep their operations above growth neutral.

So keep the cows and heifers at home and expand. The market will reward you for it. But keep recent history in mind. As the sergeant on an old TV cop show used to remind his troops, “Let’s be careful out there.”

 

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5 Trending Headlines: How To Lose An Animal Welfare Argument; Packing Plant To Open; & Quiet Cattle Handling Tips

Things are happening in the cattle business. From the anticipated opening of a “new” old packing plant in Iowa to arguing about animal welfare, this week’s roundup of industry news is a must-read.

 

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Prognosticators Optimistic For Low-Cost Corn And Pricey Cattle

I've been working this week on a roundup of some of the top economic consultants for my November edition of Beef Producer and decided to share some of their thoughts with you in my blog.

Most of these folks think corn and other feedstuffs could stay comparatively low-priced, and that cattle should stay relatively high, until near the end of the decade.

Dan Basse of AgResource Co. in Chicago said recently that corn prices should be in the range of $3-4/bu. for seven years or possibly more. Basse also said fed-cattle prices should peak this fall but are likely to remain strong for 5-7 years.

Basse said the corn price will be depressed for several years by a combination of a mature biofuel market, lower demand from the livestock sector, and the lowest U.S. export share on record for a non-drought year -- that's assuming no more droughts.

To read Newport's entire column, click here.

 

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Industry At A Glance: Retail Beef & The Ground Beef Market

retail ground beef prices

You’ve likely seen the headlines during the past week regarding the price of ground beef surpassing $4/lb. for the first time ever. Indeed, the Bureau of Labor Statistics (BLS) data placed monthly ground beef prices at $4.013/lb. in August.

The accompanying chart provides some context around the BLS retail beef price series, including that of ground beef. The chart highlights price trends for overall retail beef prices, lean and extra lean ground beef, and ground beef, respectively. Additionally, the graph also includes the 12-month moving average reflecting the price difference between retail beef and ground beef prices. Several key factors are important within the data.

The ground beef market is segmented (ground beef is not ground beef is not ground beef). Not surprisingly, consumers are willing to pay higher prices for leaner beef. And that market has gained some price competitiveness in recent years, primarily due to the loss of lean finely textured beef (LFTB) and declining slaughter numbers.

retail beef and ground beef prices

Meanwhile, while popular press coverage focuses on the seemingly important threshold of $4/lb. ground beef, the rest of the retail market and whole-muscle cuts also continue to march higher. However, it was just a month ago that the BLS retail beef price series eclipsed $6. Perhaps most important are the relative price differences within the market.

While there may be some coverage on the $4 mark, the move isn’t surprising nor out of the ordinary considering the long-run historical pattern in which retail price averages consistently have marched $2 ahead of ground beef prices. In other words, meat case pricing is all relative.

How do you perceive retail pricing differences within the market? At what point might these relationships be altered by price resistance within the meat case? Or is this all good news – retailers continue to have pricing power and have proven successful in raising prices for all categories of beef? Leave your thoughts in the comment section below.

 

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What Are Corn Stalk Bales Worth?

grazing corn stalks

It’s hard to believe the time of year is here already, but combines are entering the fields in my neck of the woods. We were hit by an early June hail storm and had a cool summer, so yields are expected to be down in many fields and some will be used for silage. After harvest, the corn stalks on many fields will be baled or the fields grazed by cattle until winter weather arrives.

We’ve been going back and forth regarding buying or baling corn stalk bales, or running our cows down the road to our corn fields for grazing. Certainly, it would be easier to let the cattle graze stalks vs. feeding bales this fall, but since they will be further down the road, there is some concern about getting them home before a blizzard hits. Plus, we think corn stalk bales make pretty good bedding in the winter time, so there’s the added value of using the stalks from our own field vs. purchasing straw.

 

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A recent article by Bruce Anderson, University of Nebraska-Lincoln Extension forage specialist, discusses the pros and cons of baling corn stalks for feed, and I thought it was worth passing along. Here is an excerpt:

“What are corn stalk bales worth?” asks Anderson. “One way to look at it is from the cost standpoint. Nutrients removed by stalk bales may need to be replaced with extra fertilizer. Using this fall’s prices, stalks contain about $10 worth of nitrogen, phosphate, sulfur, and lime/ton.

