Establish Hereford genetics as the essential component of the U.S. beef cowherd.
MISSION
Drive beef industry and Hereford breed sustainability by ensuring cattle producers’ long-term profitability through pedigree registration, genetic evaluation, breed improvement tools and educational services.
CORE STRATEGIES
I. Capitalize on the value of Hereford-influenced commercial females
II. Document, communicate and improve Hereford’s sustainability story
III. Fuel the growth of Certified Hereford Beef®
IV. Increase the demand for Hereford-influenced feeder cattle
V. Build a pipeline of future leaders
Hereford continues to increase its value and service to U.S. commercial cow-calf producers, fueled by the dedicated efforts of breeders and guided by the American Hereford Association (AHA) Strategic Plan.
Even as the U.S. beef cow herd continued to contract ahead of delayed rebuilding, more registered Hereford bulls sold at auction year over year and for a higher average price in Fiscal Year 2024 (FY24). AHA field staff reported 7,182.3 bulls, bringing an average price of $6,751.
Intentional
progress
In FY24, AHA staff made great strides toward fulfilling core strategies (see opposite page) outlined by the 2022-2027 Strategic Plan, which was adopted by the AHA Board of Directors in FY22, including:
• Significantly more Hereford and Hereford-influenced calf and yearling sales drew strong interest and increased the demand for Hereford-influenced genetics, while providing added opportunity for buyers and sellers, alike.
• AHA continued documenting the genetic advantages of Hereford through ongoing research projects with AgNext, Colorado State University and the University of Illinois. These projects further quantify the associated economic advantages of Hereford genetics. The University of Tennessee’s comparison of breeding commercial Angus cows to a Hereford bull or an Angus bull over time serves as a striking example of the unmatched economic power of Hereford genetics coupled with maternal heterosis.
• AHA took a broad step in telling Hereford’s sustainability story through research aimed at describing sire differences in traits related to the breed’s carbon footprint. AHA increased its engagement with the U.S. Roundtable for Sustainable Beef, the leader in providing U.S. cattle producers with the tools to document and further improve sustainability. AHA worked with the Noble Research Institute to publish a series of regenerative ranching articles in Hereford World and Baldy Advantage.
• AHA strengthened connections between Hereford breeders and Certified Hereford Beef® (CHB) distributors to increase demand for its premium branded beef. CHB leadership and strategy transitioned toward increased focus on highlighting the local connections between producers and beef consumers.
• The National Junior Hereford Association and the Hereford Youth Foundation of America continued to provide more Hereford youth with expanded personal growth and leadership opportunities. AHA extended this opportunity with its second successful Hereford Seedstock Academy.
You will find more examples in this Annual Report
Hammer down
Momentum is hard to attain. It can be difficult to maintain, too, but once you have it, the direction is established. In the case of Hereford, the direction is forward and upward, as long as all involved continue improving genetics and pressing for more opportunity. For Hereford, the coming opportunity to influence America’s cow herd remains historic.
JACK WARD AHA EXECUTIVE VICE PRESIDENT
Bolstering Selection Accuracy
Progress reflects breeder commitment.
American Hereford Association (AHA) members continue making extraordinary genetic improvement within individual programs and across the breed. Fiscal Year 2024 (FY24) highlighted the cumulative power of pioneering breed improvement programs.
For instance, the breed’s one-of-a-kind National Reference Sire Program (NRSP) celebrated 25 years of testing young Hereford sires with the mainstay NRSP herd, Olsen Ranches, Harrisburg, Neb.
The NRSP underscores the commitment and ability to make specific breed improvements. All of the most recent steers from Olsen Ranches graded Choice and Prime. These calves were sired by 14 different bulls, randomly AI-mated to the Olsens’ straightbred commercial Hereford cows.
Calves in the Olsen herd are born June-July, weaned OctoberNovember and then roughed on winter pastures with little to no feed supplement until the feeding trial in June. Likewise, cows receive no supplement except in extreme weather conditions. The Olsens emphasize feed efficiency and place downward genetic selection pressure on mature cow size and milk. They use sires that are breed average for growth, but above breed average for calving ease. Among sires that fit these criteria, they select for as much end-product merit as is available. In 1999, steers from the program averaged high Select/low Choice. This year, they averaged high Choice/low Prime.
More broadly, the NRSP is the linchpin of Hereford’s genetic evaluation, in part because the program quickly proves the genetic merit of promising young Hereford sires. Progeny from multiple NRSP sires comprise contemporary groups of 300 head or so. Faster proof with more accuracy also stems from the pedigree relationships between the bulls that are tested. NRSP sires influence 7% of the more than 2 million AHA performance pedigrees. Since its inception, 500 Hereford sires have been tested through the NRSP.
Olsen Ranches have collected individual animal feed intake data since 2010. They began collecting individual water intake data last year.
Hereford breeders continue making targeted progress without sacrificing the breed’s hallmark feed efficiency, maternal ability, docility and longevity.
Embracing precision
Much of the credit for the breed’s exemplary genetic progress goes to breeders’ unwavering commitment to utilize tools offering the most accurate genetic prediction available. In other words, U.S. Hereford breeders remain willing to adopt new technology as it becomes available.
Consider AHA members increasing the use of DNA testing over time (see Table 1). AHA members submitted an estimated 36,874 DNA tests in FY24, a staggering 30.8% more than the previous year. Nearing the end of calendar year 2024, there were nearly 240,000 genotypes on file with the Association.
AHA secured DNA testing cost relief for members in FY24 via a new age-based cost structure. DNA testing animals up to 6 months of age costs $30. Today, AHA members’ price of utilizing a 100K density genotype chip — considered the gold standard for genotype panels — is 70% less than it was in 2012.
Keep in mind, besides enabling genomic-enhanced expected progeny differences (GE-EPDs), DNA also offers the significant advantage of verifying parentage. Correct parentage is the basis for any accurate EPD calculation.
Proving Hereford heterosis advantages
AHA continued its multi-year research project with the University of Illinois in FY24 to evaluate and document the production advantages of F1 black baldies compared to black Angus peers. This project leverages previous AHA research efforts and will result in a comprehensive analysis of the entire life cycle, including lactation and maintenance energy requirements.
