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OSU Extension BEEF Team
BEEF Cattle questions may be directed to the OSU Extension BEEF Team through Stephen Boyles or Stan Smith, Editor
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Previous issues of the BEEF Cattle letter
Issue # 920
January 28, 2015
Earn Your MBA! - Stan Smith, PA, OSU Extension, Fairfield County
Unless you've been living under a rock, you've most likely experienced someone suggesting that raising cattle and/or eating beef is unhealthy for you, environmentally unsound, unethical . . . you name it . . . the list goes on from there. Unfortunately when we hear someone suggesting these things we often times are caught off guard, not knowing how to respond.
Fact is, anti-animal agriculture activists are at it daily raising concerns about the impact of beef production on the environment, the treatment of animals in food production, the role of beef in a healthy diet and the safety of the products we raise. Some of the restaurant chains that market our products are even involved! These people are passionate, persistent, loud, and often times very well funded.
If properly prepared, there's no one who can respond with more passion or accuracy than those of us who live and breath beef cattle production every day. Cattlemen are hard at work daily not only being environmental stewards and caring for their animals, but also providing safe and nutritious beef for dinner tables throughout the World, including their own.
For those of us who wish we were better prepared to respond when our industry is attacked, that's what the Masters of Beef Advocacy (MBA) program is about. It's a self study program funded by the Beef Checkoff that's design to prepare cattlemen to tell their story not only to individuals they may encounter on a daily basis but also in presentations to schools or church and civic groups, through local media and in the social media.
Once you have completed all five courses - at your own pace - you will continue to have access to the five courses on the checkoff-funded MBA Classroom site, as well as the latest talking points, fact sheets and presentations you need to be successful beef advocates.
For more details and an application to get started with this new checkoff-funded MBA 2.0 program, visit the Masters of Beef Advocacy website: http://www.beef.org/mastersofbeefadvocacy.aspx. Regardless your age or place within the industry, you're welcome to enroll and participate as part of a group that you might assemble, or as an individual on your own schedule.
Winter Feeding Means More MUD! - Dr. Roy Burris, Beef Extension Professor, University of Kentucky
Get out the muck boots - winter is here! If there is one thing that is associated with winter feeding in Kentucky - it would be mud! Mud causes lots of problems for cattle producers - loss of feed nutrients from hay, calf scours, calving losses, etc. But, perhaps a bigger issue is the effect that winter feeding can have on your pastures.
Feeding hay on pasture, even with hay rings, will cause a lot of damage to grass and make a muddy mess because of the intense "traffic" around the hay bale. Couple this with the ruts made in the field by the tractor that hauls the hay across the pasture and you are messing up a lot of grass. By late winter, we have made a muddy mess - just in time for spring calving!
Isn't there a better way? Some producers bring all the cows into the barn lots to minimize pasture damage - but mud is still a major problem and cows are better off calving on good sod. But when you try to progress to year-round grazing and rotational grazing, it is essential to leave the cows out on grass giving them access to supplemental feed as needed with minimal pasture damage.
Several years ago muddy feeding/calving areas were a common problem at the UKREC-Princeton. That is when we were fortunate to get the assistance of Dr. Steve Higgins, UK Director of Environmental Compliance. Whoa! When we say "environmental" folks get a little uneasy but this is not only helping the environment - it provides better care for your cattle, your pasture and your land. That's a win-win situation.
These pictures are of various feeding structures and a frost-free waterer at the Princeton Station. The hay feeding "pads" allow cattle from different pastures access to hay and can be scraped off and spread on pastures. Round bales of hay can be added as needed. It is best to locate these facilities near all-weather roads for easy access and minimal pasture damage.
Concrete feed troughs (for silage and/or concentrate feeding) are conveniently located by farm roads for minimal pasture damage and ease of delivery. Be sure to have adequate bunk space for the number of cattle that will utilize it and adequate area that is covered with geotextile fabric and rock around the bunks.
Frost-free waterers will help control the problems with the water supply freezing up. However, mud can be a problem around the waterers, too. If you pour a concrete pad or prepare an area of filter fabric and rock, be sure the area is wide enough for the length of a cow and not just their front feet (see photo).
Isn't it time that you and your cattle quit "slogging" through the mud? Make your New Year's resolution about providing better environmental conditions for you, your cattle and your neighbors. For more information on design and resources available for feeding structures refer to fact sheet ID-188 "Strategic Winter Feeding of Cattle Using a Rotational Grazing Structure".
Cattle Basis Levels - Matthew A. Diersen, Professor, Department of Economics, South Dakota State University
Here are some observations from putting together year-end cattle prices and basis levels. The cash markets below refer to South Dakota, but many patterns would hold for neighboring states. Monthly live cattle prices are available from the Sioux Falls Regional Livestock market. Prices for Choice 2 to 3 steers weighing 1300-1500# match up well with the delivery specifications on the live cattle futures contract. In 2014, as cattle were fed to heavier weights, it was necessary to use the Choice 2 to 4 price series for several months. Regardless, the basis was above the 5-year average for 10 of the 12 months. From a hedger's perspective, the basis was favorable in those months if using the board (e.g., futures or options) to manage risk. If a hedger had forward contracted, they likely were disappointed as the basis ended up greater than expected. At the national level, the 5-Area price series in 2014 had high Choice steers as the volume leader instead of the lower Choice category. What about 2015? Assuming the seasonal patterns continue in prices and basis, the 5-year average basis will be a good starting point. That means for most months live cattle basis will be $2 to $3 under the nearby. The exceptions would be a $0 basis in April and June and a basis of $4 above the nearby in May.
