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Thursday, December 20,2007

Pasture Management

by WLJ
August 22, 2005 Why pay attention to your soils? Long-term soil health is directly related to how much money you can put into your pockets. Soils and soil quality determine plant vigor. Soil organic matter content is the key indicator of soil health. Soil organic matter is important for maintaining soil structure. Soils with good soil structure generally have lower erosion rates, higher water infiltration rates and higher water-holding capacities and also serve as an important nutrient reservoir. Besides, I say, “If you can learn to feed the soils, the soils will feed you.” Healthy soils equate to a healthy life. Healthy soils are alive with all kinds of small critters living in them, eating away, making carbon, the black color in soils, called carbon sequencing. So it’s just logical, that if we can estimate and learn how to sustain and even improve soil, you can then capture more ‘solar dollars’ (a free source of energy). You won’t have to go to town and buy that same energy with ‘paper dollars’. A client of mine once asked me, “Wayne! What is the fastest way to grow more soils?” I thought about that question and responded: Find a chunk of long-term rested ground, like 10 year old CRP land—highly erode-able land set aside for conservation and government payment. Then graze and trample all that old dead non-cycling plant matter into the ground. Do this during a dry, non-growing time. By doing this, you have just speeded up a healthy soil making process by incorporating new organic matter. The biological principle here to remember is: Down yellow litter, feeds small soil critters. How to determine soil health: I pull a plug of soil, 2” x 2” x 4” deep, that fits nicely into my hand. I then photograph this plug for record keeping. I use a digital camera and snap a picture holding the plug up in the air with the background location of where I dug the plant. This gives me fast visual upper surface soil profile record. I use a small trowel, two inches wide and four inched long that has a bent handle which allows me to tap it into hard ground with a small hammer. This saves me from packing a heavy shovel around in remote pasture locations. I can see and feel certain soil health indicators in this plug (see photo). There are 3 key soil health indicators that I look for using this method: Soil type, soil organic matter content, and soil compaction. I first look for soil compaction, because that is the one healthy indicator that we have some control over. Compaction problems visually show up below the surface organic matter as shiny smooth layers of soil, all pushed together. Monitoring this way I once found heavily compacted soils, where the roots would only grow in the cracks of the clay soil, which was responsible for greatly lowering the forage production. I next look for organic matter content. Organic matter is the vast array of carbon compounds in various stages of decomposition. Visible organic matter shows up as thatch (dead and decaying plant parts in the very top layer), roots, and occasional underground bugs and worms. Another item to look for is the very small black particles that give soils that great earthy smell. These are the results of organic mater decomposition. I also determine the type of soils I sample. Take a small portion the soil from the plug in your fingers, wet it and rub it between your fingers. If the polishes make a shiny smooth sticky coating on your fingers and is grayish brown, it’s probably clay, If it feels very smooth and slippery, but not quite polished and is dark tan, it’s probably silt. If it feels gritty (small sand particles), and is light tan, it’s probably sandy soils. If it crumbles and is dark in color, not especially gritty, smooth and shiny, you probably have a loamy soil. In reality, there are all kinds of different soils. Usually in mixtures of all these different elements, but you can come close to what the major soil types are. Each soil type has their inherited limitations and advantages. What’s handy about this way of assessing soil health is that you can quickly compare one area to others. For example, I thought I had found a compaction problem in one pasture I was inspecting one day. So I dug a soil plug, and found no compaction. This soil was full of small stones, rocks and sand which does not compact. You need that sticky clay particle to form a compaction layer. Another example that surprised me was on inspecting a grazing cell center where the water and fencing configuration is built like the spokes of a wagon wheel. We found tall grass all around the cell center. However, when I went to dig up some chucks of sod to observe the root structures, I had to jump up and down on the shovel like a mad man. We had nice tall healthy looking grass, but the heavy clay soil was very compacted. Just adjacent to this cell center was an area fenced off from livestock grazing, that we called the “TEST REST AREA”. A long-term observation area of what no grazing looks like. I went to jump onto the shovel in this small fenced off area and about fell on my face. My shovel easily fell into this soft fluffy soil. What’s going on here? Compaction on the outside was caused by livestock grazing and soft fluffy soils appeared on the no-grazed area! This cell center was constructed on heavy gumbo clay soils. Gumbo is on of a variety of fine-grained soils that become waxy and very sticky mud when saturated with water. When these soils are highly compacted and dry out, they become very hard, and would make fine bricks. However, comparatively speaking, the grass was much thinner and shorter in the non-grazed area The owner of the non-grazed lands walked by this exclosure and told me, “Long-term rested soils do not grow good cow feed, and Wayne, it doesn’t even pay taxes”. The lesson learned here: If you graze livestock at high stock densities, be careful of compaction. Plan alternative areas and enough rest to allow these compacted soils to fluff with spring and fall frost heaving actions. Bottom line, soil health is the key to growing strong abundant dense vigorous forage for any livestock operation. Next time you walk your pastures, dig some plugs and see what’s happening to the soils below the surface. On top of your soils follow this one controlling rule: Keep the soils covered! —Wayne Burleson Wayne Burleson is a land management consultant working out of Absarokee, Montana. You can visit with Wayne at (406) 328-6808 or E-mail him at rutbuster@montana.net. Wayne also has an educational web site at www.pasturemanagement.com.

