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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 # 672

February 3, 2010

Forage Focus: Establishing a Fair Pasture Rental Rate - Clif Little, Extension Educator, OSU Extension, Noble/Guernsey County

In recent years, landowners and livestock producers have become interested in creative pasture leasing arrangements. From the producer standpoint concerns are long term investments such as: fencing, fertility adjustments, water accessibility/development, and facilities. From a landowner perspective the concerns are: return on land investment, retention of overall farm quality, and soil quality. I see many landowners who desire more income from their farmland and likewise livestock producers who are frustrated with rental adjustments. So what is a fair pasture rental arrangement?

While it is impossible in this article to establish recommendations appropriate for all farms, we will attempt to describe some universally important aspects of a pasture rental arrangement. So what is a pasture worth? A pasture, like a house, crop, field, or anything else being rented, is worth what someone is willing to pay. The price we can charge for land rental is directly related to demand. If we do not have competition for land, then we will be unable to get top dollar. Some parcels do not have a great deal of livestock producers living nearby. If a farmer has to travel great distances to care for livestock, the property is obviously worth less to him. On the other hand, if we have many neighbors who would benefit from the extra ground, the land becomes more valuable. To coin a real estate term, "location, location, location."

Another factor influencing pasture rental rate is topography. Is the pasture flat and machinery accessible? Pastures which are covered with scrub brush, steep, rocky and partially inaccessible to farm machinery are not as desirable. In other words, pastures and land are not all created equal in terms of suitability for livestock production.

Pasture size makes a difference. The more acres of available pasture, the greater the worth. For example, a ten acre pasture in southeastern Ohio with an annual production of 2.5 tons per acre of forage dry matter would yield 25 tons annually or 50,000 lbs. of forage. If the pasture is one big square with no cross fencing or rotational grazing system developed, then approximately one half of this annual forage dry matter production would be available, or 25,000 lbs. of dry matter. A 1,300 lb. cow eating 2.5% of her body weight per day in forage dry matter, over the course of a year, would need 11863 lbs. of forage dry matter. This means that ten acres of pasture could handle two cows annually. Therefore, size makes a difference. It is not desirable for most livestock producers to carry two cows per farm at several locations. Conversely, a large farm with paddocks developed, good water distribution and livestock working facilities is worth much more.

Landowners who would like to encourage sustainable agricultural practices may want to consider long term pasture leases. Practices such as liming, fertility application, fencing and water development are long term investments. It will take livestock producers several years to recoup investments such as these. For this reason landowners may encourage these improvements to their property in a written lease agreement which lasts several consecutive years.

Other equally important aspects of a pasture rental arrangement include:

* Liability protection - The landowner should not be held liable for the production practices of the renter or their employees.

* Government program participation - To encourage farm improvements landowners and renters should address eligibility for government programs in a written lease agreement.

* Sub leasing - Does your lease describe what is being leased and if it can be assigned?

* Payment terms - When is the rent due and what are the consequences if the rent is not paid on time?

Landowners and livestock producers can arrive at an agreeable pasture rental arrangement. Both the property owner and livestock producer should make a list of items important to them. Look at the educational lease information provided by your local OSU Extension office. Attempt to describe these arrangements in a written document. Finally, sit down with an attorney and review the agreement. A written lease agreement is peace of mind, assuring both parties and protecting the interest of each.

Crossbreeding - Its Cool Again! (Part 3) - Dr. Scott P. Greiner, Extension Animal Scientist, VA Tech

The fundamentals concerning the basic advantages of crossbreeding were outlined in Part 1 of this series. The primary advantages of crossbreeding include capturing heterosis (hybrid vigor) and breed complimentarity. Part 2 focused on the design and management of crossbreeding systems, with specific attention on the application for small herds. Additionally, tools such as the incorporation of artificial insemination, use of hybrid bulls, and purchasing replacement heifers were discussed as mechanisms to enhance the management ease of crossbreeding systems.

Crossbreeding systems have been abandoned by some producers who have cited problems maintaining uniformity in the cowherd as well as the calf crop with certain crossbreeding systems. Certainly, the potential for mongrelization of the herd exists if a crossbreeding program is not well designed and managed. This article will focus on the key aspects relative to individual sire selection that are important for maintaining a breeding system that will work over several generations.

