fbp nov/dec 2011

FRONTLINE Beef Producer 1

A NEWS SOURCE FOR COMMERCIAL BEEF PRODUCERS NOVEMBER / DECEMBER 2011 VOLUME 3 ISSUE 4

FRONTLINEbeef producer

2 FRONTLINE Beef Producer

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FRONTLINE Beef ProducerMarketing Programs DirectorBen Spitzer

Administration/CirculationFrances Miller Contributing EditorsDr. Joseph MasseyBlair FanninBre! MiddletonKeith BertrandDan. W. Moser AdvertisingMelanie Fuller979.828.5300 Copy EditorLindsey Matli ProofreaderJim Bulger OperationsRosanne SrallaPa!i Teeler

Layout/Art DirectorCrystal Clear Designs Crystal Armstead

FRONTLINE Beef Produceris a product of:Brangus Publications, Inc.5750 EpsilonSan Antonio, Texas 78249Phone: 210.696.8231Fax: 210.696.8718 Brangus Publications, Inc. Directors:Angelo Zo!arelli - ChairmanDr. Joseph Massey - PresidentBill Davis - Secretary/TreasurerR.L. RobbsDon Cox Information appearing in this issue may be reprinted only with wri!en permission of Brangus Publications, Inc. LPCLivestock Publications Council - Member

FEATURESRebuilding the Cow Herd Requires a Cycle of Producers as well as Cows by Derrell S. Peel

Cow Slaughter and Herd Dynamics "is Fall by Derrell S. Peel

New Reality Series Documents Work of Veterinarians and their Client Farms in Caring for Livestock by Rebecca Cisek and John Courtmanche

Strategies for Cow Herds with Short Hay Supplies by Dr. Dave Lalman

DEPARTMENTSOut Front: What has been happening to the Commercial Beef Herd? by Dr. Joseph Massey

"e Marketing Update by Ben Spitzer

STATE DIRECTORY

SERVICES

ADVERTISER INDEX

CALENDER OF EVENTS

TABLE OF CONTENTS

5 7 910

4

811151717

OUT FRONT | by Dr. Joseph MASSEY

Since the late 90’s the national beef cow herd has lost about 15 million head of cattle, yet we are producing about the same amount of beef today as we did when we had our highest cow numbers. !is clearly suggests that we have focused our selec-tion on producing animals with more muscle and faster growth rates, but how much longer can we continue with this trend? In the past we had cheaper oil which led to cheap commodities and input costs. In the last several years we have seen all commodi-ties including oil skyrocket in price, creating a more challenging period for cost-e"ective cattle production. As the world econ-omies continue to grow, the demand for all commodities will continue to increase and it is very unlikely that input costs will ever revert back. !is will force all cattle producers to become more innovative in their approach to cattle production.

!e logical focus of genetic selection will be to opt for ani-mals which convert forages more e#ciently and still maintain the levels of growth that we have established in our national beef herd. !is will not be an easy task but it will become what sepa-rates operations that stay in business from those that don’t. By

What Has Been Happening

to the Commercial Beef Herd?

design the beef cow is an ani-mal that has always been able to utilize forages and convert them into proteins, yet over the last 15 to 20 years we have been supplementing forages with concentrates which in the past has been cost-e"ective. However, going forward we will have to produce better quality forages for the same cost and select animals that utilize these forages better while still produc-ing quality beef that the consumer will accept.

!e economic environment that the U.S. commercial cattle producer will face in the coming years will be extremely chal-lenging and now is the time to develop alternative business and production plans for our own operations. !ere will not be one simple plan for any one operation, but rather a concerted ef-fort to re-evaluate all aspects of your operation, including the size of your cattle, the female breed of your cattle, the bulls you choose and what kind of crossbreed will get that extra hetero-sis which produces that little extra e#ciency. Knowing which breeds complement each other may take on new meaning in

understanding a crossbreeding program.We have to start with knowing our

own breeding program and how it per-forms relative to the current environ-ment. You cannot begin to make chang-es until you de$ne the most signi$cant aspects of your breeding while knowing not to change too many traits of interest at one time. It will be a time consuming process and now is the time to start. As you select bulls for this breeding season, take the time to list the aspect of your herd that you want to change most, and select bulls that will help you begin to make the desired changes. Keep in mind that no one can do this for you and that you must have good information on the bulls you are selecting.

