A new paradigm, again

It’s pretty much a law: When corn prices get high, feeder cattle go down. Why?

Well, take a look at what cost of gain (COG) does in response.

Take another look at that chart. See what the high-performing cattle do vs. the low performers? As corn price increases, the COG on those high-performers doesn’t increase quite as fast. The difference in value gets accentuated as costs go up.

Today we’ll kick off the Feeding Quality Forum in Grand Island, Nebraska, where I’m sure we’ll hear all about this. Market whizzes like Dan Basse (Ag Resource Company), Mike Sands (Informa Economics) and Professional Cattle Consultants’ Shawn Walter (also the nice gentleman who provided us with the data for that slide) will talk prices and how they’ll impact the industry.

When Mark McCully sent this around to our team, I called him to chat about the importance of this chart in today’s marketplace. With every response, things started sounding eerily familiar.

It reminded me of the story I wrote five years ago called, “Corn, cattle in a new paradigm.” If you want a flashback to prices circa 2007, read the whole article, but some of Mark’s quotes still ring true today:

“We’re trying to illustrate to producers that in these times we’re entering, an investment in better genetics, managed properly, can align their cattle to take advantage of the market.”
“To make progress, we need to eliminate the idea of letting the superior cattle subsidize the poorer ones. Grid marketing is getting fed cattle on track but we still need to rethink how we assess value on feeder calves.”
“We’re putting everything in a pressure cooker right now and the true value will show itself where performance and quality are concerned.”

So the other day we talked about all those same things that we had talked about back in 2007 and 2008:

“We went from $2 to $5 corn and we asked all sorts of questions,” he said. “Are we going to start short-feeding cattle? Are we going to have cattle spend a lot more time on grass? Is quality grade going to free fall? We are asking these same questions again as we run up to $8 corn and beyond.”

Today we’ll hear some predictions, we’ll get inundated with numbers and then we’ll have to make our best guesses as to the answers. Because it matters to our viability, just as it matters to yours.

We’d love to hear from you. Tell us your predictions on prices and how that impacts your business.

May your bottom line be filled with black ink,

Miranda

A day in the life of a beef cattle specialist

“So, what is it, exactly, that you DO?”

I get asked this question A LOT! Almost as much as, “Hey dad, can I have some money?”

I really don’t take offense to this, but am beginning to wonder if, at least when my relatives ask this question, if they think that I could actually be gainfully employed and doing something useful! Someone once said that if you can’t describe what you do in a few words (or less!) then perhaps your job isn’t necessary!

Now that THAT’s out there, what DO I do?

Gordon Stucky, AAA and CAB board member, explaining his operation to a group of International CAB customers on a ranch tour.

Boiled down: I sell Angus bulls!

No, not directly, of course. But I spend a great deal of my time communicating our message to the commercial cow-calf producer: that they need to buy Angus bulls, or Angus semen for use on their females. You see, our mission statement here at Certified Angus Beef is to: “Increase demand for registered Angus cattle through a specification-based, branded-beef program to identify consistent, high quality beef with superior taste.”

It’s a no-brainer on the bottom line…..packers pay MORE MONEY for Angus-influenced cattle that meet our brand’s ten stringent specifications. Only about ONE in FOUR black-hided animals meet these criteria! Yes, we have producers with 50, 60, 70, 80, 90, heck, even 100% cattle that qualify for CAB or CAB-Prime. The financial reward is there. Cattle sold to the packer on the grid currently return $40 per head over the base price for every carcass that qualifies (assuming an 800 lb carcass), and $160 to $200 for those that reach the Prime grade. That’s not peanuts!

Other cool stuff I get to do in accomplishing this mission: discuss with producers their sire selection criteria; helping them in the marketing of their calves; using AngusSource (age, source, and genetic verification) to enhance value of their calves; conduct feedlot data reviews; make farm and feedlot visits, license new feedlots; help with chef/restaurant/retail/wholesale tours of Angus farms and ranches and feedlots; carcass data evaluations with producers; the writing abstracts for professional societies; fielding calls in our office about CAB and how we function; attend trade shows with a booth in tow; interacting with and working with state Angus associations and cattlemen’s groups, speaking at seedstock sales and pre-sale events, and selling GeneMax(TM), our newest DNA tool that quantifies marbling and yearling gain in high percentage Angus cattle.