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Thursday, December 20,2007

Ethanol plant investments growing

by WLJ
Investments in ethanol plants are growing across the nation—including areas where larger populations need a generous supply of ethanol, according to a new report, “U.S. Ethanol,” by Rabobank. As the demand for ethanol rises, so does the need for processing plants. And, despite rising input costs—such as corn—profits remain obtainable, and investments are seen as favorable. By the first quarter of 2009, more than 200 ethanol plants are expected to be in production, which represents a capacity increase of more than 91 percent during a three-year time frame. Much of this growth in ethanol production is largely driven by demand created by government support. In fact, “government support for ethanol production, and increasing demand for ethanol in all states, will continue to foster growth of destination plants,” said Jennifer Cole, Rabobank Food & Agribusiness Research Associate. (The first ethanol plants—in the Corn Belt—are often referred to as origination plants, whereas plants outside the Corn Belt are often referred to as destination plants.) Investors are finding that the traditional areas for ethanol plants, in the Corn Belt, are becoming saturated, and are looking elsewhere. “One of the main advantages to building plants outside of the Corn Belt is the ability to ship ethanol shorter distances,” said Cole. “It is more practical and less costly to transport corn compared to ethanol.” By moving the final product closer to consumers, investors are able to keep costs in check. Because ethanol is a highly flammable substance, it incurs higher insurance rates than shipping raw corn. So the focus of investments in ethanol plants has shifted from corn producing states—Iowa, Illinois, Nebraska and Minnesota—to areas such as New York, Texas, Oregon, Arizona and Washington. “However, growth in these new regions must be accompanied by investment in infrastructure, just like any new business that requires storage and transportation,” Cole said. Additionally, “when looking at a potential ethanol plant site, the investment must be viable for the long term and perform in a sustainable manner. That is, by the time a plant comes online 12 to 18 months after breaking ground, the cost of production is likely to be different, and these uncertainties must be factored in.” While destination plants are often smaller in capacity compared to origination plants, they are increasing capacity and technological efficiencies with each plant. As more are built, the necessary criteria to support the system is growing. For example, nearby plants must be near major highways or preferably railroads. They also need planned sources for corn, water and other resources necessary for production. So far, the need for plants seems to only be increasing. By 2008, there will be better data available on the profit margins that ethanol plants earn which will determine the pace of growth through 2012.