ABOUT THE AUTHORDr. Massey has served as Executive Vice President of the IBBA since 2004. In 2007, he started Genetic Performance Solutions, LLC, a breed registry services and perfor-mance analysis company serving the ca!le and breed association industry" an IBBA owned company. GPS manages online regis-try programs for breed associations and the data base management of performance data like multi-breed EPDs.


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FEATURE | by Derrell S. PEEL

FRONTLINE Beef Producer 5 FRONTLINE Beef Producer 5

by!Derrell S. Peel, Oklahoma State University Extension

Livestock Marketing Specialist

Much has been written in recent months about the need to rebuild the beef cow herd and why it taking so long to jumpstart herd expan-sion this time. While the general economic signals for expansion seem to be in place, there are a variety of structural factors at work as well. Of course, the question is moot for 2011 as the drought in the south will trump cyclical expansion signals in other regions and ensure additional herd liquidation. However, at some point, the question of what it takes to rebuild the herd will emerge once again.

By itself, a cattle cycle operates mostly on expectations of profit-ability and historically that has meant that cycles of cattle prices were the principal drivers of herd expansion and contraction. Cattle pric-es are historically high but that is not enough to spark herd expan-sion because it has not yet translated into to widespread expecta-tions of sufficient profitability to warrant heifer retention. For some producers this is the result of skepticism about how long high cattle prices will last. It is also suggested that increased input costs means that profitability is not yet high enough to support herd expansion.

Efficient producers with relatively low costs appear to be amply prof-itable now but high cost produc-ers, who typically rely more heavily on purchased feed, fertilizer and fuel, continue to struggle with profitability. To top it all off, increased volatility of output and input prices means that there is more risk and producers struggle to identify and adopt effective risk management strategies in this new economic environment.

Along with the basic market factors, a variety of structural and demographic factors are uniquely important in the current situ-ation. Land use factors appear to be playing a more important, though regionally varied, role in the ability of the industry to expand. In more and more areas, direct competition with other agricultural production is limiting or reducing land available for pasture and hay production. In other areas, more pasture land is being diverted to recreational use or for development. Crop and pasture land values and rental rates are increasing rapidly adding an additional challenge to expansion, particularly for young producers.%

The financial environment has changed for most producers as

Rebuilding the Cow Herd Requires a

Cycle of Producers as Well as Cows

(continued on next page)


FEATURE

well. The capital requirements for production are significantly high-er in an environment of high output and input prices. Old lines of credit are often insufficient to meet the needs of higher operating and risk management costs. The equity requirements are increased for financing and many producers face limited credit availability without significantly changing their production systems or business plans.

The age of cattle producers is often suggested as a reason for the lack of herd expansion. Age itself is perhaps less of the reason in many cases than age combined with the factors listed above. Many

older producers are simply unable or unwilling to make the changes to operate in a new business environment; to take on the additional risks or debt; or to rewrite business plans to access needed credit. However, age, as a labor issue, is a direct consideration as some pro-ducers simply are unable to handle the physical requirements of a expanded cow-calf operation. Many older producers are content to hold at current herd size while others are switching from cow-calf to stocker operations to reduce labor requirements.

At the same time, the longstanding challenges for young produc-ers are even greater in the current environment. Higher investment

costs along with increased capital and equity requirements make it especially difficult for young producers to build a successful opera-tion. Risky and volatile profit margins make the financial risk particularly high for highly leveraged producers. And there are continual challenges in the regulatory and legal envi-ronments that producers must navigate in order to operate their business.