As with any breeding system, sire selection is critical for genetic improvement. With crossbreeding systems, more than one breed of sire is typically used. As a result, the calf crop and female replacements are potentially sired by different breeds and individual bulls within those breeds. It is the differences between the breeds utilized, as well as differences in individual sires used, which contribute to variation in a set of cows or a calf crop. Therefore, for a crossbreeding system to be viable, sire selection (both within and between breeds) is critical for maintaining uniformity from one generation to the next- while at the same time taking advantages of the strengths of the various breeds used in the system.

The most fundamental sire selection decision is the choice of breed. Choice of breeds to be used in the cross will be dependent on several factors, including the environment and resources of the operation, marketing program for the calf crop, and targeted carcass merit endpoint. Considerable differences between breeds exist that may effectively be utilized by crossbreeding. As mentioned previously, optimum performance rather then maximum performance is desired for virtually all economically important traits. For this reason, 1/2 to 3/4 British x 1/4 to 1/2 Continental females tend to optimize mature size, milk production, and adaptability for many Virginia producers.

The breeds chosen, and the percentage of each breed represented in the calf crop also have a pronounced impact on carcass characteristics. Coupling the general superiority of the British breeds for marbling potential with the red meat yield advantages of the Continental breeds results in offspring that have desirable levels of both quality grade (marbling) and retail yield (yield grade). The specific end product target will dictate the combination/percentage of breeds that are most likely to generate cattle with the desired carcass traits. Utilizing breed differences for carcass traits to match marketing grids will be important for producers as more retained ownership and value-based marketing is practiced.

Selection of bull within breed is equally important. EPDs are a very useful and important tool in accomplishing this task. At the same time, breed strengths and weaknesses and the genetic merit of a breed as a whole for a particular trait also need to be considered when bulls are selected for use in a crossbreeding system. In other words, EPDs need to be considered on both a within and across-breed basis for effective bull selection in a crossbreeding program. Using the EPDs in this manner will assist the producer in minimizing large fluctuations in performance and production from one generation to the next when using more than one breed.

The following table can be used to compare the EPDs of bulls from different breeds. To put the EPDs on a comparable basis, simply add or subtract the adjustment factor to the within-breed EPD of the bull. For example, consider a Simmental bull with a YW EPD of +55 and a Charolais bull with YW EPD of +25. To fairly compare the YW EPDs of these two bulls of different breeds, the EPDs must first be adjusted to a common equivalent using the across-breed table. Using the table, the Simmental bull would have an across-breed YW EPD of +77.4 (55 + 22.4) and the Charolais bull an across-breed YW EPD of +76.9 (25 + 51.9). In this example, we would expect the growth rate of the progeny of the Simmental bull and Charolais bull to be very similar on average, since their across-breed YW EPDs are very similar. Both would be roughly equivalent to an Angus bull with a +77 YW EPD (no adjustment needed for Angus). Across-breed EPDs may be calculated for the growth and maternal traits of any breed listed in the table. They may be used to compare bulls of different breeds that are being used in the crossbreeding program for similar purposes (i.e. milk production in Gelbvieh and Simmental, or growth in Simmental and Charolais).

Across-Breed EPDs: 2009 Adjustment Factors to Add to EPDs of Various Breeds to Estimate

Breed Birth wt. Weaning wt. Yearling wt. Milk
Angus 0.0 0.0 0.0 0.0
Braunvieh 7.5 21.4 12.8 30.6
Charolais 9.7 38.2 51.9 5.6
Gelbvieh 4.5 1.7 -12.6 9.9
Hereford 2.9 -2.8 -16.1 -17.5
Limousin 4.2 -3.4 -28.6 -14.2
Maine Anjou 5.5 -10.7 -22.8 -0.8
Red Angus 2.9 -5.4 -4.4 -3.0
Salers 3.4 22.7 52.3 13.1
Shorthorn 6.1 19.9 52.8 23.1
Simmental 5.5 25.0 22.4 13.7
Tarentaise 2.5 29.7 17.9 22.2

The adjustment factors may also be useful in managing uniformity when breeds are rotated in a crossbreeding system to avoid large fluctuations in traits such as birth weight and milk. For example, using these adjustments, it can be demonstrated that a Gelbvieh bull with a milk EPD of +15 will add similar milk genetics to an Angus bull with a milk EPD of +25 (both the bulls would be approximately +25 on an across-breed basis). This example demonstrates the differences between the breeds that exist- a Gelbvieh bull with a +15 milk EPD ranks in the lower 30% of the Gelbvieh breed for milk genetics, whereas the Angus bull with a milk EPD of +25 ranks in the top 25% of the breed.. With this in mind, a Gelbvieh bull can be selected to compliment an Angus cow base that will add a moderate amount of milk. Similar calculations can be made for birth weight and growth. The key is to recognize the basic genetic differences between breeds, and then select of bulls within those breeds with optimum genetics while avoiding extremes.

