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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 # 628
March 18, 2009
Ohio Beef Expo Kicks Off March 20
The Ohio Beef Expo will kick off for its 22nd year on March 20. The three day event, held March 20-22 at the Ohio Expo Center, is the premier event of Ohio's Beef Industry. Plans are being finalized and this year's event is shaping up to be the best ever with breed sales, shows, trade show, a competitive junior show and educational seminars.
The event begins Friday morning with the opening of the trade show at 10 a.m. Also starting on Friday morning is the educational seminars. These seminars will take place throughout the day on Friday and Sunday and will offer producers the opportunity to learn how to make their operation more efficient and profitable. A complete list of seminars is available at www.ohiobeefexpo.com.
The Expo will once again include a three-day industry trade show. This year's trade show is the largest ever and will feature over 100 exhibitors from 16 states. The breed shows, sales and displays will once again feature some of the country's greatest cattle. Breeders from the Angus, Charolais, Chianina, Gelbvieh, Hereford, Limousin, Maine-Anjou, Murray Grey, Piedmontese, Shorthorn and Simmental breeds will be on hand to sell or display their cattle. Catalogs for these sales can be requested by logging on to www.ohiobeefexpo.com and clicking on the sales link.
The ever-popular Genetic Pathway will once again be a feature of the upper concourse of the Voinovich Livestock and Trade Center throughout the weekend. The country's best genetics will be featured with live bulls and females on display.
Another attraction for the 2009 Expo is the junior show showmanship demonstration, fitting contest and junior social that will happen on Friday evening. The excitement will begin with a showmanship demonstration at 5 p.m. followed by the Junior Show fitting contest featuring 14 youth teams and the night will be capped off with a junior social and pizza party. These events are sponsored by Purina-Show Chow Feeds and eZall.
The junior show will kick off Saturday afternoon with Showmanship and will start again early Sunday morning with the heifer and market animal shows. Complete rules for the show can be found on www.ohiobeefexpo.com
Over 25,000 visitors from 20 states and Canada routinely attend the Ohio Beef Expo. It is ranked as the ninth largest event hosted in central Ohio and is the premier location to meet Ohio's cattle producers. Don't miss it! If you are unable to attend the event, visit www.ohiobeefexpo.com during the event because all results will be posted as it is available.
For complete details on the 2009 Ohio Beef Expo, visit www.ohiobeefexpo.com. The Ohio Beef Expo is a function of the Ohio Cattlemen's Association (OCA). The OCA is an affiliate of the National Cattlemen's Beef Association and is the state's spokesperson and issues manager for all segments of the beef cattle industry including cattle breeders, producers and feeders. It is the grass roots policy development organization for the beef business. Through the Ohio Cattlemen's Association, cattle producers work to create a positive business environment, while providing consumers with a safe and wholesome product.
Forage Focus: Spring Pasture Renovation Options - Rory Lewandowski, OSU Extension Educator, Athens County
Between overgrazing pastures the last couple of falls due to drought or tearing up pastures due to wet, soggy conditions in late winter/early spring, livestock owners may have a need to renovate pastures this spring. There are a number of options available regarding pasture renovation. How you choose to renovate your pasture will be determined by how soon you need to have the pasture back in rotation, the amount of damage to the pasture, and your end goal for the pasture. Here are some pasture renovation options to consider.