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Thursday, December 20,2007

Feedlots push fed prices higher

by WLJ
Cattle feeders last week gained the upper hand in cash trade and were working to move the market higher despite more slippage in the boxed beef market. Last Thursday, although no trade had occurred by mid-day, packers were beginning to increase bids to levels closer to asking prices. In Nebraska, mid-day trade developed last Thursday at $92 live and $145 dressed basis last Thursday, $3 mostly $3 higher than the prior week. However, many feedlot managers were betting they could go higher, and were sticking firm to asking prices of $93-94 live and $146- 147. In the south, asking prices were in the $93-94 range. Full trade was expected to develop at $91-92 live and $144-145 dressed. Despite trading lower early in the week, live cattle contracts on the Chicago Mercantile Exchange, followed the cash market higher last Thursday with the spot month contract leading the way. August contracts rose $1.15 at mid-day to reach $93.45. October contracts gained $1.05 to trade at $96.52, while December live cattle gained 72 points and February tacked on 52 points, trading at $99.32 and $99.65 respectively. Cutout prices last week rose after some good, early week beef clearance at the wholesale level. Last Tuesday packers managed to move about 400 loads of Choice and Select product out the door, although it took a 50 cent drop in the cutout to get it done. Demand remains high for beef at the consumer level although, price is a significant factor in the ability to get it sold despite the looming Labor Day holiday. Many grocers have been featuring beef alternatives in advance of the holiday including seafood, pork and poultry as a result of low margins in beef at prices consumers find attractive. Last week’s early fire sale could help add to the amount of beef features for the upcoming holiday. By last Thursday, the Choice boxed beef cutout stood at $143.65, while Select gained slightly to reach $139.99 at mid-day. Packers, who had been cutting back harvest levels in previous weeks increased chain speeds again last week despite per-head losses estimated at $11.15 by HedgersEdge.com last Thursday. Slaughter volume for the week through last Thursday was estimated at 500,000 head, above the 491,000 head slaughtered the prior week, but below the 510,000 head harvested during the same period a year earlier. Total beef production remained slightly behind the previous week however, compared to last year, beef production was nearly 18 million pounds less than the total for the same period. That is a direct result of the lighter average carcass weights this year. Although average weight, estimated at 1,275 lbs. live and 784 lbs. dressed, both remain below last year, which during the same week was 1,277 live and 785 dressed. Analysts note that each additional pound added to the weekly average is the equivalent of 1,000 head of cattle. Currently the additional production adds drag to the beef cutout, however, if the export picture improves, as many market analysts believe it soon will, that extra production could be quickly absorbed. Last week, it was expected that the South Korean Agriculture Ministry would make an announcement regarding the lifting of the country’s de facto ban on beef imports from the U.S. Likewise, the push for Japan to increase the age limit for imported beef to 30 months could also bear fruit soon. Those two important markets for U.S. beef could easily add several dollars to the beef cutout in short order. Since exports to Mexico have started declining this year, additional market access will become critical to packers and feeders alike who are looking at rising input prices this fall and winter. Cattle feeders, in particular those who haven’t or can’t lock in corn prices for the winter could see their main feed source fluctuate wildly in price as harvest approaches. Recent corn field surveys have shown wildly variable yields across the country. Growers in the eastern portions of the Corn Belt have been hurt by dry conditions this year and recent rains in much of the Midwest have also taken a toll on the crop. It will be increasingly important for cattle feeders to keep an eye on the corn market as harvest approaches. Feeder cattle Northern Livestock Video Auction (NLVA) kicked off last week with a 35,226 head sale, where very good demand was seen, with prices higher than the previous month’s sale on almost all classes of cattle. Steers in the 600 lb. range sold for $118-$125, mostly for Oct.-Nov. deliveries. Eight-and nine-weight yearling steers went for $105-115 on good demand. NLVA manager Ty Thompson said he was pleased with the sale’s offerings and buyer reception. “There were a lot of good quality cattle that went through, and prices were good all the way around. Mid-to-lightweight steers were $3-4 higher than last month’s sale, and the heavier yearling steers were usually $2 higher compared to last month. The only thing that was steady were the heifer calves, but they weren’t down. We also sold about 2,000 bred cattle, and had some of those heifers going for as high as $1,450, with the younger cows bringing $1,200,” Thompson said. Thompson said that drought didn’t have too much of an adverse effect on the demand, but that flooding did. “A lot of these cattle were going to the Oklahoma area, maybe Kansas or Texas. Good moisture in those places was creating good demand for some of the lighter weight animals, with guys planning on taking delivery closer to November when they’d have good wheat to put these calves out on,” he said. “The flooding in a few places in those states kept buyers from that area from wanting to take anything on near or immediate delivery,” explained Thompson. The NLVA sale also saw sellers getting good prices for their cows, but Thompson cautioned that it’s a little early to judge the bred cattle market just yet. “With corn prices going down and cattle prices still good, people still seem more likely to take the heifers for feeding purposes rather than replacements. We’ll probably see more bred cattle go through the sale in another month and be able to get a good feel for the cow market then. It should be strong though, especially in the northern areas. There’s way more hay and standing grass than last year, and I think people are a lot more optimistic about wintering cattle in the north this time around,” said Thompson. Bret Crotts, marketing manager for Schwieterman, Inc., said that even with drought in some places of the western U.S, and flooding in some of the plains states, he expects feeder cattle to remain strong and sees nothing on the horizon to indicate otherwise. “Feeder cattle are very firm—there’s just no other way to put it,” joked Crotts. “We have seen some resistance in the $120 range, and I think we’ll continue to trade just below that level, but even some of the upturns we’ve seen in corn haven’t broken the [feeder] market. There’s an insatiable demand for feeder cattle right now, because there’s a high demand for beef. This last live cattle summer has been more or less the best ever. We’ve been trading near $1 and have stayed there consistently,” Crotts said. Crotts did have some concerns about the market, however, and said that even with prices as good as they have been, many people are still feeling a pinch. “The market is great, and that’s true—but break-even on these cattle is over a dollar in a lot of cases. The margins just aren’t there. There are definitely some packer-owned cattle or some value-added cattle out there, and in those cases the higher input costs don’t matter as much. From the standpoint of a cow/calf producer, things are great. People who run stocker operations or expose themselves to the futures market are the ones that should be taking a look at doing some things differently,” Crotts explained. The near-term outlook on feeders looks good, according to Crotts, and he said that prices are likely to stay high as long as input costs remain elevated. “We’re starting to see corn trading above the 50-day moving average, which I think is an indication of people realizing how much the USDA may have over-shot their August corn estimates. It’s quite likely we’ll see below a 13 billion bushel estimate for September. Overall, corn is probably going to trend up, and feeders are likely to follow,” said Crotts. In Oklahoma City last week, feeder steers and heifers were steady to $1 higher, with lighter weight steer and heifer calves mostly $1-3 lower. Demand was good for heavier feeder cattle and moderate for calves. Heavy rain across much of the central and eastern parts of Oklahoma caused some flooding in low-lying areas, restricting livestock movement at the sale. Due to the flooding, receipts last week stood at 5,717, compared to 7,845 the week prior. Last week in Hub City, SD, demand was good at the Wednesday sale. Compared to the week prior, feeder steers and heifers sold mostly steady to $2 lower, with good attendance and many consignments offered in load lots. Large #1 steers were at $117-123.50 for 700-800 pounders, and $110.25-121.50 for heavier eight-and nine-weight steers. South and east in Vienna, MO, last week’s sale saw a different offering compared to previous weeks, with a high percentage of weaned and vaccinated cattle, and also large numbers of reputation cattle offering proven genetics. Seven-eight weight number 1 feeder steers and heifers were steady to $5 higher, at $111.75-$120.25 and $107-110.75, respectively. Supply was heavy, but only 42 percent of feeders were over 600 lbs. In Torrington, WY, last week, demand was good for the 1,775 head total run, with most weighing over 600 lbs. The 600-700 lb. feeder steers and heifers were selling for $115.75- 118.75, and large #1 steers in the 800-900 lb. range sold for $106-110. There was a good run of 1920 head in Cottonwood, CA, last week, and prices stayed strong on 600-700 lb. steers, which were selling at $100-110.50, with heifers following at $98-105. Heavier feeders were $2-3 lower in the steers and heifers, with 800-plus lb. steers going for $98- 106.50.

