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Cattlemen face decision on herd expansion

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By Doug Rich

Is the cattle industry ready to pull the trigger on herd expansion?

This question was examined from every angle during the Beef Industry University at the Kansas Livestock Association convention and trade show in Wichita, Kan., Dec. 4 to 6. Outgoing KLA President Mark Harms said the answer is yes and no.

“I think it depends on what part of the state you are in,” Harms said. “Our grazing areas are in the process of healing in some areas and we hope they have healed in others. Repopulation is probably going to be taking place at different rates and in different areas. Personally, how I look at it, as soon as we have enough feed stocks and some hay starts building up along the hedge rows again then we will take a hard look at the economics of retaining heifers for breeding purposes.”

The economic side of this question seems to be very much in favor of cow-calf producers right now and for the next few years. Glynn Tonsor, K-State associate professor of agricultural economics, explained the economic signals for herd expansion.

“Through 2014 and 2015 we are expecting cattle prices to go up, and along with that pasture conditions nationally are a lot better than they were,” Tonsor said.

Better pasture conditions and lower grain prices are positive signals for herd expansion and the beef industry in general.

“The expectations for 2014 are to set not just records but historically high record returns for your typical cow-calf producer in the U.S.,” Tonsor said.

Returns for a typical southern Plains cow-calf operation, over cash cost, could be double what they were in 2013, and 2013 was very good. According to the Livestock Marketing Information Center, the two best years were 2004 and 2013, when returns over cash cost were $150. The LMIC projected return over cash cost for 2014 is over $300 per head.

“That gets a lot of excitement for cow-calf producers, particularly those who are of an age or business generation that have an interest in expanding,” Tonsor said. “This could increase interest in expansion.”

“I do think there is a lot of opportunity and I think herd expansion is pending,” Tonsor said. “I don’t think it will occur uniformly across the country due to regional difference. There are opportunities for improving your profitability if you don’t expand.”

One of those opportunities will be raising replacement heifers for those producers who decide to expand their herds. This is where the new Sunflower Supreme Heifer Development program comes into play. Jaymelynn Farney, director of this program, explained the goals and objectives of this program.

“Our program objective is to provide some knowledge, guidance, and tools to help producers in the areas of reproduction, health, genetics, and record keeping,” Farney said. “As well we want to help your relationships, not just your relationship between yourself and your veterinarian, but improve your relationship with your Extension professionals and your marketing professionals. Our goal is to provide quality replacement heifers.”

Farney said they hope to have enough heifers enrolled in the program to have their first sale in southeast Kansas in November or December 2014 for spring calving heifers and sale in May 2015 for fall calving heifers. Other sales could be added as the number of heifers in the program increases.

There are some fees associated with participation in this program. Farney said there is a yearly annual membership fee of $20, there is a $2.50 fee for each heifer enrolled in the program, and a $10 per head fee for certification prior to sale.

All breeds of cattle are welcome to be part of the program, and there is no minimum on the number of heifers a producer can enroll.

There are a number of requirements for producers and heifers enrolled in the Sunflower Supreme Heifer Development program. Among these are Beef Quality Assurance certification for the producers, a vaccination protocol for all heifers, a pathogen protection plan, Bangs vaccination, a pre-breeding evaluation of all heifers and use of calving ease sires.

A full list of the requirements and guidelines for this program can be found at www.sunflowersupreme.org.

Whether a producer is planning on expanding his cow herd or planning on raising quality replacement heifers, it all comes back to grass. Burke Teichert, ranch management consultant, explained grazing strategies for maximizing forage resources. Teichert said the principles of good grazing are the same everywhere, but the practices change to fit the situation.

“You want to avoid or minimize over grazing,” Teichert said. “Pastures can be over grazed in one of two ways. You can stay too long and have regrowth that is grazed again before the animals leave which can be difficult for plants. The other way you can over graze is to leave that pasture and then come back before it is ready to be grazed again and that is the worst of the two scenarios.”

Teichert said if he had to over graze because he did not have enough paddocks he would prefer to over graze in this graze period and then allow every plant time to recover before he comes back again. Rest and recover, time and timing are principles of grazing that do not change, but practices change.

“If I am in a 7-inch rainfall desert versus a 30-inch region like eastern Kansas or western Missouri, I can come back a lot sooner,” Teichert said. “I can graze it a lot more times in a three- to four-year period, where out on the western desert I may only graze it once every 18 months or 22 months. To give it time to recover and not graze it at the same time this year that I grazed it last year.”

Teichert said planned, time-controlled grazing will signal producers when it is time to destock or restock a pasture.

Tonsor’s final words of advice to producers as they consider herd expansion was to think globally, manage locally, and stay informed.

Doug Rich can be reached by phone at 785-749-5304 or by email at richhpj@aol.com.

Date: 12/16/2013



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