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News
Cattle Trade Normalized With
Canada
As of Nov. 19, 2007, all cattle for any purposes born on
or after March 1, 1999 can be imported to the U.S. from Canada. That's
based on USDA's Sept. 14 announcement of its final rule regarding
animals and meat products from countries deemed at low risk for BSE.
"This rule is firmly based in science and ensures that we continue to
protect the U.S. against BSE," says Bruce Knight, USDA under secretary
for marketing and regulatory programs. "It also is consistent with our
commitment to promote fair trade practices and further normalizes trade
with countries that institute the appropriate safeguards to prevent the
spread of BSE."
The rule and details surrounding it are available at: www.aphis.usda.gov
Ethanol Subsidy Is
Unnecessary
Taxing the use of corn used in ethanol production,
rather than subsidizing its use, may make the most long-term economic
sense, according to a landmark study by Tom Elam, president of Farmecon.com.
"In light of current gasoline prices, the federal subsidy program is no
longer needed to promote ethanol production. The existence of the
subsidy is today severely distorting crop prices while adding little, if
anything, to the stated goals of the renewable energy program," says
Elam in the study -- "Fuel Ethanol Subsidies: An Economic Perspective"
-- conducted for the American Meat Institute and other meat and
livestock groups. "The ethanol program is also increasing the federal
outlays and has very little impact on U.S. dependence on foreign oil.
China, having also seen these effects, recently banned further expansion
of grain-based ethanol."
For perspective, the U.S. Energy Policy Act of 2005 mandates renewable
fuels in gasoline reach 7.5 billion gals. by 2012. In his State of the
Union address this year, President Bush called for 35 billion gals. of
renewable or alternative fuels by 2017. USDA's 2007 long-term
projections show ethanol production growing to more than 12 billion
gals. by the middle of the next decade, assuming no changes in policy or
technology.
Elam looked at the results of achieving 100% gasoline blended with 10%
ethanol (E10) -- which would require about 21.3 billion gals. of
ethanol. It would take about 7.7 billion bu. of corn, equivalent to 62%
of this year's estimated corn crop. "To reach the required 21.3 billion
gals. of ethanol/year and not reduce other uses of corn will require
more than 30 million acres of additional corn plantings on top of the
near-record 92.2 million planted in 2007," he explains.
Worse, Elam points out, "On a net-energy basis, ethanol will not make a
significant contribution to overall energy production, even if we
stretch U.S. ag resources and increase food costs significantly by
reaching 100% E10 blended gasoline." That's based on how much energy it
takes to produce and make the ethanol available, as well as the lower
energy value of ethanol compared to gasoline.
"The subsidy program is not only causing negative side effects on food
costs, but also is not making a material contribution to U.S. net energy
supplies or energy cost independence of the U.S. economy," Elam says.
"The effects are not limited to the U.S. As ethanol production expands
in the U.S., the industry here is beginning to have a significant effect
on global grain prices and food costs. If the U.S. achieves 100% E10
blended gasoline, about 10% of the world's current grain supply will be
utilized to add (on a net energy basis) about 3.4% to U.S. gasoline
output and offset 1.5% of our crude oil consumption.
"If wholesale gasoline prices increase significantly from today's
levels, U.S. food costs and food availability will be severely
compromised by further increased use of grain for fuel production. This
is true even if the federal subsidy were to be scaled back or
eliminated. As China has already realized, it is simply not feasible to
divert large amounts of food to fuel production without major effects on
food costs. In the future, even with today's gasoline prices, we, like
China, may also find it advisable to tax or otherwise regulate the use
of grain for ethanol production."
Read the complete study at: www.balancedfoodandfuel.org.
Follow the Facts, Advise Oklahoma
Stockers
"I never felt so sick in my entire life because I
realized how far behind we were," says Tom Gallery of the Gallery Ranch
at Dewey, OK. He's remembering the winter of 2002 and a demonstration of
management software that opened his eyes to what was possible when you
collected and analyzed cattle data in a systematic way.
