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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 # 673

February 10, 2010



Forage Focus: Pasture Planning - Rory Lewandowski, Extension Educator, Athens County, Buckeye Hills EERA

Mature cow weight + Hoof action + Dormant pasture plants + Soft, wet soil = Nothing good, if the goal is to keep the pasture sod in good condition. In fact, depending upon how soft the soil is and how much hoof action there was as determined by the number of hooves and the amount of time they were in an allotted area, the result could be mud and the destruction of the sod base. In less intense areas the result might be some chewed up or pugged up soils with enough sod base left to insure that this will once again be a productive pasture paddock when the growing season returns.

In either case, the pasture manager should be making plans now on what is needed to improve, renovate or re-establish various pasture paddocks. I think of this as 3 separate management approaches. Pasture improvement generally involves the least amount of change. Typically we are talking about adding a legume component to a predominantly grass pasture. Pasture renovation is considered where the pasture manager is not satisfied with the mix of grass and legume plants and/or where the goal is to bring some new genetics into the pasture mix or possibly to repair some areas that have been trampled up during the winter period. It requires more planning and work. Pasture re-establishment is generally necessary in those areas that have been severely trampled over the winter period and where the sod base has been destroyed. It requires the most planning, time and dollars to accomplish. Let's take a little closer look at each of these pasture management methods.

Although all of these management methods will improve the pasture, in this article I am using pasture improvement more with the idea of tweaking or fine tuning what is already there. This is a pasture paddock that is working, but with some minimal effort and expense can be raised to the next level. As I stated above, this is usually accomplished by adding legumes to a predominant grass pasture. Legumes help to boost the protein and energy values of the grass sward. They also fix nitrogen and when they are present at a level of about 30% of stand, evenly distributed, they provide the nitrogen needed by the grass plants as well. Synthetic nitrogen fertilizer is not needed. The density or cover of that grass pasture determines the seeding method that can be used to add the legume. If the cover is thin, enough so that there are bare patches of soil between grass plants, then the paddock might be a good candidate for frost seeding. If the sod cover is too heavy and can't be opened up enough for frost seeding, then a no-till drill is the best option.

Frost seeding involves broadcasting seed over a pasture area and letting the natural freeze/thaw cycles of late winter and early spring help to move the seed into good contact with the soil. If the seed can't get down to the soil surface because of sod cover, then frost seeding will not work. Late February through March is generally a good time to consider frost seeding in our area. The two most popular legumes to frost seed are red and white clover. Annual lespedeza might also be considered, but it is a light seed and really needs some open soil in the grass sod to get successful seed and soil contact. One technique that might improve seed and soil contact and increase the chance of frost seeding success is to broadcast the seed and then allow some light hoof action across the area to help work the seed into the soil. Wet soils and heavy cows are too much and can bury the seed too deep. I have seen sheep do a very good job, so maybe some calves or stocker weight cattle could be used. Consider using the following seeding rates per acre when frost seeding:

Forage Species Seeding Rate (lbs/acre)
Red clover 6-8
Ladino/white clover 2-3
Alsike clover 2-4
Birdsfoot Trefoil 4-6
Annual Lespedeza 15-20

I'm going to define pasture renovation in this article as going beyond the need to add a legume component to a satisfactory grass sod. In this instance the goal is to improve the grass component and to add legumes. Grasses do not frost seed well and so pasture renovation will make use of a no-till drill. As in the frost seeding situation, the area to be renovated should have been grazed down hard or tight to the soil in preparation for the seeding. I encourage pasture managers to spend some time studying forage trial results and talking to representatives of various forage seed companies. There have been some impressive improvements made in forages over the last decade. Both grass and legume species have been developed specifically to do well in grazing situations. There are varieties that have improved disease, drought and grazing frequency resistance. Varieties have softer leaves, increased palatability and more spreading type of growth habits, again more conducive to grazing situations. When using the no-till drill make sure it is properly calibrated and set up. Seeding depth should not be more than one-quarter inch. Plan on completing the seeding before mid-April.

Pasture re-establishment, as I am using it in this article, is really starting over in a pasture paddock. It may be necessary in an area that was severely abused in the winter period, sacrificed to save other pasture paddocks from extensive damage. It will require some type of tillage to level out the ruts and prepare a seed bed for planting. It could be done in two steps, depending upon the need for forage and grazing on the farm and the composition of the previous sod base. If some late spring/early summer grazing is needed from this paddock and if the previous sod base was infected fescue, then tilling/leveling the area in late March and seeding a forage oat or winter wheat should provide some grazing in 45 to 60 days after seeding. Another option would be to add a brassica, such as a forage turnip to the oat or wheat seeding. It should be possible to get a couple of grazing passes from this type of seeding and it will also help to prevent any of the previous infected fescue base from firmly re-establishing. In late summer, the stand can be killed off, using glyphosate, which will also help to kill off any fescue that may have re-established, and then the paddock can be no-tilled seeded with an improved pasture mix. See the comments above regarding reasons to consider some of the new pasture plant genetics.

