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OSU Extension - Fairfield County

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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 # 648

August 19, 2009

Tips to Becoming More Efficient in Cow-Calf Business - Dr. Scott P. Greiner, Extension Animal Scientist, VA Tech

Becoming more efficient is a necessary step to weathering the current economic conditions of the cattle business. Since 2008, we are all fully aware of the decrease in cattle prices and simultaneous rise in input costs to historic levels. While none of us can control market prices and volatility, through our management practices we can control the impact of these external forces on our bottom line. Becoming more efficient in the cow-calf business can be approached through enhancing revenues or controlling costs, or both. This article presents a few items for consideration to become more efficient, and enhance margins.

Maximize Use of Grazed Forage : Forage quality and quantity has long been the strength and foundation of the Virginia cattle industry. Given the cost of making and storing hay, along with prices for purchased grains and other feedstuffs, maximizing pasture utilization by the cow herd is a necessity. Now is the time to make plans to stockpile fescue to reduce the need for winter hay (see detailed article by Dr. McCann in July 2009 Issue). Stockpiling for fall-winter grazing, pasture rotation, and proper soil/forage plant management are examples which have stood the test of time and proven to be effective and economically sound. Forage is our cheapest and most abundant resource, maximize the use of it.

Assess Winter Feed Supply : In most areas of the state, the spring and summer growing season has been superior to that experienced the last couple of years. Consequently, hay inventories are in good shape. The pertinent question is the quality of the hay that has been put up. Sample hay supplies now and use the results to design a winter feed plan. Knowledge of hay quality and quantity will allow for more accurate projections on the need for supplemental purchased feeds (if any). Grain prices have weakened in recent months and delivered prices of common commodities used to supplement cows (such as corn gluten feed) have dropped accordingly. If the last 18 months have taught us anything, it is that there will be volatility in the grain and feed markets. Having a plan in place will allow you to make wise buying decisions at an opportune time.

Add Value to the Calf Crop : Strategies to add value to the calf crop are well documented. Feeder cattle buyers are willing to pay premiums for calves that are weaned, properly vaccinated and managed, and offered in uniform load lots. This recipe is well established, and by following it there are dollars to be had to add to your bottom line. Additional factors which add value include good genetics and verification programs such as "age and source" and "natural." The Virginia Quality Assured program is an example of a value-added program which garnered over $45 per head in premiums for producers in 2008. While these programs do require additional input costs and labor, these costs are more than offset by the additional value received for the calf. With the increased costs of gain and tight margins being experienced by feedyards, many expect the value differentiation among feeder cattle to continue to widen.

Evaluate Cow Herd : Open cows (regardless of age) will not generate revenue through calf sales in the coming year and consume forage that could be used to support other animals in the herd. A controlled breeding season and pregnancy checking the cow herd have always been an economically sound management practice. Given the carrying costs of cows, working with a veterinarian to identify open females will provide significant return on investment. All cows should be evaluated as to their productivity and profitability. Generally, cows with the poorest returns are those which produce less pounds of saleable calf and calve late in the calving season. With a good cow record keeping system, poor producing cows and problem cows can be identified and culled when warranted.

Get the Most for Your Cull Cows : Cull cows also represent a significant portion of the net return in a cow-calf operation. Two primary things influence the value of cull cows - grade and time/season of marketing. In Virginia, market prices (2005-2008) were over $7 cwt. higher for cows that graded as "Breakers" compared to those graded as "Lean." This difference is primarily body condition, with Breaker cows being fleshier and Lean cows being somewhat thin. Regarding season, cull cow prices are typically lowest during the winter (December-January) and highest May-July (~$7 cwt. spread). Given these price differences, with proper management and timely management over $100 in cull cow value can be attained. Make cull cow marketing a planned event.

Establish Simple Recordkeeping System : The ability to manage costs is dependent on the ability to quantify expenses and make decisions accordingly. Similarly, identifying opportunities to add value and improve management and genetics is dependent on records to form a reference. Very simple and basic records can be useful as a start. The basic information needed to complete Schedule F of tax returns provides very useful information from which to begin. Basic production records include cow inventories, pregnancy and calving percentages, and sale weights of calves. Individual identification of cows is highly encouraged and allows for more accurate management and culling decisions. Now is the time to initiate a process which works in your operation to collect and record this very basic information.

These items focus on short-term items that can be addressed now or in the coming months. There are several others which require a more long-term approach and will be the focus of future articles.

Another Mystery Solved - Dr. Roy Burris, Beef Extension Specialist, University of Kentucky

I would guess that the most common question that is asked of me is "why don't my calves gain like you say they should?" The answer is generally pretty simple - they don't gain because you don't feed them. You cannot give young, growing calves access to something that can generously be described as hay, along with a couple of pounds of concentrate and expect them to do much.

"How much are you feeding them?"