At the time, the Gallerys recorded information on note cards. "It wasn't
until after the cattle were gone that we could tally up what had
happened. We didn't have any real-time information," explains Tom, who
operates the stocker phase of the ranch with his brother, Bill.
Also at the time, the Gallerys -- the winner of the Dry
lot/Backgrounding Division in this year's National Stocker Award
competition -- still owned every head walking through their stocker
operation, chasing grass deals from South Texas to South Dakota.
Aside from assuming all the risk in the cattle, Bill points out having
to find cattle at certain weights to fit particular resources and timing
also meant they often were backed in the corner on prices just to keep
the wheels turning.
Tom had gone to take a look at the software with the Gallerys'
consulting veterinarian, Shaun Sweiger of Edmond, OK. That's a whole
other story, but it boils down to Tom and Bill discovering a
veterinarian who had some commonsense suggestions that led them to
cutting costs dramatically by winnowing their medicine cabinet,
implementing consistent treatment protocols -- not switching products
mid-treatment -- and treating cattle only as many as three times (with
long-lasting antibiotics that may become even less).
"He broke us of medication overload," Tom says. "Hands-off for a certain
period of time after treatment was the biggest eye-opener, to realize
they weren't going to die if we didn't give them another shot that day."
Along the way, they also learned how devastating even a few calves
persistently infected (PI) with bovine viral diarrhea (BVD) could be to
the bottom line. They test every head on arrival these days and have for
the past two years. By weeding out the PI calves, they figure they've
cut mortality in half, sliced treatment cost by 40% and increased
average daily gain by 0.25-0.75 lb.
When they find a PI calf, they always try to find out what cowherd
produced it; they're successful in tracking down the source about 20% of
the time. "It's not a matter of finding them to say we won't buy your
calves next time; we're already testing," says Tom. "It's a matter of
letting them know they have a problem that's costing them a fortune."
Soon after starting to work with Sweiger, the Gallerys began conducting
commercial research trials which have paid for an extraordinary pen and
alley renovation at their backgrounding facility. The renovation was
required to conduct the largest trials, but having access to any group
of cattle without having to move any other group also cut their labor by
two employees. They've learned plenty, too.
For instance, Bill explains, "We learned to keep load lots together and
in smaller bunches, especially with PI testing... We learned we were
better sending everything back to a home pen rather than the hospital
and not to take the sick cattle through the others." That's a short
list. These days they'll conduct a major commercial research trial each
year, in addition to the research they conduct on their own.
Managing risk with partnerships. It was through this research
that the Gallerys first worked with Bill Roser, manager of Wheeler
Brothers Feedyard at Watonga, OK. Over time, that's what led to
discussions about how different segments of the industry might work
together for the benefit of each one.
"We were tired of risking everything we had every year by owning all of
them," Tom says. "We felt like we could increase volume through our
facility and still participate in ownership... We were seasonal buyers,
so that facility sat idle at times. We realized there would be more
benefit if we could concentrate on that one phase of the business and
get better at it."
These days, the Gallerys own a percentage of every head they backgound
in a unique partnership with Joplin Regional Stock Yard at Joplin, MO,
and Wheeler Brothers Feedyard. Within the unique alliance, each entity
is the other's customer. Along the way they leverage their individual
expertise, share risk and information, ratcheting up efficiencies along
the way.
Not coincidentally, the arrangement also exploits geography. The cattle
head from Missouri to northeastern Oklahoma, then on to the western part
of the state, rather than passing each other on the highway.
Now, the Gallerys concentrate on backgrounding calves that will be
shipped straight to Wheeler Brothers or for additional growth on forage
along the way. About nine months of the year, the Gallerys receive and
ship 2-3 loads/week. Cattle will spend the first 28 days here in
separate home groups -- 20- to 60- acre traps -- and then another three
weeks or so in commingled groups and larger pastures.
"We still participate in the ownership but we're not having to risk
everything every day," Tom emphasizes.
"We've lowered our risk with this business model and we've been able to
diversify with our cowherd, too," Bill explains.
