Do your cows eat GRASS??

[DOC HARRIS]

- - or - - do they REQUIRE CORN in order to survive, reproduce and present a healthy appearance? Well, if you have been keeping your attention focused on the commodities market for the last few months, particularly the last few weeks, you had better know that your cows had BETTER be able to survive, reproduce and maintain their optimum health grazing on GRASS in light of the demand which is going to be placed on the Corn, Soybeans Wheat, and other Grains in the next several years! This topic has been discussed to a minor extent on these Boards recently, but if you will read this article, you must realize that the Breeder who depends on CORN and other grains for sustaining his herd will be hard put to continue that practice. (Unless, that is, he has a GRAIN BIN full of dollar bills!) Are you going to continue to be BEEF CATTLE Producers - or Ethanol Marketers? It would probably be a wise move to concentrate on cattle that THRIVE on grass!

COMMODITY INSIGHT

by: Jerry Welch

January 11, 2007 -- Early this week, head USDA economist Keith Collins stated, "We have a bull on the loose here and it is going to have a lot of implications for American agriculture and our population." Mr. Collins was referring to surging demand for corn to produce ethanol. Corn is the bull he says is on the lose.
On Friday of this week, the USDA released several reports dealing with final crop production for '06 and ending supplies. The reports were so bug eyed bullish for corn that prices rose to their highest levels in 10 years, locking limit up. The move upward was so violent because the report was so bullish that soybean and wheat prices exploded upward with a vengeance as well. At one point, soybeans were up 49 cents and wheat 30 cents before late day profit taking pushed values off the day's best levels. For the day, it was one of the most bullish sessions in history in absence of crop problems such as hot and dry weather.

In my October 20 column I composed for this newspaper I stated, "clearly a historic battle is underway between those that need corn for food purposes and those that want it for fuel. In coming months, if ending corn stocks drop to 800 million bushels as end users battle for existing supplies, corn prices will be, "$5 or so a bushel." The key for corn prices rests with ending stocks." According to the USDA on Friday, ending stocks of corn are now pegged at 752 million bushels, below the 800 I mention back in October but corn prices have yet to hit $5 a bushel.

Needless to say, virtually everyone is bullish corn at this point and rightfully so. Any sort of further drop in stocks or the failure to add new acres to the '07 crop will send corn prices on a white knuckle rally that will blast thru the $5 a bushel level in a blink. The market is that bullish due to tight ending stocks.

What grain producers and traders will be facing in years ahead will be price movements similar to what was seen in the 1970's. Corn and wheat stocks are historically tight and soybean stocks, though not there yet will be there by '08. That means for at least the next three years, the price swings seen in the grain complex will be reminiscent of the '70's. In the '70's, there were no commodity funds and there was no battle going on between livestock producers that want corn for food or ethanol plants that want corn for fuel. Yet, the price movements were staggering nonetheless. Here is a small peek at what happened in '72 to '73. CORN-In Jan. '73, July corn futures were as low as $1.40 a bushel but on the next to the last trading day before the contract expired, prices closed at approx. $2.60 a bushel. On the final day of trade, prices exploded upward and closed at $3.80 a bushel, a rise of $1.20 in one final day of activity.

Wheat-In early '72, July wheat was trading as low as $1.40 but the contract expired, went off the board so at $3.50 a bushel. In the '70's it was soybean prices that were the strong link in the complex in the opening years of the decade. Today, the strong link for now is corn. But here is what soybean prices accomplished in the early '70's in Jan. '72, soybean prices traded as low as $3.15 a bushel but in early June, '73 they hit $12.90 a bushel. By mid July, a month later, they were back down to $6.40. But there is more!

From mid May of '73, soybean prices rose from $8.75 a bushel to $10.25 and the market was limit up bid for seven consecutive trading days. That was a $1.50 a bushel rise in seven sessions. Those short could not exit and those wanting to buy the market could not do so.

And the bull (old crop '73 versus new crop '74) soybean spreads expanded to historic wide ground. The spreads moved from approx. $1.25 nearby futures over the distant months to $6.50 over, a gain of $5 a bushel. The way that was accomplished was brutal: On some days, nearby soybeans were limit up while new crop limit down. That happed several days in a row and in particular during that seven day period in May, '73 when prices were limit up bid for nearby futures for a total move of $1.50 a bushel.

Mr. Collins is right. There is a bull on the lose and it's going to have major implications for agriculture and general public. Those that argue prices are about to be as volatile as they were in the '70's are also correct. All that means one thing in my view, the Era of the Speculator has returned.

If I can be of help, call me at 406-682-5010.

