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OSU Extension - Fairfield County

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and the

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 # 716

December 22, 2010

New Year's Resolutions, and Planning for a Good Calving Season - Francis L. Fluharty, Ph.D., Department of Animal Sciences, The Ohio State University

While most people are thinking of holiday plans and family get-togethers, many beef producers are concerned with the rising price of feed ingredients and how winter storms are impacting their cow herds. As a result, this is the time of year when calls come in from producers who are shocked by corn and byproduct prices where they are. With nearly 90% of fetal growth occurring in the last three months of the cow's pregnancy, we look at body condition score as one of the best measures of how the cow will perform during calving, but late-gestation cow nutrition is important for the health of the newborn calf, too, because the nutrition of the cow impacts the eventual calf's immune status and survivability.

In cattle, the survival of the calf is dependent on its receiving high-quality colostrum within the first 24 hours of life, because the structure of the placenta prevents the fetus from receiving immunoglobulins (IgG) in utero. This is very different from most species, such as humans, which receive IgG across the placenta, and are born with the ability to mount an immune response to pathogens. As a result, newborn calves can't fight a bacterial or viral challenge until they have acquired passive immunity through the IgG in colostrum. The IgG are a specialized form of antibodies, gamma globulin proteins, that fight bacterial and viral infections by binding to pathogens and neutralizing them. With cattle, the newborn calf's small intestine can only absorb IgG during the first 24 hours of life. Furthermore, within the first 24 hours of life, the timing of the calf receiving colostrum is critical as the ability to absorb IgG from the small intestine starts to decline after the first 6 hours, and is essentially stopped after 24 hours (Rogers and Capucille, 2000). Therefore, for optimum immunity, the calf needs to nurse well within the first 6 hours. With first-calf heifers, this timing is an important management issue, as heifers that don't let their newborn calves nurse immediately are in a much greater danger of losing them, or having them get sick.

The effects of poor immunity in newborn calves have real economic impacts. Calves with inadequate serum immunoglobulin at 24 hours of age were found to be up to nine times more likely to become sick, and five times more likely to die before weaning, compared with calves that received adequate immunity, and calves that became sick within the first 28 days, after calving, were 35 pounds lighter at weaning than calves that were healthy (Wittum and Perino, 1995). As this research showed, colostrum quality and quantity can have a major impact on profitability. In a recent study, 6% of calves between 2 and 8 days of age had inadequate immunity, 10% of calves had a marginal immunity, and one-third of the calves were below the adequate immunity level based on a blood serum IgG level of 24g/L (Waldner and Rosengren, 2009). For producers who need to know how much colostrum a calf needs, research has found that an adequately nourished beef cow should be able to provide an adequate supply of IgG in about 3 liters of colostrum, which means that a calf should consume one pint of colostrum for every 20 pounds of calf weight (Rogers and Capucille, 2000).

As cattle go through the winter, they will lose body condition due to the nutrient demands of the growing fetus, plus dealing with winter weather, unless nutrition is excellent. From an energy standpoint, body condition scoring is an excellent way to assess the cow herd. In areas where forages are protein deficient, protein supplementation during late gestation has been shown to have several positive effects on reproduction (Martin et al., 2007). In all cases, the health of the newborn calf is impacted by the quality of colostrum consumed, based on the levels of IgG in the colostrum, and the quantity of colostrum consumed. The nutrition of the cow in late gestation determines these, with the production of colostrum beginning approximately 5 weeks before calving (Field et al., 1989). While energy and protein status have received the most attention in colostrum research, both selenium and vitamin E have been shown to affect the quality, and quantity, of colostrum, and in one study by Swecker et al., (1995), higher concentrations of IgG were seen in the colostrum of cows grazing selenium-deficient pastures, and supplemented with a trace mineral salt containing selenium compared with those receiving a selenium injection prepartum, or control cows not receiving selenium. This winter's educational programs will focus on cow nutrition during late gestation through rebreeding, including the importance of mineral nutrition.

EDITOR's NOTE: Dr. Fluharty will extend his discussion above regarding 3rd trimester nutrition and fetal programming during the third session of the Ohio Beef Cattle Schools on February 17, 2011. Find details in the December 14, issue 714, of the Ohio BEEF Cattle letter.

Temple Grandin's recent Ohio presentation, on-line

As you likely know, Temple Grandin was in Columbus recently to speak at the Animal Welfare Symposium which was co-hosted by both the OSU Department of Animal Sciences and the OSU College of Veterinary Medicine. Her presentation is now posted on-line, and well worth the hour invested in listening to and viewing all of it. Go directly to it by clicking on this link.

If you're interested in reviewing the entire day's proceedings, you will find them under this link to the OSU College of Veterinary Medicine web site.

Great Lakes Professional Cattle Feeding and Marketing Short-course

The 2011 Great Lakes Professional Cattle Feeding and Marketing Short-course will be held January 19 and February 2 at the Wood County Junior Fair Building in Bowling Green Ohio. This short course is a joint effort of Ohio State University Extension, Michigan State University, and the Ontario Ministry of Agriculture to enhance the cattle industry in the Eastern Corn Belt.