Ironically, Dan Gallery -- Tom and Bill's father -- got out of the cow
business in the mid 1980s -- a herd in the making since 1952 -- because
it didn't fit the stocker and cattle-feeding programs he had in place.
In 2002, industry and buying opportunity intersected; now cows fit
again.
Oh, that software? Starting in 2003, Tom and Bill began collecting every
nugget of data you can think of on every individual calf that runs
through here.
"When we became computerized and started using that software we could
finally pay attention to the results we were getting because we had
captured all this data in a systematic way," explains Tom. In short, if
there's a question about how any one cattle or management variable is
affecting another, they have the wherewithal to ferret out the
information. Plus, they can compare their performance with that of from
other operations using the same data-management system.
Such precision is also made possible by the scales they've had under the
chute since 1991, which allows for a host of opportunities, including
dosing to actual weight. They also have portable scales they can easily
move to pastures. And there's a scale under their feed box, so they know
exactly how much of each commodity is in the mix.
None of this is to say they rely solely on the computer for management
though. The Gallerys have one of the simplest, most powerful
treatment-documentation schemes you've ever seen. When cattle are
treated, they receive a vertical or horizontal mark on their shoulder or
hip. A different color paint stick is used for each day of the week; the
mark location and direction is based on the week. Ear tags are notched
based on the product used.
"Anybody pushing cattle knows if they've been treated and exactly when,
just by looking at the mark," says Tom.
"We're proud of where we are, who we've aligned ourselves with, and that
we've been able to move forward," says Tom. "We're excited about where
we are and where we're positioned to go."
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Stocker Management
Calves Persistently Infected With
BVD Cost Stockers Lots
By weeding out calves persistently infected (PI) for BVD
(BVD), Tom and Bill Gallery of the Gallery Ranch at Dewey, OK figure
they've cut mortality in half, sliced treatment cost by 40% and
increased average daily gain by 0.25-0.75 lb. (see "Follow the Facts,
say Oklahoma Stockers" elsewhere in this issue) in their stocker
operation.
That's how much knowing if there's an infected calf in the bunch can be
worth. That's why the Gallerys test every head that shows up at their
operation -- 2-3 loads each week.
Consider, too, a trial we reported on last year conducted by Bill
Hessman, DVM of Central States Testing and the Haskell County Animal
Hospital at Sublette, KS. One of his feedlot clients, Cattle Empire LLC,
began wondering how prevalent the disease and pen infection rates were
in the operation. They wanted to know to what extent PI calves were
impacting the bottom line.
According to Hessman, the cost per head exposed to PI in that operation
is $67.49, resulting in a total average cost per head across the entire
population of $41.17. That was based on 21,743 head across 240 pens.
The trial began in July 2004 at one of the firm's starter yards
(10,000-head capacity) where cattle are limit-fed for 60 days and aren't
implanted. Every animal was tested. PI animals were removed from some
pens and left in others so Hessman and Cattle Empire's owners, Paul and
Roy Brown, could gauge how PI calves influenced pen health if they'd
been in a pen then removed, left in a pen, or whether they existed in an
adjoining pen to a non-PI set of calves, or ever had.
In a smaller trial conducted by Hessman for Cattle Empire (2,284 head in
24 pens at finish facilities), using closeout performance to compare
between PI-pens and non-PI pens, the economic damage was $47.43/head in
the pens exposed to PI.
Keep in mind, the bulk of the damage came from lost performance in the
cattle exposed to the PI animals, not to mortality and morbidity among
the infected animals. Hessman points out that while many PI calves die
early on, some survive to slaughter. Tracking those in Cattle Empire's
starter-yard trial, only 25.6% of the calves died during the 60-day
starter phase. Of those, 64% of the deaths were due to mucosal disease;
27% were due to respiratory disease. In the smaller trial in the finish
yard, 71% of the PI calves survived to slaughter.
Incidentally, when the Gallerys find a PI calf, they always try to find
out what cowherd produced it; they're successful in tracking down the
source about 20% of the time. "It's not a matter of finding them to say
'we won't buy your calves next time'; we're already testing," says Tom.
