STIR the POT - again!

[DOC HARRIS]

In reading the threads being produced on the Forum lately, it seems that a very critical subject, that being Feed and Fuel costs, has been allowed to sink to the bottom of the "pot", so to speak. That subject related, indirectly, to the size of our cows, and the relative ability that they posses to perform economically and profitably - noticably with FEED EFFICIENCY!

A few days ago I attempted to stimulate the thinking of our participants on these posts by instigating discussions regarding Cow Size, Frame Scores, and Body Conditioning Scores. It elicited some relative comments.

Here is another effort to "Stir the POT" a little, and stimulate your thinking in regard to your own beef operation. It is by Kit Pharo, and whether or not you subscribe to his philosophies, it certainly is food for thought!

As such - please THINK about the relativity between OIL PRICES, fuel prices, feed costs and your success or failure in the beef business.

Folks, the Environmentalist's, and the lethargy of the voting public, is strangling our businesses and our country!





Cowboy Logic: “A chip on the shoulder is a sure sign of a blockhead.”





Can You Say, “$8.00 Corn” ?



The front-page article of our July/Aug 2001 Newsletter was entitled $8.00 Corn. At that time, I did not expect to actually see $8.00 corn within this decade. I was just trying to make the point that high-priced corn might be the best thing that could happen to the beef industry. Why? Because high-priced corn would hit our competitors (pork and poultry) much harder than it would hit us. Producing great-tasting, well-marbled beef on grass isn’t difficult if you have the right genetics.



Six years later, I did a re-make of my $8.00 Corn article for our Jan/Feb 2007 Newsletter. It was called $6.00 Corn. At that time, I was quite confident that we would see $6.00 corn in the very near future. However, I remember catching a considerable amount of flack over that article. While the farmers were all hoping my predictions would come true, the status quo cattlemen all thought I was at least one brick short of a full load. They could not imagine the beef industry going through the types of changes I was talking about.



Guess what? We saw $8.00 corn earlier this week. How many of you actually believe the beef industry can continue “as usual” with $8.00 corn?



In last week’s PCC Update, I asked, “What is your strategy for dealing with ever-increasing crude oil prices?” This week, I am going to ask, “What is your strategy for dealing with ever-increasing feed prices?” Whining and complaining is NOT a good management strategy. Neither is sticking your head in the sand.



The current beef production model was built on cheap grain and cheap fuel. Times have changed! Cheap grain and cheap fuel are things of the past. What has worked for the past 20 years will NOT work for the next 20 years. Those who are quickest to adapt and change will be in the driver’s seat. Those who are slow to adapt and change will get left behind or run over.



DOC says, " DON'T GET ME STARTED!"

DOC HARRIS

 

[MikeC]

Makes no sense Doc. We don't have enough grass/pastures to fatten all the beef harvested in this country, and most certainly not with the price of nitrogen where it is..........................

We cannot compete with much of South America for forage fed beef.

Greg Doud, economist for NCBA says that the "Corn rationing" (for livestock feed) being talked about by the USDA will be the death sentence for the U.S. cattle industry. I think so too.

 

[DaletheDairyFarmer]

We in agriculture have not been afforded the luxury of cost of living increases everyone else has gotten for the last 20-30 years(ever since we went off parity pricing) we have been told to get more effiecient or get out. Subsidies have always been a sore subject. We don't want them but because the price of practically everything ag is controlled to favor cheap food the consumer would either pay directly from the market or indirectly through taxes and subsidies and therefore we need them. Fastforward to today corn ,grains in general even gas, are finally priced where they should have been all along price of everything else responds by going up.This country in general has a problem with the difference between I need and I want. They will complain about price of food or gas but will not even think about controlling uneeded spending. Seriously has there been a movie produced in the last 10 yrs that was worth the cost of a ticket?yet we the sheople are told to go see such and such movie and off we go so some overpaid schmuck in hollywood can make millions and then complain how overworked they are. most of these people couldn't keep up with anyone of us for a morning say nothing about all day. I won't even get started on sports, but I will mention all the crap that goes with it shirts, hats, jerseys, sneakers, memorabilia in general how many millions are wasted every year on that stuff yet they have the gall to complain about food. I know I kinda got off subject but it felt really good! Was reading something on dairyline.com yesterday where one guy says $15 corn is not out of reach based on the flooding. If that happens pigs and chickens will become nonexistant on a large commercial basis. Feedlots will have to seriously rethink feeding strategies. Dairies will also. Heck we rotational graze and if grain goes much higher production will drop because we won't be able to stay on top of the grain bill the only answer is to cut way back.Normally we hold our own in winter then get ahead in summer. So far not getting ahead.Feed price goes up weekly, after news of flooding I don't even want to order next week I'm guessing $10-15/T anyway maybe more. I can't predict the future but I think I can safely say we are in for some big changes in the way the country operates, the way we as farmers do business and the way consumers spend what little money they will have and its going to get alot worse before it can get better. Some folks will be able to change faster than others some will not be able because of investment levels made on cheap oil/food policy. The radio this morning said the airlines are all in trouble because they were set up at $50 oil not 150 to counter that ticket prices are going up and sooner not later air travel will become too expensive for anyone but important business. I don't know what we can do, just bear down and get sticky we're in for a wild ride!!!!!