Jerry Bohn (far left), General Manager of Pratt Feeders near Pratt, KS, visits with a group of cattlemen. We often link farmers and ranchers with Angus-influenced cattle with our licensed feedlots to discover the value of their calves in retained ownership programs.

This week, I’ll be ON THE ROAD to Amarillo for a seedstock event in which I’ll discuss GeneMax with their bull customers; I have a tradeshow booth at a stocker conference in Enid, OK the following day; and then back to Amarillo for our annual Feeding Quality Forum. Then there’s that trip to visit producers in Minnesota with the Angus Association regional manager Vern Frey; the National Angus Conference and Tour…….a day in the life! The good life!

~Gary

Yield grade 4 and CAB?

Producers often turn to the guys in our office to help them make heads or tails of carcass data. It is our kind of thing…

A call came in last week that sounded an awful lot like one our team has heard before:

“There must be some mistake…I got a yield grade 4 discount and a CAB premium.”

This myth is completely understandable, especially once you learn its history:

Myth: Certified Angus Beef LLC (CAB) doesn’t accept yield grade 4s (YG4) into its program.

Fact: If you’d asked us that question in early 2006, we’d have said, “You’re right. There must be some mistake!”

But then this happened:

“Responding to beef industry changes and consumer demand, the Certified Angus Beef LLC (CAB) Board of Directors on Sept 7 <2006> voted to adjust Certified Angus Beef ® (CAB®) brand specifications. In place of a long-standing Yield Grade (YG) 3.9 limit, the brand will use a more specific consistency requirement in the future. Finished cattle weights have increased steadily and beef fabrication styles have evolved in the 28 years since CAB was founded. The changes will address uniformity issues that technology has been unable to control.”

Essentially that took the YG spec and broke it into its three separate parts—ribeye size, backfat and carcass weight:

10-16 square inch ribeye
Carcass weight less than 1,000 lb
Less than 1 inch external backfat

This has helped us deliver more consistency to our customers. If you want to get into all the details behind the move, check out: “CAB to enhance uniformity.”

But in short, you can get a YG 4 discount (because packers like to discourage waste fat) and a CAB premium (because they like to reward quality).

May your bottom line be filled with black ink,

Miranda

On target

“Thirty-aught-six, you know? Like the gun.” The year was 2006 and I was getting the lowdown on all CAB Supply Development programs.

But I was just out of college and didn’t want to appear like the naïve gal that I was (or still am depending who you ask), so I just nodded my head. I didn’t want to say that I knew the difference between a squirt gun, a BB gun and shotgun, but that was about it.

So I went back to my desk and did what every not-wanting-to-show-a-weakness journalist would do: I Googled it. And I learned two things: 1—CAB didn’t get any red flags about a new hire searching guns on her computer (thought about that one after-the-fact!) and 2—It doesn’t matter what the gun looks like, it’s just a darn good metaphor.

For what you ask? Well, cattle feeders with precise aim. We have a Thirty-Aught-Six (30.06) program that honors pens of cattle, fed at partner yards, that reach 30% brand acceptance with less than 6% outliers. You know, those cattle that hit the target.

Each month we publish a listing in the Angus Journal that honors those feeders with pens that meet that criteria. Even though we like those numbers, sometimes it’s the stories behind those charts that really get us excited. Sometimes we have to play to detective, uncovering those gems, but as we do, we want to share them with you.

So here’s our first installment of “On Target”, as authored by former intern (now CAB employee) Emily Krueger:

Setup for success

Shaw, Landon — Landon Shaw, McPherson Co. Feeders

It’s no surprise to Landon Shaw, assistant manager of McPherson County Feeders, Inc., that Steve Humphries’ cattle made the cut for the 30.06 list earlier this year.

Nearly 44% of Humphries’ 73-heifer pen qualified, with more than 76% finishing at Yield Grade (YG) 1 or 2.

A regular customer at the feedlot since the mid-1980s, Humphries has an eye for superior genetics, and his exceptional health management sets those cattle up for success, Shaw says.