What does it all mean? Is the industry des-tined to continue shrinking?% I don’t believe so. High cattle prices indicate that there is considerable opportunity for the industry. Growing global food demand and especially meat demand provides the backdrop for con-tinued viability of the beef industry, albeit with considerable need to adjust to chang-ing production and market conditions. The market is trying to encourage increased pro-duction but so far has been unable to over-come the challenges of input market shocks; changing land use% patterns; more stringent financial requirements and producer age demographics.%

However, markets work and will eventu-ally attract the investment and producers needed to expand production to meet market needs and opportunities. Progress is slow in the face of the rigidities outlined previously but markets are persistent and will eventu-ally prevail. If current price levels are not suf-ficient to provoke herd expansion, markets will increase the incentives to encourage a new generation of producers to invest in the industry. I believe there is considerable potential in the cattle industry in new market opportunities. Certainly there are plenty of challenges as well. The industry is transition-ing from what%it was to what it will be and that takes time...but it will happen.

ABOUT THE AUTHORDerrell Peel: Oklahoma State University Professor in Agricultural Economics Department and Extension Livestock Marketing SpecialistResearch publications: “Beef Cattle Growing and Backgrounding Programs” and “Economics of Stocker Production”

(continued from previous page)


FEATURE | by Derrell S. PEEL

Cow Slaughter and Herd

Dynamics this Fall

Cow slaughter continues at a pace well above last year in the Southern Plains. Beef cow slaughter in federal-Region 6, which corresponds to the worst drought area, is averaging 150 percent of year ago levels for the past eight weeks. For the year to date, beef cow slaughter in the region is 123 percent above a year ago. Beef cowslaughter in all other regions for the year to date is down 6 percent, resulting in a total national beef cow slaughter that is 101 percent of last year. However, beef cow slaughter outside of Region 6 is 4.5 percent above year ago levels for the past eightweeks re-sulting in total beef cow slaughter higher last last year for the past few weeks.. Ad-ditionally, signi$cant numbers of cows have moved out of Texas and Oklahoma to other regions, though it is hard to know how many cows have been relocated. All of this likely means that cow culling for the remainder of the year will not follow typical seasonal patterns both inside and outside of the drought areas.

In the drought regions, it seems clear that most of the cows normally culled for age or productivity reasons have long since moved to market and are part of the increased slaughter already documented. Additionally, many younger or still productive cows have also been sold, either to slaughter or to new owners in other regions along with some relocation of cows by owners in the drought region. !is raises the question of what to expect in the drought area for the remainder of the year. !ough most of the normally culled cows have already been sold, continued dry conditions will presumably force additional cow liquidation through the fall. One would presume that most producers have by now determined if it is feasible to keep cows through thewinter or not and that additional movements might be at a slower pace than summer levels. However, there are reports that pregnancy evaluations are, in some cases, showing signi$cantly reduced pregnancy rates due to the e"ects of the drought and this may lead to some additional culling this fall.

Drought liquidation may have an impact on beef herd culling in other regions for the remainder of the year. Beef cow slaughter in regions outside the drought area is also up the past eight weeks. Forage conditions in most of the rest of the country have ranged from very good to average and increased slaughter is likely not the result of poor forage conditions. However, the movement of drought region cows into other regions may be changing normal culling patterns. Produc-ers with good forage may be culling early to take advantage of the opportunity to trade out cull cows for young cows from the drought zone or take in lease cows needing a new home. Additionally, many heifers held for replacement in the drought region have also been liquidated making more replacements available to producers in other regions. !e availability of heifers and breeding cows from the drought area may help accelerate the herd expansion already in place in northern regions of the country.

!e drought ensures that beef cow slaughter this year will be close to, or per-haps above, year ago levels on a national basis. !e total beef cow herd will de-crease by 2-3 percent this year. !e regional impacts will be much more dramatic with herd growth likely in the Northern Plains and northern Rocky Mountain regions and double digit reductions in herds in Texas and Oklahoma.

by Derrell S. Peel, Oklahoma State University Extension

Livestock Marketing Specialist


THE MARKETING UPDATE | by Ben SPITZER

As the old saying goes, “Tough times don’t last, tough people do.” While this is obvious to most, sometimes we need a reminder. With the crippling drought and well documented cowherd liquidation, it is easy to get a little depressed and forget about looking to the future. A good friend, Dr. Dan Stein at Oklahoma State University once told me, “Until you have to personally make decisions to deal with drought, you have no business telling someone else what they should do.” Well, I have had to personally make some tough decisions in my career, and I still don’t think I have any business telling anyone what they should do. Each operation is unique, and what will work for some could be the wrong answer for another. What I do think I have the ability (and duty) to do is remind beef producers about the oppor-tunities and the bright future for the beef industry.