Feeder cattle prices and basis were incredibly variable in 2014. Using auction prices for 700-800# steers in South Dakota, the basis relative to the nearby futures price was above expected levels throughout 2014, and especially so in July, August, September and December. In absolute terms these are record high basis levels. However, in percentage terms or percent of the futures price, similar levels were observed during 2005. A more subtle comparison to the CME Feeder Cattle Index shows that South Dakota feeder cattle traded at a large premium compared to feeder cattle from other states except during November. What about 2015? With the feeder futures still showing an inverted pattern, basis will be tricky. The 5-year average would give a starting point. Then adjust basis (add to it) for any inversion, especially in non-contract months.
The basis on stocker cattle was also very high and at record absolute levels for 2014. Using the auction price for 500-600# steers in South Dakota, the basis relative to the nearby futures price was typically $50 throughout the year. The observed basis was about twice the expected or recent average for basis. Unlike the feeder cattle basis, the basis on calves or stockers reflects the other inputs (mainly corn and hay) needed to grow the cattle. Thus, the seasonal pattern and absolute levels are less likely to follow any average, unless those other prices are at normal or average levels. What about 2015? High absolute feeder cattle futures prices will keep the stocker basis high or large compared to recent years. The current 2015 projections are for slightly lower hay prices and slightly higher corn prices in South Dakota compared to 2014. These cancel out the effect and suggest that basis in 2015, especially for fall, will likely be around $50. Should feeder futures prices drop, then the basis will narrow or become smaller too.
December Feedlot Placements Fall and Fewer Heifers in Feedlots - John Michael Riley, Extension Agricultural Economist, Department of Agricultural Economics, Mississippi State University
The United States Department of Agriculture's National Agricultural Statistics Service (USDA, NASS) released their monthly Cattle on Feed report Friday afternoon (Jan 23). The report revealed that 10.690 million head of cattle were in U.S. feedlots with a capacity of 1,000 head or larger on January 1, 2015. Placements into feedlots during the month of December, which included one additional business day compared to December 2013, totaled 1.544 million head while marketings during the same month totaled 1.655 million head.
Placements totaled 1.544 million head, a decrease of 8.1% from December 2013 and a 6.4% decrease from the five-year average from 2009 to 2013. Market analyst expected placements to come in at 1.681 million head, so the reported value was much lower than anticipated and even below the lowest guess of a 7.7% decline. This marks the third lowest December placement number on record since 1996.
Cattle placed in major feeding states (Texas, Nebraska, Kansas, and Colorado) were, at the very least, not positive for weight categories below 800 pounds. Texas saw smaller year-over-year placements of 800 pound and heavier cattle, Colorado had even placements for this weight group, while Nebraska and Kansas had more 800 plus weight cattle placed. As a result, the average placement weight (694 pounds) continued the recent trend of being higher versus year ago (691) and five year average (688) levels.
Cattle marketed in December totaled 1.655 million head. This put marketings down 4.7% versus last year and down 5.6% compared to the average from 2009 to 2013. Pre-report expectations called for marketings to be 4.4% lower than the same period last year.
The total number of cattle in feedlots with 1,000 head or larger capacity totaled 10.690 million head, up 0.9% versus January 1, 2014 but 4.8% lower than the five-year average. Market analyst expected a 1.6% year-over-year increase in cattle inventories, with smallest guess looking for a 0.8% increase, meaning the reported value was very near the bottom end of expectations.
This report also provided a break-out on the types of cattle in feedlots (i.e., steers, heifers, cows/bulls). There were 6.935 million head of steers in feedlots with 1,000 head or larger capacity on January 1, 2015, a 2.3% increase from last year. Heifers totaled 3.671 million head, down 1.6% from one year ago; and cows/bulls totaled 84,000 head, up 5%. The smaller number of heifers in feedlots will likely add to the story-line of increased heifer retention and growth in the beef herd. More will be known this coming week with the annual Cattle Inventory report.
Visit the OSU Beef Team calendar of meetings and upcoming events
BEEF Cattle is a weekly publication of Ohio State University Extension in Fairfield County and the OSU Beef Team. Contributors include members of the Beef Team and other beef cattle specialists and economists from across the U.S.
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Keith L. Smith, Associate Vice President for Agricultural Administration; Associate Dean, College of Food, Agricultural, and Environmental Sciences; Director, Ohio State University Extension and Gist Chair in Extension Education and Leadership. TDD No. 800-589-8292 (Ohio only) or 614-292-6181.
Fairfield County Agriculture and Natural Resources