AHA also completed work with the University of Tennessee to quantify the economic advantage of Hereford heterosis, modeling the economic difference between breeding a Hereford bull or an Angus bull to commercial Angus cows over 10 years and retaining replacement females. Results of the analysis demonstrate the significant economic advantages of using a Hereford bull, due to the breed’s inherent genetic advantages incorporated with complementary crossbreeding and the resulting maternal heterosis.
Genetics and sustainability
The AHA’s ongoing collaborative research project with Colorado State University and AgNext continues to explore sire differences for traits related to the carbon footprint. Specifically, individual cattle methane emission and nitrogen excretion data are being collected from calves resulting from the Olsen NRSP herd. Research results thus far suggest sire differences account for the majority of variation in methane and nitrous oxide production. Potential genetic selection tools for these and related traits are made possible by NRSP’s structural design.
Table 1: Hereford Genotyping Over Time
Sharing user stories and heterosis economics.
AHA communications broadened its growing focus on sharing how commercial producers across the United States add profit potential to their operations with Hereford genetics.
Team Hereford visited commercial users of Hereford genetics in nine states during Fiscal Year 2024 (FY24), gathering photo and video assets at each stop, while documenting individual stories shared in Baldy Advantage, news releases and other Association promotions. These are examples of the comments:
“They’re (F1 baldy) an overall commercial mother cow that generates money year after year. We have a lot more luck with an F1 cow — weaning weights, breed-backs, efficiency; and they’re easy fleshing as far as maintaining them.” — Daniel Shuler, Shuler Farms, Trenton, Mo.
“She has all of the maternal heterosis that you would want going into a cow herd. She has the ability to cross with any type of bull somebody would want to use. Going from a Bos Indicus to a Bos Taurus, even a Continental, all of them will work and will complement well.” — Alan Kelley, Kenansville Cattle Co., Kenansville, Fla.
“I really believe in the Hereford breed. I love the maternal instincts, their conformation and disposition, but, more than anything, I’m after pounds.” — Kody Woodward, Dupree, S.D.
“We found those cattle to be fertile under these conditions, to milk well, raise their calves and maintain their condition for us. In this area, breed-back is always about the most important thing that occurs with our cattle, and if they don’t breed back, they’re gone.” — Bill Wilhelm, 21 Ranch, Sundance, Wyo.
The team also captured stories of Certified Hereford Beef® customers and consumers at a range of events, highlighting the importance of putting individual producer faces and names with the product.
Spreading the word
With the launch of the new website in 2024, all of this information became easier for AHA members and others to find.
For instance, current and potential users of commercial genetics can find comprehensive breed research, programs and related resources with a single click of the “Commercial” tab.
AHA members can click the “Media” tab and find a gateway to media assets created for them to use — photography and videography, artwork, publication inserts and more — all supporting the breed’s cohesive message.
Growing social presence
AHA communications also continued to harness the power of social media in FY24 to magnify the breed’s message. Through organic and paid content the Hereford message reached 1.8 million accounts through Facebook and Instagram, nearly double from FY22. The message continues to focus on the value of Hereford genetics in the commercial industry.
Buford ranches llc | OKLA.
HERMES LIVESTOCK | Colo.
HRC FEED YARDS LLC | KAN.
KENANSVILLE CATTLE CO. | Fla.
Expanding Commercial Demand
Hereford breeders add value with knowledge.
Despite historically high calf and feeder cattle prices, buyers continued to pay a premium for many of the cattle selling in the growing number of Hereford and Hereford-influenced calf and yearling sales during Fiscal Year 2024 (FY24). All told, 20,058 head sold in 30 sales across 13 states. Buyers also expressed strong demand for 5,754 Hereford and Hereford-influenced commercial females selling as part of Hereford production sales in 26 states.
Besides inherent genetic advantages, demand also reflects ongoing breed improvement forged by Hereford breeders’ commitment to knowing more about how their genetics perform beyond the pasture.
For instance, participation in the Hereford Feedout Programs grew once again with 103 participants from 23 states sending 2,379 Hereford and Hereford-influenced calves to feed at HRC Feed Yards LLC in Scott City, Kan.
“The value of this information and being closely engaged with the cattle feeding sector has always been important. It is becoming invaluable as more cattle are channeled into specification-based, value-added areas of the supply chain,” explains Trey Befort AHA director of commercial programs. “By learning their herd’s genetic potential and understanding what performance traits cattle feeders and beef packers find the most valuable, producers can build a more effective marketing plan to make sounder marketing decisions year after year.”
The experience also informs production decisions.
“We needed to find a way to make sure our genetics were doing what they’re supposed to be doing. What better way to do that than to take calves that you’re raising at home and send them to the feedlot,” says Denise Loyning of L Bar W Cattle Co., Absarokee, Mont. “Let’s get back carcass data. Let’s find out if our health protocols at home are working. Are the bulls that we’re selecting right for what the industry is needing today? Are those carcass bulls truly performing? Are all those things coming together?”
It was the third year L Bar W Cattle Co. had sent calves to the feedout. Data so far led them to shift some of the sires they utilize and health protocols they employ.
Likewise, Carlisle Braman, a National Junior Hereford Association member from Refugio, Texas, explains, “We’re really just wanting to be able to better ourselves. It’s benefited me, as a breeder, because I get to see from the bottom line what I can do better and then how my program can grow.” She and her sister, Madeline, are sixth-generation ranchers. The sisters and their family saw their second set of calves at HRC during the annual field day April 12-13, 2024.
“Every year, we see increased interest in these programs from our members and their customers because of the value they find in benchmarking feedlot and carcass performance in their programs and then tracking subsequent performance relative to their benchmark,” Befort says.
Spreading the word
AHA took another step forward during FY24 in highlighting stories of commercial producers’ success with Hereford genetics across the country, from feature stories in Baldy Advantage and inserts in industry publications to engaging videos and social media posts.