 

[Avalon]

I can see the writing on the wall. Seems that for some time it was all about weaning weights, then marbling. I think time is coming when many production traits will take a back seat to FEED EFFICIENCY 9as far as value on an animal). I bought a bull based on other critera this year. However, I was very happy to see that he scored 7of 8 for FE on Gene Star. Seems that all my neighbors were more interested in that than actually seeing what he looked like. After 16 hours on a truck and 40 days in the pasture he seems to be holding up to the hot Texas summer (coming from SD). I do think slowy but surely we are all becoming more aware of the need for easier doing more efficient cattle.

 

[EAT BEEF]

Well I'll bite. What I see are some more good times for Kit,It's all coming together for the marketing, nonbreeding Pharo.He's getting rich off of his cooperators breeding and hard work.I'm not saying it's wrong and don't want to be the guy that hates someone because they made it to the big money ,but I wish it could have been someone with their own genetics.

As for getting thru it I think I have some pretty decent cows that make it on grass and mineral or they go to town.This still leaves me with a major problem as Mike stated the cost of N is not profitable.It going to cost me about $200 in N to run each additional cow over what my land will run with no nitrogen.This will eat away at profits pretty fast or I can sell about half the cows and might stay pretty profitable on what I have left if feeder prices hold.If feeder prices tank I can sell more cows and try to finish on grass(N might make money in a grass fattening program).I'm going to plant some legumes and try some other things so that maybe I don't have to sell so many cows.Or maybe I can be the next Pharo cooperator and afford .75 for a lbs of N.Either way it's going to be interesting and most of us will find a way to get thru it.

Maybe I'll just pack up the wife,the dogs and a couple nitrogen tanks and head for Buenos Aires
:wave:

 

[novatech]

The size animal produced will be up to the feed lot and what they are willing to buy. They are the ones feeding the corn. The size of the cows producing the calves for the feed lots will be up to the ranchers and has little to do directly with corn. The efficiency of cow size has to do with the producer. The efficiency of a terminal calves genetics has a lot more to do with the feed lot and certainly will help the calf producer.

 

[Frankie]

So what are you looking for here, DOC? Do you expect someone to say "no, feed efficieny isn't important?" I think we all know that it is. We've been performance testing bulls for 15 or more years. Some producers are willing to pay more for bulls that gain faster. There are considerably more bull testing stations around the country than there were when we started testing bulls. So I'm not sure what you're aiming for here.

My personal opinion is that the use of corn as fuel is not going to last many years. Things are tough right now and I don't expect to see much change in the near future. But I don't think finishing cattle on grain is going away. Like Mike said, there's not enough grass to produce the beef we need in this country and we can't compete with other countries in producing grass fed beef. IMO, we should be looking at weaning bigger calves, not smaller ones. An additional 100 lbs at weaning means 100 lbs that the feedlot doesn't have to put on the calves.

 

[EAT BEEF]

Maternal cow terminal bull hmmm who has been saying this for a while.

 

[backhoeboogie]

Doc Kit is a good salesman with some really good salespitch. Most everyone has figured that out long before now.

He is not dealing with the same terrain, climate, and grasses that I am.

When something isn't broke it doesn't need to be fixed. You said yourself that you need to keep good ole common sense and to not complicate things.

Two things that contribute to a bonus for me. One is hay cradles versus the rings I was using. Less waste. The other thing is Hubam clover and the N it puts into the ground. Most of my soil tests reveal N is all that is needed. Hubam clover does that and I bought seed for $2 a pound last fall from Turner Seed out of Breckenridge, TX. That is much cheaper that buying fertilizer. Hubam has been excellent for me now two years running. One year a dry year and one year a wet one. This fall I will be investing more in seed and less in N next spring. Hence, there is my hi-tech (NEW)learning experience as of late.

