Cattle producers must deal with change

By Jennifer Bremer

Changes in the agriculture industry has created new opportunities for cattle producers according to University of Wisconsin Extension Forage Specialist Dan Undersander.

"While cattle producers do have concerns with the price of corn and the price of land, they can also take charge of the changes and set goals as to how to better their production," he said to a group of producers at the Cornbelt Cow-calf Conference in Ottumwa, Iowa, on Feb. 24.

Undersander said producers must raise beef differently than they have in the past since the inputs and markets are different than they were even two years ago.

Factors affecting the cattle industry

He said there are many factors that play a part in the changes in the cattle industry.

--There is a greater awareness of the agriculture industry by the urban population.

--The increased use of corn for biofuels.

--An increase in food prices. Even though the U.S. has the cheapest food in the world, the prices are continually increasing.

--Distillers grains more plentifully used as a feed source for finishing cattle and to stretch pasture.

"As the corn prices continue to rise and make it harder for cattle producers to afford feeding corn, we must remember that in most of the rest of the world, corn prices are twice what they are in the U.S.," he said. "That's why there is more grass-fed beef in other countries. We can learn ways to produce beef differently from these countries."

Undersander also encouraged producers to look into new marketing opportunities which may include natural, organic, locally raised, selling in groups or cooperative and the use of the Internet to market cattle and beef.

Explore renting options

Another way to increase profits and to continue to raise cattle is by exploring new areas to rent land. He said to talk to retired land owners or urban land owners about grass land and he suggests signing a multi-year contract.

"Another suggestion is renting on the animal unit month, which is commonly done out West and may be a better option than a cash rent per acre," he said. "Yet, another option is some form of share rent. This is commonly done for grain production across the Cornbelt."

The benefits for share renting are for both the renter and the owner. The renter has the ability to build capital towards financial goals, the lifestyle enjoyed while farming and the farming and business skills gained through experience and other necessary education.

From the farm owners' side the benefits include the ability to discontinue animal handling without relinquishing total involvement in the farm, the ability to maintain an income and modest return on their investment and a share renter will produce more than a waged worker and therefore increase or maintain the value of the property.

"This type of share renting also has benefits for the cattle industry because it allows younger people to come into the industry and young people can provide new ideas resulting in increases in production," said Undersander.

Reduce capital costs

Reducing capital costs is another option to stay in the business. This can be done by reduced machinery costs by buying machinery with other producers or contract harvesting hay, silage and haylage.

Extending the grazing season can reduce costs. He said livestock can graze through up to 20 inches of snow on stockpiled pasture.

"In livestock budgets stored feed typically accounts for 25 percent or more of the cost of production and analyses of producer records often reveal it to be even higher," said Undersander. "Less labor is required to have animals graze rather than to provide them with stored feed. The forage quality of leafy autumn residue is usually considerably higher than that of hay, which is usually produced by cutting older more fibrous forage."

He does stress that stockpiling pasture is a great option, but performance is usually better when animal are grazing on properly managed pasture.

Increase outputs

Another method of profitability is to increase output per unit of capital costs. The first step in higher production is to have a high fertility rate in cows. Undersander said when cows have better gains they then have better fertility.

He suggested fertilizing pastures and have pasture species that will result in high forage yields.

"After a cow has taken their 30,000 bites per day they are done. If they take bigger bites of grass they will gain better than if they take smaller bites," he explained.

Outputs can be increased by being efficient in hay storage and feeding. After harvest, forage should be stored to minimize loss and maintain accessibility when needed for feed.

Exterior losses on hay bales can be significant. Four inches of loss around the outside of a 5-foot diameter bale is 30 percent of the total forage it contained. Undersander said that producers could be losing 25 to 40 percent of the feed value of hay because of poor storage. Other losses of hay occur in field curing, harvesting and feeding.

"With good management practices you can go from a 70 percent loss in hay to a 30 percent loss. It is hard to understand how any business could exist in this day with 70 percent losses," he stressed. "A 70 percent loss in hay production can make hay cost $172 per ton, but a 30 percent loss makes hay cost only $70 per ton. It is so important to have good management to lower this cost."

Undersander said changes need to be made in beef production in order to stay competitive and remain profitable in the future.

Jennifer Bremer can be reached by phone at 641-938-2342 or by e-mail at jbremermaj@hotmail.com.

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3/5/07

1 Star WK

Date: 3/1/07

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