AHA also mailed a letter to leading feedlots with a flier underscoring Hereford breeder’s industry engagement and their ongoing commitment to genetic improvement. It highlighted the feedlot and carcass performance of the most recent steers from the National Reference Sire Program herd at Olsen Ranches, Harrisburg, Neb. — 100% Choice and Prime with exemplary feedlot performance, all sired by Hereford bulls and out of commercial Hereford females.
Standout Service
Hereford Publications Inc. is a one-stop-shop.
Amid the evolution of print, electronic and social media, Hereford Publications Inc. (HPI) helps create messaging that connects customers to breeders and resonates with American Hereford Association (AHA) members across multiple platforms to add value to Hereford genetics.
Something for everyone
In addition to publishing Baldy Advantage and the Hereford World — HPI offers Hereford breeders and others a comprehensive suite of advertising design and sale catalog publication services. HPI creates catalogs, postcards, logos, brochures, directories and newsletters, and can pair any of these services with digital marketing.
For instance, HPI helps customers utilize Facebook target marketing to reach potential customers in specific geographic areas and drive them to their website, sale offering or other area of interest. Breeders may also purchase banner advertisements with placement on the AHA website or in AHA email campaigns.
HerefordsOnDemand.com
More Hereford breeders took advantage of HPI’s HererfordsOnDemand.com (HOD) in FY24 to market their cattle through online production sale and private treaty catalogs. EPDs (expected progeny differences) automatically update in HOD catalogs, which can also include easily accessible videos of each lot. HOD also enables potential buyers to create customized searches within the catalog. Creative services can create HOD catalogs for clients or clients can create their own. As well, HOD catalogs are included with printed catalogs produced through HPI.
Along with the HOD features, users can find flip-book and PDF versions of sale catalogs, and the latest sale reports on HerefordsOnDemand.com.
In the marketplace
Moreover, from video sales to feeder calf specials and purebred auctions, AHA field staff continue to be a valuable resource for prospective buyers and Hereford breeders. They are an integral part of connecting Hereford and Hereford-influenced genetics to customers.
The AHA’s field staff had one new addition in FY24: Corbin Cowles now oversees the Upper Midwest region.
Hereford Hallmarks
Hereford World and Baldy Advantage complement the Hereford breed.
The American Hereford Association’s (AHA) flagship publication, Hereford World, has been a valuable resource for Hereford enthusiasts for more than a century. From coverage of AHA events and national shows and sale reports to management articles and stories featuring all things Hereford, the publication is the voice of the Hereford breed.
The AHA’s newest publication — Baldy Advantage — introduced in August of 2023, has created a buzz. Like the Hereford World, the F1 baldy and tiger stripe females are beef industry icons. Replacing the Hereford World tabloid issues, the Baldy Advantage prints four times each year: August, October, January and February. Created with the commercial cow-calf producer in mind, the Baldy Advantage emphasizes the value of Hereford heterosis — “More pounds – less cost.”
In August 2024, the AHA celebrated one year of Baldy Advantage. In Fiscal Year 2024 (FY24), more than 40,000 copies of Baldy Advantage went to AHA membership, commercial producers and Hereford bull buyers, accounting for almost half of the 82,030 copies printed between the two publications.
In FY24, the Hereford World and Baldy Advantage featured 1,420 pages. Of those pages 600 were editorial, and 100 were staff-written features.
“We are extremely proud of the Baldy Advantage and Hereford World magazines,” says Sydnee Shive, Hereford World managing editor. “A hallmark of the AHA and Hereford Publications Inc., the editorial team works hard to present timely information, pertinent articles and stories that feature the breed’s outstanding producers.”
Of course, Hereford World and Baldy Advantage are a success due in part to breed and industry advertisers. In FY24, more than 800 pages of advertising were published in Hereford publications.
Hereford field reps attended 214 sales in FY24. At those sales, almost 13,000 head grossed nearly $80 million. They also reported 56 local, regional and state Hereford shows in Hereford publications.
Hereford World and Baldy Advantage are AHA mainstays, continually advocating for the Hereford breed and the value of Hereford heterosis in the U.S. cow herd, while providing valuable information for producers.
Top 10 Registrations
State
Texas 9,446
Nebraska 5,423
South Dakota 4,935
Kansas 4,389
Oklahoma 4,389
Missouri 3,464
Montana 2,903
North
2,521
Iowa 2,411
Tennessee 2,159
Breeders
Upstream Ranch, Taylor, Neb. 912
Rausch Herefords, Hoven, S.D. 875
GKB Cattle, Desdemona, Texas 731
W4 Ranch, Morgan, Texas 607
Van Newkirk Herefords, Oshkosh, Neb. 550
Topp Herefords, Grace City, N.D. 531
Shaw Cattle Co. Inc., Caldwell, Idaho 500
Fawcett’s Elm Creek Ranch, Ree Heights, S.D. 486
Wiese & Sons, Manning, Iowa 388
Alexander D. and Alison Mih, Chanute, Kan. 387
2023-24 Registrations, Transfers and Memberships
Broader Information Faster
MyHerd evolution offers more tools.
MyHerd — originally launched in 2014 — serves as the fulcrum of pedigree registration and data reporting for AHA members. Based on member feedback, the AHA continued enhancing the system in Fiscal Year 2024 (FY24).
The animal summary report serves as an apt example. It provides basic animal details, up-to-date expected progeny difference (EPD) values and accuracies, breed average EPDs, percentile distribution for each trait, an interactive pedigree and some key EPD stats from the underlying data on which the EPDs are based.
Like the performance pedigree report, the animal summary can be accessed from the “details” tab on the animal screen within MyHerd.org. The animal summary is easily downloadable, so it can be shared with prospective customers or other team members, printed for display or added to that animal’s file in your records.
AHA’s customer service team received numerous positive comments from members who like this new report, especially when accessed on a mobile device. The team recommends AHA members use this report when conducting MyHerd.org searches.
Building on improvements
Updating the MyHerd platform over the previous two years allowed for the inclusion of powerful yet flexible search tools, which users can use to pinpoint animals that fit their breeding goals.
Stacy Sanders, AHA director of records, explains MyHerd allows users to tailor the data their customized searches return. It offers producers assistance in interpreting EPDs and helps them measure where an animal fits in relation to the breed.
