Cattlemen's College gives producers an opportunity to learn
By Kylene Scott
A wide range of speakers in seven educational sessions gave cattlemen and women the opportunity to sit down and hear about relevant issues and information to improve production and profit, during the Cattlemen’s College as part of the Nebraska Cattlemen annual convention in early December 2013 in Kearney, Neb.
Before lunch, Gary Sides of Zoetis discussed defending agriculture in a Facebook culture, while Kim Stackhouse-Lawson gave tips on improving beef production today to protect tomorrow. Rick Rasby explained a couple new apps that could help cattle producers.
Following the noon meal, Terry Klopfenstein, professor emeritus, ruminant nutrition at the University of Nebraska-Lincoln, discussed the economics of confining cows and calves when the grass supplies are low.
“The cattle industry in Nebraska is heavily forage based. On a cost basis it’s around 70 percent because the concentrate feeds are more expensive,” Klopfenstein said. “We have an abundance of residue for two reasons: The proportion of residue or forage to grain is relatively constant; and we converted some of those pasture acres to corn.”
As the yields in corn increase, more corn per acre is produced, and more residue per acre is produced. Not a bad problem to have.
“To some extent, what we’re short on is pasture land,” Klopfenstein said. “For years we’ve talked about what would you do with the sandhills or pasture lands other than run cattle on it—and now we have to think we could use more pasture.”
The thoughts on the lack of suitable pasture helped Klopfenstein lead a group studying how economical it would be to confine cows and calves in a feedlot situation. In April 2012, they established a confinement cow system with 42 cows each at Scottsbluff and at Mead, Neb. Bred cows who were set to calve in June and July would be better candidates due to the January weaning and marketing age of the calves. Cows were bred in the feedlot by natural service and calves weaned at 205 days of age. Diets were a mix of corn stalks or wheat straw and wet distillers grains. Those at Scottsbluff, Neb., also had some wet beet pulp in their diets.
According to Klopfenstein, there were seven different cow-calf systems used in the study. Three represent traditional Sandhills production systems; two represent eastern Nebraska production systems; and another two systems are the total confinement system and a hypothetical system based on a combination of the confinement system and the June and August calving systems in the Sandhills.
In the end, Klopfenstein and his team found a few things:
In the conventional systems, break-even prices for calves (both steers and heifers) ranged from $1.34 per pound to $1.55 per pound. Sandhills system using June calving had the lowest breakeven because no hay was used and cornstalk grazing was economical. Highest was the eastern Nebraska system because of the amount of hay fed.
Complete confinement system had a break even of $2.11 per pound.
Hypothetical confinement/stalk grazing system had a projected break even of $1.35 per pound.
Stalk grazing is very economical. Based on supply and demand economics, stalk grazing should remain very competitive, but many factors affect this practice.
“The dollars just don’t work, I don’t think, for confinement for 365 days,” Klopfenstein said. “For pasture the question is cost and availability in the future. I think the confinement and stalk system has potential.”
Many of the producers at the Cattlemen’s College questioned the health of the calves in the confinement study.
“Again, we didn’t have scours problems. We’ve not had young calf problems. Our treatments have occurred in that 3- to 4-months-of-age range,” Klopfenstein said.
He noted that passive immunity from the colostrum is wearing off and the calves haven’t developed active immunity very well at that age range. It doesn’t matter if they are early or late weaned either.
“I’m thinking our vaccination program we need to take a hard look at that and try to develop a little more active immunity in them early,” Klopfenstein said. “We’ve not had major problems with it (morbidity in calves); not had major death loss, but we’ve done some treatments, yes.”
Klopfenstein also discussed the effects of weaning age on the system’s outcomes and sees the potential in it.
“I think there is as much or more potential for late weaning as there is early weaning; and maybe feed that cow a little bit more supplement. Run it through her and make milk, which really works great for that calf,” Klopfenstein said. “Now, you’ve got to feed the cow accordingly because you’re going to take some condition off of her. You just have to feed her, but you can feed that pair. It’s a great opportunity.”
Kate Brooks, assistant professor, agricultural economics at UNL, followed Klopfenstein, and she discussed livestock industry trends and Nebraska’s role in them. The state ranks in the top five of a number of different areas within the livestock and beef industries, but that doesn’t always help the situation.
“We all kind of know industry numbers on the beef side are declining,” Brooks said. “We have increasing cow-calf cow prices; slaughter prices; increasing calf prices; and at the same time input prices have been coming down, but we’re seeing highly variable prices at the same time.”
Recently there has been some positive demand, and Brooks thinks that forecasters thought there would be some declines in demand as retail prices continue to increase.
“So we’ve seen some surprise in demand, but demand is also getting a little bit more of a hard topic to talk about,” she said.
Looking at the cow-calf sector, the numbers are at the lowest point since the 1960s, and analysts are continuing to see a decline. Brooks expects to see more of a decline when the Jan. 1 U.S. Department of Agriculture cattle inventory report is released.
“We saw further declining numbers at the beginning of this year as we saw extended winter weather—more drought impacts,” she said. “I don’t think we’ve probably seen that hard expansion trigger quite yet. We know we have some people out there starting to try to ramp up some of that, but we haven’t seen actual herd expansion triggered.”