"It's a matter of letting them know they have a problem that's costing
them a fortune."
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Markets
Increasing Calf Trade Meets Lower
Prices
Though fed-cattle prices increased $1-$1.50/cwt. last
week ($94-$94.50), and Friday's "Cattle On Feed" (COF) report confirmed
the ongoing short supply of cattle in relative terms, calves traded
$2-$5 lower last week; yearlings steady to $3 lower.
"The lower feeder market was a result of continued strong grain prices
and two weeks of light show list clearance from an intense standoff
between packers and feedlots," explain analysts from USDA's Ag Marketing
Service (AMS). "During the first two weeks of September, only around
226,000 head of finished cattle were moved in the five major feeding
areas and this would normally be much closer to 400,000. The grain
markets continue to rise (amid the harvest of a bumper corn crop) as
they compete with each other for acreage.
"Also, export demand for grain received a shot in the arm from our
weaker dollar this week, following a half point cut in U.S. interest
rates to help prop up our economy and stock market. For the first time
in 30 years, folks along our northern tier are swapping U.S. dollars for
Canadian dollars with no boot involved," the analysts say.
According to the COF report, cattle on feed as of Sept. 1 stood at 10.3
million head, 6% less than last year. Placements during August were 7%
less than a year ago (2.12 million head), while marketings were
basically on par with last year at 2.07 million head.
The summary below reflects the week ended Sept. 21 for Medium and Large
1 -- 500- to 550-lb., 600- to 650-lb. (calves), and 700- to 750-lb.
feeder heifers and steers (unless otherwise noted). The list is arranged
in descending order by auction volume and represents sales reported in
the weekly USDA National Feeder and Stocker Cattle Summary:
| Summary Table |
| State | Volume | Steers | Heifers
|
| Calf Weight | 500-550 lbs.
| 600-650 lbs. |
700-750 lbs. | 500-550 lbs. | 600-650
lbs. | 700-750
lbs. |
| MO | 37,500 | $126.17 | $122.15 |
$122.16 | $115.18 | $112.42 | $110.76 |
| OK | 37,000
| $124.02 |
$121.01 | $118.45 | $112.81 | $112.73 |
$109.68 |
| KY* | 33,000 | $104-114 | $104-114 |
$100-1105 |
$97-107 |
$91-1013 | $88-985 |
| TX | 29,400 | $116.61 | $111.56 |
$112.74 | $109.98 |
$108.33 | $110.43 |
| Dakotas | 16,900
SD
ND |
$125.85
** |
$130.272
$121.194 |
$123.24
$120.48 |
$116.86
$123.362
|
$120.03
$118.97 |
$115.59
$112.57 |
| NE | 15,700
| $128.88 |
$125.52 | $120.866 | $120.79 | $120.20 |
$115.20 |
| AL | 15,000 | $114-119 | $107-113 |
$104-110 | $100-1091 |
$98-1053 | $96-100 |
| TN* | 12,300 | $113.06 | $107.78 |
$102.25 | $102.29 | $99.42 | $96.86 |
| Carolinas* |
11,000 | $94-119 | $92-111.50 |
$83-111 |
$84-105.50 |
$85-108.10 | $79-92 |
| FL* | 10,200 | $100-118 | $94-106 |
$90-104 | $90-108 | $85-98 | $85-99
|
| GA*(***) |
10,100 | $98-117 | $94-115 |
$90-104 | $90-109 | $80-103 | $84-95 |
| AR | 9,500 | $114.95 | $109.87 |
$103.68 | $106.25 | $101.99 | $100.704 |
| IA | 8,600
| $131.53 |
$123.934 |
$121.65 | $121.83 |
$113.404 | $101.577 |
| KS | 8,600 |
$123.202 | $119.95 |
$118.78 |
$118.85 | $114.67 | $111.13
|
| MS* | 8,600 | $108-1181 | $100-1083 | $90-1005 | $100-1051 |
$90-1003 | ** |
| LA(ND) | 7,900 | $103-118 | $103-1162 | ** | $97-114 | $94-1102 | ** |
| WY | 5,500
| $122.81 |
$121.934 | $117.60 | $115.65 | $112.604 | $110.32 |
| CO | 4,800 | $115.85 |
$112.662 | $114.10 | $110.522 | $114.32 | $109.25
|
| NM * | 4,700 | $128.19 |
** | ** | $109.28 | **
|
** |
| WA* | 3,800 | $110.97 | $105.91 |
$104.82 | $97.98 | $101.17 | $97.76 |
| VA | 3,700
| $115.64 |
$108.35 |
$104.38 | $105.32 | $103.36 |
$92.77 |
| MT | 2,500
| $117.632
| $116.08 | $118.886 | $112.252 | $115.44 | $109.996 |
* Plus 2
** None reported at this weight or near weight
(***) Steers and bulls
(?) As reported, but questionable
NDNo Description
1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.