“Everything he’s fed with us has been high-quality cattle, and he focuses on getting them ready to feed,” says Shaw. “His herd health program is phenomenal. Every pen we get, we treat an incredibly small percentage of cattle that he sends to us and they’re always ready to grow.”

The heifers came to McPherson weighing 715 pounds (lb.) and reached 1,150 lb. with an average daily gain of 3.4 lb.

Humphries agrees genetics and health played a large role in his the success, and adds that the fescue grass around Maysville, Ky., where his stocker operation is located, allows him to feed his cattle efficiently with little to no supplementation.

“Our grass in this country is super good,” he says. The veteran cattleman knows where to find the best quality Angus cattle and keep them on track for feeding success: “That’s how we make money.”

———————————————————————————————————-

May your bottom line be filled with black ink,

~Miranda

Better than expected

Hay seekers,

Well actually my cows are grass seekers but they have had to settle.

Creep feeding is part of preconditioning this year. To get our surviving 75 calves started on the path to independence, we put out 5 tons of creep in early July and it was gone in 5 weeks. That was about 3.8 pounds per day on the ration of 1/3 each oats, corn gluten pellets and cottonseed hulls. Putting out another half-batch to get us into the Sept. 8 weekend weaning date.

Cracks in the ground not getting wider because they are filling in with dust! It will be interesting to see what is merely dormant and can come back to life next spring. Cows are on prairie hay with occasional alfalfa or range cube treats. They come a runnin every time now, but seem disappointed when it’s only prairie.

Preweaning shots and individual weights this past weekend, starting one after-hours weekday that ran short of daylight by the time we returned calves to their mammas.

Sundowner work sometimes gets into dusk. Cows hurry to reclaim calves that have three more weeks to prepare for weaning.

A lot of dust all over, but cooler weather helps. Thirty top AI-sired heifer prospects looking good.

Except for a few lingering cases of pinkeye from the incessant dust, calf health seemed good and weights were amazing under these conditions. This was two weeks earlier than last year, when 14 of 90 calves weighed more than 600 lb. We still had 9 of 75 in that category and 14 more that could be there in two weeks if they belly up to the creep feeder! It is heartening to see that a promising first-calf heifer from last year, 132, only managed a 325-lb. heifer then but came through with 525-lb. this time around. Old 85 will wean her last AI heifer this fall, but she looks like a good one, too.

It’s been a tough summer, and even a nice rain now can’t help this year’s forage. But it can sure make us feel better about next year.

Till next time, let’s keep targeting the brand and building tomorrow together,

–Steve

Here in the real world

Sometimes I hear commercial cattlemen discussing seedstock producers like they’re some elite class of uber-rich that don’t have to adhere to the same fiscally conservative practices most of the rest of the folks in production ag do.

I’ve also heard talk of how they baby their cattle and that they just “don’t get” what it’s like to be a commercial rancher.

I’ve spent time on registered ranches. Sometimes they have nicer fences or cleaner machine sheds, their places a little showier, but quite often I don’t think you’d be able to tell by looking if they were raising bulls or feeder steers. I’ve also heard many of them talk about their share of tough times and scraping by.

I draw from my boots-on-the-ground experience with today’s falsehood:

Myth: There aren’t any seedstock producers who know what it’s really like raising cattle in the real world.

Fact: Sure some producers are tunnel focused on the bull market, but a great many take great interest in all other segments of the beef business.

The Klausmeyers: a few of the consigners (the winners, in fact) in this year’s Kansas Carcass Data Project.

Take the Kansas Angus Association members. They recently wrapped up their Carcass Data Project where nine breeders co-mingled 79 calves to feed at McPherson Co. Feeders.

“This was kind of a learning experience,” said one consigner of his first shot at some firsthand feeding knowledge. “A good chance to compare with other good cattle,” said another.

Earlier this summer I was at Schiefelbein Farms in Minnesota, where they not only raise bulls, but also feed out calves.

“It also elevates your knowledge base,” says Don.

Between balancing rations and grid marketing they’re deeply entrenched in the same issues that a feedlot is. They know real-world and that helps direct their breeding program.

2007_6_mr_Downey Ranch-2 — Downey Ranch Inc. knows about commercial cattle: it was their first source of income and continues to be a large part of their operation.