Kit probably is right about most everything, but there are other folks I would rather pay close attention to.

 

[BRG]

We need to be efficient, but in the same token, we need to produce what the feeders want. Or else we won't have anyone bidding on our calves!

 

[DOC HARRIS]

So what are you looking for here, DOC? Do you expect someone to say "no, feed efficieny isn't important?" I think we all know that it is. We've been performance testing bulls for 15 or more years. Some producers are willing to pay more for bulls that gain faster. There are considerably more bull testing stations around the country than there were when we started testing bulls. So I'm not sure what you're aiming for here.

My personal opinion is that the use of corn as fuel is not going to last many years. Things are tough right now and I don't expect to see much change in the near future. But I don't think finishing cattle on grain is going away. Like Mike said, there's not enough grass to produce the beef we need in this country and we can't compete with other countries in producing grass fed beef. IMO, we should be looking at weaning bigger calves, not smaller ones. An additional 100 lbs at weaning means 100 lbs that the feedlot doesn't have to put on the calves.

Frankie-

Your seeming inability to comprehend my meaning, or - "what you're aiming for here" - is confusing to me! Inasmuch as you claim to have been "Performance Testing Bulls" for 15 years, I would suspect that my first paragraph would clearly explain that FEED EFFICIENCY is absolutely mandatory (necessary!) to enable our beef cows to perform economically and profitably! (Oh, I guess that is exactly what I said! :roll: :nod: )

But - I did NOT say, or intimate, or infer, that we should not consider increased weaning weights on our calves! Quite the opposite! That cycles back to a discussion - or discussions - in the past about avoiding SINGLE TRAIT SELECTION in our BALANCING EPD's with phenotype, genotype and functional considerations. The discriminating processes in differentiating our seedstock choice protocols dictate that we KNOW how to balance EPD's between getting our cows so large that they are inefficient in our efforts to increase our Weaning Weights, and at the same time holding our Milk EPD down to a sensible level (preferably using "across Breed EPD adjustment factors) to around +22 - +26.

In perusing your comment that using corn as fuel is not going to last many years - and that not finishing cattle on grain is not going away - I concur with you - and Mike also. All the more reason to re-visit the subject of Cow size (the bigger they are the more they eat - the more they eat the more it costs to feed them - the more it costs to feed them the less profit you realize - the less profit you realize the more quickly you begin to consider - - FEED EFFICIENCY! :???: (Oh, I guess that is exactly what I said! :roll: :nod:

You mentioned that some producers are willing to pay more for bulls that gain faster. That seems more than reasonable to me! It also seems more reasonable to me that some cow-calf producers would be willing to pay more for bulls whose female progeny result in cows which weigh 1250 lbs. mature weight - AND can produce calves themselves with acceptable Weaning Weights for the Terminal Feedlot side of the business. We would be talking out of BOTH side of our mouths at the same time! That is a REAL conundrum - and it is what the entire Beef Business is all about. Tough Gordian Knot to untie!

Frankie - I hope that this will help you to comprehend what I was "aiming for here." Certainly not anything as complicated or illogical as a return to "the 'pony-types' of the 40's and 50's. God forbid that should ever happen again! It seems to me that the answer to MOST of the difficulties of Beef Cattle Production revolves around - FEED EFFICIENCY! (Oh, I guess that is exactly what I said, isn't it? :roll: :nod:

DOC HARRIS

 

[ga. prime]

This cow stays fat in the leanest of times. I bet she weighs more than a ton. I'd hate to know how much she eats. Her calves make it to 5 weight at weaning in a good year. This while other cows in the same herd not much more than half her weight wean 700lb calves. Only reason I still have her is that she's one of two that are holdovers from when my Dad was managing the cow herd. She's going to the sale end of Summer. Times are too tough to keep a cow for sentimental reasons.

 

[DOC HARRIS]

ga prime-

VOILA' Two pictures are worth MORE than a thousand words!

DOC HARRIS

 

[greenwillowhereford II]

Like Mike said, there's not enough grass to produce the beef we need in this country and we can't compete with other countries in producing grass fed beef. IMO, we should be looking at weaning bigger calves, not smaller ones. An additional 100 lbs at weaning means 100 lbs that the feedlot doesn't have to put on the calves.

:shock: Sorry, couldn't resist....