* Use of cereal grains: Think of this as a temporary patch for pastures that have been severely overgrazed or for those areas that have been tore up in wet, muddy conditions. At this point I have to say that I could not find any research where use of a winter cereal grain had been seeded into an overgrazed pasture in the spring, but I think it might be worth a try. Here is my recommendation if a grazier is willing to experiment. First, choose a pasture that has been severely overgrazed, but that still has an intact sod base. Use a no-till drill to seed either winter wheat or winter rye at a rate of 1 to 1.5 bushels per acre. On an experimental basis, I might stick closer to the 1 bushel/acre rate. Seed should be drilled about an inch deep. Seeding time should be in the mid- March to mid-April time period. Depending upon soil fertility and how our spring develops, I estimate that a grazing pass might be made 45 to 60 days after planting. The idea is to let this annual crop fill in the forage void of a stressed perennial pasture while the sod base recovers. If winter wheat or winter rye is used, the advantage is that these plants will not produce a seed head, they will stay vegetative. Oats will produce a seed head, so need to be grazed before seed head formation to keep forage quality high. It should be possible to get multiple grazing passes and I would expect more passes from winter wheat or winter rye than oats. Eventually the cereal grain will be grazed out and by that time the sod base should have recovered and once again be productive. I'll say again, I could not find research-based information for this recommendation, so try this as an experiment on limited acres. This same plan could be used for areas that have been tore up and the sod base destroyed. Level the area and plant the cereal grain to get some late spring through early summer grazing. If the sod does not recover, then do a late summer seeding to establish perennial grasses/legumes in the area.
* Use of annual ryegrass: This is another temporary patch option. Annual ryegrass is noted for its quick germination and rapid establishment. Mark Sulc, OSU Extension Forage Specialist, thinks this is an option worth considering. Mark recommends seeding annual ryegrass at about 15 pounds/acre. Seeding depth should be about one-quarter inch. As with the other options, seed as early as possible once we get into March. The ryegrass will produce a quicker and more vigorous growth compared to the stressed perennial sod base and will provide some spring through summer grazing to supplement the recovering sod base. If used in an area where the sod base has been destroyed by overwintering livestock, then a late summer seeding to establish perennial grasses/legumes could be done if the sod base does not recover satisfactorily.
* Use of turnips: I have seen this used and heard other graziers talk about the use of turnips in those areas that get tore up by overwintering livestock. Turnips planted into those areas in the spring at 2 lbs/acre and ¼ to ½ inch deep, will provide grazing about 60 - 80 days later and into the summer. As with the previously mentioned options, the area can then be re-seeded into perennial forages in late summer if the sod base has not recovered.
* Use of perennial cool season legumes: Consider this in situations where a sod base still exists or will recover by early summer after a rest period. The least cost way to add a perennial cool season legume such as red or white clover to a pasture is by frost seeding. Success depends upon several steps being followed. First, there must be exposed soil. Since we are talking about overgrazed pastures and pastures tore up by overwintering livestock, that requirement should be met. Broadcast seed at 6-8 lbs/acre for red clover and about 2-3 lbs/acre for white clover. Second, timing must be right. Frost seeding depends upon freeze/thaw cycles to insure good seed and soil contact. We need daytime temps in the 40's (or higher) plus nighttime temperatures below freezing. I like to see mid-twenties. In Athens County we can generally count on those kinds of conditions through about mid-March. Some years that window can be extended into April. Watch the forecast and plan accordingly. The final step is post germination care of the new legume plant. Do not let it get shaded out by the grass sod. Once the grass reaches 6-8 inches in height, a grazing pass or clipping must be made to insure that sunlight will get down to the newly emerged legume plant and let it get established in the stand. Graze or clip the grass down to 3-4 inches and no lower.
If frost seeding is not an option, or the window of opportunity has passed, consider no-till seeding red or white clover into a damaged pasture grass stand. Seed red clover at 4-5 lbs/acre and white clover at 2 lbs/acre. Follow the same post germination care guidelines as above. The addition of a legume into a grass stand will boost forage quality, both in terms of crude protein content as well as energy content. Legumes also fix atmospheric nitrogen and can reduce or eliminate the need for nitrogen fertilizer.