(The information in this article is the opinion of Commodity Insight's Jerry Welch

DOC HARRIS

 

[SEC]

No doubt about it that the feed grain industry is going to change. But to flip the coin over there is another side.

As of right now, Ethanol isn't economical with oil hovering around $50/barrel. If it goes lower (who knows) than Ethanol really becomes out of whack.

Up here, the gov't has helped get some plants going
That can only spell trouble as whatever they get into certainly doesn't usually turn out well.

I do agree that one needs to make sure the cattle are real and not counterfeit.

 

[KNERSIE]

Doc, I know your post was aimed at the corn/ethanol stuation in the USA, but the situation over here in SA is similar with the exception that we don't have our own oil resources and very limited gas resources. We see ethanol as a possible outcome to overcome being price takers from the Middle East as far as crude oil goes.

The positive on your side of the coin is that the by product of ethanol is a very good high energy feed and should be alot cheaper than corn. It least over here its about 25% of the price of corn. It is called mealie maroek over here, no idea of the proper name.

As for the type of cows I need to make a living off beef cattle:

They need to raise a good calf on grass and leaves only without supplement of any form except minerals in the growing season or on planted pasture in the dry times of the year. And breed back to stay in their calving season.

Dry cows need to be able to maintain themselves on veld in the dry summers where their diet will almost solely consist of leaves. In extreme drought I will supplement with barley straw and energy licks.

For this reason I calve twice a year six weeks each to be able to run more cows on my limited resources. The winter calving herd raise their calves off the veld and the summer calving cows on pasture.

 

[OK Jeanne]

It's my opinion that "forage-friendly" genetics are going to
be a must for anyone wanting to produce beef in the next
10 years(might be sooner, depending on geopolitics). it's
also my opinion that the diminishing supply of fossil fuels
will make changes presently unimaginable in the life-style
(and diet) of people in the "developed" world.

 

[jhambley]

KNERSIE writes:

The positive on your side of the coin is that the by product of ethanol is a very good high energy feed and should be alot cheaper than corn. It least over here its about 25% of the price of corn. It is called mealie maroek over here, no idea of the proper name.

If the producers are making a lot of ethanol, that means oil and gas prices are high. In that case, the cost of fuel to plant and harvest, fertilizer to boost gains, petroleum to make pesticides, fuel to transport grain, fuel to process corn into ethanol, gas to dry the by product, fuel to ship it back to the cattle producers will all be very expensive as well. Not the greatest senario for a cheaply purchased by product.

Our economy, and its inefficient methods, are currently supported by relatively cheap energy prices (we pay less for a gallon of gasoline then we do for bottled water). When oil and gas supplies tighten, our entire economy will have to be reinvented with the cost/availablity of energy being the sole criteria in determining whether a process/product is viable.

 

[jhambley]

it's also my opinion that the diminishing supply of fossil fuels will make changes presently unimaginable in the life-style
(and diet) of people in the "developed" world.

I totally agree. We may all be raising giant rabbits. See this article:

http://www.timesonline.co.uk/article/0,,25689-2543514,00.html

 

[George Monk]

Doc
We maintain a great body condition (and keep them easy handling) on our cows by feeding 2lbs/hd/day. At $5.00/bu that's $65/yr/hd. If I were to go broke because I feed 2lbs/day then there is no way that I should own any cows right now. I could never survive a drought year like this because the addition hay we have fed this year is far and above the expense of the corn we feed. Just the amount of hay fed would make owning cows impossible never mind the additional increase in $$$/bale.
I have herd (pun intended) this argument that you shouldn't supplement your cows but I have yet to be convinced of it. I feel that I will get more calves from my cows if they are well conditioned. Plus they are in great shape when they are finished in my herd so they bring more $$$ when they are sold. Some are even bought to go into other herds as breeders.
Now all that said I could be wrong :lol:

 

[dun]

Doc
We maintain a great body condition (and keep them easy handling) on our cows by feeding 2lbs/hd/day. At $5.00/bu that's $65/yr/hd. If I were to go broke because I feed 2lbs/day then there is no way that I should own any cows right now. I could never survive a drought year like this because the addition hay we have fed this year is far and above the expense of the corn we feed. Just the amount of hay fed would make owning cows impossible never mind the additional increase in $$$/bale.
I have herd (pun intended) this argument that you shouldn't supplement your cows but I have yet to be convinced of it. I feel that I will get more calves from my cows if they are well conditioned. Plus they are in great shape when they are finished in my herd so they bring more $$$ when they are sold. Some are even bought to go into other herds as breeders.
Now all that said I could be wrong :lol:

As in most everyting with raising cattle, environments make a huge difference. Some cattle because of the quality of forage and the individual genetics can benefit from supplement, others in a different area or with different adaptations or forage don;t. The way we raise cows around here probably wouldn;t work in the frozen north, although they did pretty good during the short frozen midwest period. Those same cows in FL or probalby AL or GA would get hog fat with the better forage and less severe environment. We're currently feeding 4-5 year old outside stored fescue and Mix30. The cows are staying in excellent condition, but they started out in very good condition. I think some of them are even gaingin some excess condition now.
What works one year and one place won;t alwasy work. Year to year changes and just locality variations all enter into how managment practices have to be adjusted.

dun

 

[Jeanne - Simme Valley]

Our cows survive on grass in the summer hay/baleage in winter (with calving just starting, they are on hay nursing calves). They are EXPECTED to breed AI in a 60 day calving season. Weaned calves are put on a grain ration, and replacement heifers are kept on grain til bred & turned out on grass with cows never to see grain again.
(exception would be anything that is in the show string during the summer/fall months - generally 4-5 head)
Everything has the best mineral program and the best health program.

 

[KANSAS]

Maybe I should post another topic, but if cattle must be able to gain on grass alone what are the best breeds out there in your opinion? Tarentaise? Aubrac? Galloway? BreedX?


I currently have longhorns and galloways. I know I know a real eclectic group there.

 

[KMacGinley]

My thoughts on this issue are as follows:

I have some 7+ frame cows that literally weigh 1800 lbs or more. These are large Hoff bred cows. My calves averaged 653 lbs adj. weaning weights for heifers and 723lbs bulls on AHIR.

I also have some 5 frame cows with Nichols breeding. These weigh in the neighborhood of 1300-1400 lbs.

These calves weigh about the same at weaning. Of course there is a difference at yearling.

What about the cow maintenance costs? Does anybody want to tell me that they are the same? Or as someone on the other thread asserted that larger framed animals are more efficient on forages?

I don't believe that larger framed animals are ever more efficient to maintain, too much goes into taking care of the larger body mass.

Now, when corn is 1.50 a bushel, this doesn't matter that much, especially here where there is corn as far as the eye can see.

But, mark my word, we are at a turning point. Simmental, Charolais, Chi's, most angus and herefords and shorthorns are going to take a hit. Cattle are going to have to do it on forage or they won't do it at all. I am retaining 5 frame or less bulls to breed and AI ing to smaller framed bulls when I can find them.

If I keep those 8 frame cows, I would have to breed to a 2 frame bull or a lowline, to get where I want to go.

This also coincides with consumer concerns about portion size on steaks. Epds for RE area have always puzzled me, since Consumers want smaller ones and the bulls being pushed seemed to advertise larger ones. (Also the high RE bulls look like lightmuscled holsteins to me. Funnelbutts)

The calf of the future will need to utilize forage for the majority of its life, and be finished with a short period of feeding or not at all. 13-14 month old fat cattle will be a thing of the past, with the majority approaching two years of age.

Is this a problem? Maybe in the short term, trading time for gigantic feed expense., After the first year of slower forage development it would just be a different way of doing things.

Carcass epds could become interesting as well. It is all predicated on a corn high energy system. I wonder if the current high marbling cattle will have such "high epds" on forage? I would guess not.

In short, I think we are heading for the 20s the time before industrial agriculture made corn so plentiful, it won't be plentiful for us, so we will have to breed cattle that don't have to have the feed. 3,4,or 5 frame cattle, that can fatten on forages.

These are my thoughts, for what it is worth

 

[turning grass into beef]

The fact that grain prices have risen, and will likely rise some more, will hopefully make all of us beef producers (not cattle producers ;-)) take a look at the way we produce beef. Even in times of low grain prices, the question that keeps coming up in my mind is; Am I working for the cows or are the cows working for me? I realize that in time of drought or other unexpected circumstances management decisions may need to be changed in the short term. But assuming normal environmental conditions I can't afford keep cows that REQUIRE grain in order to calve, conceive, nurse, wean, stay in average condition, and calve again every 365 days. There are 2 reasons for this. 1) Even in times of low grain prices I cannot afford the time and cost of getting the grain to my cows. Even when grain prices are low it costs money to process the grain and deliver the grain from the bin to wherever my cows happen to be on that given day. 2) My bull customers can't afford the time and money to do this either.

It's probably not a big deal (from a time and energy standpoint)for the guy with 10 cows to go out every day and feed his cows a few pounds of grain, but think about the rancher with 1000 cows. Just the logistics of getting a few pounds of grain to each cow, every day is cost prohibitive, let alone the cost of the feed itself. This is one reason why large scale producers don't have cows that require grain to produce beef.