Another key factor for crossbreeding sire selection is the matching of frame score across the individual bulls selected. Frame score has a strong relationship with cow size. Therefore, minimizing differences in the frame scores of the bulls used to produce replacement females will assist in minimizing differences in mature size of the resulting cowherd. This coupled with avoiding large differences in milk production is the key to having a cowherd that is uniformly adapted to the resources of the operation even though several breeds are represented. Minimizing differences in frame score will also assist in minimizing differences in the calf crop.

For many feeder cattle producers, coat color is an economically important trait. Today's genetics offer the opportunity to stabilize coat color and still maintain a crossbreeding program. Technological advances such as DNA genotyping have made it possible to more easily manage coat color in several breeds. Therefore, coat color does not need to be a limiting factor to maintain a crossbreeding program.

In summary a well-designed, manageable crossbreeding system is an important aspect in making genetic progress in the various economically important traits that drive profitability in today's beef industry. To accomplish this task, bull selection must consider both within and across-breed differences to optimize genetics which influence reproductive efficiency, maternal performance, growth and feed efficiency, and end product merit.

Ohio House Introduces Livestock Care Standards Legislation - Peggy Kirk Hall, Director, Agricultural & Resource Law Program, Ohio State University Extension

Representatives Sayre and Bolon introduced the implementation legislation for State Issue 2's Ohio Livestock Care Standards Board on Tuesday, January 19. H.B. 414 does the following:

* Defines "livestock" as equine animals, regardless of the purpose for which the equine are raised; porcine, bovine, caprine and ovine animals; poultry; alpaca and llamas.

* Requires the appointment of the Ohio Livestock Care Standards Board within 45 days of the bill's effective date and establishes board member provisions such as terms of office, vacancies, meetings and compensation.

* Reiterates Issue 2's language regarding the purpose of the board.

* Directs the board to adopt rules regarding civil penalties for violating care standards.

* Establishes duties of the director of the Ohio Department of Agriculture for assisting the board and grants authority to the director and his/her representative to enter property for inspection and investigation.

* Prohibits anyone from providing false information in response to the livestock care standard requirements, or otherwise violating the rules developed by the board.

* Creates an Ohio livestock care standards fund and authorizes the director of the Ohio Department of Agriculture to use the fund for program administration and enforcement.

* Increases the commercial feed and seed inspection fee in ORC 923.44 by 15 cents over the next three years, in five cent increments per year-to 30, 35 and 40 cents per ton-and increases the minimum fee from 25 to 50 dollars.

* Allows the director of ODA to request annual transfers of not less than $500,000 from the commercial feed and seed fund to the Ohio livestock care standards fund.

* States that the law does not affect the authority of county humane societies or officials.

* Clarifies that the law does not apply to food processing production activities regulated under ORC Chapter 1717.

View H.B. 414 here.

Ohio May See a Second Proposed Constitutional Amendment on Farm Animal Welfare - Peggy Kirk Hall, Director, Agricultural & Resource Law Program, Ohio State University Extension

Not surprisingly, a group called Ohioans for Humane Farms has requested a petition initiative certification from the Ohio Attorney General that could place a second proposed consititutional amendment on farm animal care before Ohio voters this fall. Ohioans approved "Issue 2? last fall, a constitutional amendment that created the Ohio Livestock Care Standards Board to create standards for the care and well-being of farm animals (see earlier posts).

The current petition certification request for a new initiative, submitted January 27 and signed by over 1,000 Ohio electors, requests approval to circulate a petition that proposes amending the Constitution to require the newly created Ohio Livestock Care Standards Board "to adopt certain minimum standards that will prevent the cruel and inhumane treatment of farm animals, enhance food safety, and strengthen Ohio farms."

The petition's proposed constitutional amendment goes beyond the expected prohibitions on confinement of pregnant pigs, laying hens and veal calves that farm animal welfare advocates have advanced in other states, but it does not conflict with the language enacted by Ohio's Issue 2. According to the proposed ballot initiative, the minimum requirements the Ohio Livestock Care Standards Board would be required to adopt include:

* Prohibition of the confinement of veal calves, pregnant pigs and egg-laying hens on a farm, for all or the majority of any day, in a way that prevents the animal from lying down, standing up, fully extending his or her limbs, or turning around freely. There are exceptions for scientific or agricultural research; veterinary treatments; rodeo, fair, or other exhibitions; 4-H and similar programs; during slaughter; or for pregnant pigs, in the seven days prior to giving birth. A "farm" is land, buildings and equipment used for the commercial production of animals for food an fiber.