Still, a big handful of breeders are also in the commercial business. When I visited with Barb Downey at the Downey Ranch in Kansas a few years back, we mainly talked about her commercial herd.

“We started this commercial cow herd with the emphasis from the start on trying to produce higher-quality beef. We were already keeping the kind of records that you’d need, and we had established a real firm idea of what we wanted in our seedstock. We have a very grounded idea as to what’s important to a commercial man in our area, because that’s what we are.”

So many places I’ve been to, they talked about treating their cows just like any commercial cattle. They followed the same breeding season, no second chances for under-performers. Some might run a few more cows through a calving barn, but they’re still tied to making a profit. That’s a universal motivator. It’s good for their bottom line to see what makes yours.

As Danny Schiefelbein said, “Our whole goal is for them to be in the business a long time and the only way they can do that is to do it a profitable way.”

May your bottom line be filled with black ink,

Miranda

Self reliance

Some people lay awake at night, worrying about the cattle market.

Some people have nightmares about the cows getting out on the highway in the middle of the night prior to them leaving on a little vacation the next morning.

Some people worry that they won’t have enough money to see them through until the end of the month.

My fear is that my kids will not be self reliant!

My nine-year old with her commercial breeding heifer, “Chocolate”

Don’t get me wrong, there are people in this world that need help, and we all need help from friends, neighbors, and families now and then. Some need more help than others. But let’s face it, speaking in terms of today’s society, there are lots of helpless people out there. Can you imagine what our pioneer forefathers would think of most people’s inability to take care of themselves? Those folks drove oxen and mule teams across parched deserts, killing their own food, making their own campfires, making their own clothes, repairing their own wagons; dealing with rattlesnakes, living in crude log cabins and shelters, crossing deep streams with loads of their personal possessions in hopes of making their lives better someday. Not to mention fighting off attacks from natives who didn’t think they should be there.

We fuss if they don’t have the right olives on the olive bar at the local supermarket. We moan when our favorite football team loses. We go totally out of our minds if we are without electricity for a couple of hours. Our favorite TV show was on tonight! Darn it! My son complained the other day when we made him ride his bike 2.5 miles one way to school for weight training and conditioning……but it was that, or not go at all, so he did it. No big deal, but he thought it was. We are trying to teach them to do without some things; Lord knows we have more than enough! Last weekend we worked our few head of calves: vaccines, de-wormer, fly tags, and put a tattoo in each ear. They help me change oil and change flat tires. They feed calves and run the tractor and loader. They check cows for heat, and run the mowers to keep the place looking decent, and yes, they clean out the barn, too! They water new trees and shrubs, and weed the garden. Sometimes, just for fun, I have them pick rocks up out of the yard (they really like that one!). Some kids do a lot more than that on their home farms or ranches; ours is more of a lifestyle or hobby farm. But I do hope they are learning a few things along the way about making their own way! I love my kids, but they need to learn to work, at least a little bit!

Things were more difficult in those days. My grandfather, back row, far left, circa 1905, with his siblings.

One thing I really admire about most people in agriculture is that they can do so many things for themselves. They are self-reliant. They are “doers” and don’t sit on the sideline watching others do all the work. They grew up with that mindset and we need more people like that.

That’s why I think so many commercial producers are using the tools that they have available to make sound genetic decisions in their cowherds. With the vast database that exists out there in “World Angus”, the cow-calf sector can grab ahold of a tool and use it as a means to a better end, and ultimately, a better product for the consumer. With the use of Expected Progeny Differences and the latest DNA test being offered by Certified Angus Beef in “GeneMax”, rapid progress can be made in their herds. They can move it all forward, just as their ancestors did, (albeit more slowly!) when they moved across the country in search of a new and better life.

You see, with the drought forcing many ranchers to cull their herds (supposedly the bottom end), and all the technology we have (DNA, ultrasound, use of EPD’s updated daily now in the Angus breed), the average cow in this country will be much better than she was four or five years prior. And, that’s good for everybody!

For more information on how GeneMax can move your herd forward, check out the link on our website at www.cabpartners.com.