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Thursday, December 20,2007

U.S. ag trade strong midway through the year

by WLJ
Conventional wisdom in agricultural circles says that what goes up—particularly commodity prices and farm incomes—must eventually come down. However, this has not been the case for U.S. agricultural exports this year, according to mid-year analysis by American Farm Bureau Federation (AFBF) economists. Trade in U.S. agricultural products is strong in 2007, and it appears likely that strength will continue as the year progresses, according to AFBF. Data for sales through the first half of 2007 and contract indications for the rest of the year indicate that the U.S. is setting yet another agricultural export record in 2007–for the fifth year in a row and for 32 successive quarters on a year-over-year basis, according to the AFBF report. Given the pace of business to date, 2007 exports are likely to top $80 billion compared to $70.9 billion in 2006 and only $53 billion as recently as 2002. Favorable market supply conditions and demand fundamentals, both domestically and abroad, are keys to understanding this positive trade situation. “The world is currently experiencing strong economic growth on an almost global basis, short-term weather developments and a weak dollar which all contribute to this condition,” Pat O’Brien, AFBF economist, said. U.S. imports also are strong, which is somewhat surprising considering the declining value of the dollar against foreign currencies, according to AFBF. The decline of the dollar that has contributed to cheaper U.S. export prices also is making imports more expensive, thus slowing or reversing the growth in U.S. agricultural imports. However, U.S. agricultural import data shows the reverse – agricultural imports have risen to set successive record highs as the dollar has fallen to record lows. Demand for these imports, particularly semi-processed and processed products like French wine and Swiss chocolate, seems to be strong enough to overshadow the effects of the exchange rate, according to AFBF economists. The AFBF analysis also looks to the future and suggests if the dollar continues to be cheap, then the U.S. can expect continued strong exports. And a continued weak dollar may mean import growth may become somewhat restrained. If the dollar strengthens, the U.S. likely would lose its momentum in export growth, while agricultural imports would become cheaper. “Underlying all of this is the need for American farmers to realize that for at least the export market, it is the cost of American products in pounds, yens, and pesos—rather than U.S. dollars—that make or break U.S. sales,” O’Brien said.