"I'm giving them a bucket every day."

"How many calves?"

"Twenty".

Unless that bucket is on a front-end loader, they are not getting much feed.

How much should they get? We should, of course, feed a ration that is balanced for a desired rate of gain. However, let's simplify that a little bit. We can estimate that it takes about 6 or 7 pounds of feed for every pound of gain. So multiply 6 or 7 times your desired rate of gain and you should be in the "ballpark" of what they should consume. For example, a calf gaining about 2.5 lb/day would be eating about 17 pounds of feed.

When calves are fed adequate amounts of a balanced diet, postweaning gains will surprise you. We have been doing feeding demonstrations with weaned calves at UK-Princeton for several years. I will share last year's data with you.

In the first trial (Table 1) calves were fed 51 days after weaning and sold in a CPH-45 sale. They received free-choice hay with one of the supplements shown.

Table 1. Preconditioning fall-born calves - 2008.

The next trial demonstrated the effect of the level of concentrate intake on gain of preconditioning calves for 45 days after weaning. Calves were fed a mixture of two-thirds soyhulls and one-third corn gluten feed (Table 2).

Table 2. Preconditioning spring-born calves - 2008.

Calves will gain if you feed them a balanced ration and practice good feedbunk management. Keep feed fresh and clean.

And another thing, why is feed always described according to protein level? If someone is asked what they are feeding their cattle, they'll say something like "I'm feeding that 12 percent feed". Protein is not the only thing that a cow needs. Energy is just as likely to be a problem. Of course, you don't even find energy on the feed tag. Maybe if we understood that energy is more limiting on performance than protein, we would feel comfortable feeding higher levels of feed to our calves and not think of everything as a protein supplement.

Similarly, we are influenced greatly by the level of calcium on the mineral supplement. It's listed first so it must be the most important. Right? Not necessarily. It is listed first because it is the most abundant in the mixture. Calcium - from calcium carbonate - or ground limestone or - crushed rock is not very expensive. That is not usually critical. We should pay special attention to the trace minerals like copper, selenium, zinc, etc. I hope that we are making progress on clearing up the "mystery" of purchasing minerals with our efforts with the Beef IRM mineral program.

Forage Focus: Liming Considerations for Late Summer and Fall - Keith Diedrick, Robert Mullen, OSU Extension Fertility Specialists

Fall is a great time to address soil fertility issues, including liming. Recent soil tests from a reputable lab will give you some guidance on how much (if any) lime would be needed. Two pH figures are reported on a soil test report: pH and buffer pH (sometimes you may see lime test index, or LTI; to convert LTI to buffer pH, divide LTI by 10). The pH figure tells you whether or not you need lime and the buffer pH value tells you how much is needed to reach the target pH preferred by future crops (see the Tri-State Fertility Guide and Ohio Agronomy Guide at http://agcrops.osu.edu/fertility/)

Raising soil pH is the goal of liming, and cost per acre should be the basis for selecting liming materials. If magnesium is deficient or low in the soils, those soils may benefit from the application of dolomitic limestone, though magnesium availability increases with increases in pH. Consider price per ton and effective neutralizing power (ENP) to compare products equally. We have an Excel calculator that will figure lime application rate and costs using your pH, buffer pH, target pH, and ENP of the material you will be using: http://agcrops.osu.edu/fertility/documents/pH_lime_rec_spreadsheet_000.xls

A few other things to keep in mind:

1. Tillage is the best way to incorporate lime, since lime is not terribly water soluble. If in a continuous no-till system, consider cutting the lime rate by half (since the tilled assumption of the lime calculator assumes 8" of soil).

1a. If in no-tillage, do not surface-apply urea within a year of lime application. Urea volatilizes much more quickly on an alkaline surface, and nitrogen is lost to the atmosphere.

2. Price per acre should be the driving force in picking products.

3. Pelletized lime is not stronger or more effective on a pound-for-pound basis than aglime of similar screen size, i.e. 300 pounds of pelletized lime will not substitute for 2000 pounds of aglime, it's chemically impossible. See #2.

4. Calcium deficiencies are extremely unlikely in Ohio and most states in the Midwest; apply liming materials to adjust pH up, not to supply calcium (which becomes abundant at optimum pH levels). Most of our soils contain abundant amounts of available calcium, and row crop production systems only remove a small amount of calcium (200 bushel/acre corn removes around 40 pounds per acre and 50 bushel/acre soybeans remove around 50 pounds per acre). Applying any nutrient that is already sufficient will not raise crop yields, it only reduces marginal revenue. Yield increases due to "supplying calcium" are likely due to increased pH. See #2.

5. Gypsum does not raise soil pH.

Cattle Outlook, August 14, 2009 - Glenn Grimes & Ron Plain, University of Missouri

Total cow slaughter through the week ending August 1 was up 1.1 percent from a year earlier. Dairy cow slaughter was up 14.8 percent but beef cow slaughter was down 8.7 percent for this period compared to 2008.