On a final note, I recently received a phone call from a farmer who had been looking at some clover seed. He noticed on the seed tag that the germination test had been done in 2006 and at that point the germination was 80%. He asked for a sample of the seed, took it home and did a germination test using paper towels. He calculated the current germination was somewhere in the 65% range. The message here is pay attention to the seed label, evaluate the germination rate, and when you are seeding, adjust the seeding rate to take into account germination rates under 100%.

Now is the time for pasture managers to be evaluating pasture paddock condition and to be making plans for pasture improvement, renovation and re-establishment. For more information regarding selection of grasses and legumes to include in a pasture mix and seeding rates, contact your local OSU County Extension office, or make plans to attend one of the upcoming pasture management workshops announced in the following article.





Grazing and Pasture Management Workshops are Set

Eastern Ohio graziers and pasture managers have at least two opportunities yet this winter to participate in grazing and pasture management courses.

A three part "Pasture for Profit" workshop will be held at the Licking County Extension office in Newark, Ohio starting February 15, 2010. The classes will run from 6:30 p.m. to 9:00 p.m. on Monday's February 15, 22, and March 1, 2010. The program will present information on pasture fertility and management, pasture species selection, fencing and water systems. Paddock layout and design will also be addressed by course presenters Bob Hendershot and Rory Lewandowski. In addition, grazing management systems, understanding the principles of pasture growth, grazing economics and procedures to evaluate your land resources will be considered.

This program is sponsored by Natural Resources Conservation Service (NRCS) and the Licking County OSU Extension Office. Cost for the complete workshop including a reference notebook is $40.00 per farm business. The class will conclude with a pasture walk that will be held in April.

Information about registration can be secured by contacting the Licking County Extension office at 740-670-5315 or on the web by clicking on this link.

Further east in a separate program, a Grazing Management Workshop will be held on 3 consecutive Mondays beginning March 1 in Woodsfield and continuing March 8 in Barnesville, and March 15 in Belle Valley. These programs will begin at 6:30 p.m. each evening and will be resourced by Steve Schumacher, Chris Penrose, Mark Landefeld, and Cliff Little from OSU Extension, Jeff Bettinger, Bob Hendershot, and Jeff Bettinger from NRCS, and Van Slack, Guernsey SWCD. Registration, including the handbook is $35 per person, or $5 per person for those not desiring their own copy of the handbook. Reservations may be made by contacting OSU Extension in Monroe County (740-472-0810), 101 N. Main St. Rm. 17, Woodsfield, OH 43793





Monthly Market Profile: No Worries? That'll Bite Ya'! - Nevil Speer, Professor, Animal Science, Western Kentucky University

"Where's the market headed?" That question has been increasingly frequent in the past few months. More-often-than-not, it's probably asked with an underlying intent: "Please tell me some good news." My response always includes, "Well, that depends on the consumer." Over the short-run resilience / survival is the predominant theme for the market. But more important are the long-term business implications of beef demand trends.

That theme served as the focus of last month's Monthly Market Profile which reviewed the long-term trends relative to consumer expenditures for beef, pork, and poultry. My summary of those circumstances last month was as follows: "Per capita spending [for beef] is forecast to decline in the coming years - those projections by USDA released a year ago and developed before full manifestation of the financial crisis (this year's numbers may look worse yet) . . . the battle for tastes/preferences and comparative price/value relationship has never been more important . . ." Potential opportunities for growth and increased market share, over the long-run, hinge upon the economy. Some perspective of the macro-picture of the economy, recovery and consumer behavior helps to serve as a foundation for decision-making going forward.

The recession and financial crisis has left no industry untouched - the entire global economy is going through fundamental restructuring. Within that scenario is the mandate for many Americans to repair their personal balance sheets. That condition coupled with associated anxiety, worry and trepidation about excessive debt will likely establish some lasting consequences. The legacy effect will prove significant - consumer spending will likely be permanently altered. Add unemployment and plunging home values to the mix and you'll find persons who vow to never again base personal spending on their respective ability to borrow. In the future, the "new normal" for spending behavior will increasingly be dictated by real savings.

Perceptions of uncertainty are underscored by CNBC's December consumer survey. The aggregate view of the economy remains unchanged from the previous year: 91% of those surveyed are pessimistic about current economic conditions and only 2% were changed in their attitude about the future (52% were pessimistic versus 54% in 2008). Stagnant home values, unemployment concerns and the need to shore up personal savings will limit growth going forward. William Dunkelberg, Chief Economist, National Federation of Independent Business explains the current state of the consumer and recovery like this (Bloomberg on the Economy, Dec 10, 2009): . . . all the stimulus stuff that was done from January on, very little really was stimulating the consumer. And the consumer is what we're missing. 50% of consumption [consumption being 70% of GDP] . . . comes from the top 20% of the income distribution. They're the ones who stopped buying cars - they still have their jobs, they still have their incomes but they aren't spending. They, of course, shot their wad with using a lot of debt from their home value and so on. So they're not spending - They need to get back into the game. Nothing has been done but threaten them with higher taxes.