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Thursday, December 20,2007

The right receiving protocols lead to better performance

by WLJ
Whether starting lightweight calves or growing and finishing cattle, a sound receiving program that includes prevention, control and treatment measures for respiratory issues helps offset the guessing game producers are typically faced with. “Unless producers are buyig known origin cattle or animals verified with SelectVAC, they don’t know what they’re getting,” says Mitch Blanding, DVM, Pfizer Animal Health veterinarian, Lenexa, Kan. “In any given group of animals, we don’t know if they’ve been vaccinated and for what, we don’t know if the sick animals have been ill for 1 or 5 days, we may not even be sure if they’ve come from a drought-stricken area that adds to the ‘normal’ level of stress.” Prevention is the most economical medicine Blanding says the most economical place to start to intervene with respiratory disease is with prevention. A beneficial practice to keep in mind is that for every hour animals spend in transport, give them at least that much time after they arrive before you start vaccinating. This allows them a chance to rest before the additional stress of processing. “We first try to intervene with those animals that have a competent immune system and are capable of responding to a vaccine,” Blanding says. However, many animals’ immune systems are already compromised due to not only their young age, but also risk factors such as nutritional and trace mineral deficiency, or other stressful events associated with the marketing process like weaning, heavy commingling and shipping. “In high-risk cattle, it would not be unusual to have a significant percentage of the animals not respond to the initial vaccination,” Blanding says. “A common practice in many operations is to revaccinate these animals somewhere between 8 and 12 days after arrival in hopes of starting an immune process in more of the animals and enhancing the overall level of immunity of the group.” On-arrival control measures add up For a certain population of animals, it will be too late to intervene with prevention. Risk factors may be stacked against them; they may be incubating bovine respiratory disease (BRD) and are either sick on arrival or will soon become sick. For these animals, Blanding recommends administering a control antibiotic to catch the disease early and put the animal on the road to recovery and gaining weight as quickly as possible. “Using extended therapy products is a groundbreaking concept for on-arrival control programs,” Blanding says. “These products can last up to 7 days and work with the animal’s own immune system to respond and help fight the infection. However, it can be difficult for some producers to trust the product is working.” Study results back up what Blanding recommends. Studies show that using an extended therapy antibiotic that maintains therapeutic blood concentrations for up to 7 days, compared to the traditional 3 days, results in healthier calves that start eating at the bunk faster, resulting in more weight gain and better carcass value. Using these products on arrival also reduces the total number of pulls. “Many animals just need a longer time to recover, and convalescing animals are more susceptible to reinfection,” Blanding adds. “Extended therapy products protect the animal for a longer period of time, allow the animal’s immune system to help fight off additional bacteria and reduce the reinfection that sometimes takes place during the convalescing period.” It may come down to treatment Ideally, you’ve impacted all the animals in a group with either prevention or control and no animals need additional treatment. However, producers know that’s not realistic; there are individuals in any group that fall into each category of needing prevention, control or treatment. “We’ve tried to intervene with vaccines to prevent the disease, we’ve tried to intervene with an extended therapy antibiotic to control the disease, but some animals will get sick regardless, and then it’s time to intervene with additional treatment,” Blanding adds. At the point when treatment is necessary, it is critical to choose a proven, effective antibiotic to prevent chronics, reduce the loss of cattle due to BRD and avoid significant risks to performance. Additional benefits to BRD control Blanding reminds producers that operational efficiency is another benefit of controlling BRD. “A producer may not be able to maximize opportunities because of limitations in cattle health,” he says. “If he is spending more time tending to sick animals, then he has less time to start new groups. Dealing with sick cattle can be a bottleneck in operations.” That’s in addition to treatment costs, labor associated with treatments and closeout value. It all adds up to maximizing profitability with a BRD protocol of prevention, control and treatment, and working with your veterinarian to select the best products and technologies available.