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Weather And Crops
Record Corn Harvest On Track
With about 15% of the corn crop harvested, there's
little reason to doubt the recent estimate that this year's crop will be
the largest on record. The National Ag Statistics Service increased its
estimate for this year's crop on Sept. 12 to 13.3 billion bu.
However, there's also plenty of reason to expect increased volatility
and prices that will remain on par with a year ago, if not higher.
"The size of the 2007 U.S. corn crop has lowered feed-grain prices
compared to earlier this summer. But U.S. ethanol production will
require acreage planted to corn to be large again in 2008," explain
analysts from the Livestock Marketing Information Center (LMIC).
"However, in contrast to the winter and early spring months of 2007,
soybean and other crop prices for that same timeframe in 2008 will be
much higher. So, during harvest this fall corn prices could be below a
year ago, but corn prices could surge in 2008 and could easily match
those posted this year.
"That situation could result in some pressure on feeder animal prices in
early 2008. For example, this fall calf prices are forecast to be above
a year ago, partly due to lower corn prices. But, surging corn prices in
early 2008 could easily pressure calf prices in early 2008 to levels
below 2007's," the LMIC folks say.
For the week ending Sept. 16, according to the National Ag Statistics
Service:
- Corn -- 14% is harvested, which
is 6% ahead of last year and 5% ahead of average. 96% has reached the denting stage, which is on
par with last year, but 6% ahead of average. 64% is
mature, 15% ahead of last year, and 18% ahead of average.
63% is rated Good or Excellent, 2% more
than last year.
- Soybeans -- 55% is dropping leaves,
10% ahead of last year and 8% ahead of average. 4%
has been harvested, which is 1% behind last year and the
five-year average. 56% is rated Good or
better, which is 5% behind last year, and the same as the
previous week.
- Winter Wheat -- 14% of the crop is
planted, 3% less than last year and 6% less than average.
- Sorghum -- 90% has colored, compared
to 80% last year and 77% for average. 45% is
mature, 2% ahead of last year and 3% ahead of average. 27% has been harvested, the same as last year
but 2% ahead of average. 65% is rated Good or
better, compared to 33% last year.
- Pasture -- 39% is rated Good or
Excellent, compared to 27% last year and 1% better than the
previous week. 34% is rated Poor or Very
Poor, 11% less than last year, and 2% less than the previous
week.
States with the worst pasture conditions -- at least 40% of the acreage
rated Poor or worse -- include: Alabama (71%);
California (94%); Georgia (47%); Idaho
(74%); Illinois (46%); Indiana (74%);
Kentucky (72%); Maryland (59%); Missouri (46%); Nevada (89%); North Carolina (88%); Ohio (42%);
Oregon (59%); South Carolina (52%); Tennessee (78%);
Utah (58%); Virginia (52%); and West Virginia (55%).
The most lush pasture conditions -- at least 40% rated Good or better --
exist in: Colorado (50%); Florida (54%); Iowa
(68%); Kansas (55%); Louisiana (48%); Maine (63%); Nebraska (57%); New Mexico (48%);
North Dakota (47%); Oklahoma (74%);
South Dakota (55%); Texas (78%);
Washington (45%); and Wisconsin (54%).