* Use of improved perennial grass and legume species: Consider this in situations where a major renovation is desired and where the stand can be managed to provide time to allow new grass and legume species to become established. An example might be a pasture sacrifice area. On one hand, the pasture has been destroyed and productivity has been lost, on the other hand is an opportunity to bring in some new improved varieties that have higher yield potentials, better drought tolerance and improved palatability. Think about planting at least 3 grass species and 1 to 2 legume species in the mix. Do not settle for old genetics, talk to seed company representatives and take advantage of the advances in genetics that have been made in the past several years. Recognize that it will take 6-8 weeks after germination for the new grass plant and legume plant to get established. The first couple of grazing passes will need to be managed carefully. Planting should be done late March through about April 20. Contact me at the Athens County Extension office for recommendations on specific seeding rates and species selection.
A final point to keep in mind is that the kind of pastures we have, in terms of species present, production and quality is a response to our management. So, if you aren't happy with what you have, renovation can be part of the answer, but a change in management is the other necessary part.
Webinar Focuses on Estrus Synchronization - Dr. Les Anderson, Beef Extension Specialist, University of Kentucky
With the breeding season quickly approaching, it is not too early to start the planning process. A webinar is being offered to help you sort out estrus synchronization protocols that are used for heifers and cows and application of those protocols.
This webinar will be presented by Dr. Glenn Selk, Oklahoma State University and Dr. Les Anderson, University of Kentucky. Dr. Selk is a beef cattle specialist at Oklahoma State University with a focus in Beef Cattle Reproduction. The seminar will discuss the basic reproductive biology, products used to control estrus, estrus synchronization protocols and the economics associated with using this tool. Dr. Selk and I are looking forward to helping cattlemen understand this information and answer any questions that you might have.
You can view this webinar from your home or office computer. Join us for this webinar event scheduled March 25, 2009, 1:00 to 1:15 pm EDT. At the meeting time, simply click on the following link or copy and paste it into your browser to enter the meeting: http://connect.extension.iastate.edu/beefcattle/
When you go to that URL you will find yourself at a login page. Simply enter your name under the "Enter as a Guest" heading. Click on "Enter Room." The instructions that detail how to join the integrated phone audio conference will be on the screen when you join the meeting.
Anytime before the meeting you can visit the following URL to confirm your ability to connect to the Connect server: http://www.extension.iastate.edu/testconnect/
This webinar is being presented by the Beef Cattle Clearinghouse eXtension Community of Practice.
AgSight: COOL - Moral Hazard / Miserable Timing - Nevil Speer, Professor, Animal Science, Western Kentucky University
Last month's AgSight focused country-of-origin labeling; discussion ended with the following observation:
COOL's success…will be dictated by the ability to provide consumers with meaningful information and create value at a reasonable cost while also establishing U.S. producers with a comparative advantage over foreign competitors. But that's the long-term perspective. In the short-run, the industry is burdened with implementing a law that is extremely complex and burdensome from a logistical, notification and record-keeping standpoint. What about the benefits? Domestically, COOL provides no assurance of additional consumer revenue; internationally, it creates animosity and potentially impedes sales to our two largest export partners - markets which can't be taken for granted. Given the adverse cost/benefit considerations, not to mention potential for unintended consequences along the way, COOL represents a steep and tenuous risk/reward proposition. Reopening COOL for comment will likely only serve to worsen that scenario.
Seemingly, Secretary Vilsack's request of the meat industry to voluntarily raise conformance measures was meant to establish a short-term solution to implementation. However, the move has not only put us back to square one but also turned the entire process upside down.
Before delving deeper into the turmoil it's helpful to review some fundamentals. The law's intent stems from belief that U.S. consumers possess different demand curves for U.S. products versus imported items. Additionally, proponents often tie implementation to food safety and advocate U.S. products as being inherently safer products. Thus, passage was contingent on two distinct perspectives: 1) consumer preference - consumers will purchase relatively larger amounts and pay more for domestic items; 2) consumer protection - domestic items possess less risk. Lastly, it's important to note the provision largely originated from within the beef industry.
With that background let's move forward with analysis about potential implications. The first illustration below provides historical comparison regarding meat expenditures. Purchasing decisions for meat don't differ from any other type of product - comparisons are made among competing products. During the 20 years preceding 1999 beef surrendered significant market share. More recently, beef expenditures have slightly outpaced the competition. That turnaround largely results from a hard lesson: beef's cost structure and subsequent price/value relationship was previously bested by pork and poultry.