~Gary

Not forced to love it

Perhaps you’ll notice a new level of excellence in my writing or be able to sense that I’m less stressed thanks to my recent professional training at the Agriculture Media Summit in Albuquerque, New Mexico last week.

But when more than 500 professional in the ag communications business get together, you can bet there’s a whole other round of learning going on in the hallways, during breaks and social hours. Everyone shared drought stories, from their own experience or places they’d been. We talked crop conditions, markets, cow numbers and politics—not unlike a bunch of producers meeting for their morning cup of coffee down the road, except the hotel coffee was more expensive. And we were wearing slacks and skirts. But otherwise, pretty much the same.

p145763698-3 — Everything I write about comes back to the end product, but I don’t complain about that!

During one of those chats a friend and I were talking about writing for ag papers (which we both have done at one point in our lives) and writing for companies and breed associations.

I commented that I love the writing at CAB, because of the combination of Steve’s background (former editor of Beef Today and Grass & Grain) and our leadership team’s philosophy that make it feel like I’m just a regular ag journalist. I don’t have to write about things I don’t believe in. I’m not instructed to “push” things. Sure, my work always has to have a connection to high-quality beef, but c’mon, who wouldn’t believe in that?

I’m not sure if he bought that or not, so I thought I’d pull this one out of the archives:

Myth—The CAB supply development team just spews Angus propaganda, regardless of the facts.

Fact—We do want you to use more Angus in your herd, but only because we truly believe it will lead you down the trail of profitability.

And it takes a lot to make us “believe” because our team is made up of scientific minds who take a hunch and then find the hard-core data to back it up. We’re not easily swayed by popular opinion. We want to know the numbers, the supporting facts and then firsthand accounts from ranchers and feeders.

Almost all of us come from a production background and most of us continued that early education with advanced study in the agriculture field, some holding masters and doctorates. Heck, our president isn’t just a marketing whiz. Dr. John Stika is a Kansas farm boy, still firmly grounded by his advanced study of meat science.

We have looked at the numbers on everything from how having more Angus-influence in your herd affects quality grade to how the breed has improved its growth traits. When somebody asks us about implant recommendations, we crunch the numbers and then ask for outside opinions.

We lean on a wide and varied network of university and private researchers to provide us with information that we can share with you.

Of course it’s always going to include talk about quality. We are paid to increase the long-term supply of Certified Angus Beef^® but I certainly didn’t take this job to spew propaganda. I’m sure my teammates would agree: We all want you to succeed. If you want to do that by producing a darn tasty product, we’re here to share with you all that we know (and all that the true-blue experts know) about getting that done.

I get to look at things from all angles. I get to wear a critical thinking hat and talk with experts with diverse opinions. And then I get to share that with you.

Sounds kind of like my first paid writing gig freelancing for The Land. Except now I get some fringe benefits (read: CAB for breakfast, lunch and dinner).

That said, if there’s anything you’d like us to dig into….let me know. I’d love to hear your questions.

May your bottom line be filled with black ink,

~Miranda

What not to ring Marilyn about

Marilyn likes to stay under-the-radar, out of the limelight, but behind the scenes….she makes a lot of things happen.

Right now the Feeding Quality Forum registration is in full-swing and if you’ve got questions, Marilyn’s your gal. If you need Best Practices Manuals to give out at a meeting or you want to know how to get CAB® product for your bull sale, again Marilyn’s your gal.

Many people call into our office and ask Marilyn questions she’s never gotten before and if she doesn’t know the answer, she finds it for you.

Last week, she got one of those, “Hmmm…never gotten that one before” questions. A rancher called in and said something like, “Hey, we’ve got a replacement heifer that showed up at our place, and it has one of your CAB tags. Could you tell me who owns it so I can call them to come and get it?”

That made me think it was time to bring this myth up again:

Myth: AngusSource® tags=CAB eartags.

Fact: CAB doesn’t have a tag system, but our parent company (The American Angus Association) does. It’s a USDA-approved age, source and genetic verification program, that’s been proven to help feeder calves fetch more at the auction barn. It’s especially driven by age-and-source premiums at the feedlot level, which are often in the neighborhood of $30/head. Calves sired by a registered Angus bull, can be enrolled for an initial $50 and $1 for each tag in that group.

