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OSU Extension - Fairfield County

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Phone: 740.653.5419

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

Previous issues of the BEEF Cattle letter

Issue # 387

April 14, 2004

2004 Ohio Bull Test Sale

The Ohio Bull Test will hold its 35th Annual Sale on April 17, 2004 at the Eastern Agricultural Research Station in Belle Valley, Ohio. The auction will feature 74 bulls including: 53 Angus, 8 Simmental, 4 Polled Hereford, 3 Charolais, 3 Gelbvieh and 3 Red Angus.

Bulls were delivered to the Test Station on October 28, 2003 and screened for conformation and health requirements prior to being weighed on test November 25 and 26. Bulls were weighed off test on March 15 and 16, 2004 and then placed on a "cool down" ration, to help place them in optimal breeding condition, until the April 17 sale. Performance records provided on the bulls include birth weight, weaning weight, pelvic area, scrotal circumference, frame score, carcass traits measured by ultrasound, Expected Progeny Differences (EPDs), Five State Beef Initiative Power Scores and weights and average daily gain during the test. Only bulls meeting minimum performance requirements and classified as "Satisfactory Potential Breeders" become eligible for the 12:00 sale this Saturday.

In addition to the auction at Test Station, four remote sale sites will be used across the state of Ohio for buyers who are unable to be at Belle Valley on sale day. The sites are Shelby, Knox, and Carroll County Extension offices and the former South District Extension Office in Jackson. Each site will be linked to the sale arena by telephone. While watching the bulls on videotape, buyers will be able to listen to the sale as it occurs and place their bids over the telephone. Bulls purchased while attending the sale at the remote sites will be delivered to the site for $25 per bull.

The Ohio Bull Test is a program of the Ohio Cattlemen's Association held in cooperation with Ohio State University Extension and the Ohio Agricultural Research and Development Center. The Ohio Bull Test Station is located at the Eastern Agricultural Research Station in Belle Valley, Ohio. Visit the Ohio Bull Test web site at http://bulltest.osu.edu. For more information, contact Justin Lahmers at 614-873-6736 or jlahmers@ohiobeef.org.

Calves = Very Valuable; Bulls Deemed "Satisfactory Potential Breeders" = Priceless! - Stan Smith, PA, OSU Extension, Fairfield County

One requirement of bulls being offered at the Ohio Bull Test Sale on Saturday is that they be examined for breeding soundness and pass the requirements to be deemed "Satisfactory Potential Breeders." Sounds simple enough - purchase bull; put bull with cows; calves appear in ~ 283 days; collect calves 205 days later; sell calves for historically high prices! Well maybe it's that simple, but . . .

Since weighing off test last month, 9 of 84 bulls evaluated at Ohio Bull Test failed the examination to be deemed Satisfactory Potential Breeders. Admittedly, these are all relatively young bulls (12-15 months old) that will continue to mature and possibly become sound at some point. Fact is, if the ones that failed needed to cover 15-20 cows now, they likely couldn't do it in a timely fashion.

If you purchase a higher priced bull, or a more mature bull, is he likely to be potentially a better settler of cows? Maybe - however, a two year old purebred that recently was sold in Ohio for $5000 failed his breeding soundness examination shortly after the sale was completed. He had no live or motile sperm! In fact, during the breeding soundness examinations that have been conducted so far this winter at Hillsboro and Zanesville in cooperation with OCA, as many as 10% of the mature bulls have failed their evaluations.

Regardless of where you purchase a bull, be certain he has the ability to settle the females he's exposed to in a timely fashion. Even delaying conception for one 21 day cycle could easily cost you $45+/- per calf on the day the 2005 calf crop is marketed.

It's not too late to get bulls evaluated for soundness before breeding season. The Ohio Cattlemen's Association and Five State Beef Initiative have coordinated with both the United Producers Yards in Hillsboro, and Muskingum Livestock in Zanesville to provide a convenient opportunity for cattlemen to have their bulls examined. The cost of the breeding soundness examination when performed at either of these two locations is $45 per bull for non OCA members and $40 for OCA members.