“Corn stalk removal also can reduce soil organic matter, increase erosion risk, and increase soil water evaporation. Nebraska research shows that dryland corn yield declines about 2 bu. for each ton of residue removed while irrigation cost increases similarly to maintain corn yield. That’s another $8/ton.”

Anderson adds that baling corn stalks is much harder on equipment than baling grass, which can equate to $20-25/ton for labor and equipment costs.

He estimates that costs incurred to bale corn stalks are about $40-50.

“So, what are corn stalks worth as a feed?” asks Anderson. “One rule of thumb suggests the dollar feeding value is just a bit higher than straw. But feed value of stalks varies greatly, and cattle tend to waste more of it. If you bale the entire field you may only have 3-4% protein and less than 50% TDN. Harvest just the tailings in the two or three rows behind the combine and TDN increases to the lower fifties and protein to about 5%. But you should test to make sure.”

Anderson concludes that it may be a toss-up, based on the numbers, whether it’s worth the time, labor and expense to bale corn stalk bales.

Do you feed corn stalk bales or use them as bedding? What forages do you rely on for fall grazing? Does winter weather impact your decision-making for how long you graze and what you feed in the fall? Share your thoughts in the comments section below.

The opinions of Amanda Radke are not necessarily those of Beefmagazine.com or the Penton Farm Progress Group.

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Consumer Demand Continues Evolution

“The beef market and demand profile is evolving, especially in light of higher-priced cuts,” say analysts with the Livestock Marketing Information Center (LMIC). “More cuts of beef are being developed from the more affordable and available primal cuts such as the chuck.”

The LMIC folks recently conducted a basic analysis of annual changes in the percentage of value each primal cut contributes to carcass cutout value. The timeframe considered was 2006 to August of this year. They remind that beef carcasses are fabricated into seven primal cuts: brisket, chuck, flank, loin, rib, round and short plate.

“The rib to carcass cutout value ratio has decreased by 11% and the loin to carcass cutout has decreased by 21%,” LMIC analysts say. “Another interesting note are the short plate, chuck, and brisket to carcass cutout value ratio have increased by 22%, 25%, and 38%, respectively, since 2006. The flank to carcass cutout value ratio has increased by 7% and the calculated carcass cutout value itself has increased by 60% from 2006 to 2014.

The LMIC study underscores the trend that began appearing during the Great Recession, as lesser-value end meats began providing more support to the beef complex overall, rather than the more expensive middle meats.

“Although a simple analysis and comparison, the numbers tell an important story, wholesale aspects of the beef industry are changing,” LMIC analysts say. “Although we are not through 2014 yet, markets suggest prices will remain strong through the end of 2014, allowing the above comparisons to be relevant and reflect the impressive market conditions seen so far this year in the beef industry.”

 

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Feeder Cattle Prices Continue Advance

feeder cattle prices

“Calf and feeder cattle prices have continued to strengthen as the engine of the fall roundup starts to rev,” says Andrew P. Griffith, University of Tennessee economist, in his weekly market comments. “Little to no weakness is evident in calf and feeder cattle markets as we head into October.”

Yearling feeder cattle this week traded fully steady to $3 higher, according to the Agricultural marketing Service (AMS). Calves traded unevenly steady from $5 lower to $5 higher.

“The biggest losses on calves were for those weighing over 500 lbs. in most cases, with gains more prevalent on lighter-weight calves under 500 lbs. in the Southeast,” AMS analysts say.  

Judging by Feeder Cattle futures at the end of the week, no one anticipates much, if any, near-term price weakness. Feeder Cattle futures were mostly limit-up $3.00 and near limit-up Friday. Week-to-week, after expiring Sep., they were an average of $5.28 higher across the board.