Fortunately, cull cow prices have held steady at very favorable prices, we’ve seen record high Fats consistently trading close to $120/cwt and feeder calves trading in the $145-150 range. These prices are, in my mind, a signal of what is to come. Free trade agreements are sure to expand the already growing export market for US Beef. The US domestic economy will one day rebound and with that will follow increased beef demand from US consumers. Market indicators are lining up in favor of enhanced profitability for US beef producers.

As you have surely seen referenced in this publication and others, we are extremely short on cows and it is uncertain just where we will end up before herd rebuilding and heifer retention will occur. When that does occur, all females will be highly valued, and those that have been designed with adaptability and profitability in mind will com-mand a premium.

Ranchers who have been tough enough or fortunate enough to sur-vive the hard times of the last several months will be uniquely posi-tioned to thrive in the new beef industry environment. Tremendous opportunity exists for designing replacement females to capture more value for cow-calf producers. The lessons learned in the last

several years by a multitude of cat-tlemen will not soon be forgotten. Many have realized that ignoring the age old rule of thumb of match-ing their cow herd to their environ-ment doesn’t work very well. They will be looking for females built to withstand the ebb and flow of drought so common to the southern United States. Brangus sired females fit more environments and produce longer (while also meeting industry demands for efficiency, carcass quality and yield) than any other cow out there.

Operators at all segments are realizing that pressure placed solely on carcass premiums only works in perfect environmental condi-tions. Feedlots have lost thousands of head in the yard from heat stress over the past two summers. Conversion and feed efficiency are hot topics of discussion. Why? Besides rising feed costs, we as an industry have drifted away from what we know works in the yard. Additionally, commercial herds across the south have seen decreased pregnancy rates and lower percent calf crop mainly because their cows simply do not fit the harsh and challenging environments where they are located.

I would challenge commercial cattlemen to look once again at Brangus bulls to quickly make positive change in their cowherds. Commercial Brangus influenced females and the premium they are sure to command are the obvious reason. Many, however, overlook the value of Brangus sired feeder calves in the feedyard. Fewer days on feed and better conversion with higher yields and quality carcasses make Brangus sired calves highly valuable.

USDA Meat Animal Research Center (MARC) data show Bos Indicus x Bos Taurus crossbreds (English or Continental x Brangus) deliver as much as twice the hybrid vigor of a Bos Taurus x Bos Taurus cross (English x English or English x Continental). This cre-

ates a huge opportunity for commercial beef producers to dramatically impact their profitability.

Using Brangus bulls also allows access to Brangus Marketing Programs. IBBA programs and staff are available to users of Brangus genetics free of charge. Take advan-tage of new marketing outlets to help add dollars to your calf crop. Age and Source verification through the USDA approved PVP OptimaxX feeder calf program and the Brangus Gold commercial female program are easy to use and enroll cattle. New opportunities are always being devel-oped. Among them are the BrangusLIST as well as Brangus Feeder Blast. BrangusLIST is a free online listing of cattle for sale. Brangus Feeder Blast is a direct marketing program that informs feedyards and order buyers of Brangus influ-enced feeder calves available. Be sure and take advantage of these programs.

Now is the time to make genetic adjustments to capitalize on lessons learned. Environmental adaptability and longev-ity are making a comeback in American beef cattle herds. Brangus fit the bill when it comes to both, and they don’t have the negatives associated with other Bos Indicus breeds. Take advantage of your opportunities and consider Brangus in your planned cross breeding programs this breeding sea-son.

The Marketing Update


By Rebecca Cisek and John CourtmancheFive livestock veterinarians and about 20 of their client farms in four

states volunteered to be $lmed for a new reality series, to give consum-ers a personal and up-close view of responsible livestock farming in the U.S.