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Thursday, December 20,2007

BEEF TALK

by WLJ
August 29, 2005 The North Dakota Beef Cattle Improvement Association (NDBCIA) has been keeping records since 1963 and annually presents five-year rolling benchmark values for average herd performance on several traits. The purpose of the NDBCIA is the improvement of beef cattle, primarily focusing on genetic improvement, but also being very cognizant of the yearly management that is involved in a beef cattle operation. By comparing individual herd values with the overall averages, individual herd performance can be evaluated. The data from the evaluation may lead to discussion, which may be the basis for management changes. Data trends also can be evaluated. For example, cattle have gotten larger, smaller, larger again, and perhaps have somewhat leveled off in body size. This would be a typical data trend, a trend in the overall growth rate of cattle involved with the NDBCIA program. A notable benchmark for producers this year is weaning 500 pounds of calf per cow exposed to the bull and points to increased growth. Growth, generally thought of as average daily gain in the feedlot business, is a major component of profit. In terms of the cow-calf producer, growth has the same impact; total pounds times price contributes in a major way to gross income. Growth for cow-calf producers is different from feedlot growth. In the feedlot, an individual calf is responsible for only bearing its share of the overhead and variable expenses, since each calf gains weight according to its genetic potential. In the cow business, that is not true. Cows make producers money by producing calves that have more value than expense. The value of the calf principally is determined by weight, but in contrast to the feedlot calf, the cow also must carry the burden of expense for cows that do not produce a calf. An open cow has a market value, but that value will not cover the cost of replacing the cow. Each cow in the herd has to produce a calf to cover her annual expenses and those of nonproducing cows. As the NDBCIA evaluates traits to measure cow performance, the trait “pounds weaned per cow exposed to the bull” is a trait that factors in both management and genetics. This is just an example of the many traits NDBCIA monitors using the Cow Herd Appraisal Performance Software (CHAPS) program. Additional traits follow along with the current benchmark. The average CHAPS producer exposed 191 cows to bulls. The cows had an average age of 5.6 years. Of the 191 cows exposed to the bull, 93.4 percent were pregnant in the fall, 92.8 percent calved in the spring and 90.3 percent weaned a calf in the fall. During the calving season, 62.4 percent calved during the first 21 days, 86.4 percent during the first 42 days and 94.6 percent within the first 63 days of the calving season. Here are the actual weaning numbers: age was 192 days, weight was 558 pounds and the frame score was 5.5. These growth numbers translated into a gain of 2.95 pounds per day of age and a 627-pound adjusted 205-day weight. For every cow exposed, CHAPS producers weaned 500 pounds of calf. Knowing these numbers allows for appropriate modification through management or genetics. There are no absolute answers to what a particular ranch should produce. The academic answer is optimization. In reality, the need is to grow profitable cattle that a producer can appreciate and still meet industry needs. Each producer must answer the question, but the answer must be based on data that ultimately tells you if you are in the game. To all those naysayers that claim you can’t wean 500 pounds per cow exposed to the bull, look again. Your neighbor may be filling more trucks and trailers than you may be. May you find all your NAIS-approved ear tags. — Kris Ringwall (Kris Ringwall is a North Dakota State University Extension beef specialist, director of the NDSU Dickinson Research Center and executive director of the North Dakota Beef Cattle Improvement Association. He can be contacted at 701/ 483-2045.)

