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October 2011 Archive for Out to Pasture

RSS By: Steve Cornett, Beef Today

Read the latest blog from Steve Cornett.

More Help with Beef’s Image Problem

Oct 31, 2011

Merck had its Zilmax team in Texas last week, and I spent a day with them.  We visited the West Texas A&M University’s impressive meats lab program and a couple of feedyards that are 100 percenters on the Zilmax product.

I’m not here to talk about feed additives, mind you. I don’t do production stories anymore. It’s not that I’ve ever had much doubt about Zilmax efficacy, anyhow.  (For a quick overview , I’d suggest a visit with Jason Cleere at: http://animalscience.tamu.edu/images/pdf/beef/beef-zilmax.pdf)

The WTAMU crew, under Ty Lawrence, has done a lot of the carcass work on the product. The university, by dint of being situated within a couple hours drive of more than 30% of the country’s fed cattle, has done a lot of carcass work for a lot of companies, including the major packers. Lawrence had  a couple of fed Holstein carcasses hanging so we—a handful of beef reporters—could see the difference in Zilmax steers compared to control cattle.

At Dawn Cattle Feeders, we heard manager David Bauman tell us he felt the product added “just about a $20 bill” to every head; same sort of story from Ben Fort at Quien Sabe feeders near Happy.  At Dawn, almost all the cattle are heifers and all are marketed on the grid to Tyson. Happy is 100% Holstein steers (maybe 110% to judge by a long look across the yard) and, again, relies on Tyson’s grid. The Merck folks admit their product works best in such railer situations because it adds more carcass weight than live weight.

That’s fine. I’m all for making more meat cheaply. The more value we can add to each animal, the better the deal for everybody concerned, from cowman to consumer. My concern is that we always be sure we’re adding value and not just pounds. And Zilmax does have that marbling and toughness thing, even though Merck and Ty assure me it’s not enough to drastically impact palatability (it stays within that “range of acceptability” score) and affects grading only at the margins, it makes me nervous when we adopt technologies that trade pounds for taste.

Don’t get me wrong. I trust Ty and Merck when they assure me that the loss of quality grade is modest and, on the grid, offset by the increase in the size of high value muscles. But it gets me to the point of what I sat down to write about which is: the late arrival of agribusiness at agriculture’s public relations challenge.

Among those on the tour was Carrie Thomas, whom Merck brought onto a “food chain affairs” group to help packers and retailers accept their new technology.

Packers were, bless their famously soft hearts, concerned enough about palatability of Zilmax-impacted products to demand more research before they agreed to take the cattle.  JBS has only recently signed on. Cargill and National are still not on board, I guess. No offense to Zilmax, but that attitude pleases me no end.  Not long ago, when packers were offered more yield with lower palatability they hardly hesitated.

But this time they did. And so Merck (and not Merck alone) had to start thinking of itself as a food company with “food chain affairs.” This is very, very good for cattle agriculture. During much of my life, cattle people thought of themselves as cattle producers and it wasn’t until, I’d say the 1980s, that the industry ethic began to change to make us think of our cattle as food products.

You’ll recall that, not long ago one of meat cutters’ biggest complaints was buckshot. (The food quality folks called it “buckshot”, though my guess and I’m not admitting any personal experience by saying it, is that it was really the less dangerous and more affordable birdshot.) People were, so the theory goes, actually using live ammo to herd cattle. Shooting them right in the beefsteak. That’s “hurry up cowboy” stuff; that’s not how food producers think.

And I don’t even want to get into what used to happen with various illegal substances rumored to cure illnesses or increase weights.

Near as I can tell, we have changed. I credit the leadership of guys like Gary Smith (at Texas A&M at the time), the NCBA and the checkoff program—especially the carcass lesion work led by NCBA’s Gary Cowman and the Beef Quality Assurance Program—with helping change our attitude. They did for our "food product" mindset what Temple Grandin is doing for our "animal welfare" mindset.

But we’ve been doing it with too little help from our suppliers. I’m convinced that properly screened and properly-used growth promotants, antibiotics, pesticides, larvicides and all the other cides are good for producers and consumers.

But they’re even better for patent holders, and for too long these companies spent their promotion programs selling their wares to us and seemingly ignoring the buildup of consumer distrust and resentment on the other end of our market chain.

They seem to think of themselves as being in the technology industry; the implant business;  the pharmaceutical business; the seed business.  Well, time to think again. They’re in the food business, too, and if you don’t believe it go read what folks think about technology at places like Mother Jones  or Marion Nestle.

