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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

You may subscribe to the weekly Ohio BEEF Cattle letter by sending an e-mail to smith.263@osu.edu

Previous issues of the BEEF Cattle letter

Issue # 907

October 22, 2014

Feeder Calf Preconditioning Considerations

Certainly this is the season for weaning calves. Considering their value, any hiccups in health or performance can be costly. Dr. Troy Brick and John Grimes discuss preconditioning options and alternatives that can prove to be a benefit to weaning management in this 16 minute video.

"We're drinking from the saucer . . ." - Dr. Roy Burris, Beef Extension Professor, University of Kentucky

My grandparents' generation used to "saucer" their coffee to cool it. In fact, many tea drinkers did the same thing. They didn't use a mug like I do. They poured some of their "piping hot" coffee from the cup into a saucer, swirled it around, savored the aroma and drank it down.

That practice later became symbolic of "good times" or of "counting your blessings" when someone coined the phrase "I'm drinking from my saucer 'cause my cup has overflowed." We in the cattle business don't like to talk too much about our recent "run" of good luck (prices) for fear that we might jinx things, but our cup has indeed overflowed. Cow-calf producers are in the best position that we've ever been in and it appears that it should last for a while.

Let's "saucer the coffee". In other words, take time to smell the aroma and enjoy where we are at this point in time. We've almost been guilty of "panic selling" because we are afraid that the good times won't last. Relax. I don't see anything that's going to cause prices to collapse in the near future.

A cattleman recently told me that he usually preconditions his calves but sold them this year at weaning to take advantage of the good prices. You can make money either way, by selling or retaining ownership, but we haven't had many opportunities to put extra weight on calves at these prices. Go ahead and maximize your returns. Folks that are buying expensive calves will want some assurance that calves have been properly immunized and managed - so that they have an edge on survival. The Kentucky CPH feeder calf program provides that assurance.

Some other considerations to maximize income involve reproductive performance. We need to get the cows pregnant and try to save every calf! This is no time to come up short on your feeding and management programs. There is too much at stake. Feed costs might even be falling a little - at least it seems that corn will be cheaper this fall. Keep those cows in proper condition for good breeding efficiency. Provide a watchful eye during your calving season - be there and save those calves. Whatever it takes!

Having a live calf is the most important thing that the cows will do. So what does that tell you about the bulls? Select those that are reasonable calving ease prospects for the cows/heifers on which they will be used. Be sure that heifers are properly developed and bred to calving-ease bulls. This is no time for a "train wreck".

This coming winter will be a very important time for your cattle operation. There's no excuse for "roughing" cattle through and hoping that the next calving and breeding seasons will work out okay. Take good care of your animals to ensure that your cow herd performs at the optimum level. Losing a cow or calf is not only painful but represents a huge loss.

This is also a good time to cull some cows. Prices are good and if a cow isn't going to raise a calf, sell it. However, if you have open cows at weaning, you might consider holding them a while after weaning, and feeding them to put on extra weight before you move them. They can gain a lot of weight in a short period of time.

Cattle numbers are down and it will take some time for them to recover. Don't keep waiting for someone to pull the proverbial rug from under your feet. Capitalize on what we have now. It is a good time to make some needed capital improvements on your farm. And remember, provide good care for your cows . . . and take time to smell the coffee!

COOL's Last Stand? - John D. Anderson, Deputy Chief Economist, American Farm Bureau Federation

On Monday, the World Trade Organization (WTO) released the report of the compliance panel reviewing the Canada/Mexico complaint against the U.S. over Country of Origin Labeling (COOL). Given that this process has been grinding through the wheels of WTO justice for so long, a brief recapitulation of the issue is probably in order.[1]

As a domestic policy issue, COOL originated in the 2002 Farm Bill. Due to a lack of any kind of consensus on how COOL should be designed, though, implementation on beef and pork was delayed until revisions were made to the policy in the 2008 Farm Bill. A COOL interim final rule was published by USDA in July 2008. By December 2008, Canada had begun the WTO dispute settlement process by requesting a consultation with the U.S. on the issue through the WTO. This process continued over most of the next year, with other countries - notably Mexico - formally joining the process. In October 2009, Canada requested and was granted the establishment of a formal dispute settlement panel. The panel was appointed by the Director-General in May 2010. The dispute was heard over several months, and it was not until November 2011 that a report was issued.

The first dispute panel report was unfavorable to the U.S. position on COOL, finding that the rule was inconsistent with U.S. obligations under the WTO: specifically that it afforded less favorable treatment to imported livestock than to domestic and that it failed to "fulfil [sic] its legitimate objective of providing consumers with information on origin . . .". On March 23, 2012 - that latest possible date at which it could do so - USDA filed a formal appeal of the panel finding. This appeal was contested over several weeks, with an Appellate Body report issued at the end of June 2012. The Appellate Body upheld the original panel's findings but differed significantly in their rationale for doing so. They agreed that the COOL rule constituted a disincentive to use imported livestock due to recordkeeping and verification requirements. However, they argued that the detrimental impact on foreign producers could be justified if it stemmed "exclusively from a legitimate regulatory distinctionů". From the Appellate Body's position, origin labeling can be a legitimate requirement. The problem with COOL was that so little of the information collected and maintained was actually passed on to consumers; the disproportionate burden associated with imported products was not justified by the limited information conveyed.