 

[DiamondSCattleCo]

We cannot compete with much of South America for forage fed beef.

This line is something Can-Am producers need to look at over and over again. Commit it to memory. Even using the most efficient animals walking, we still CANNOT produce beef as cheap as South America can. AND WE NEVER WILL. At least not in my lifetime.

So where does that leave us? Of course we have to maintain peak efficiency in our animals. Thats always been the case, at least for anyone that wanted to make money in livestock. And of course we have to trim costs wherever we can. But we need to do something more, otherwise we're going to cost manage ourselves right out of business.

If we cannot compete on price, why do we keep trying to compete in a commodity market that we simply cannot compete in? Its my opinion that as Can-Am producers we need to be looking at several things to allow our families to survive into the future:

1) High quality beef production. Not lowest-cost commodity beef, but rather animals that grade well every single time. Sometime around 30 or 40 years ago, we lost the ability to raise high end animals. We need to get that back and we need to get that back with a lowest possible cost mindset.

2) Niche markets. Again, we cannot compete in the commodity marketplace, so look for a niche that will suit your management style. There are plenty of them out there, and they are gaining strength each and every day. Hormone free production is currently paying dividends. USDA/CFIA Organic pays a few cents extra. Every little bit counts. The big fellas like Cargill and Tyson all want to buy nothing but cheap commodity beef, so let them. There is plenty of demand for GOOD beef around the world. Lets lock that market down and give this low-margin market to South America.

3) Finish our own animals. Used to be a time when just about everyone finished their own animals. We need to do it again. Eliminate the middle man. I know we keep hearing about "economies of scale" of using feedlots, but if you've got 50 calves, chances are your economy of scale isn't far off the biggest feedlot. If you can't afford corn or whatever your choice of finishing ration is, GROW IT YOURSELF! Take a hundred acres, till it up and stuff some grain into it. Small pony presses and small combines are cheap. So take a couple days and pretend to be a dirt farmer.

4) Learn how to grow forages again. In the era of cheap fertilizers, just about everyone went to hard grazing techniques to gain every last bit of production from their grass and hay. Stuff some more fertilizer on it, and you were back at it next year. Re-learn how to stockpile grasses. Maintain the health of your stands. I just quit taking second cut on my hay lands, and I can't believe the difference its made, even in a couple short years. I split one field in half and took a second cut from one side of it, while I left the other side. I gave up a 1/2 ton/acre second cut, but gained more than a full ton an acre the next year. I expect more this year. And my stand simply looks better on the single cut side. So if you normally take 2 cuts, take 1. If you normally take 3 cuts, take 2. Give your land a rest and it will pay you back.

There are certainly more, but I believe these are some of the most important. Just like single trait selection in animals, anyone who is going to manage their business on a single trait (lowest cost) will see themselves out of business in a few years.

I'll step down off my soapbox now.

Rod

 

[DOC HARRIS]

We cannot compete with much of South America for forage fed beef.

This line is something Can-Am producers need to look at over and over again. Commit it to memory. Even using the most efficient animals walking, we still CANNOT produce beef as cheap as South America can. AND WE NEVER WILL. At least not in my lifetime.

So where does that leave us? Of course we have to maintain peak efficiency in our animals. Thats always been the case, at least for anyone that wanted to make money in livestock. And of course we have to trim costs wherever we can. But we need to do something more, otherwise we're going to cost manage ourselves right out of business.

If we cannot compete on price, why do we keep trying to compete in a commodity market that we simply cannot compete in? Its my opinion that as Can-Am producers we need to be looking at several things to allow our families to survive into the future:

1) High quality beef production. Not lowest-cost commodity beef, but rather animals that grade well every single time. Sometime around 30 or 40 years ago, we lost the ability to raise high end animals. We need to get that back and we need to get that back with a lowest possible cost mindset.

2) Niche markets. Again, we cannot compete in the commodity marketplace, so look for a niche that will suit your management style. There are plenty of them out there, and they are gaining strength each and every day. Hormone free production is currently paying dividends. USDA/CFIA Organic pays a few cents extra. Every little bit counts. The big fellas like Cargill and Tyson all want to buy nothing but cheap commodity beef, so let them. There is plenty of demand for GOOD beef around the world. Lets lock that market down and give this low-margin market to South America.

