In this issue we're going to take up where we left off prior to the special herd bull edition last time. As you may recall we discussed many of the trends that appear to be developing in the beef industry in terms of markets and how we produce cattle. We also touched on what affects much of the value of the cattle we run through the supply pipeline and what type of impact these factors have on the grass-roots cattleman. We will continue on these lines of discussion but delve more into production trends and the things we will begin seeing implemented on a day-to-day production and management basis. We'll break some of these topics out more specifically so we can focus more effectively on the path before us.
Breeding and Genetics
First off I want it made clear that I am not an expert in B&G. This is pretty obvious if you go back an have a look at my college transcripts and the grades I got in these courses. Nonetheless, breeding and genetics play, now and in the past, a cor-nerstone role in the overall beef production system. A significant amount of research is underway in an attempt to identify specific genes which affect tenderness in beef, fat and lean tissue deposition as well as a host of other parameters. We have always been interested in identifying the genetic code(s) which create a superior carcass that can be produced consistently and cost effectively. Likewise, other performance parameters such as milking ability, average daily gain, feed conversion and so on continue to be of interest. How long it will take for us to make significant headway in this area is difficult to say. Remem-ber that the time it takes for a new discovery to make it's way in to production can be extended but nonetheless important.
Perhaps more immediately we need to fine-tune our selection process in how we determine which cattle are used in our breeding herds. This, to a large degree, is where much of our problem lies in the beef industry. Historically, cow-calf pro-ducers and cattle feeders have been separated by what would seem to be a vast chasm. Cattle ranchers have, in the past, wanted little or nothing to do with feeding cattle and for the most part simply wanted to get their calves to weaning and out the door. They didn't understand the feedyard industry and they sure didn't trust someone 500 or 1000 miles away to feed their cattle the way they needed to and not cheat them in somewhat or another. This lack of exposure to and understanding of the cattle feeding industry by cow-calf producers was really hammered home to me recently at a producers meeting I attended. One of the speakers was a customer service rep from one of the large cattle feeding corporations. He gave his presentation and spoke expansively of his company and what they did and what they could do and all the benefits to feeding and how the cattle were marketed on either a cash basis or on formula contracts and so on. When he asked for any questions, one rancher stood up and asked “what do you mean by marketing on a cash basis?” The local producer didn't understand how cattle were sold (in this case, cash marketing simply refers to selling the cattle while they are still alive, standing in a pen and the packer buyer gives the feedlot manager a bid which he will accept or reject). As with many industries there is a language that exists within the cattle feeding industry that many cow-calf producers do not speak and because it exists they are distrustful of the industry.
Cattle feeders, and we might also throw stocker operators into this group, didn't necessarily want to own a cow feeling that that portion of the system is too expensive and inefficient. Because these two groups have not historically communicated very well (as a group) the initial base product (a new calf) has, in many cases not been what the industry is looking for.
As we look down the road, cow-calf producers have to understand that for them to remain competitive they have to select cows and bulls for their herd which will produce a calf that will satisfy the criteria set forth by the feedlot industry, the pack-ing industry, the retail meat industry but most importantly by the consumer. We see within the industry the development of various “alliances” which take cattle from the breeding and calving pasture through the packing house. At the same time we are developing tracking systems through which a given carcass can be tracked back through the feedlot it went through, back through the stocker operation and on to the ranch where it was born. The information provided can be used to help the rancher see that a particular breeding and selection program he is using is or is not working and can help him determine what type of changes he needs to make to improve his product. We'll see more ranches becoming involved in programs of this nature and because they are putting in the time and effort and investing the dollars will eventually (hopefully) be paid a pre-mium for these cattle.
The cattleman which does not choose to become involved in that way will find it in his best interest to be as well informed as possible of what the cattle feeding industry and meat packing industry is looking for and produce to meet the market. I've encountered many ranchers which grumble about this system as in “I'm not gonna let some @#@&% feedyard or packer tell me what to produce!” Consider this however: did Nike or Reebok become successful by producing the shoes they wanted to produce? Did Chevy or Ford become the best selling truck company in Texas (depends on whose commercials you listen to) by making the trucks they wanted to make? No, these and other successful companies (any successful company) became successful by selling what the market wanted or demanded. If you are going to sell your cattle -- and everyone will sooner or later -- you've got to produce what the market demands. Our industry is NO different from any other in that respect. This is a concept many purebred breeders are struggling with because right now many of the breeds don't fit the demand mold and because of this they are taking a beating in the replacement bull and cow markets. This will become more the case. Bottom line is: you have to produce what is in demand and be flexible enough to change as the market and industry changes.