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Thursday, December 20,2007

BLACK INK

by WLJ
August 29, 2005 We live in an era of new ideas and technology that can produce better beef profitably. It’s exciting to try out the cutting edge, but unless you are isolated and independently wealthy, you’ll feel pressure to justify your actions. When you “know” you are right, that pressure is a pain in the neck. Maybe you just need an adjustment. There is risk in making changes to an enterprise based on any new insight, tool or practice. The more you depend on that enterprise for a living, the more risk. The less known about the new application, the more risk. On the other hand, when new ideas debunk myths that stand in the way of profit, financial rewards can be great. In many farm and ranch businesses, there is a generational divide. Those who devoted their life to the business may feel a conservative skepticism toward ideas put forth by younger, inexperienced partners. They may also depend on the farm’s continued financial strength for their retirement security. A senior partner may be less conservative, but still skeptical. Conflicts arise from different ways of trying to achieve the same goals. If decades of experience and intuition without data served your father well, he may question the value of hours you spend on a computer or methodically sorting cows based on data. Your banker can raise a lot of questions, too. But if he is a scientific skeptic, you can convince him with proof. He’s not against progress, if that’s what it is. He just takes a Missouri, “show- me” approach. Any reach toward progress, must recognize its foundation. Maybe the previous manager set up a performance-oriented program and established benchmarks that are hard to beat. Yet, if those records are mainly production-based, there’s work to be done on the bottom line. Maximums often give way to optimum under the light of financial analysis. Differing views come from every age group and orientation along the optimistic-pessimistic line, men or women. A spouse or a junior partner may be holding up your idea of what might be progress, waiting for more information. As long as the skeptics recognize proof when they see it—and you know when to admit they are right—they do the business a great service. They make you think. Say you want to crossbreed the cows to bulls your friend is selling. You will get hybrid vigor so the calves will weigh more; you can point to studies that prove it. If you have to defend the idea, you will develop a structured crossbreeding program, how you will market the calves, where you will get replacement heifers and criteria for bull selection. And why they will return more profit through the years. No matter how much data you bring to bear on it, you must recognize the counter arguments as well. Skeptics aren’t just obstacles to knock down; they are often right. Your partner who spent 40 years developing a purebred herd may have built in some value in predictable quality that your plan will set back. Sometimes the answer lies in a compromise. Try terminal crossbreeding on some cows, and a greater marketing effort to capture more of the potential premiums from existing genetics. Try out-crossing within that breed to achieve some of your goals. Skeptics guard tradition on one hand, and seek science-based advancement on the other. You will find a lot of them at the local auction market; they base a lot on visual experience, but take nothing else at face value. They have heard the auctioneer’s claim that calves entering the sale ring have “had all their shots.” What would it take to convince them the calves are truly worth more? An ear-tag from a recognized health program might do it, or just knowing the owner stakes his reputation on those calves. Seeing is believing, and in the profit-driven world, that means seeing green. Whether you are the resident skeptic or blessed with the need to justify your actions to another, information is the key to that vault. — Steve Suther (“Black ink” is a cattle management column written by Steve Suther, industry information director for Certified Angus Beef. The column is not designed for strictly Angus producers, and does not necessarily represent the views or opinions of WLJ or its editorial staff.)

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Thursday, December 20,2007

COMMENTS

by WLJ
August 29, 2005 Just when you think all the ballyhoo about the Canadian border is over, someone has to go and push the “fools button”. The calamity of errors over the Canadian import rule and BSE testing continue; this time it was the Canadian Food Safety Agency that messed up. You would think that with the sensitivity toward BSE and trade with Canada that the agencies would go out of their way to insure accuracy of import and testing standards. Last week, it was discovered that a heiferette over 30 months old went through a processing plant in Wisconsin. Then, to top it off, the load of 35 Canadian fed cattle produced eight pregnant heifers. Apparently, the Canadian CFIA vet had an arthritic arm and palpated the heiferettes with his other arm and consequently missed the pregnant heifers. This vet, and the exporter, were both de-certified as a result of the episode. Verifying age on these cattle through dentition isn’t 100 percent accurate and the idea that we’re going to get them all would be a bit unrealistic. A month or two difference in the age shouldn’t be that big a deal and I would suggest that 99.9 percent would be more realistic. However, putting eight pregnant heifers on a truck destined for a U.S. packing plant is a pretty big mistake and it is unthinkable that a qualified vet could miss these pregnant heiferettes. As I said, 99.9 percent accuracy on age would be good enough for me, but for groups like Public Citizen and R-Calf USA who want to keep the border closed, they would certainly require 100% compliance. Their cause to keep Canadian live cattle out of the country just received a shot in the arm and justification for mandatory country of origin labeling was also bolstered. Now, perhaps add a spaying requirement is next. Unfortunately, the beef from this cow over 30 months old made it into the food supply. The product has been recalled, and although it probably has been consumed, it is unlikely there is any human health risk. The eight pregnant heiferettes were processed and sent down the line also. The fetuses were destroyed, but questions remain about the fetal blood serum which has been banned from import. At this point, the entire episode makes you wonder who is minding the store. The USDA has had their share of problems and everyone needs to take some responsibility that these imported cattle are handled properly. A 30-month animal that was actually 31 months old shouldn’t be that big a concern, but heiferettes will always be in a very suspect age window and should require much closer evaluation. This episode casts a little shadow of doubt on the enforcement of our import rules with Canada. Make no mistake, it is the CFIA that is responsible for this one. USDA is, for the most part, out of the loop. Besides raising questions about older cattle getting into the U.S. beef supply, this situation is sure to raise some eyebrows from our export markets for both the U.S. and Canada. There is still speculation the Japanese market could open this fall. However, the food safety commission said again, last week, they need more information to approve beef trade with the U.S. The folks at USDA say the Japanese have all the information they need. USDA and Secretary Johanns have been very aggressive in their pursuit to resume trade with Japan. USDA recently made a proposal to accept Japanese beef, which is a small gesture but says we’re not concerned about Japanese beef even though they have had several BSE cases. Where USDA seems to be dropping the ball is on the epidemiology report on this Texas cow that was confirmed to have BSE. This episode has caused several countries to halt trade and many are waiting for this report. Sources at USDA told us that the report should be done in a week or so; that comment was made six weeks ago. Apparently, the hold up is that USDA is waiting to test one more animal. They know where it is, but the owner is busy harvesting cantaloupes and said he will round up the cows and let USDA get their cow when he’s done picking the melons. In the meantime, beef export trade is on the back burner and appears to be costing the beef industry a pile of money.– Pete Crow