!e series, “Veterinarians on Call,” captures the pride and respon-sibility of veterinarians in their day-to-day work on U.S. farms and ranches, working with their client livestock farmers and other profes-sionals raising pork, beef and dairy animals. Presented by P$zer Animal Health, Veterinarians On Call premiered in September on channel You-Tube.com/VeterinariansOnCall or YouTube.com/VeterinariansOnCall.

“We as veterinarians and farmers have great stories to tell of the care we provide to animals on the farm,” said veterinarian Dr. Paul Ruen of Fairmont, Minn., immediate past president of the American Asso-ciation of Swine Veterinarians (AASV), one of $ve veterinarians who volunteered to host a $lm crew on his job. “I am proud to explain that I wear several hats as a pig veterinarian including diagnostician, animal welfare advocate, and public health o#cer. My hope is that the con-sumers of America’s meat products will feel a bit more connected to the families and farms that work professionally and with care in raising food for their tables.”

Another featured “Veterinarian On Call” is Dr. Peter Ostrum, recog-nized by millions of movie fans as “Charlie” from the classic 1971 $lm Willy Wonka & !e Chocolate Factory. Today, Dr. Ostrum has transi-tioned from “candy man” to milk man and is practicing as a dairy cow veterinarian in Lowville, N.Y.

“By participating in this project, I hoped to draw the public’s atten-tion to the hard working men and women who own and operate our country’s family farms,” says Dr. Ostrum. “We want consumers to know that food safety and animal welfare issues are top priorities for both veterinarians and dairy farmers alike.”

Dr. Angie Supple, self-proclaimed “city girl turned pig vet” with de-grees from Notre Dame and Purdue Universities, serves a variety of cli-ents from small operations to big commercial facilities.

“My clients and other hog producers take a lot of pride in what they do. It’s important to them to raise pigs with the animals’ welfare in mind,” she says. “At the end of the day, it’s important for the consumer to know that the animals were raised humanely and safely.”

!e $rst season of Veterinarians On Call also features two other vet-erinarians who volunteered to allow a $lm crew to document their work:

Minnesota who has been working for the Swine Vet Center as a pig vet-erinarian for 12 years throughout Minnesota and Iowa as well as other states and countries

-as, a 30-year veterinarian with a degree from Texas A&M

!e Veterinarians On Call reality series is part of P$zer Animal Health’s Commitment to Veterinarians™ platform, which o"ers support to the veterinary and animal health industry through training and edu-cation, research and development, investing in the future of the profes-sion, and philanthropy.

“A key part of our mission at P$zer Animal Health is to help our customers raise healthy animals,” said Clint Lewis, President, U.S. op-

FEATURE | by Rebecca CISEK and John COURTMANCHE

erations, who personally helped develop the series during the past two years. “We want to help showcase to the public the valuable, critical work of veterinarians and farmers dedicated to responsible and safe care of livestock animals.”

For more about P$zer’s Commitment to Veterinarians™ platform, visit:

Viewers can watch the series at YouTube.com/VeterinariansOnCall.Funding for this series is provided by P$zer Animal Health, a world

leader in discovering and developing innovative animal vaccines and prescription medicines. P$zer Animal Health works to ensure a safe, high quality food supply from healthy livestock, $sh and poultry; and helps companion animals and horses live longer, healthier lives.

!e series is produced by Essex Television, a full-service media pro-duction and communications company based in Old Lyme, CT. Its award-winning HD broadcast division produces the popular TV series Chasing Classic Cars on Discovery’s Velocity channel (formerly Discov-ery HD !eater).

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(continued on next page)


Dr. Dave Lalman, Oklahoma State University Beef Extension Specialist

!is year’s historical drought has forced cattle producers in the South-ern Great Plains to liquidate a portion or all of their cattle, begin feeding months ahead of their normal winter feeding schedule, ship cows to grass somewhere North or East, purchase marginal or low quality hay from hundreds of miles away, and deal with a higher percentage of open cows due to the extreme summer heat. Like never before, this is the win-ter feeding season to consider ways to improve e#ciency of harvested forage use. And fortunately, there are a few relatively simple concepts or strategies that when combined could result the need for only about 2/3 of the hay most of us think we need.