ADVERTISEMENT
Stocker Event
Stocker Conference At Kansas State
Is Thursday
You've still got time to head for Manhattan for the
annual Kansas State University Beef Stocker Conference on Thursday
(Sept. 27). Kicking off at the Clarion Hotel at 9:30 a.m., the topics of
discussion include: a cattle market outlook, health protocols that add
value, evaluating the sick calf, selecting your antibiotic, strategies
to control input costs, and using byproduct feeds for receiving and
growing diets. The day ends at the KSU Beef Stocker Unit for a tour and
Prairie Oyster Fry.
Registration is $30 at the door. For more info, call 785-532-1267 or
visit www.ksubeef.com and
click on "2007 Stocker Conference."
BEEF Quality Summit Early
Bird Rate Ends Oct. 1
Oct. 1 is the early registration deadline for the 2007
BEEF Quality Summit, set for Nov. 7-8 in Omaha, NE. The $125
registration ($150 after Oct. 1) includes the two-day conference, one
breakfast, two lunches, an evening reception and a dinner.
Sponsored by BEEF magazine, this year's theme is "Beef Quality In
The Ethanol Era." The program is designed to provide attendees with the
background, knowledge and tools to garner more value from their cattle
in this new ethanol-driven paradigm.
Throughout the meeting, there will be ample opportunity to network with
experts and other producers to discuss increasing cattle value. A new
feature of this year's BEEF Quality Summit is a one-on-one
opportunity for attendees to meet with representatives of various
value-based marketing alliances in attendance.
Another special feature at this year's conference is the introduction of
this year's BEEF Trailblazer Award winner, along with the winner
of this year's National Beef Stocker Award.
Check out the agenda or register at: www.beefconference.com
Events
Calendar
Sept. 27 -- Beef Stocker Conference, Kansas State
University, Manhattan, KS, call 785-532-1267 or visit www.ksubeef.com and click on "2007
Stocker Conference."
Sept. 27 -- Factors That Impact Feedyard Performance & Finished
Steer Evaluation, Angelo State University, San Angelo, TX; 325-659-6523.
Sept. 27 -- Soil Health and Quality Workshop, Fischer Auditorium,
Wooster, OH; 419-354-9050.
Sept. 27 -- Rangeland Water Harvesting Field Day, 9 a.m. to 3
p.m., Sherman Hammond Ranch, Fort Stockton, TX; 432-336-2541 or djelrod@ag.tamu.edu.
Sept. 27-28 -- Wildlife-Livestock Field Day, McFadden Mercantile,
Victoria, TX; www.texas-wildlife.org.
Sept 28 -- Carbon Credit Conference, Texas A&M University System
Ag Research and Extension Center, Overton, TX; www.reynoldsforestry.com
or 903-834-6191.
Oct. 25 -- Central Oklahoma Cattle Conference, Agri-Civic Center
in Lincoln County Fairgrounds, Chandler; glenn.selk@okstate.edu.
Nov 7-8 -- BEEF Quality Summit, Omaha, NE; www.beefconference.com
Nov. 30-Dec. 2 -- South Carolina Farm and Ranch Expo, T. Ed
Garrison Arena, Clemson, SC; Contact R.D. Morrison at rdm95573@bellsouth.net or
Harold Hupp at hhupp@clemson.edu.
Dec. 11-13 -- Range Beef Cow Symposium, Larimer County
Fairgrounds, Fort Collins, CO; 970- 491-6233 or jack.whittier@colostate.edu
Dec. 13 -- Alabama Forage Conference, Troy, AL, contact Eddie
Jolley at 334-887-4564, or Don Ball at 334-844-5491.
Contact
Questions & Comments
Please send questions to:
Wes Ishmael, Contributing Editor, BEEF Stocker Trends, at wesleysink@aol.com
Joe Roybal, Editor, BEEF magazine, at jroybal@beef-mag.com
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