* Requirements that all killings of cows and pigs be performed in a humane manner using methods deemed "acceptable" by the American Veterinary Medical Association, and prohibition of any killing of cows and pigs by strangulation.

* Prohibitions against the sale, transport or receipt for use in the human food supply of any "downer" cow or calf that is too sick to stand or walk.

* Misdemeanor charges for any violation of the standards developed by the Livestock Care Standards Board, punishable by up to one year of jail and/or $1,000.

If passed by Ohio voters, the proposed constitutional amendment would take effect within six years of the date of its adoption.

The Ohio Attorney General must act on the initiative petition by February 5, 2010. If the Attorney General certifies that the petition's summary contains a fair and truthful statement of the proposed amendment, the petition goes to the Ohio Ballot Board, who must ensure within ten days that the proposal contains only one constitutional amendment. If approved, the Attorney General files the petition with the Secretary of State, and the proponents may then begin collecting signatures on the petition. The number of valid signatures required to place the initiative on the ballot is at least 10% of the number of votes cast for governor in the last election (total votes for governor in 2006 were 4,022,928). At least 44 of Ohio's 88 counties must be represented with signatures from at least 5% of each county's votes cast for governor in the last election. The proponent must file the petitions by June 30, which is 125 days before the date of the general election date of November 2, and the proponent will have ten days to correct the insufficiency of signatures after a determination by the Secretary of State.

According to a press release issued by the Humane Society of the United States, the ballot proposal by Ohioans for Humane Farms is supported by The Humane Society of the United States, Farm Sanctuary, Ohio Society for the Prevention of Cruelty to Animals, Toledo Area Humane Society, Geauga Humane Society, Ohio League of Humane Voters, Center for Food Safety, United Farm Workers, Consumer Federation of America and Center for Science in the Public Interest.

View the initiative petition for the Livestock Board Amendment on the Ohio Attorney General's website at http://www.ohioattorneygeneral.gov/Legal/Ballot-Initiatives

AgSight: iPods Sure Aren't "COOL" - Nevil Speer, Professor, Animal Science, Western Kentucky University

Country-of-origin labeling (COOL): a divisive, controversial issue bouncing around like a pinball that never gets drained. Just passed, the seven-year anniversary of an article I authored outlining some of the foundational concerns subsequent to implementation following the 2002 Farm Bill (COOL Has Implications For The U.S. Beef Industry, Feedstuffs, Jan 27, 2003, 75:4). And last February in AgSight I described COOL as "an already long, contentious, arduous process [that] just went into overtime." The rhetoric and posturing is heating up again; back-and-forth reinitiated through the fall as Canada and Mexico solidified their pursuit of a formal WTO complaint.

This month's observations are NOT intended to rehash COOL's various intricacies or address the cost/benefit relationship (or lack thereof). Rather, my intent is to address foundational principles surrounding international trade.

Some context and review is useful. COOL was established on the premise that U.S. consumers desire additional information and possess differential demand curves for U.S. products versus imported items. However, the impetus for COOL primarily derives from, and establishes benefit for, U.S. beef producers providing relative advantage over foreign competitors (Canada and Mexico); lobbying efforts were also fierce and sustained to appease a specific segment of the beef industry. The ruling requires additional record-keeping and makes it more problematic to schedule livestock which originated from Canada or Mexico - COOL has slowed the flow of cattle sourced from our NAFTA partners. As such, the WTO legal action asserts COOL represents an illegal trade barrier and establishes unfair trade discrimination.

The WTO challenge has proponents fighting back. For example, R-CALF USA addressed a letter to the National Cattlemen's Beef Association (NCBA) in October rebuking NCBA's policy towards the Canadian WTO complaint. The letter reads that NCBA's position which highlights the revenue-based benefits of trade with Canada and Mexico, ". . . fails to disclose the critical fact that trade (i.e., both imports and exports) with these two countries continues to generate a substantial revenue-based deficit for the U.S. - a deficit that has averaged more than $1.3 billion in each of the past five years and that has resulted in a cumulative five-year loss of more than $6.6 billion." R-CALF followed up on that theme several days later with a letter addressed to Secretary Vilsack and USTR Ambassador Kirk.