Possible strategies include:1) Limit feeding hay. By limiting forage intake, forage digestibility should increase and

waste should go down. !is can be accomplished by feeding a predeter-mined amount of around 75% of what the cattle would normally con-sume. !is can be accomplished by rolling out the appropriate amount of round baled hay every day or &aking o" big square bales. Another option is to place hay in feeders in a dry lot where cattle can be allowed access to the hay for about 6 hours. Research shows that 6 hours of ac-cess to hay reduces forage intake to about 75% of normal. !is program should only be used with good quality grass hay and is not recommend-ed for $rst calf heifers or thin, older cows. !e better quality the hay, the better this program will likely work. Limiting access to extremely low quality forage may exacerbate weight loss.

2) Using hay feeders designed to limit hay waste. If producers are using round bale hay feeders, be sure to select/pur-

chase a model with a sheeted (solid) bottom. Open bottom hay feeders have been shown to waste as much as 21% of the original bale weight!

!e sheeted bottom should reduce waste to around 12-13%. Using a cone style feeder or modi$ed cone feeder with a sheeted bottom should reduce waste to around 5-6% of the original bale weight.

3) Using an Ionophore (feed additive). Finally, consider using an ionophore for grazing cattle and cattle con-

suming hay. Older research has shown that Rumensin and Bovatec im-proves weight gain of growing cattle. Rumensin is approved for the use in mature beef cows. Older research showed that Rumensin reduced hay intake by around 10% while still producingabout the same amount of weight gain. In a recent study in our shop at Oklahoma State University, cows fed 200 mg of Rumensin gained an additional 0.5 pound per head per day and nearly one half a body condition score unit more during a 58 day study. Importantly in this project, the forage digestibility was im-proved dramatically, resulting in the improved cow performance. One could look at the addition of Rumensin in the supplement as having increased the net energy value of this low quality hay diet by about 15%. In other words, less of the same diet (hay) would need to be fed to get the same performance. In our region, the cost of Rumensin is ONLY ABOUT $0.02 per cow per day! I don’t know any other way to get that much improvement in forage utilization at such a low cost. !ere is a reason why the cattle feeding industry has been using this feed technol-ogy so well for so long, and a substantial improvement in feed e#ciency is it. !at improvement is available to the cow/calf industry as well.

Strategies for Cow Herds

with Short Hay Supplies

FEATURE | by Dr. Dave LALMAN

At P$zer, we apply science to our global resources to improve health and well-being at every stage of life. We strive to set the standard for quality, safety and value in the discovery, development and manufactur-

ing of medicines for people and animals. Our diversi$ed global health care portfolio includes human and animal biologic and small molecule medicines and vaccines, as well as nutritional products and many of the world’s best-known consumer prod-ucts. Every day, P$zer colleagues work across developed and emerging markets to advance wellness, prevention, treatments and cures that challenge the most feared disease of our time. Consistent with our responsibility as the world’s leading bio-pharmaceutical company, we also collaborate with health care providers, governments and local communities to support and expand access to reliable, a"ordable health care around the world. For more than 150 years, P$zer has worked to make a di"erence to all who rely on us. To learn more about our com-mitments to animal health, please visit us at www.p$zerAH.com.

New Reality Series Continued...

ABOUT THE AUTHORS:Rebecca Cisek Head of U.S. Communications at P#zer Animal HealthSenior corporate communications and public relations professional with a 20-year track record of successfully designing strategic, results-driven com-munications strategies that support corporate goals and building teams that exceed aggressive targets.John Courtmanche Communications ConsultantAccount Exec, Producer at Essex Television Group, Inc.Developed a national Web-based public awareness campaign for the vet-erinary profession, presented by P#zer Animal Health, launched Oct 2010. Encompasses reality video series, consumer market research, PR and digital in$uencer strategy, and Web advertising.

(continued from previous page)


ALABAMA

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ARIZONA


ARKANSAS

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