Looking at the USDA’s long-term projections, Brooks said the beef cow inventory and per calf retail weight in pounds is declining, but projections shouldn’t remain that way.
“They’re expecting after 2015 to start seeing that increase in our cow herd numbers—showing a 12 percent increase in our herds from 2022 compared to 2012. There’s others out there predicting roughly about that same 2 to 4 million increase in herds, but it’s going to be a slow process,” Brooks said. “We know the biology behind the cow, and we can’t ramp those herds up overnight. We can’t ramp up production like pork or poultry can as fast.”
They are estimating that 12 percent increase in the cowherd numbers, but it’s going to take several years to get those numbers up.
“The big question is where are these numbers going to come from and who’s going to increase these numbers as we go forward,” she said.
Declining pasture acres and the quality of the remaining pasture acres both contribute to the number of cattle in the nation’s cowherd. Brooks questioned whether those acres will be put back to pasture after the price of corn has declined.
“Are we going to get some of the pastures in the Corn Belt back and in some of these regions as we try to start rebuilding the herd?” Brooks said. “Some of the question goes whether or not some of those farmers want to go back to producing cows again. If they left producing cows to produce corn, whether they’ll start doing that second job or whether they’ll just continue producing the crops.”
Nebraska’s cow-calf sector did see a decline from Jan. 1, 2012, to Jan. 1, 2013, Brooks said. Even from 2005 to 2011 there was a decline in Nebraska similar to what was happening across the United States. But, at the time it was looking like producers were trying to rebuild herds.
“We saw a jump in our herd numbers there at the beginning of Jan. 1, 2012, but then the drought hit about May of 2012, and we started selling off cows, selling off heifers,” Brooks said. “We saw that decline there around Jan. 1 of 2013. I don’t think we’ll see here again an expansion in Nebraska when the numbers come out Jan. 1, 2014.”
Extended drought throughout the beginning of 2013; late winter storms; and declining hay numbers also contributed to other sell-offs. More cows were going to slaughter and heifers were going into the feedlots at the beginning of 2013.
“As we enter the end of 2013, however, there are two things to note. We have seen a decline in those cow slaughter numbers, even though typically during towards the end of the year, we see those increases starting to cull some of those animals after weaning. We haven’t seen that increase in the U.S., or in Nebraska,” she said. “And the other thing, if you’ve been watching replacement heifer prices, we’ve started to see premiums for those replacement heifers, especially if you’re comparing them to the slaughter steers or just heifers that aren’t denoted as replacement heifers. We’re starting to see some discrepancies with those prices.”
Brooks said the discrepancy in price is an indication that somewhere out there they’re starting to think about rebuilding those herds.
She also expects returns on cow-calf estimated averages to increase. From a high in 2004 of $150 per cow, for 2013 producers could expect $140 (approximately) per cow returns.
“We’re looking into 2014, and we’re looking at double those numbers. We’re looking at very good potential for a very good return on cow-calf in the coming year,” Brooks said. “We’re seeing declining input numbers. We’re seeing better pasture conditions, as well as seeing record high cow prices (and calf prices).”
In 2013 there were some higher cow-calf returns, but not what producers were expecting.
Those numbers could still go down as we go forward,” Brooks said. “The question is if we’re looking at these potentials for extremely high cow-calf returns are they high enough to get people to get back into cow-calf if they got out, and or are they big enough for people to start rebuilding those herds.”
Cattle on feed numbers also have been down, she said. Nebraska tends to ship in more cattle to feed than the state can produce. Even more cattle are shipped in to fill packing plants.
“So we do have some gaps between our cattle on feed and our calf crop and what we can actually slaughter in the state of Nebraska,” Brooks said.
The decline in the beef numbers can be felt in pork and poultry industries because they are picking up the slack.
“We know soybean prices and corn prices have allowed these two to start ramping up in 2013,” Brooks said. “So as beef production declines, we’re still seeing an increase in our total red meat and poultry production, because the decline of beef production is being offset by broiler production and pork production.”
Pork producers may not see as many rises in production because of the issues with PEVD not being completely under control yet.
“So where as to those numbers go in 2014 and 2015 may have something to do with that disease and how far we see increases in their production,” she said.
In conclusion, Brooks said she doesn’t think there have been any indicators for expansion in the cow-calf sector yet, but she thinks it will come in the next few years—it all depends on improvements in the drought and pasture conditions.
“But I think as we move forward, it’s not going to continue to be what it was for our fathers and grandfathers. It’s continuing to change,” she said. “It’s going to depend on sound management and cost efficiencies that are going to be key for profitability as we move forward.”
One final thing to consider, she said, was when looking to replace heifers, be sure to include all costs involve. Online calculators can help with the calculations when comparing raising replacement heifers or buying them.
“I think you should really take a look at that as heifer prices continue to rise. And maybe opportunities to purchase heifers, but at the same time because of the input prices declining, there may be some opportunities to go ahead and raise your own replacement heifers as you move forward,” Brooks said.
Kylene Scott can be reached by phone at 620-227-1804 or by email at email@example.com.