For the four-week period ending August 1, total cow slaughter was down 5.5 percent from 12 months earlier. Dairy cow slaughter for these four weeks was up 2.1 percent but beef cow slaughter was down 11.0 percent from the same weeks last year.

The large dairy cow slaughter in recent months is due to the dairy cow buyout of the industry as they work to downsize. The probabilities are high that the dairy cow herd on January 1, 2010, will be smaller than a year earlier. However, the rate of decline in the beef cow herd has at least been slowed.

The southeastern states were very dry for two or three years through 2008. This year the southeastern states have received more timely rains, and they may be rebuilding their beef cow herds some.

In our opinion, we need to reduce the beef cow herd more to get supply of beef in line with demand at these higher costs associated with feed grains.

Corn production in 2009 is forecast at 12.8 billion bushels, up 5 percent from 2008 but down 2 percent from 2007. If this forecast holds, it will be the second largest crop of record trailing only 2007.

Corn yields are expected to average 159.5 bushels per acre, up 5.6 bushels per acre from last year and the second largest of record trailing only 2004.

Soybean production for this year is forecast at a record-high 3.2 billion bushels. Yields for 2009 are forecast at 41.7 bushels per acre, up 2.1 bushels per acre from 2008. Acres for soybean harvest are forecast at 76.8 million acres, up slightly from June and up 3 percent from 2008.

The USDA estimated farm price for corn for the 2009-2010 marketing year is $3.10-3.90 per bushel, down from $4.00-4.10 per bushel for the current year. The estimate by USDA for soybean meal prices for the 2009-2010 marketing year is $260-320 per ton, down from $325 per ton in the 2008-2009 marketing year.

These crop estimates and the potential for lower feed prices will be positive for feeder cattle prices.

Feeder cattle at Oklahoma City this week were unevenly steady. Calves were firm in a light test.

The prices by weight groups for medium- and large-frame No. 1 steers were: 550-600-pound calves $105.75-107 per cwt, 700-750-pound calves $93.75-95 per cwt, 600-700-pound yearlings $101-110.50 per cwt, 700-800-pound yearlings $100-104 per cwt, and 800-1,000 pounds $89.75-100.75 per cwt.

Beef exports in product weight were up 2.6 percent in June from a year earlier. For January-June, beef exports in product weight were up 4.0 percent from a year earlier. Beef exports in carcass weight equivalent will be in next week's letter.

Live weighted-average fed steer prices for the 5-market area through Thursday at $81.98 per cwt were up $0.71 per cwt from a week earlier. The weighted-average negotiated carcass price for the 5-market area through Thursday at $130.68 per cwt was up $1.07 per cwt from seven days earlier.

Wholesale beef prices Friday morning had Choice beef at $141.31 per cwt, up $0.74 per cwt from last Friday. Select beef at $134.77 per cwt was up $0.79 per cwt from a week earlier.

Slaughter this week under Federal Inspection was estimated at 643 thousand head, down 6.4 percent from a year earlier.

Weekly Roberts Agricultural Commodity Market Report - Mike Roberts, Commodity Marketing Agent, Virginia Tech

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) were down on Monday. The AUG'09LC contract closed down $0.350/cwt at $84.300/cwt. DEC'09LC futures closed at $87.850/cwt; off $0.200/cwt. Some deliveries against the August contract were noted. A lower stock market, a higher U.S. dollar, and lower outside markets kept the lid on fat prices. Early estimates ahead of USDA's Friday Cattle-on-Feed report an spreading out of the October into the August and Decembers contracts were bearish for prices. However, higher cash cattle prices last week and demand for deliveries helped prices. USDA on Monday put the Choice Boxed Beef cutout at $142.65/cwt, up $1.36/cwt from the previous close and $1.81/cwt higher than this time last week. Cash cattle ranged from $1-$1.5/cwt higher with USDA placing its 5-area average price at $81.92/cwt; $0.75/cwt higher than this time last week. According to HedgersEdge.com, average packer margins were raised $19.30/head to a positive $49.90/head based on the average buy of $81.38/cwt vs. the average breakeven of $85.17/cwt. Sell cattle when ready.

FEEDER CATTLE at the CME were mixed on Monday. AUG'09FC futures finished at $100.675/cwt; off $0.025/cwt. The August contract will expire on August 27. The OCT'09FC contract closed at $100.225/cwt; down $0.050/cwt. Feeders followed the commodities lower. Cash feeders in Oklahoma City were mostly steady to $2/cwt lower. Steer and heifer calves were in high demand. Reports show 7300 head were sold today vs. 6611 a week ago and 6105 this time last year. The CME Feeder Cattle Index for August 13 was placed at $100.48/cwt, down $0.23/cwt.

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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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