That lesson applies today: beef demand has suffered during the past 12-to-18 months from a stumbling economy; pork and poultry compete more favorably as consumers scale down spending. Meanwhile, the meat industry is facing increased costs associated with COOL stipulations. Adding insult-to-injury, Secretary Vilsack is now "asking" the industry to step up its respective compliance further yet. However, doing so provides no carrot of promise except to avoid the stick of further mandates. The cost structure will be most burdensome to the beef industry due to its fragmented and segmented value chain. And within that environment which industry has the most to lose? The beef industry . . . it begins with a relative price disadvantage confounded now by a weakening economy and additional regulatory costs. Ultimately, who will pay that cost? Not the consumer . . . not the retailer . . . not the processor . . . the producer!
What about food safety? The food industry has experienced two huge recalls in the past twelve months: last year's Hallmark/Westland ground beef recall (143-million lb) and the recent recall of products containing paste from Peanut Corp. (2000+ products). In both cases, COOL would provide neither advantage nor solution - after all the products originated from the United States. The National Academy of Sciences National Research Council (NRC, 1998) reported that: "It is by no means clear that imported food, as a class, poses greater risks than domestically produced food."
Lastly, the pragmatic aspect of trade is important here. The first illustration below represents trade activity of Canada, Mexico, Japan, and Korea. Collectively these four countries accounted for over $3.62 billion in beef product exports in 2008; the highest level since 2003's record of $3.86 billion. Reestablishing trade normalization across the globe has been grueling and incremental. Amidst that grind the major bright spot has been exchange with NAFTA partners: Canada and Mexico now represent nearly 60% of the U.S. beef export market. Trade with the two countries has grown by over $900 million since 2003 and now provides over $2 billion of revenue to the U.S. beef industry - that's approximately $75/head in the fed market and roughly $15-20/head better than 2003 levels. And now the industry is forced to put that at risk with a non-tariff trade barrier.
In the end, broader principles are what really matter. First, Secretary Vilsack's request: "…provide consumers with sufficient information about the origin of products, processors should voluntarily include information about what production step occurred in each country when multiple countries appear on the label." Meanwhile, "[USDA] will be closely reviewing industry compliance with the regulation and its performance in relation to these suggestions…" But what's the threshold of compliance? It's a dark target. More importantly, the scenario establishes the moral hazard. Company A won't voluntarily inflate their costs, especially if it puts them at a competitive disadvantage - they'll wait for company B to do so. No real incentive likely equals unfulfilled expectations.
Also important from a principled perspective are standards and implications surrounding international trade. Razeen Sally (c. 2008) explains: "The theoretical case for free trade is strong and compelling…Free trade means to engage in international transactions without discrimination…free trade is part and parcel of free markets." Per that principle, the Canadian Cattlemen's Association is requesting its government to resume the country's WTO challenge against COOL. Meaningful growth is not likely to occur domestically; international trade represents the greatest possibility of establishing revenue growth and endeavors to expand international markets must be relentless.
Where does that leave us? The Obama Administration has seemingly put COOL on track to be opened back up. The outcome of that process will likely mean even more cumbersome, restrictive and costly regulation. Better hang on!