To look into the future we have to remember the past and some of what we've know for ages. The primary benefit to producing cattle is that they can take material that cannot be readily used by other meat-producing livestock and turn it into tissue. Obviously the main point here is the use of grass and hay. Because cattle are ruminant animals, having a four compartment stomach system which allows for the degradation of high fiber materials from which nutrients, essential to life and growth can be extracted they can be raised on range land, using materials that pigs and chickens cannot. This being the case we have to understand that significant portions of the nutrients needed by cattle come from a forage base in some shape, form or fashion. This can vary greatly depending on what part of the country you are in because of forage availability, nutrient density, digestibility and so on. We also find that increasingly we will be required to produce more animals on fewer acres of land. This will be dictated by the development of more and more acres into land used for housing, manufacturing and retail space, recreation and environmental conservation. Additionally, there will be competition for lands that can go either into livestock production or crop production. This says that we will need to manage our pastures more intensely, producing more forage matter per acre that can be used as a nutrient source for livestock. Many systems have been developed to meet this need and we will see greater utilization of programs that not only produce more pounds of beef per acre but also effectively build the soil so as to sustain the ecosystem. There will be an increased requirement that we maximize pounds of beef produced per land unit while minimizing production cost. Much of this will be related to better management practices and utilization of forages that produce more vegetative growth that is more digestible and more nutrient dense. An example of this is the establishment of Tifton 85 Bermudagrass to replace other varieties of Bermuda. Tifton 85 has shown to be more prolific in terms of forage production as well as digestibility of nutrients. It has even been shown to provide better than expected gains in growing cattle grazing dormant pastures.
Feeds and Feeding
As we've discussed many times in the past, there is an ever-increasing trend to feed various by-products to cattle. While I feel there will always be a very significant use of traditional grains -- corn, milo, oats, wheat, soybean meal, cottonseed meal (the last two are actually by- products if you think about it), we are finding that these grains can be more profitably used in other applications. For instance, we are seeing greater amounts of grains such as corn and milo going into the production of ethanol which is used for fuel. Fortunately this process produces a substantial quantity of by-product that can be used in feeding.
Additionally, as we spoke of the genetic research in cattle, we find the same thing occurring in plants used for grain production. Research is working to locate genes that improve nutrient density (i.e. energy levels, protein, etc.) and which will make these nutrients more digestible.
As we select cattle that fit the market's specifications more closely we will find that to optimize production we will need to pay closer attention to nutrition. While this is nothing new, I believe that to produce at a profitable level and take advantage of the genetics we will see emerging that will be essential that we do a better job meeting the nutritional needs of the cattle we are producing. This is applicable to how we feed and supplement our cow herd, to the calves they produce to stocker and preconditioning/backgrounding operations and on into the feedlot. Management of body condition to enhance breeding performance is an accepted and well recognized method of improving conception and calving rates and a practice which every cow-calf producer needs to adopt. Additionally, as the calves are weaned it will be essential that they be preconditioned prior to shipping. This will include not just the weaning and processing as we have discussed before but the provision of accurate nutrition programs that deliver the appropriate nutrient levels into these cattle. Finally feeding and feeding management has always been critical in the feedyard and will remain so as we battle to meet the demand of market specifications.
We've all been made aware of the significant impact that environmental legislation has played on our production system. The concern for the environment is not going to go away and we'd better get ready to deal with the issues. We will find more range land that will be eliminated from use as grazing lands due to fears that cattle grazing these areas - forested, range, etc. are disturbing or destroying the natural ecosystem. As we see more people moving out of the cities into the suburbs and beyond we will find more incidences of conflict between neighbors over issues such as odor control, water runoff, dead animal handling, etc. This is frustrating for many producers simply because someone new may be telling them how to run an operation they have managed all their lives. As we see greater regulation of air and water quality, the day may come when the typical rancher will be required to obtain permits for nothing more than running a few cows on pasture. This day may be long in coming (hopefully) but I think it is coming no matter what.
Today's cattleman has a lot on his plate. Managing a successful operation will take a lot more “management” and a lot less sitting on a tractor, feeding the cows and working that pen of steers. As we've discussed before planning is vital to your program, not only for what your doing next week but six months down the road, a year from now and five years from now. It is important that we are cattle producers of vision, seeing what is coming down the road and keeping this far-view in mind. We are food producers, delivering product for a growing and increasingly affluent and hopefully better informed society. We must be prepared to be cow-calf men, stocker operators, cattle feeders, meat merchandisers, agronomists, nutritionists, veterinarians, legislators, lobbyists, environmentalists and a whole host of other titles that we'll now wear. The beef industry has always been a challenge and will continue to be. Be proud of what you do even when the road gets rough and frustrating. It's our job to feed the world and that's a badge that everyone in agriculture should wear proudly.