As an example, Sanders says when AHA members access the aforementioned “performance pedigree report” for an animal, they find up-to-date EPDs, an interactive pedigree and a host of data on the subject animal along with its sire and dam as well as summaries of their progeny for varying traits. The MyHerd performance pedigree report can help users better understand the underlying data the animal’s EPDs are based upon.
Brand Trust
CHB helps customers put a face and name with the eating experience.
Brands make a promise to consumers. Successful brands consistently deliver on that promise.
Certified Hereford Beef® (CHB) promises premium quality from a producer-owned organization backed by Hereford’s unique story.
CHB’s consistent premium eating experience speaks for itself.
“I have shopped other brands of beef in different grocery stores, and nothing compares to the Hereford beef,” says Ro Rheinberger, Shawnee Mission, Kan., who stopped by the Certified Hereford Beef display during last summer’s promotional event at Hen House Markets, the brand’s longest running retail partner.
“I will drive miles out of my way past many grocery stores to buy the Hereford beef at Hen House,” she adds.
“It’s a brand that I know I can trust, a higher quality than the other brands I’ve tried in the past.” Her three children grew up eating CHB from Hen House Markets.
Local satisfaction
As consumers evolve, the story behind the brand is becoming as significant as the product itself.
“More and more, consumers demand a closer connection with their choices, not just knowing where their food comes from, but who is producing their food,” explains Ernie Davis, CHB president and CEO. “Certified Hereford Beef is owned by those who produce it, and they are engaged in representing the brand.”
In Fiscal Year 2024 (FY24), CHB focused on connecting customers with producers while highlighting the brand and breaking through the broader barrier that exists between customers, consumers and the producers who grow their food.
That’s why CHB staff works hard to include Hereford producers at food shows and in promotional materials. It’s also why they spend time working with producers to host events on the farm or ranch, giving customers an inside look at the dedicated care behind the brand.
Forging local connections for CHB comes with extra power because current CHB customers and prospects are smaller regional retail chains and independent stores or restaurants — folks who still have meat cutters in-house.
The agricultural production story resonates with food distributors and their retail and foodservice customers, especially when they hear it from a producer. It resonates because, like much of society, this is the first time many hear about how much care goes into growing their food. Coupled with the story behind Hereford and CHB, these folks often quickly become advocates for agriculture.
Sometimes, current or potential customers are already Hereford advocates.
Dwayne Goodwin raises Hereford cattle in Mauldin, S.C. He also owns several Save A Lot stores in the state. He introduced CHB to his stores during FY24.
“I’m proud to be able to bring the gold standard of beef to my Save A Lot customers,” Goodwin says. “As a Hereford cattle farmer myself, I know the high standards of animal care and sustainable farming practices in place for this amazing product. It means I can have confidence my Save A Lot customers will be enjoying the very best.”
“Certified Hereford Beef is the gold standard of beef, known for its exceptional marbling, tenderness and rich flavor profile,” Save A Lot’s introduction announcement read. “What makes Certified Hereford Beef so special is not only the taste, but also that the producers are committed to sustainable and ethical farming practices, ensuring the wellbeing of the animals and the environment.”
Caribbean and South American restaurateurs and retailers took part in the 2024 U.S. Meat Ideation Week which brought the group to the American Hereford Association and a tour of Grimmel Schaake Cattle Co., Manhattan, Kan., to learn about the brand.
Consumers sampled ribeyes at the Hen House Market, Leawood, Kan., a longtime partner of CHB, with many visitors sharing stories about their loyalty to the brand providing a consistent product to feed their families.
Innisfail Farm, Madison, Ga., hosted a farm tour to strengthen the connection from pasture to plate for the US Foods-Atlanta sales team.
The National Hereford Pen show at Cattlemen’s Congress draws a crowd of seedstock and commercial cattlemen.
Commercial red baldy females featured in the Maternal Merit sale at National Western Stock Show.
Exhibitors compete in Hale Arena during the American Royal Hereford show.
Showing Off
Hereford numbers remain strong at national shows and sales.
National shows have a deep-rooted history in the Hereford breed. Every year, the American Hereford Association (AHA) Annual Meeting and Educational Forum coincides with the American Royal. This year marks the 125th year of the American Royal — an event founded around Hereford exhibition.
Maintaining a legacy
National shows have served as starting points for cattlemen and women searching for their next bull or female since the early 1900s, when traveling to a large exhibition was one of the best — and only ways — to view large groups of the country’s premier Hereford cattle and connect with fellow producers.
For those searching for herd additions, the pens at Cattlemen’s Congress, in Oklahoma City, Okla., and the Yards at the National Western Stock Show (NWSS) in Denver, Colo., are still excellent places to start.
For Jerry Delaney, Delaney Herefords, Lake Benton, Minn., national shows, like Cattlemen’s Congress, are valuable opportunities to network and learn. He can see how his genetics perform in different matings and herds and note any outside lines that would suit his operation.
“You can go out looking for new, fresher genetics,” Delaney says. “And you can check on your genetics to see how they are working in different environments, different bloodlines and different crosses. When you’re looking for something different, you can see what those genetics are working on and maybe what it’s not working on.”
Delaney and his family also attend national shows to get bulls and females off the ranch and in front of potential customers. They exhibit pens at Oklahoma City and NWSS to stir interest in their annual bull and female sales with Atkins Herefords, Tea, S.D. He says it may take three or four years for a prospective customer to buy a female or bull, but the consistent networking year-afteryear is an asset.
“If you can sell something to them, that’s great, but it doesn’t happen overnight,” he says. “That’s why it’s a long-term deal, going to Denver or going to Oklahoma City, because people want to know if you’re real and consistent. It’s a tradition.”
Like Delaney, the Douthit family uses the national shows as both an opportunity to make connections with potential customers and see new genetics.
“It’s a place for me to look at a ton of different genetics without going to all the different ranches,” Megan Douthit-Downey, Douthit Herefords, says. “I can go up on the Hill and look at a lot of genetics and see if it’s something that I think is going to fit or cross in our program or walk through the Yards and talk to the guys about what they like about the lines they’re using. I use it as a learning tool.”