3) Finish our own animals. Used to be a time when just about everyone finished their own animals. We need to do it again. Eliminate the middle man. I know we keep hearing about "economies of scale" of using feedlots, but if you've got 50 calves, chances are your economy of scale isn't far off the biggest feedlot. If you can't afford corn or whatever your choice of finishing ration is, GROW IT YOURSELF! Take a hundred acres, till it up and stuff some grain into it. Small pony presses and small combines are cheap. So take a couple days and pretend to be a dirt farmer.

4) Learn how to grow forages again. In the era of cheap fertilizers, just about everyone went to hard grazing techniques to gain every last bit of production from their grass and hay. Stuff some more fertilizer on it, and you were back at it next year. Re-learn how to stockpile grasses. Maintain the health of your stands. I just quit taking second cut on my hay lands, and I can't believe the difference its made, even in a couple short years. I split one field in half and took a second cut from one side of it, while I left the other side. I gave up a 1/2 ton/acre second cut, but gained more than a full ton an acre the next year. I expect more this year. And my stand simply looks better on the single cut side. So if you normally take 2 cuts, take 1. If you normally take 3 cuts, take 2. Give your land a rest and it will pay you back.

There are certainly more, but I believe these are some of the most important. Just like single trait selection in animals, anyone who is going to manage their business on a single trait (lowest cost) will see themselves out of business in a few years.

I'll step down off my soapbox now.

Rod

ROD-

DON'T step off of your soapbox! This is the kind of information that producers - ALL producers should hear and think about and consider seriously in their own operations. This is what I mean when I continue to beat the bushes about "Management Technics" and THINKING about what one must do to stay in business! You just joined my teaching staff!

DOC HARRIS

 

[ROB]

Doc- although i would not disagree with the importance you stress concerning feed efficiency, and maintenance costs of cows due to frame size, we should also consider that with moderate and large framed cows alike- some are efficient and some are not. just because a cow is smaller doesn't necessarily dictate that her maintenance costs will be less than that of a larger framed cow. it seems to me that the tide is turning in that more producers on this forum are in agreement that we should look into RFI tested bulls. but it also seems that some on this forum are not willing to give up completely on all their current practices and go a completely different direction. if one chooses to continue to look for bulls that have high ADG but also takes into account RFI data - they're selections will be improved. cows out of these selected bulls will be lower maintenance cows than that of their contemporaries. but IMO more money will be realized by "maximizing the minimum" input costs of the cows (smaller framed- out of RFI tested bulls that have acceptable EPD's and ADG) and increasing stocking rates to the maximum that my farm will consistently support. a few more calves at sale time will more than make up the difference of those growthier calves out of big ADG bulls.

ROB

 

[novatech]

Calculating Efficiency;
Herd cow; The cost to maintain the cow and still produce a marketable calf.
Feed lot calf; The cost of putting on a lb. of marketable beef.


Not just how much does it eat?
Not just how much does it gain?

 

[ROB]

looking at novatech's last post i thought i would ask y'all to consider this.

herd cows #1: (large framed - non efficient)
herd cows #2: (large framed - efficient)
herd cows #3: (moderate framed - non efficient)
herd cows #4: (moderate framed- efficient)

you have three bulls with identical EPD's, frame, etc., (two of which has been RFI tested) to choose from:
bull #1: (RFI -2)
bull #2: (RFI 1)
bull #3: (RFI ?)

in order from best to worst, which top 3 bull and cow herd scenario's would you choose? and why?

ROB

 

[wstevenl]

How is it that some people think that high input of N is a must and others like Joel Salatin are even finishing with ZERO N? He rotates his herd every day or two and also rotates chickens through the same pastures. All of his winter manure is composted by letting hogs turn it over in the barn and is spread on the pastures. This puts 100% of his manure back into the fields and so by grazing management, pasturing poultry, and spreading his own composted manure/bedding he maintains productive pastures, without even seeding.

I understand that poultry in the pasture would be a stretch for most cattle men but it seems like just through MIG or Mob grazing or the like, you could cut alot of your fertilizers out.

Are these feed efficiency tests corn based? if so then it should be made clear that it is a trait for feedlots because it doesn't mean much to someone trying to do grass finishing. I imagine that the ability to gain on grass is alot different.

Also, of course we don't have enough pasture now, so much of our land is in corn and soy. Have you considered that if the country moved more towards grass fed/finished then some of that corn land could be more valuable and healthy being put back into perennial grasses. And why can't we produce grass fed beef as well as South America? because people don't want to learn something new??

I'm not much of a cattlemen, I only have 7, but I've been reading alot and it just seems to me that people are scared to try something different.