Most “food activists” like farmers, and they like ranchers. Most like beef. But they are convinced that modern technology is ruining our product. Technology is helping us produce beef (and just about every other commodity) cheaper and better and, for that matter, more safely and with less environmental damage. But growing numbers of consumers don’t trust us because they don’t trust our technology.

And they don’t trust technology, I assert, because manufacturers have not given them reason to, those soft light ads on the Sunday morning talk shows notwithstanding.  The anti-corporate mindset evident in the "Occupy" movement applies to food and food products. In many minds, beef is being “tainted” by its association with “the man” and his products.

So thanks, Merck, for paying attention to a part of that problem. And let’s be hopeful that Merck and other such companies will see the value of adding their names and dollars to efforts like those at the U.S. Farmers and Ranchers Alliance, whose list of “industry partners” is not exactly tome-like.

I’m not sure the USFRA is the big answer to all this, but it’s a start. Well, not a start. I’m more partial to the efforts of the Sustainable Beef Resource Center, but my wife’s company is involved with them, so as a journalist I can’t recommend them for fear of a conflict of interest. (But I’m a retired dude, so I guess I just did.)

If you take some of that research from the SBRC and then use the USFRA’s idea of a sort of online “peoples’ megaphone” to amplify it, you’ve got the start of something that might help agriculture help consumers to adjust to the future.

Anyhow, judging by consumer attitudes about technology, we’re late to the game. But at least it seems more companies are beginning to realize that they can’t sell their stuff to us if we can’t sell our stuff to consumers.    

Rain and Snow in Wheat Country

Oct 27, 2011

panhandle snowThere is moisture falling in some of the drought area this morning. I shot a picture a minute ago off the front porch. That is rain, I suppose, but it was snow not long ago.

The weather map indicates a lot of the Texas Panhandle and South Plains has had an inch or more of moisture. There are better pictures in the Amarillo paper at http://amarillo.com/.

Not to suggest this is a “drought breaker,” mind you. It’s still awful dry over a very large part of the Southern Plains, but darned if some of us don’t have some wheat sprouted from an earlier round of moisture a couple of weeks ago.

And, without consulting anybody that knows, this old wheat farmer thinks this will get us into winter dormancy—and a chance at more moisture—and provide a little much-needed wheat grazing if we get a warm November.

Take Your Cows to the Feedlot?

Oct 17, 2011

It gets more difficult by the day to not get giddy-bullish on the outlook for beef cow prices. Seems like the only question is how much meat money that 99% we keep hearing about is able to come up with.

But, happy day, with the supply outlook, it looks like we may find out just how much they WILL pay next year. That’s one reason there are a lot of cows in commercial feedlots in Texas. It is not cheap to keep cows in commercial feedlots, mind you. But if the alternative is selling perfectly good cows, gambling a few bucks this fall and winter might be worth it.

Last week’s news provided several reasons to talk about this. One is last week’s approval by both houses of Congress of the free trade agreements with South Korea, Panama and Colombia. National Cattlemen’s Beef Association President Bill Donald of Montana said Friday the Korean deal alone could eventually be worth $2 billion to the beef industry.

Then there was the WASDE report, calling for historically tight supplies of beef next year—almost 5% under this year, for goodness’ sake—and suggesting that "cattle prices are forecast higher for the remainder of 2011 and through 2012. Demand remains stronger than expected and the strength is expected to carry into 2012."

The WASDE wizards expect strong international demand will also—despite those higher prices in the U.S.—reduce imports into the U.S. and increase exports from the U.S.

Like I say, it’s hard not to get all giddy with the smart guys saying things like that. Assuming you still have some cows, of course. Lots of folks in Texas, Oklahoma and parts of New Mexico, Kansas and Louisiana don’t. They had to sell them because of the drought.

But not everybody that ran out of grass and/or water sold.

I visited last week with Paul Colman and Jeff Matsler at Frontera Feedyard in Muleshoe, Texas.  They have several pens full of mama cows and bred heifers and others full of early-weaned calves. There are a lot of similar deals around the feeding belt.

Paul was nice enough to share some of the math his cow customers are looking at. He says they can maintain cows on a high-roughage ration with 16% corn for around $2 a day. For poorer cows needing some upgrade, he said that as of last week a 45%-50% corn ration calculated to raise body score one point in six weeks would run $2.50 to $2.70.

In normal (at least what we old folks consider "normal") times, that would seem awful high. Guys hereabouts think $15-$20 a month should keep a cow on grass.

But these are not normal times, no matter how old you are. Nobody knows yet how deep this drought cut into the cowherd, but there’s no doubt it’s historic. A lot of folks are concerned about the accuracy of official cow counts.