Located in northwest Kansas, Douthit Herefords has been displaying pens of cattle in the hallowed NWSS Yards for 81 consecutive years (excluding the canceled 2021 NWSS). While they sell most of their Hereford bulls private treaty to commercial cattlemen and women, years ago, loads of bulls were purchased out of the display pens. Today, the Douthit family uses the show mostly as a marketing tool.
“The big advantage we have with those commercial guys we run into at Denver, is that we are close enough to Denver,” Douthit-Downey says. “We will always leave catalogs and price sheets with our help at home. A lot of years, we have guys drive out to our ranch. They won’t buy the bulls we take to Denver, but they will come out here and look at the bulls we have for sale, and they will look at our heifers, too.”
For more than a century, Hereford producers have gathered at national shows across the country to view potential herd additions and market their cattle. In Fiscal Year 2024 (FY24) Hereford producers showed nearly 1,300 cattle at national Hereford open shows from Reno, Nev., to Harrisburg, Pa. Cattlemen’s Congress and the NWSS draw the most numbers every year, due in part to their pen shows. This year, exhibitors showed around 600 head of cattle during the two events’ open shows — including the nearly 200 pen cattle.
“You’re going to one spot to look at everybody’s best,” Delaney says. “You don’t have to weed through a lot of average cattle when you go to Oklahoma City and Denver. You’re looking at everybody’s very top ones. You’re seeing the cream of the crop. And not only that, but you can also see the cream of the crop working in more than one operation.”
Sale success
Each year, Hereford breeders consign cattle to multiple sales at national shows — including the National Hereford Sale, ‘Hereford Night in OKC,’ at the Cattlemen’s Congress.
Between Hereford sales at the American Royal, NWSS, Fort Worth Stock Show (FWSS) and Oklahoma City, the Hereford breed continued to build momentum.
Hereford Night in OKC boasted strong numbers this year, with bulls selling for an average of $31,950 and females averaging $11,588. The NWSS ‘Herefords in the Yards’ sale grossed nearly $600,000. Groups of F1 baldy females were also in high demand, selling at both the Maternal Merit sale at the NWSS and the Texas Hereford Association’s Annual Powerhouse Sale at the FWSS.
“We’ve consigned at the National Sale,” Delaney says, “We try to take our best there, and then if you can get them out, and you can get your cattle into the right hands, it makes a world of difference. If they’re successful, that builds on more success. So, you find it’s a good place for networking opportunities.”
Reaching Beyond the Ring
The National Junior Hereford Association pushes education and leadership to the forefront.
This year, the VitaFerm® Junior National Hereford Expo (JNHE) celebrated its 25th anniversary in Grand Island, Neb., at “The Grand Daddy of ’Em All.” The silver anniversary of the JNHE provided a golden opportunity to build upon the momentum driving the National Junior Hereford Association (NJHA) with around 800 exhibitors from 41 states and Canada exhibiting nearly 1,300 head of Hereford cattle.
While high-quality Hereford cattle have been synonymous with the JNHE since its inaugural event in Tulsa, Okla., in 2000, the true value of the exposition reaches outside the showring. Each year, NJHA shapes the next generation of Hereford breeders, agriculturalists and industry advocates through educational events and leadership opportunities hosted alongside the junior national, such as the Bridging the Gap college and career fair, the Pen-to-Pen mentorship program and the junior board election and delegation.
Pen-to-Pen mentorship program participant Kristin Waters, Norborne, Mo., treasures the connections she made through the mentorships. “Being able to connect with other juniors across the country made me feel more confident and part of something bigger,” she says. “I really looked up to my mentors, and I hope I can be a positive influence for the younger kids I get to mentor now.”
Forging lifelong friendships and connections between peers is an NJHA hallmark, but the association also facilitates conversations between Hereford youth and industry professionals. The networks youth build during their junior membership provide opportunities for these young people as they further their education and enter their careers. Bridging the Gap college and career fair connects NJHA members with college representatives and industry professionals to learn about opportunities, discuss career paths and offer their resumes for scholarships and potential internships.
“(Bridging the Gap) is a great opportunity to explore different careers within our industry. It also gives juniors a chance to meet and connect with industry professionals that can help you pursue a career,” says Kendall Boatman, Rockford, Ill. “You never know, you might end up working with them one day, just because of having a simple conversation.”
This year, Bridging the Gap expanded outside the JNHE with a second college and career fair during the Faces of Leadership conference, hosted in Fort Worth, Texas. Boatman attended both Bridging the Gap networking events this year and saw value in the expanded offering.
“I like attending these events because I am able to explore different careers and opportunities within the agricultural industry,” she says.
Reaching further
Faces of Leadership is a great example of how the NJHA builds upon connections made ringside and translates these networks into real-world opportunities.
“Every time I attend junior nationals, I meet the coolest people, but never have much time to truly get to know them. Faces of Leadership has given me another opportunity to reconnect with the friends I’ve made and meet even more Hereford kids,” Tymber Billman, Rigby, Idaho, says.
Billman used the communication skills she learned at Faces of Leadership to connect with peers from across the nation.
“It’s so neat that we can come from all across the country for a few days not knowing each other at all, and then go home with friendships for a lifetime,” she says.
This year’s Faces of Leadership conference theme was “Even Leadership is Bigger in Texas,” and while Fort Worth served as a great background to learn about leadership at the intersection of the beef industry amid tours of Allflex USA and Texas Christian University’s ranch management program, NJHA once again proves that its biggest asset to the Hereford industry is cultivating a pipeline of future professionals, leaders and breed changers. The Building on Leadership Development (BOLD) conference expands upon leadership lessons learned at Faces of Leadership with a hand-selected group of college-aged participants that call the formative event a critical steppingstone in their development as leaders and future professionals. Another valuable building block for young agriculturalists is industry knowledge.