In Hillsboro, remaining examination dates are Fridays April 30 and May 21. In Zanesville, examinations are scheduled for April 26, May 11 and May 24. Contact Logan Edenfield (UPI Hillsboro, at 937-393-3424), Denny Ruff (Muskingum Livestock, at 740.452.9984) or Justin Lahmers (lahmers@ohiobeef.org or 614-873-6736) for details on having any and all of your prospective herd sires evaluated for breeding soundness. You may also consult your veterinarian for details on having an examination performed on your farm.

Considering today's cattle market, high quality, sound beef bulls are a valuable commodity . . . but, getting live calves on the ground in a timely fashion next spring may well be priceless!

Bull Values Require Plans - Steve Suther, Director, Industry Information, Certified Angus Beef (reprinted with permission from the CAB "Black Ink" publication, February 2003)

It doesn't take much of a bull to make your cows pregnant. But if you want to improve the herd, you must reach far beyond hamburger value. For 20 years, the average price for registered bulls has been about 2.2 times the price of 450-lb. steers.

But what is an individual bull worth to you? You have heard of commercial yearlings selling for $5,000 or more, maybe even paid in that neighborhood. Many ranchers say they buy the best they can afford, but everyone has different criteria, motives and plans for making the purchase return a profit.

Some buy the best because they don't have resources for artificial insemination (AI). Others buy because they want to narrow the quality gap between calves from AI and herd bulls. Still others add the notion that a bull could be an AI star in his own right.

What's the difference between a $500 and $5,000 bull? It's more than hype, smoke and mirrors. Producers are getting a first-hand education in relative bull values as they participate in value-based marketing.

It's not unusual to see a $400 value difference from top to bottom individuals in a finished pen of steers. Multiply that times progeny, including the relative value of daughters over time, and you can see why the bull value spreads are widening.

Reputable breeders sell bulls that are worth more because they want to keep a good reputation. But a bull must fit your needs. A seedstock operation sells several different types of bulls, even within the same breed, so the name alone will not indicate a certain value for you. Before you go to buy, know your cows' need, and what the seedstock producer's cows offer.

Characterize your cowherd genetics, management and marketing. What are the strengths, weaknesses and opportunities? Look for bulls that will make a little progress in strengths and more in weak areas. The bulls that literally do it all are the most expensive ones today, but by careful bull selection you can build a herd of cows that do it all.

If a bull is just for producing calves to sell, the calves need to represent good and improving value. Conservative producers may hesitate to invest in more expensive bulls, but risking reputation in the market goes against conservatism.

Buyers care about feedlot performance and carcass value potential. Carcass value is not a single trait but a set of traits that include weight, yield and marbling. To ignore this side of the value equation risks your reputation as well as consumer demand for beef.

Keeping replacements makes a bull worth more, not just in next year's calves but for several years, and then living on for generations through his daughters. No scientific formula can put a price on that, though efforts are underway to help characterize bulls based on their economically important traits, customized to your cows.

Some basic components of value are registration, balanced EPDs with strength in key areas, cow-family background and pedigree.

If you've done the background checks and feel certain this is the right bull, even at $5,000, go ahead and bid. Then execute your "return on investment" plan, starting with life insurance. One commercial producer who recently paid $12,000 for two bulls at a sale started with the understanding that he would get a lot of service after the sale in getting the bulls collected for AI.

He bred his 150 fall-calving females using synchronized AI, followed by natural cleanup by the same bulls. He planned to do the same for much of his 300 spring-calvers, and by now, the seedstock supplier referred other customers to the effect of selling 100 units to others for AI.

Within a couple of years, as this producer and others feed and harvest progeny and breed replacements, the bulls will generate enough progeny data to determine whether either will be an AI star. These plans met the buyer's goal of injecting a high degree of uniformity and quality into his herd, and he felt confident the investment would pay over a period of years.

You can pay too much for a bull - none of them are worth a million dollars. But with a plan in mind, you can feel confident about winning the bid for many of the bulls on your wanted list.

Gain is for Profit, Not Cost Recovery - Kris Ringwall, Beef Specialist, NDSU Extension Service

The cost of doing business is a phenomenon that is still pondered in the beef business. Several years back, efforts were made by the industry to clarify and bring some common terms to those keeping records. Many will remember the letters SPA, an acronym for "Standardized Production Analysis." These efforts, supported by many in the industry, continue to limp along. Certainly great rhetoric, but more is needed.