Tumbling cash corn prices—especially in areas where the record harvest is overwhelming available shipping capacity—are adding fuel to the calf and feeder markets. We heard of some cash corn prices in the Dakotas this week at around $2.20/bu. Week-to-week, corn futures were about another 9¢ lower through the front six contracts.

“The lack of price weakness at this point in the game may or may not be a surprise to producers and industry experts as the fall rush of cattle is slowly creeping upon the market,” Griffith says. “However, there has been no indication in the past 12 months of feeder cattle markets weakening and prices declining.”

Surprising or not, there’s plenty of unease among producers. On the one hand, there’s fundamental strength. On the other, plenty of questions remain pertaining to when and how fast the herd begins rebuilding, which will tighten supplies further. That wonderment includes puzzling over how much farmer-feeders may push the calf market in an effort to walk some of their corn crop to market. Even sooner than that, folks are wondering how many calves traded earlier this year and how many are left to come to town.

Despite continued seasonal erosion to wholesale beef values, rising carcass weights and the dearth of cash fed cattle trade this week, Feeder Cattle futures helped pull Live Cattle futures ahead. Week-to-week, Live Cattle futures were an average of $2.09 higher.

Choice boxed-beef cutout value was $6.05/cwt. lower week-to-week, closing Friday at $237.66/cwt., while Select was $4.13 lower at $225.48.

USDA’s monthly Cold Storage report this week was supportive. The volume of beef in freezers Aug. 31 was 6% less than the previous month, and 20% less than the previous year. Total red meat supplies were 7% less year-to-year.

“Though live cattle prices have eased slightly the past two weeks, cutout prices have descended at a much quicker rate,” Griffith explains. “Packers were able to support cutout prices through the summer by closely managing slaughter rates, but this may become more difficult as fed cattle marketings are likely to increase in the near future.”
 

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John Otte, Penton market analyst, explained earlier this week that bears in the market are questioning whether consumers will continue to pay higher record retail prices for beef, while the market bulls continue staking a claim in tight supply.

“Cash fed cattle sales volume thinned in recent weeks, which some market watchers attribute to the steady declines in prices retailers have paid for wholesale beef,” Otte explains. “If grocery stores, restaurants and export buyers are unwilling to pay historically lofty prices for burgers and steaks, processors have less meat sales revenue to bid aggressively for cash cattle.”
 

Feedlot, stocker margins

In the meantime, continued price strength for calves and feeders will challenge the margins of stocker producers. However, Derrell Peel, Oklahoma State University Extension livestock marketing specialist, notes in his weekly market comments that stocker value of gain remains strong and that traditional rules of thumb about price rollback don’t work in the current market.

“The price rollback is, in part, a function of absolute price levels so the result at current record prices is a good value of gain despite the big rollback in purchase relative to sales price,” Peel says.

Even with declining feed costs, the high price of replacing feedlot cattle could also challenge feedlot margins, which have been record-high in recent months.

According to Glynn Tonsor, Kansas State University (KSU) agricultural economist, steers sold by Kansas feedlots in July returned $310/head in profit, the most in the history of the KSU Kansas Feedlot Net Return Series which began in 1993. July was the seventh consecutive month of profits exceeding $125/steer, also a record. Incidentally, Tonsor points out the increased level of input costs means that return on investment is less than suggested by the gross dollars.
 

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Projections for closeouts during the August and September periods are both over $100/head,” Tonsor says. “This is consistent with several past months, as these positive returns essentially reflect the substantial increase in fed cattle prices relative to expectations when feeder cattle were purchased at levels much lower than today’s prices.”

In the fourth quarter, though, Tonsor says higher feeder cattle prices, in tandem with stagnant fed cattle prices, suggest feedlot returns will head back to deep negative territory.

All of this is occurring on the cusp of what could be robust demand for calves to stock wheat pastures.

“Calf prices may also get a boost from winter wheat grazing prospects in the Southern Plains that are the most favorable in several years, at least as indicated by winter wheat plantings,” says Peel.