International trade is prickly. Facts often get quickly twisted to suit one's perspective. R-CALF touts the "trade deficit" between the U.S. and our NAFTA partners. The broader perspective is important. Detailed below is breakdown of the global trends related to international trade (utilizing the same data sources compiled for R-CALF's report: 6-digit bovine trade codes - which does NOT include hides):

* Total bovine imports, worldwide, increased $720 million (17%) over four years from $4.23 B in 2004 to $4.95 B in 2008

* Total bovine exports, worldwide, increased from $648 M to $3.27 B between 2004 and 2008 (a difference of $2.62 B and in excess of 5-fold improvement)

* Net "trade deficit", from a global perspective, declined from $3.59 B to $1.69 B between 2004 and 2008 - a difference of nearly $1.9 B

In other words, over the span of four years, beef exports outpaced imports by a difference of nearly 475-million-to-one. Meanwhile, the pace quickened further yet in 2009. Available data is only available through November; however, 2009 is on pace to post a "trade deficit" of $1.1 B - a decline of $800 million versus the previous year.

What's the point? Selective snapshots avoid the larger story and miss the true intent of international trade. Daniel Griswold (Mad About Trade, c. 2009) reminds us that trade occurs on the behalf of consumers:

"When we import more of a certain category of good than we export, say shoes or shirts, by definition we are buying and consuming more of that type of good than we produce. More Americans have more money at stake as consumers of the good than as producers. So when a tariff raises the domestic price of an item, we have more to lose collectively as consumers than we have to gain as producers."

Import competition provides lower prices and more variety. Those attributes create cost savings for all families - and the largest benefactor being low-income households.

Broader principles about economic growth are also overlooked. Marc Chandler (Making Sense of the Dollar, c. 2009) points out that sole focus on balance of payments (i.e. trade deficit) fails to reflect value-added activities and derived profits:

Although Apple Computer makes a hefty profit selling iPods, each one sold increases the U.S. trade deficit by $150. Yet the iPod sells for about twice its cost of goods, which means that $150 accrues in profit to an American company for each iPod sold. That doesn't get factored into [nor is reflected by] the trade deficit. Who would argue that America would be a more competitive nation if Apple had never developed the iPod?

The same principle applies here; focusing strictly on the deficit overlooks added value and benefits derived for U.S. businesses at all levels of the value chain including producers, processors, purveyors, distributors, retailers and restaurants - that results in economic growth and job creation.

In the end, utilizing negative trade deficits as justification for country-of-origin labeling is wrong-headed. COOL represents a non-tariff trade barrier; a means to protect some (certainly not all) American producers from foreign producers. But more importantly, as illustrated above, trade is essential to consumer well-being and overall economic growth. The U.S. can't, on one hand, expect trade partners to abide by the WTO framework while, on the other hand, implement questionable legislation that impedes trade. Any challenge to foreign obstruction (e.g. Taiwan, Russia) must be based on solid footing. Failure to possess a principled approach diminishes ability to grow international markets in the future.

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

LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) ended down on Monday. FEB'10LC futures closed down $0.55/cwt at $85.250/cwt; $0.950/cwt lower than last week at this time. The APR'10LC contract finished at $88.700/cwt; off $0.675/cwt and $1.475cwt lower than last report. Cattle traded lower, as expected, amid bearish reactions to the recent USDA Cattle Inventory report. Cash cattle also traded steady to weak being as much as $1/cwt lower. USDA put the 5-area average on Monday at $84.400/cwt; $0.51/cwt lower than last Monday. USDA on Friday put the choice boxed beef cutout at $140.49/cwt; off $0.24/cwt and $2.72/cwt lower than last report. According to HedgersEdge.com, average packer margins were lowered $21.60 from last report to a positive $15.75/head based on the average buy of $84.66/cwt vs. the average breakeven of $85.66/cwt. Corn should come down or remain in a sideways pattern.

FEEDER CATTLE at the CME finished lower on Monday. MAR'10FC futures finished at $97.725/cwt; off $1.150/cwt and $1.050/cwt lower than last report. The MAY'10FC contract was off $0.950/cwt at $100.850/cwt but$ 0.300 cents higher than last week at this time. Feeders followed live cattle lower while corn prices pressured feeder prices. Volume in cash cattle was light due to winter storms. The feeder market in Oklahoma City was closed due to the weather. As a result, there was no published CME feeder cattle index for Monday.

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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