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Thursday, December 20,2007

Mexican cattle linked to drug cartel

by WLJ
The U.S. Department of Treasury (Treasury) Aug. 18 announced that two Mexican cattle companies are among the front businesses for Mexican drug-trafficking cartels. Cattle sold to Texas ranchers by these suspect companies after Aug. 19 could be seized as evidence of a money laundering scheme, agency officials said. Cattle already purchased and owned before the suspect Mexican companies were identified are not going to be impacted by the announcement, Treasury officials said. The department also plans to inform cattle associations and other groups of the action taken against the Mexican companies, officials said. The Treasury also will provide other information, such as the brands used by the cattle companies linked to the drug cartels. For now, buyers are expected to practice due diligence when purchasing cattle. The two Mexican cattle companies named by the Treasury Department are Corrales San Ignacio S.P.R. de R.L. de C.V. and Del Nortes Carnes Finas San Ignacio S.A. de C.V., both of Mexico’s Chihuahua state. A U.S. company in Presidio, TX, Corrales San Ignacio L.L.C., was identified by the Treasury Department as a “mirror” entity, which is an organization that exists on paper to give a foreign company a U.S. outlet. Treasury officials said it was unlikely that company actually has any pens or feed lots. The two suspect cattle companies are linked to the Arriola Marquez group, which is associated with Mexican drug kingpin Joaquin “El Chapo” Guzman. Guzman is a leader of one of the factions fighting for control of Nuevo Laredo and its smuggling routes into Texas. The U.S. cannot seize cartel property outside the country. But once the companies have been identified as having links to drug cartels, federal law prohibits anyone from doing business with them and allows the federal government to take any property of the groups that is “in the possession or control of U.S. persons.” It is not clear how many Mexican cattle owned by companies linked to drug cartels have been sold in Texas. The two cattle companies are part of approximately 30 total companies and individuals that have been linked to the Arriola Marquez and Arellano Felix organizations.

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Thursday, December 20,2007

Plaintiffs must pay Tyson’s trial costs

by WLJ
The three judge panel unanimously supported a district court decision, ordering the plaintiffs — five individuals and one corporation — to pay Tyson Fresh Meats more than $70,000 in expenses related to the trial held last year in Montgomery, Alabama. Last week the appeals court affirmed Judge Lyle Strom’s decision to reverse a jury verdict against Tyson Fresh Meats, a subsidiary of Tyson Foods, Inc. They found Tyson did not violate the law through its supply agreements with independent cattle producers and has legitimate business reasons for entering into such agreements. In the subsequent ruling on trial costs, the appeals court rejected the plaintiffs’ argument that the case was “close” and that they should be exempt from paying Tyson’s expenses. The appeals court wrote “this case was not a close and difficult one” and noted the plaintiffs “lost every aspect ...” The court found that “witnesses for both parties agreed Tyson had a number of competitive justifications” for using marketing agreements. “The legal issues were not particularly novel or difficult. Although it took a long time to try, the case was not especially complicated.”

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