The Appellate Body ruling at least kept the door cracked for a COOL fix; and USDA requested a "reasonable period of time" to implement such a fix. That reasonable period was to extend to May 23, 2013. On that date, USDA implemented a revised final rule in an attempt to address the deficiencies identified by the WTO Appellate Body. The main feature of the revision is that it would expand the COOL label to include more of the information being collected under the COOL program (the born, raised, slaughtered feature of the new labels). It is this new final rule that has been under review by the WTO compliance panel; and it is this compliance panel's report that was issued on Monday.

The compliance panel has determined that even though the amended COOL program results in better consumer information, it imposes a "disproportionate" burden on importers as compared to domestic suppliers; therefore the amended COOL measure accords less favorable treatment to imported livestock than to US-origin products and as a result is still in violation of U.S. obligations under WTO. Specifically, the panel found that the revised COOL rule actually increased the detrimental impact on imported livestock (as Canada alleged) because it increased the degree of segregation and the level of recordkeeping that would be required for compliance. They further found, addressing the Appellate Body's concerns, that this detrimental impact did not rest exclusively on legitimate regulatory distinctions. This is largely due to the fact that a large proportion of relevant meat products (e.g., anything sold through the food service trade) is exempt from COOL anyway.

So what happens now? Is this the end of the long and winding road for COOL? Maybe; but probably not. For now, the WTO compliance panel recommends that the WTO Dispute Settlement Body (DSB) request the U.S. to bring the inconsistent measure "into conformity with its obligations." The next step in the WTO process would be adoption of the compliance panel's report at a DSB meeting. Adoption of the report - subject to delay by a U.S. appeal - would trigger Canada and Mexico's rights to compensation or retaliation. If the U.S. files an appeal and loses once again, Canada and Mexico would be authorized to slap retaliatory tariffs on U.S. exports.

Basically, then, two more important decision points remain. First, the U.S. must decide whether or not to appeal the compliance panel's ruling. This decision should come within the next 60 days. An appeal will likely last the better part of a year. If the U.S. appeals and wins, COOL stands. If the U.S. appeals and loses (which must be considered likely in light of previous experience with the process) the U.S. will face the second decision point. At this decision point, there are three options: 1) let COOL stand as a non-compliant program and endure whatever retaliatory measures are permitted to Canada and Mexico by the WTO, 2) repeal COOL - at least on beef and pork, or 3) replace COOL with a new labeling law that is compliant (or that will start the whole review process over again). The first option is not likely. Retaliatory measures can be quite broad and will therefore awaken powerful domestic constituencies to oppose COOL; this is what such measures are designed to do. The second option is the cleanest but will obviously not appeal to those who have invested well over a decade in COOL. It may not be easy to stand down on the issue at this point. That leaves the third option. But a new COOL law won't necessarily be easy to design. COOL has always been an attempt to thread the needle between what WTO requires of compliant labeling programs and what domestic producers (and other industry stakeholders) are willing to implement in their own operations. It is not clear that the eye of that needle has gotten any bigger in the last twelve years.

[1] This summary is based on WTO's summary of dispute number DS384, United States - Certain Country of Origin Labeling (COOL) Requirements. This material is available online at http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm#bkmk384rw. All direct quotes are from this source.

Northern Plains Fall Calf Marketing Situation - Tim Petry, Livestock Economist, North Dakota State University Extension Service

On Sept. 29 - Oct. 2, I had the opportunity to see a good portion of the heart of Northern Plains cattle country. We drove across southern North Dakota (N.D.), down through southwestern N.D. and the entire stretch of western South Dakota (S.D.), and halfway down eastern Wyoming. Two unusual things for this time of the year were evident from southwest N.D. to eastern Wyoming: green grass and ample moisture. Usually the grass is brown and dry conditions prevail.

And of course many remember last year on Oct. 4, when precipitation came in the form of a severe blizzard that killed thousands of livestock. On the trip the entire area from Dickinson, N.D., to Lusk, Wyoming, had received 1 to 5 inches of rainfall in the previous week and it rained off and on all four days of the trip. Places in western S.D. received record rainfall amounts in September. Most of the area had received adequate moisture throughout the growing season. Pasture and range conditions were much improved from just a couple years ago when drought occurred in much of the area.

There was an above average hay crop with many hay bales still in fields. Some producers were still making hay but were hampered by wet conditions. In southwest N.D. and northwest S.D. there were still scattered spring wheat fields yet to be harvested, which is unusual for this time of year.

Due to the good grass conditions, late harvest, and wet conditions, most beef cows and calves were still on ranges, pastures, and crop aftermath. Very little weaning had occurred and the fall calf marketing run had not started. In N.D., USDA-AMS usually reports four major feeder cattle auctions this time of the year, but due to low calf receipts reporting has been at only one or two of those auctions in the last several weeks. Official comparisons of receipts with last year are not possible because last year USDA was shut down due to sequestration.

Record high and still contra-seasonally increasing calf prices have producers weighing marketing options. Several ranchers that I visited with indicated that they plan to keep more heifer calves this fall. However, when asked how many heifers they would actually keep in their own herd for expansion, there was a wait and see attitude. Several said they want to see what spring moisture and market conditions are before deciding what to do.

Calves sold at weaning will generate very nice profits this year. But ample feed supplies in the Northern Plains at the cheapest prices in several years; and improved winter wheat conditions in parts of the Southern Plains compared to the last several drought years may offer opportunities. In N.D. where I am, spot corn prices at some country elevators are now under $2 per bushel with ethanol plants paying up to $2.60. An early frost in some areas caused both more corn silage than originally expected to be harvested, and low test weight corn that may be best utilized as livestock feed. The wet conditions and late harvest caused sprouted malting barley that is now feed barley. There is also some sprout and disease damaged wheat available at attractive prices for feeding calves.


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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.

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