The Corn Crystal Ball - Darrell R. Mark, Ph.D., Assoc. Professor, Department of Agricultural Economics, University of Nebraska-Lincoln
Corn prices are some 35% lower than last year at this time, which should be some relief to cattle feeders (although positive margins are still hard to come by). With large changes in corn price levels and corn input costs, all eyes in both the grain and livestock industry focus on planting acreage and production in 2009. The first survey-based estimate on corn planted acreage won't be available from National Agricultural Statistics service until March 31 and the World Agricultural Outlook Board doesn't begin its supply and demand balance sheet for the 2009-10 marketing year in its monthly World Agricultural Supply and Demand Estimates (WASDE) report until May 12. These will be key reports to watch in upcoming months. But, USDA's Outlook Forum at the end of February provided some early indication of what USDA analysts are expecting for this next year. Currently, USDA expects 86 million acres of corn to be planted this spring, the same as last year, and a national yield of 156.9 bu/acre, 3 bu/acre higher than last year. With the nearly 1.8 billion bushel carry-in from this current marketing year, that provides a total corn supply of nearly 14.2 billion bushels. On the demand side of the balance sheet, USDA currently forecasts a 100 million bushel drop in feed use based on lower livestock numbers compared to this current year. But, USDA also projects ethanol demand for corn to grow to 4.1 billion bushels in the 2009-10 marketing year in order to meet the renewable fuels standard (RFS) (this is an increase from 3.6 billion bushels in the current year's use). This 14% increase in use, combined with a 100 million bushel increase in expected export demand, raises total use by 0.5 billion bushels. Thus, USDA projects the ending stocks for 2009-10 at 1.7 billion bushels, close to the ending stocks projected for the current 2008-09 marketing year. Such a stocks-to-use ratio at 13.8% is just a little tighter than that currently estimated for the 2008-09 marketing year.
Livestock feeders should be able to find some solace in these numbers. With such adequate ending stocks for the current marketing year (at 1.74 billion bushels and 1.72 billion bushels for 2008-09 and 2009-10, respectively), dramatic corn price spikes like those in 2008 are rather unlikely. That doesn't, however, mean that cattle producers shouldn't be prepared for some moderate price increases at times. Given the high input costs and tighter expected corn margins this year, it is possible to have planted acres decline 2-3 million acres from last year's acreage and for yields to fall below trendline in 2009. While those things may not happen, just the fear of them occurring could cause the corn market to rally in April and June, respectively. Uncertainty about ethanol fuel demand for corn also abounds, but the 4.1 billion bushel figure USDA is currently using likely represents a highest possible figure (based on the RFS). If the RFS is not enforced or is met through credits or imported ethanol (any of which could happen depending upon crude oil prices), corn use may not reach this level. If that happens, corn prices may move even more favorably for livestock producers.
A note of caution is always warranted. Current forecasts of supply and use for corn don't suggest any major run-ups in corn prices for livestock feeders to deal with. However, corn prices will likely be higher than levels in the early and mid 2000s as well. Plus, with the general economy seeming to drive the commodity markets recently, things can change quickly. For example, USDA's March WASDE report, released yesterday (March 11), reported generally bullish numbers on the domestic supply and demand balance sheet, yet the futures market could not sustain a rally through the day's trading session as the stock market declined for the day. It's possible that the opposite types of events could occur in the next year: the economy could begin to grow and commodity prices could recover quickly too. But, even if that resulted in higher corn prices for cattle feeders, improved beef demand would likely offset those higher input costs.
Weekly Roberts Agricultural Commodity Market Report - Mike Roberts, Commodity Marketing Agent, Virginia Tech
LIVE CATTLE futures on the Chicago Mercantile Exchange (CME) finished mixed Monday. The AUG'09LC contract was up $0.100/cwt at $83.000/cwt. Seasonal fundamentals applied pressure while a better day for the DOW and a weaker dollar were supportive. Cash cattle were steady with USDA putting the 5-area price at $80.70/cwt. USDA on Monday put the Choice Boxed beef at $134.98/cwt, off $0.86/cwt. Packer demand was limited due to negative margins. June/April spreading weighed on the nearby at times.
FEEDER CATTLE at the CME closed off on Monday. MAR'09FC futures were down $0.250/cwt to $91.700/cwt. The APR'09FC contract closed at $92.050/cwt; down $0.025cwt. Profit taking and short covering were not supportive. Fundamentals are expected to weaken on lower packer and merchandiser demand. The CME Feeder Cattle Index for March 11 was placed at $91.38/cwt, down $0.21/cwt.
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.
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