The industry is implementing programs to maintain consumer confidence in the product produced in our facilities. One of these programs is audits conducted by third party entities on animal care and environmental compliance. The first session will discuss the framework for an audit for your feedlot. Other topics for the first session include animal health, and maximum dietary levels of distiller's grain with solubles. The impacts of globalization and projections of $10/bu corn have created uncertainty about the future trends in our industry. The second session will address these trends.

Registration and refreshments will be provided beginning at 6 p.m. each evening. Participants may enroll by sending a check made payable (US Funds) to Michigan State University ($35 for 1st person and $25 for each additional family/farm member; FFA/4-H students can register for $15 each) and mailed to Faye Watson, Dept. Animal Science, Michigan State Univ., 1290Anthony Hall, E. Lansing, MI 48824-1225. Please mail before January 15, 2011. If not mailed by January 13, contact Steve Boyles (boyles.4@osu.edu, 614-292-7669) or Dan Frobose (frobose.1@osu.edu, 419-354-6916) if you desire to attend the program or if you have any questions about the program.

Call for Nominations, 2011 OSU Animal Science Hall of Fame

The Animal Science Hall of Fame Committee is soliciting nominations for the ANIMAL SCIENCE HALL OF FAME. The award will be presented at the Animal Science Spring Awards Program.

The following criteria need to be considered when making nominations:

a. Nominees will be considered who have been bona fide majors in Animal Science at The Ohio State University and have been graduated twenty (20) or more years.

b. Nominees must have demonstrated superior skill and achieved success for themselves and their families. The major activity must be in an area related to Animal Science.

c. The nominee shall have practiced service to others. Such activity includes giving of time, energy and thoughtfulness in the local community. A reasonable amount of participation in statewide or national affairs is desirable.

d. Consideration of nominees among production, academic and allied industries will be used in selection.

e. Faculty and staff who have retired from the Department of Animal Science at Ohio State are not eligible.

The Hall of Fame Selection committee is soliciting nominations, with adequate justification, for the Animal Science Hall of Fame. The nomination should provide information on how the nominee excels in the above criteria for the award. The deadline for the nominations is February 28. Please send nominations by e-mail (boyles.4@osu.edu) or mail to (Steve Boyles, Department of Animal Sciences, Plumb Hall, 2027 Coffey Rd., Columbus, Ohio 43210-1094). Nominations will be forwarded to the selection committee.

Rebuilding the Beef Cow Herd Will Not be Easy - Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

With feeder cattle prices near record levels at the end of 2010, market incentives to rebuild critically low U.S. cattle numbers are increasing. Severe market shocks since late 2006 have completely masked the cattle cycle and the resulting additional liquidation has pushed the cow herd inventory to new lows. Though the annual cattle inventory report is a few weeks away yet, it appears the 2011 will begin with a beef cow herd that is close to two million head lower than the 2006 level, when the last expansion was interrupted. Although herd rebuilding is likely to occur in the coming months and years, several factors have changed that will impact how and where herd rebuilding will occur and, most importantly, how fast it will occur.

The biggest keys to heifer retention are the economic signals embodied in calf prices and producer expectations for the coming years. Although calf prices are near record levels, it is not clear that profitability is high enough to ensure herd rebuilding. In order to decide to retain a heifer, producer expectations have to be such that anticipated prices are high enough for long enough to make the present value for breeding exceed the current value of the heifer as a feeder animal. Many producers face high and volatile input costs that offset some of the incentive of higher cattle prices. Some of these impacts are regional, suggesting that rebuilding may be slower in some areas than others. For example, higher shipping costs have increased the discount on cattle in the Southeast, relative to the rest of the country. This fundamentally reduces the relative competitiveness of cattle in that region.

Broader changes in agricultural land use also increase the difficulty of rebuilding the beef cow herd in many regions. Increased demand for crop production means that improved pasture areas compete directly with crops for land use and indirectly for the inputs needed for crop or forage production. Increased crop production has led to loss of pasture and hay production in areas like Iowa and Missouri, and corresponding decreases in beef herd size. In other cases, high fertilizer and other input costs have led to reduced stocking rates that limit carrying capacity. In general, regions from the eastern Great Plains eastward are most affected by direct and indirect competition from crop production. In other regions, cow numbers have not decreased much or in some cases have increased already in response to these regional factors. Beef cow numbers in Montana, New Mexico and Oklahoma, for example were higher in 2010 than in 2006, when expansion was interrupted. Broadly speaking, beef herd expansion incentives will be higher in the western Great Plains and Rocky Mountain regions compared to the Midwest and Southeast. In other regions, other land use factors limit forage availability for cattle, including nonagricultural development and urban sprawl, and wildlife use.