For the fourth consecutive year, NJHA’s commitment to education and breed research led the association to host the Fed Steer Shootout Field Day at HRC Feed Yards LLC in Scott City, Kan. Participants learned more about the cattle feeding and beef packing sectors while collecting performance data from their cattle during the expanded, two-day field day. This year the Fed Steer Shootout attracted 72 junior participants in 20 states — from California to Pennsylvania — which entered 211 head of Hereford and Hereford-influenced steers.
The NJHA Fed Steer Shootout and its affiliated field day offer junior members eye-opening insight about the beef industry. NJHA alumna and current New Jersey Junior Hereford Breeders Association advisor Abigail (Billing) Vander Groef, Newton, N.J., encourages young people to participate in the program. She believes the Fed Steer Shootout provides industry context and added opportunity for NJHA members residing in less agriculturally dense states that may not be able to feed cattle to harvest without such programs. “I wish I had done it sooner,” she says. “I wish I had known that I had the opportunity to do it sooner because it really changed a lot of things for me.”
As the NJHA builds upon its foundation of leadership, education and teamwork the association will continue to provide educational, networking and leadership opportunities, both inside and outside of the showring, for its more than 4,000 members for the next 25 years and beyond.
BOLD conference participants visited GKB Cattle, Desdemona, Texas, during the three-day event in April.
Top 10 showmanship contestants in each age division are recognized during a buckle ceremony prior to the start of senior showmanship finals at the VitaFerm® Junior National Hereford Expo.
Shane and Melissa Schaake, Grimmel Schaake Cattle Co, Manhattan, Kan., shared insights and opportunities with participants in the Bridging the Gap college and career fair during the Junior National Hereford Expo.
Mark Kypton Lofton, Wesson, Miss., carries the Mississippi flag through the ring during the 25th annual VitaFerm® Junior National Hereford Expo grand entry.
More than 100 Hereford juniors from 25 states attended the 2024 Faces of Leadership conference in Fort Worth, Texas, making a stop at the Cowboy Channel.
Participants in the NJHA Fed Steer Shootout have the chance to see how their steers are performing during the field day at HRC Feed Yards LLC in Scott City, Kan.
National Hereford Queen, Marie Prodell, Algoma, Wis., and state queens present the awards for the top 5 bred-and-owned females at the VitaFerm® Junior National Hereford Expo. This award is made possible through the GKB Cattle Youth Endowment.
Lauren Jones, Darlington, Wis., receives a 2023 Vanier Family Scholarship through the Hereford Youth Foundation of America.
Logan Topp, Grace City, N.D., receives a Hereford Herdsman Scholarship at the VitaFerm® Junior National Hereford Expo.
Everly Foster, Niles, Mich., competes in the judging contest at the VitaFerm® Junior National Hereford Expo.
Lauren Gatz, Fairview, Kan., received the Mead Memorial Scholarship presented by the Hereford Youth Foundation of America at the VitaFerm® Junior National Hereford Expo.
More than $2 Million
The Hereford Youth Foundation of America surpassed the $2 million milestone in scholarships.
This year, during 25th annual VitaFerm® Junior National Hereford Expo, the Hereford Youth Foundation of America (HYFA) surpassed $2 million in scholarships awarded to young people involved in the Hereford industry. Today, the Foundation awards more than $200,000 through 50 or more scholarships annually — a far cry from the first $750 awarded to a deserving student in 2004. National Junior Hereford Association (NJHA) members from 27 states have been awarded money to continue their education — representing added opportunities for young agriculturalists covering more than half of the country.
Since HYFA was established in 1989 as a not-for-profit 501(c)(3) corporation, the Foundation, its supporters and its board have provided Hereford youth with scholarships and educational opportunities. At the core of the Foundation’s four pillars — scholarships, leadership, education and research — is an unwavering commitment to educate youth, develop leaders and encourage young people to return to production agriculture, and this noteworthy financial milestone stands as proof of that promise.
More tangible proof of HYFA’s influence on creating the next generation of leaders are the testimonies of scholarship recipients. The generosity of the Vanier family alone has awarded nearly 100 young people more than $750,000 to date, and those gifts have nearly an immeasurable impact on their recipients.
“I was working three jobs to support myself and pay for my schooling on top of attending classes and taking care of my animals,” says Briana Katzenberger, 2016 Vanier Family Scholarship recipient. “The Vanier family changed my life with this scholarship by giving me the financial freedom I needed to focus on getting the most out of my education and to reach my goals.”
Today, Katzenberger serves as the trade show and channel marketing coordinator for the Dairy Farmers of Wisconsin, using her education to serve that agricultural industry. And she is not alone.
“Without a doubt winning a Vanier Family Scholarship along with numerous other HYFA scholarships allowed me to achieve my goal, but also paved the way for me to go on study abroad trips, attend industry conferences and events, be a part of multiple judging teams, and last but certainly not least the opportunity to pursue a master’s degree and Ph.D. in meat science,” says Keayla Harr, 2016 Vanier Family Scholarship recipient. “It is my hope that through my long-term goal of teaching and conducting research in meat science at a land grant university that I can continue to showcase and give back to the agricultural way of life.”
By paving the way for young people to further their education, HYFA and its donors have helped create the next generation of Hereford breeders, industry leaders, advocates and spokespeople — all of which are imperative for the future of the beef industry as fewer Americans are directly involved with production agriculture.
“Our voices in agriculture need to be heard now more than ever, and these scholarships are investing in the youth and believing in the future,” says Mallory Carlson-Vos, a three-time Vanier Family Scholarship winner and fifthgeneration agriculturalist.
Growing support, greater improvement
But it is not just the award recipients who have improved through HYFA’s support and efforts. The additional educational activities offered to NJHA members with the Foundation’s financial support, along with the growing scholarship program, has cultivated young people who are truly more prepared to take the next steps after their junior careers, as cited by HYFA scholarship selection committee members.
George Sprague, HYFA board vice president and scholarship selection committee member, notes that each year the applicants for the Foundation’s numerous scholarships seem better than the year before. “They were indeed an impressive group: thoughtful, accomplished, articulate and ambitious,” he says.
National Hereford Women (NHW) board member and interview panelist for the NHW-affiliated scholarships, Cameron Kolinski, was also impressed with the quality of young people that grew through their NJHA membership with HYFA support.