Small producers or large, low grain prices or high. From a cost standpoint I can't see how beef producers can afford to feed grain on a daily basis to their cows.

 

[dun]

Maybe I should post another topic, but if cattle must be able to gain on grass alone what are the best breeds out there in your opinion? Tarentaise? Aubrac? Galloway? BreedX?


I currently have longhorns and galloways. I know I know a real eclectic group there.

Some breeds may have fewer animals that will do it, but we've had calves from Red ANgus, Angus, Polled Hereford, Simmenthal, Glebvieh and crosses of those breeds within those breeds that all gained well, carried condition, bred, calved and raised good calves. A lot has to do with the genetics within the breed I think.

dun

 

[OKJeanne]

We have been extremely satisfied with the way our
purebred and cross Murray Grey gain and maintain
condition on forage. We won't use over a frame 5
bull and prefer our cows to be 3.5 to 4 frame....
maybe a 3 if she is a good milker and really "beefy".

 

[S.R.R.]

Doc what an excellent post!!! You have hit the nail right on the head so to speak. The extent to which cattle producers have come to rely on grains ect. in order to raise quality animals is frighting at the least. What is going to happen when suddenly a bull man has to raise them on grass? What will happen when stockers have to come close to finishing on grass alone? What kind of heifers are going to be able to grow to a mature breeding size in a reasonable amount of time on just grass? I am afraid that some of the cattle men and women today are in for a shock when they find that their fancy grain and supplemented cattle fall apart when grass is the only option!
Great post!!

 

[MikeC]

Personally, I have never seen a bovine who couldn't survive and thrive on grass. Some do it better than others but they all can thrive on ample forage. The same goes for grain fed cattle. Some do poorer than others. Those animals should be culled from either program.

With the population increasing rapidly and "pastures" giving way to shopping centers, malls, and interstate highways, plus the fact that ethanol production will take previously used pasture and/or grazing land from cattle production, we should all assess our herds for what fits our area the best.

When Real Property prices elevate to the point that it is cheaper to dry lot animals than it is to pasture them (in some places this is true today) we must move to the appropriate position, whichever the direction is.

It is not possible to fatten the entire American slaughter cattle herd on grass. There is simply not enough pastureland available.

Grass and grain both have their place in the U.S. cattle industry, as to the extent of which one or the other........ is up to the individual cattle owner.

 

[purecountry]

Our cow herd hasn't been given any grain for 5 years now, other than a pail or 2 on the tailgate to trail them home. Our herd is a mixture. We have Angus X Tarentaise F1's, Angus X Herf and Angus X Shorthorn F1's, then a bunch of 3/4 Angus daughters from that group. Now that we use Galloway bulls, we have some 1/2 Galloway heifers, and have added some purebred Galloway cows as well. When we cut grain out of the program, the fossil fuel cows weeded themselves out right quick, and there were a few from each breed combination, but the most notable ones were some of the purebred Angus cows we had left. They melted away. They just weren't the right phenotype for it. They had too many generations in their pedigree of grain-dependancy, which is our error, not theirs.

One of the most interesting things we've done is keeping over some bulls every year for meat. When we calve in June in bush country, there's always a few who end up keeping their nuts. At 18 months of age, they're going into their 2nd winter, and they aren't much to look at. Green, lean, rough and tough best describes them. But when they hit grass come spring, the weight they put on is incredible, and by the time they pass their 2nd birthday that summer, they look like herdbulls. I haven't sold any, since they're all 1/2 bloods, but we sure get plenty of offers. I'm going to use one or two of them again this year, because I believe that their genes passed on will get us closer to a completely supplement free herd.

 

[redangus]

How many more millions of acres will be planted in corn in 07' compared to 06'?

 

[gberry]

Those same cows in FL or probalby AL or GA would get hog fat with the better forage and less severe environment.

dun

I seriously doubt that the forage in FL, AL or GA is better than the forage in MO. Cool season perennials that should grow in MO provide good quality forage for much longer portions of the year than bahia or bermuda. I wish I knew that those cows would get hog fat here but I think many more of them would completely fall apart due to the heat and low quality forage.

 

[bullpeddler]

I have always considered myself a grass farmer who uses cattle as a way to harvest the grass. So the goal is to limit the use of concentrates to winter supplementation or feedlot beef. There is silver lining to the whole ethanol situation, though, since beef producers can utilize distillers grain, one of the by products of ethanol production, while chicken and pork producers can't feed this product.