Another unique feature of the current situation is the competing demands for both cow-calf and stocker production leading to increased demand for forage. Historically, cyclically high cattle prices resulted in incentives to emphasize cow-calf production and simultaneously deemphasize stocker production for a period of time. It worked well when grain was cheap. Today however, in addition to the need to increase cattle numbers, there is an ongoing need to reemphasize forage based production of feeder animals in response to permanently higher grain prices. The competitiveness of the beef industry in the future depends on capitalizing on the ruminant production flexibility that allows the industry to substitute forage for grains to some extent. Thus, the need to increase cattle numbers and emphasize stocker production both result in increased forage demand at precisely the time when increased competition with crop production is reducing forage supply, especially in some regions.

A final factor that is often mentioned to me is the demographics of cattle producers. The average age of cattle producers continues to increase and, for many older producers, there may be little interest in expanding cattle numbers regardless of incentives. The challenge of rebuilding the cow herd may be simultaneously a challenge of attracting younger producers into the industry who are willing and able to tackle the challenges and pursue the opportunities of a cattle industry that will be quite different in the future compared to the last few decades.

I am confident the market will provide the necessary incentives to rebuild the beef cow herd to meet market needs. However, I am not sure the current price levels are yet sufficient to ensure herd rebuilding. I suspect higher prices will yet be needed to provide the profitability and expectations necessary to retain enough heifers in enough regions to rebuild cattle numbers. Cow-calf producers need to strategically consider opportunities and challenges of herd expansion at several levels, including the overall industry situation and their specific geographic location, as well as their individual needs, resources, and plans.

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

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) finished up on Monday. The DEC'10LC contract closed up $0.600/cwt at $102.775/cwt and $0.825/cwt over last report. The APR'11LC contract closed at $108.800/cwt, up $0.650/cwt and $0.700/cwt higher than a week ago. AUG'11LC futures closed at $107.300; up $0.750/cwt and $1.300/cwt higher than last Monday. Live cattle futures set a two-week high on Monday with fund buying a major factor. When February futures broke through $105.20/cwt automated technical fund buying picked up on set buy-orders. Hedgers actively covered short positions. Several floor sources said April/February spreading was a standard play and is likely to pick up in January as long positions are moved from the February contract to further deferreds. Traders are bullish on live cattle seeing decreasing U.S. herd numbers even as USDA shows a 3% increase in feedlot headcounts as of December 1, 2010. Two local traders said most traders think feedlot numbers will shrink once calves of the smaller breeding herd come in next year. However, several other sources said the market makes little sense since rising corn prices, a stronger U.S. dollar, and slight weakness in equities markets often influence cattle futures lower. Additionally, they said end-of-year balance squaring and extended holidays often cause markets to go lower this time of year. Cash cattle traded $1/cwt lower in Kansas last week and at $101/cwt in Texas. USDA put the 5-area price at $99.13/cwt for Monday, December 20, 2010; $1.80/cwt lower than this time last week. USDA put the choice beef price at $160.54/cwt, down $1.17/cwt from Friday and $5.51/cwt lower than last week at this time. Restaurant data show people ARE buying prepared beef, but only in fast food establishments. It is a very good idea to price only short-term feed needs (unless you take a short position in futures) and forward price production at this time. According to HedgersEdge.com, the average packer margin rose $7.60/head to a positive $4.60/head based on the average buy of $100.50/cwt vs. the average breakeven of $100.86/cwt. Buying an out-of-the money PUT option on the next three months production would not be a bad idea.

FEEDER CATTLE at the CME finished up on Monday. The JAN'11FC contract finished at $120.725/cwt; up $1.700/cwt and $1.525/cwt over last report. APR'11FC futures finished at $122.500/cwt; up $2.025/cwt and $2.325/cwt higher than last week at this time. The AUG'11FC contract settled at $123.500/cwt, up $1.600/cwt and $2.375/cwt higher than a week ago. January feeders registered the highest price ever for a lead contract. Following live cattle, fund buyers were key factors in higher feeder prices. All contracts set fresh highs. Fundamentals show that there will be fewer feeders available for fattening next year. The U.S. cattle herd has been shrinking for some time now and is the smallest it's been in 50 years. The decline is due to years of poor net profits on cattle due to high feed costs and older producers retiring out of the business. USDA figures show 93.7 mi head on U.S. farms and ranches, the lowest since 1959. The data also show there were 35.82 mi calves born in 2009, the lowest since 1949. Tight supplies are expected for another 18-24 months. The Oklahoma National Stockyards was closed on Monday and will resume on January 3, 2011. The CME feeder index was placed at 119.29 cents/lb; up 0.06 cents/lb from last Friday and 1.2 cents/lb over last 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.

All educational programs conducted by Ohio State University Extension are available to clientele on a nondiscriminatory basis without regard to race, color, creed, religion, sexual orientation, national origin, gender, age, disability or Vietnam-era veteran status. Keith L. Smith, Associate Vice President for Ag. Admin. and Director, OSU Extension. TDD No. 800-589-8292 (Ohio only) or 614-292-1868

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