“Some of these juniors left me speechless during their interviews. Each year the pool gets stronger, making judging more challenging as they are all deserving,” she says. “These juniors possess a passion for others in the industry and give credit where it is due. I think the Hereford industry is in excellent hands with these young members, and the future is bright.”
As the Foundation continues toward its next milestone, demonstrating its support for NJHA members and youth in agriculture, young leaders will be left forever changed in the wake. And for that, they’re thankful.
“I will forever be grateful for the experiences and the opportunities provided through the NJHA, HYFA and all of the generous donors,” says Tyler Eldred, two-time Vanier Family Scholarship winner.
AMERICAN HEREFORD ASSOCIATION AND SUBSIDIARIES
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors, American Hereford Association, Kansas City, Missouri
We have audited the accompanying consolidated financial statements of American Hereford Association; Hereford Publications, Inc.; Certified Hereford Beef, LLC; American Beef Records Association; and Hereford Legacy Fund, LLC (collectively, the Association), which comprise the consolidated statements of financial position as of August 31, 2024 and 2023; the related consolidated statements of activities, functional expenses, and cash flows for the years then ended; and the related notes to the consolidated financial statements.
Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Association as of August 31, 2024 and 2023, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America (GAAP).
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audits of the Consolidated Financial Statements section of our report. We are required to be independent of the Association and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with GAAP, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Association’s ability to continue as a going concern for one year after the date that the consolidated financial statements are available to be issued.
Auditors’ Responsibilities for the Audits of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not absolute assurance, and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Association’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Association’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits, significant audit findings, and certain internal control-related matters that we identified during the audits.
Report on Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The supplementary schedules are presented for purposes of additional analysis and are not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from, and relates directly to, the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audits of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.
— K. Coe Isom, LLP, October 3, 2024, Lenexa, Kansas
CONSOLIDATED STATEMENTS OF
CONSOLIDATED STATEMENTS OF FUNCTIONAL EXPENSES – Years Ended August 31
The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS – Years Ended August 31
preserves pedigree records for owners and breeders; participates in and promotes the arrangement of fairs, exhibitions, and cattle shows to encourage the breeding of Hereford cattle; and assists with the promotion of the end product produced from Hereford cattle on behalf of Certified Hereford Beef, LLC.
Members and subscribers of AHA are primarily owners and breeders of Hereford cattle. The members and subscribers are located world-wide; however, the largest concentration is within the United States.
Hereford Publications, Inc. (HPI) is a for-profit corporation that provides publication services to Hereford cattle ranches and publishes a magazine periodically.
Certified Hereford Beef, LLC (CHB) is a not-for-profit association whose sole member is AHA. CHB strives to increase demand for Hereford cattle by promoting Hereford beef as a premium beef product under the Certified Hereford Beef ® trademark. CHB was formed as a limited liability company on September 27, 2000. Prior to that date, CHB’s activities were performed and accounted for within the Association.
American Beef Records Association (ABRA) is a not-for-profit association that is wholly owned by AHA. ABRA provides computer consultation in herd planning and management, breeding services, and marketing for commercial livestock of various breeds. ABRA ceased operations on November 11, 2022, and the entity dissolved on August 31, 2024.
Hereford Legacy Fund, LLC (HLF) is a not-for-profit association whose sole member is AHA. HLF holds the proceeds from the sale of AHA’s building in 2018 and makes distributions to the parent for a portion of its investment income to pay for the rent of the consolidated Association. HLF was formed as a limited liability company on April 12, 2018.
Check
Cash and Cash Equivalents – End of Year $419,662 $755,093
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
The
Notes to Consolidated Financial Statements
1 — NATURE OF ORGANIZATION AND OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation The accompanying consolidated financial statements include the accounts of American Hereford Association (AHA) and its wholly-owned subsidiaries: Hereford Publications, Inc.; Certified Hereford Beef, LLC; American Beef Records Association; and Hereford Legacy Fund, LLC. All significant intercompany transactions have been eliminated in the consolidation. Collectively, the consolidation is hereafter referred to as the Association.
Nature of Organization and Operations AHA is a not-for-profit association that conducts research and experiments in the breeding of Hereford cattle; compiles and
A majority of the Association’s business activities are with customers in the cattle industry. Therefore, a substantial portion of its debtors’ ability to honor their commitments is dependent upon the cattle economic sector.
Consolidated Financial Statement Presentation The Association classifies its information regarding net assets and revenues, expenses, gains, and losses based on the existence or absence of donor-imposed restrictions. Accordingly, net assets of the Association and changes therein are classified and reported as follows:
Net Assets Without Donor Restrictions: Net assets in this category are not subject to donorimposed restrictions and may be expended for any purpose in performing the primary objectives of the Association. These net assets may be used at the discretion of the Association’s management and the Board of Directors.
Net Assets With Donor Restrictions: Net assets in this category are subject to stipulations imposed by donors. Some donor restrictions are temporary in nature; those restrictions will be met by actions of the Association or by the passage of time. Other donor restrictions are perpetual in nature, whereby the donor has stipulated the funds be maintained in perpetuity.
Donor-restricted contributions are reported as increases in net assets with donor restrictions. When a restriction expires, net assets are reclassified from net assets with donor restrictions to net assets without donor restrictions in the consolidated statements of activities. The Association has no net assets with donor restrictions.
Measure of Operations The consolidated statements of activities report all changes in net assets, including changes in net assets from operating and nonoperating activities. Operating activities consist of those items attributable to the Association’s ongoing animal services and interest and dividends earned on investments. Nonoperating activities are limited to resources that generate return from investments and other activities considered to be of
or
Basis of Accounting The accrual method of accounting is used, which recognizes income in the period earned and expenses in the period incurred.
Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, the Association considers all money market investments and highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Investments amounting to $374,344 and $662,008 were considered to be cash equivalents at August 31, 2024 and 2023, respectively.
The Association maintains cash on deposit in various financial institutions. Due to the nature of the Association’s cash flow, amounts on deposit in individual banks may temporarily exceed the applicable coverage of the Federal Deposit Insurance Corporation throughout the year.