Today, the industry is again challenged, pondering the cost of implementing technology within the industry. Interestingly, comments are shared back and forth and are as diverse as the number and type of cattle breeds available to cattle producers.

One very prominent point that seems to be repeated is the difference between adding steps to production practices currently being utilized versus the complete commencement of new production practices. Sentiments vary considerably, to patience within the industry, to the extreme of "leave them in the dust."

Understanding cattle production between regions within the United States can be and generally is as diverse as understanding production principles between different countries. The bottom line to most discussion is still a "seat of the pants approach" and moves quickly to the political arena.

At the Dickinson Research Extension Center, we frequently move cattle. As a result, we are able to track items not generally tracked by commercial cattle producers. The data we have collected gives benchmark values to the cost of moving cattle and other associated costs.

Cattle identification is a hot topic at present. As this discussion mushrooms into a mandatory system imposed on the industry, producers need to keep their options open.

One concept that has been advanced within the industry is gathering cattle to a common point and applying the identification at that point. Such an approach would eliminate the need for individual producers to purchase and handle the electronic equipment needed to read the electronic identification (EID) tags. (This could also provide some marketing alliances for producers.)

One point many people tend to overlook is the loss resulting from handling cattle. Shrink is invisible to the average cow calf producer, but shrink is a direct cost.

DREC data from last fall reflects the cost of handling quite well. On Nov. 6, the Center gathered, sorted and weighed 40 steer calves. The calves averaged 572 pounds in the pasture, with a maximum of a half-mile walk to the working facilities. The calves were loaded on two gooseneck trailers and hauled just over 70 miles to the Hettinger Research Extension Center, unloaded and weighed. They weighed in at 560 pounds. Shrink, if calculated at this point would have been 12 pounds per calf or just over two percent. Actually very good, and the calves were doing fine.

The calves were started on a trial after an acclamation period of four days. The calves were weighed on Nov.10 and averaged 556 pounds and again on Nov.11 and averaged 552 pounds. The November11 weight was 20 pounds lighter than when the calves were on pasture. The calves started gaining weight and averaged 715 pounds when shipped to the feed yard on December 30.

In the end, the calves lost weight for five days, and they did not gain the weight they should have had they never left home. The calves pre-weaning average daily gain was 2.7 pounds per day so the lack of gain for five days accounted for a loss of over 11 pounds per calf. Combined, the 20 pounds lost during acclimation to a change and the 11 pounds on no gain resulted in losses of over 30 pounds.

No one debates the need to move cattle and the need to process and work cattle, but an understanding of all costs is needed for a fair transaction of dollars to take place. Calves are living, changing and growing entities. The dollars are made in growth, and are meant to be profit, not cost recovery.

May you find all your USAIP ear tags.

Weekly Purcell Agricultural Commodity Market Report for April 13, 2004
Wayne D. Purcell, Agricultural and Applied Economics, Virginia Tech

Choice boxed beef cutout values are above $160 in Tuesday morning trade, up nearly $15 since April 6. Cash cattle are as high as $140 in the beef in Nebraska with limited live sales in Texas at $86 and in Iowa direct trade at $88. Live cattle and feeder cattle prices exploded to the upside on Monday, with the June live cattle up $2.30 and the market is showing gains in some contracts in Tuesday trade. Monday's close in the June live cattle was above the old contract high of $78.75 from back in October of 2003 and making new highs could open up this market to still higher prices. I have been questioning the big discount to the cash and to the nearby futures in the June live cattle for weeks, and would not be anxious to move to short hedges here. If we see cash cattle trade in the high $80s to as much as $90 across the next few weeks as appears likely, I would expect this June to climb higher. No precipitous break is likely barring another BSE announcement or some such, and the re-opening of the Canadian border to bring more cattle into the slaughter mix is not imminent. Let's watch this live cattle market for better pricing chances later and the same advice is there for August feeder cattle. The August feeder cattle contract is moving up with the strong live cattle futures and cash market and with corn showing some signs of topping in the short run. The August should be able to approach the November highs near $93 and the contract high of $93.25 from October 14, 2003. It is interesting and encouraging, and perhaps a sign of continued strong beef demand, to see these feeder cattle markets challenging the highs that were recorded before the December 23 BSE announcement.

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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