But USDA says cow and bull slaughter ran well ahead of year-earlier levels all summer, shooting to records—despite this small herd—in September, and whether its counts are right or not, however many cows we used to have, we don’t have that many anymore.

I’m not sure the precise numbers matter.  Many cows have died. Thousands of others have found nice—probably permanent— homes in places like Nebraska. There is no reason to assume they will be for sale next spring.

So, the way Colman figured it last summer at the height of the drought sell-off, a rancher had the choice between selling a cow and planning to replace her next spring.  He says that some figured that, given the 2011 value of cows versus the presumed 2012 value of cows, they might need to spend $500 to $750 more to replace cows than they’d get for cows now.

I don’t know whose pencil is that sharp, of course. Who can guess at cow prices next year? I don’t see how they could be much lower, given the situation, but how can you guess how much demand there will be? Sure, I’ve heard guys who think any cow with four legs and one or more good eyes will be worth $1,500 or $2,000 when the rains come.

If it rains in the drought area, that is. (And that is a pretty "iffy if" given the talk about another La Niña.) But even if it doesn’t rain, you have to figure that it’s worth something just to avoid selling in the midst of the worst drought sell-off in history. And I see Allendale’s Rich Nelson predicting that fed cattle could get to $1.36 next spring.

I’m not sure consumers are going to pay that much for beef in the economy projected for 2012, but I’m also not sure they won’t. I mean, hey, if that’s what it costs, that’s what I’ll pay. How about you?

If so, there is no telling what a fertile cow would be worth. But certainly more than the $700 or so my neighbors were getting last summer.

Some of the same ranchers—and without dropping names, some of these are pretty savvy, experienced guys—who sent Colman their cows also sent him their early weaned, 300 lb. and 400 lb. calves to go onto growing rations. He expects to grow them to the 650 lb. to 700 lb. feeder weight for perhaps 85 or 90 cents.

Given my druthers, I’d have calves that size on wheat pasture this time of year. The gain would be cheaper. But even with the rains much of the drought area’s wheat belt got last week, the prospect for wheat grazing isn’t good. There will be some, but without more rain there won’t be much.

So maybe, even with the price of feedstuffs, everybody should be looking at feedyards. This looks to be an ascending market for a while. A guy looking at what to do at weaning and cow culling time should keep that in mind.

One More Reason to ID Your Cattle 

Oct 03, 2011

The U.S. Meat Export Federation (USMEF) has jumped into the animal identification fray with a study suggesting that foreign demand for traceability is probably enough to pay the costs of a mandatory national ID program.

And that’s not even why USDA wants to do it. USDA is worried about being able to trace and head off a disease outbreak. If the study is right, extra import demand would probably pay the bill for the whole thing.

This is not surprising. It is just one more reason the industry should be jumping all over USDA’s first-step proposal. It’s the least the agency can do.

Let me count the many ways an electronic tag and tracing system will be self-funding: 

  1. The animal health thing. One day, we’ll get foot-and-mouth disease, and when we do, every minute will count. The faster the feds can identify and find every exposed animal, the less chance you or I will be wiped out.
  2. Herd improvement. This should take the work out of getting feedyard and carcass information back from feeders and processors, no matter who buys the calves.
  3. Consumer confidence. People trust branded products more because they know somebody is standing behind that promise. How does it look when producers say they are afraid of being held liable for their product?
  4. Country-of-origin (or any other) labels. All at once, packers will know the source and background of every animal going in their door. It won’t  be long before their customers demand the same information.
  5. Evidence of ownership. Yes, yes, brands are adequate for trading cattle. But to get full benefit, some owner somewhere down the line is going to have to add the ear tag, so it might as well be the original owner who can then get full benefit from all that traceability information.
  6. Export viability. "Viability" may be too strong a term, but we saw what happened after the BSE cow in 1993. We went from "viable" to "unviable" overnight.

 

Here’s why it can be important. Traceability connotes trustworthiness. USMEF points out that we currently face one or more "trust" based restrictions on trade from most of our major trading partners, including China, Europe, Japan, South Korea, Taiwan, Hong Kong, Russia and Mexico.

The European Union, Japan and Korea have already adopted mandatory traceability for their domestic cattle, and there is no reason to presume they won’t apply the same standards to exporters. Of the eight major beef-exporting countries in the world, that would impact only the U.S. and India. The other six have programs up and running.

The bottom line of animal ID is that the technology is here. The consumer demand is here. The cost, compared to other cattle production inputs, is nearly negligible.

I can understand people not wanting the government to make it mandatory. I don’t, however, understand why so many oppose the idea of developing an industry-driven ID system and making it, if not "mandatory," then at least a condition of doing business.

 

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