It's also important to note that housing is now confounded with unemployment; people are reluctant to pick up and move to take a new job if their mortgage is underwater. The implication being, at least over the short-term, the consumer remains under pressure.

For the beef industry that means consumers are trading down (in favor of pork and poultry) and across (switching from restaurants to retail). That reality has made it difficult for the market to find traction; that's been the case for most of 2009 and played out again this past week. Cutout values continue to find strong resistance at $140-5. That directly impacts the fed cattle market. Spurred by government stimulus checks in 2008, fed cattle prices experienced a mid-year, contra-seasonal peak at $101; the market subsequently experienced lower prices over the span of eight months and established a near-term low ($79) almost a year ago - the difference representing $275/head. Since that time, fed prices have been stuck in a relatively narrow trading range (see graphs below).

Conventional wisdom generally assumes that beef spending is positively influenced by the "wealth effect" or positive economic growth. At the consumer level that's usually reflected by various measures including income, home values and investment portfolios. The graph below indicates the beef industry can't simply rely on an improving economy - it doesn't automatically equate to better beef sales. (The relationship between the S&P500 index and cutout values is nearly non-existent. And we witnessed a divergent trend in economic growth and beef demand between 2004 and 2007). Given the data and the trends mentioned above, beef sales are not guaranteed to pace GDP growth. Economic recovery is more appropriately viewed as opportunity or a foot-in-the-door to regain market share.

Meanwhile, forecasts for higher prices in coming years are promising - but those need to be interpreted with some caution. Higher prices, based on dwindling supply, don't necessarily mean more market share and/or new opportunities for producers (nor do they take into account the offsetting effects of inflation and rising costs). In the end, only improved demand - consumers buying more beef at higher values (versus pork and poultry at both the restaurant and retail level) - will provide business growth for producers.

The upshot being that creative promotion and product innovation has never been more important. It also reinforces the need for the beef industry to obsessively manage its cost structure to remain competitive. In the end, back to the original question about the market, perhaps the best wisdom of all comes from Clarice Bean (my daughter's favorite book character) who puts it like this: "Always remember: it's the worry you haven't thought to worry about that should worry you the most." Or stated another way, amidst the uncertainty and turbulence of a "new normal", it's better to worry (i.e. manage risk and monitor costs) and not need to than to not worry and wish you had.

Price Summary

Item

Week Ending:

2/5/10 1/29/10 1/22/10 1/15/10 1/8/10
Slaughter Steers ($/cwt) 85.76 83.23 84.30 84.53 84.17
Choice Cutout ($/cwt) 139.34 141.40 144.95 144.91 140.23
Select Cutout ($/cwt) 136.85 137.98 140.46 139.65 134.97
Hide and Offall ($/cwt) 9.55 9.53 9.41 9.38 9.31
USDA Slaughter Weights (lb) 1294 1296 1296 1297 1297
USDA Steer Carcass Weights (lb) 836 839 841 843 841
CME Feeder Cattle Index ($/cwt) 98.43 97.62 97.01 97.26 94.90
Cow Cutout ($/cwt) 114.03 114.71 115.76 117.49 115.63
Corn (basis Omaha: $/Bu) 3.35 3.36 3.40 3.47 3.99
Cattle Harvest (000 head) 642 629 665 652 640
Beef Production (million lb) 496.0 487.3 515.6 505.6 497.0




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

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) ended up on Monday. FEB'10LC futures closed up $0.25/cwt at $87.675/cwt; $2.425/cwt over this time last week. The APR'10LC contract finished at $90.800/cwt; up $0.400/cwt and $2.100cwt over last report. Futures rose on higher cash and retail prices. Short covering kicked in prompting some fund buying. Bad weather conditions for cattle continued to stress production output. Cash cattle in Texas and Kansas were up $1-$2 with USDA putting the 5-area average at $85.78/cwt. USDA on Friday put the choice boxed beef cutout at $138.48/cwt; up $0.58/cwt but $2.01/cwt lower than last report. According to HedgersEdge.com, average packer margins were lowered $24.35/hd from last report to a negative $8.60/hd based on the average buy of $84.82/cwt vs. the average breakeven of $84.14/cwt. Fundamentals show weakness in feed supplies & market rallies on technical short covering.

FEEDER CATTLE at the CME finished higher on Monday. MAR'10FC futures finished at $99.225/cwt; up $0.900/cwt and $1.500/cwt higher than last report. The MAY'10FC contract closed up $0.225/cwt at $101.400/cwt and $0.550 cents over last week at this time. Fund buying on short covering and spillover from live cattle were supportive. Feeders managed to make it above major moving averages on the charts. Higher corn futures kept the lid on. Cash feeders were steady with good movement through the Oklahoma City auction over the last few days. The CME feeder cattle index was placed at $98.43/lb; up $0.04/lb.





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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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