“A relative abundance of wheat pasture this fall may be in contrast to extremely tight supplies of available stocker cattle,” Peel says. “Wheat pasture grazing values may be pressured as more wheat acres chase a limited number of stockers. At the same time, stocker demand is likely to add additional support to calf prices this fall. This fall may bring together the best opportunity for winter wheat grazing in several years with both forage availability and favorable economics. This assumes, of course, that moisture conditions do not turn dry this fall, which remains a distinct risk. The Drought Monitor is a reminder that marginal drought conditions remain across the Southern Plains and, while timely rains this summer have improved conditions considerably, any interruption of timely moisture would permit drought conditions to rebuild quickly.”

 

 


 

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Vet Students Get A Boost From AABP-Zoetis Scholarship Program

It’s a collaboration designed to pay dividends. But for 15 large animal veterinary students, on top of more than 100 of their predecessors, those dividends will double down. That’s because the scholarships these vet students received not only help with the expense of vet school, but they help livestock producers nationwide by ensuring that veterinary care for their animals will be ongoing.

Carrying that tradition forward, fifteen veterinary students from across the nation recently received scholarships made possible by a collaboration between Zoetis and the American Association of Bovine Practitioners (AABP) Foundation.

“AABP and Zoetis are committed to the next generation of veterinarians,” said M. Gatz Riddell Jr., DVM, AABP executive vice president. “Our hope is these students will soon enter the field of veterinary medicine and become leaders in our industry.”

The 2014 scholarship recipients are: Jonathan Angel, The Ohio State University; Jayton Bailey, Texas A&M University; Lindsey Borst, University of Minnesota; Patrick Brinson, North Carolina State University; Elizabeth Brock, Cornell University; J.D. Folsom, Oklahoma State University; Julia Herman, Colorado State University; Alissa Hunter, The Ohio State University; Andy Kryzer, University of Minnesota; Brendan Martin, Virginia Maryland Regional College of Veterinary Medicine; Lee Michels, University of Minnesota; Aaron Schaffer, Kansas State University; Douglas Shane, Kansas State University; Megan Thompson, University of Minnesota; and Holt Tripp, Oklahoma State University.

Commitment to Veterinarians

One of last year’s recipients, Thomas Cully, Cornell University, plans to pursue a career in dairy production medicine. The scholarship and support of Zoetis and AABP have helped him toward his career goals of assisting others to produce safe, affordable, abundant and nutritious food, Cully said.

“Animal health and veterinary medicine are very strongly correlated,” Cully said. “By working to advance animal health, veterinarians everywhere benefit. Zoetis demonstrates its commitment to vets with philanthropic scholarships, support for student events and support for veterinary functions.”

Zoetis supports veterinarian medicine through this scholarship program, part of the Zoetis Commitment to Veterinarians platform. The platform offers support through training and education, research and development, investing in the future of the veterinary profession and philanthropy.

One of those efforts supports first- or second-year veterinary students by allowing them to take part in the Zoetis Externship Program. “As part of the externship, students spend more than four weeks in a veterinary practice gaining firsthand experience and acquiring skills they need after graduation,” said Doug Braun, DVM, veterinary segment manager, strategic initiatives marketing, Zoetis.

“Some of the best learning happens outside the classroom, and the externship program is a great learning experience,” Braun said. “It connects students with those who are effectively servicing their clients and managing a thriving veterinary medicine practice. Our Commitment to Veterinarians provides financial support and access to additional resources such as continuing educational and networking opportunities. We feel these can lead to a successful career and a robust veterinary community.”

Zoetis is the proud sponsor, with the Smithsonian Institution Traveling Exhibition Service, the American Veterinary Medical Association and the American Veterinary Medical Foundation, of the mobile educational exhibit Animal Connections: Our Journey Together.  Families visiting the exhibit will explore the vast bonds between people and animals and learn about the important role veterinarians play in protecting animal and human health.  For more information, visit http://www.zoetis.com/animal-connections-tour/.

AABP is a membership-based, not-for-profit organization serving cattle veterinary medicine professionals across the United States, Canada and other countries. For more information, visit www.aabp.org.