Often times folks think having an AngusSource tag means they’ll automatically make CAB. I busted that myth last year in the post, “Can I have some of those CAB eartags? Nope!”

As I said then: “Just wanted to make sure we’re clear: We’re totally supportive of the AngusSource program and all it stands for. It’s just that it’s not a “CAB ear tag.” You still have to wait until the packer pulls off that hide to see if it gets certified.”

Hopefully that clears a few things up.

Oh, and if you were wondering…we’re not sure if that heifer found her way home, but the good folks in St. Joesph were able to look that tag up.

May your bottom line be filled with black ink,

Miranda

What to consider when you’re on the fence

The two most important men in my life are both directly tied to farming and cattle production. And to be honest, it doesn’t matter which one I talk to on any given day, the conversation tends to go in the same direction.

“I sure wish we’d get some rain.”
“Another day over 100 degrees.”
“I had to turn another hay customer down today.”
“I need to get those cows in and start thinking about early weaning.”
“I’d sure like to keep more of my heifers back this year, but I don’t know where I’m going to get the pasture.”

The drought has hands-down been the topic of summer 2012.

If your crops and pastures have suffered from drought, chances are, you might have some difficult decisions to make this year on heifers after weaning. Maybe resources require you sell more of your heifers than usual, which means you need to be more focused than ever on selecting the most elite set to retain in the herd.

At home in Indiana where the corn crop looks like this across the entire county, you can bet my dad will be more selective than ever about the heifers he’ll keep and which ones to take an early payday on.

While you may be on the fence this year about how many heifers to retain or cows to cull, you don’t have to lose sleep at night wondering if you kept the right ones.

While the commercial Angus herd doesn’t come fully equipped with EPDs and pedigrees, there are still ways for those cattlemen to gain confidence in selection. Often times, the information that you already have can be a huge asset. Good records of how your calves perform can be a key indicator of the maternal quality in your herd – especially if you use similar sire groups. Consider partnering with a feedlot to get more information on feed efficiency and carcass quality. That last piece of the puzzle can come in handy when making cuts in the cowherd for next years’ team.

But what about this year’s heifers? Last week, Gary discussed GeneMax™ as another tool to cure your droughty blues in heifer retention. Without progeny data, it’s difficult to guess how young cattle will perform as part of the herd. Do you think you could tell without all of the tools?

A couple weeks ago, I introduced a contest on our Facebook page and asked folks to rank five heifers in terms of the potential each had for gain and grade. While we had several people take a stab at it, none of our entries ranked all five in the correct order. In all fairness, we were being a bit tricky. As some of our contestants pointed out, asking cattlemen to evaluate heifers on phenotype alone for gain and grade is hardly fair – especially when we’re using GeneMax™ scores as official placings.

That is exactly the point we were trying to drive home with the contest. In many cases, commercial Angus cattlemen don’t have data for young replacement heifers. In pastures where multiple bulls are turned out, or clean-up bulls are used to follow AI matings, you may not even be able to accurately identify complete pedigrees. Selection decisions are often made by the naked eye. A good set of feet and legs, a sound udder, and overall balance are undeniably important qualities in potential cows. However, in a year where maybe you can only afford to keep 10-15% of your heifers instead of 30-35%, consider using additional tools from the toolbox.

Just like our judging contest online, it’s difficult to tell which of these western Nebraska calves have the greatest potential for gain and grade.

Whether it’s diving a little deeper into your records or using a genomic test like GeneMax™ to add more information to your females, don’t let this year’s heifer and cow selection be a gate-cut decision. In times where grass is short, corn is sparse and break-even costs are scary, the value of adding predictability to your herd is greater than ever.

Author’s Note: Congratulations to Heather Hamilton for winning our Facebook contest last week! She most-closely ranked the five heifers according to gain and grade potential. Look for your prize in the mail, Heather!

~Kara

A new paradigm, again

You may also like

A day in the life of a beef cattle specialist

You may also like

Yield grade 4 and CAB?

You may also like

On target

You may also like

Better than expected

You may also like

Here in the real world

You may also like

Self reliance

You may also like

Not forced to love it

You may also like

What not to ring Marilyn about

You may also like

What to consider when you’re on the fence

You may also like