Accounts Receivable and Allowance for Credit Losses Accounts receivable are stated at the amount the Association expects to collect. The Association maintains allowances for credit losses for estimated losses resulting from the inability of its customers to make required payments. Management considers the following factors when determining the collectability of specific customer accounts: customer credit worthiness, past transaction history with customer, current economic industry trends, forecast of future events, and changes in customer payment terms. Past due balances of 90 days and other higher risk amounts are reviewed individually for collectability. If the financial condition of the Association’s customers was to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based on management’s assessment, the Association provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. The Association’s receivables are considered past due based upon contractual terms and are automatically charged off after three years. HPI’s policy states that accounts with outstanding balances beyond 60 days will accrue interest at 1.5% per month; balances beyond 90 days will no longer be provided with services; and balances beyond 120 days may be turned over to a collection agency.
Management believes that the historical loss information it has compiled is a reasonable base on which to determine expected credit losses for trade receivables held at August 31, 2024, because the composition of the trade receivables at that date is consistent with that used in developing the historical credit-loss percentages (i.e., the similar risk characteristics of its customers and its lending practices have not changed significantly over time). Management has determined that the current and reasonable and supportable forecasted economic conditions are similar to the economic conditions included in the historical information.
Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on the first-in, first-out method.
Investments The Association’s investment portfolio is subject to the investment policy set forth by the Board of Directors. Investments are comprised of debt and equity securities and are carried at fair value. The fair value of investments is based on quoted fair prices for those investments or similar investments as of August 31, 2024 and 2023. Gains or losses on sales of investments are determined on a specific-cost identification method. Unrealized gains and losses are determined based on year-end market values and are reported in the consolidated statements of activities as increases or decreases in net assets. Fair Value Measurement Accounting standards generally accepted in the United States of America (GAAP) define a fair value as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants on the measurement date.
The Association determines the fair value of investments using three broad levels of input as defined by related accounting standards.
Level 1: Observable inputs – unadjusted quoted prices in active markets for identical assets and liabilities;
Level 2: Observable inputs – other than quoted prices included in level 1 that are observable for the asset or liability through corroboration with market data; and
Level 3: Unobservable inputs – include amounts derived from valuation models where one or more significant inputs are unobservable.
The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used during the years ended August 31, 2024 and 2023.
Equity Securities: Equity securities are valued at the closing price reported on the active market on which the individual securities are traded.
Fixed Income Securities: Corporate, government, agency, and municipal bonds and fixed-income securities are generally valued by a computerized pricing service or, for less actively traded issues, by utilizing a yield-based matrix system to arrive at an estimated market value.
Exchange Traded Funds: These assets are valued at the net asset value reported on the active market on which the securities are traded. The valuation occurs throughout the day based on the market value of the underlying securities, as well as the market supply and demand for the particular exchange traded fund.
Mutual Funds: Each investor in the mutual fund will typically receive units of participation in the mutual fund. These units are valued daily, based on the underlying securities owned by the mutual fund, which are usually publicly traded debt or equity securities.
Revenue Recognition Revenues from member dues, advertising and subscription, and hosting database services are recognized over the term of the contract. The contracts are generally for a term of one to three years. Advertising and subscription revenue is deferred and included in prepayments for advertising and subscription in the consolidated statements of financial position. Revenue is deferred at the time of sale to the customer and is recognized monthly, as outlined in the contract. At the end of the subscription period, the remaining balance is recognized as revenue, reported as advertising and subscription revenue in the consolidated statements of activities. The balances of the prepayments for advertising and subscription revenues were $138,844 and $147,483 for the years ended August 31, 2024 and 2023, respectively.
Publication and advertising, genetic services, creative services, retail, and marketing services are recognized when the service is provided.
A five-step model is used to determine the amount and timing of revenue recognized. The Association’s additional disclosures are included in note 12.
Property and Equipment Property and equipment are stated at cost and depreciated using the straightline method over the estimated useful life of each asset. The estimated useful lives of assets range from 3 to 30 years for consolidated financial statement purposes. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statements of activities for the period. The Association capitalizes all assets, major replacements, and betterments with a useful life greater than one year and cost in excess of $1,000. Maintenance and repairs are charged to expenses as incurred.
Long-lived assets to be held and used in the course of business are tested for recoverability whenever events or changes in circumstances indicate that the related
carrying amount of an asset may not be recoverable. When required, impairment losses on assets to be disposed of by sales are reported at the lower of carrying amount or fair value, less cost to sell.
Operating Lease Right-of-Use Assets and Liabilities The Association obtains the right to control the use of various assets under long-term agreements. The Association evaluates contracts to determine whether they include lease and non-lease components. The Association has elected to exclude any variable payments for non-lease components, such as maintenance and insurance, from lease expense. Leases are recognized on the balance sheets as right-of-use assets with a corresponding lease liability.
Compensated Absences Employees are entitled to one week of paid time off each year. Unused paid time off cannot be carried over from one year to the next and is not paid out upon termination. Accordingly, no liability for accrued paid time off has been recorded. The Association’s policy is to recognize the costs of compensated absences when actually used by employees.
Functional Expenses The costs of providing program and other activities have been summarized on a functional basis in the consolidated statements of activities. The presentation of expenses by function and nature is included in the consolidated statements of functional expenses. The Association charges direct expenses incurred for a specific function directly to the program or supporting service category. These costs can be specifically identified as being incurred for the activities of that program or supporting service. Other costs that are incurred by the Association that benefit more than one program or supporting service are allocated on a reasonable basis that is consistently applied. Payroll and related costs are allocated based on estimates of time and effort; other costs, including depreciation, certain occupancy and office costs, and consulting, are allocated based on estimates of usage or benefit received by each function. The Association reevaluates its allocation method each year to determine if there are adjustments that are necessary to the allocation method based on actual activities conducted during the year.
Advertising Costs Advertising costs are charged to expense when incurred. The amounts expensed during the years ended August 31, 2024 and 2023, were $202,567 and $155,595, respectively.
Income Taxes AHA, ABRA, CHB, and HLF are exempt from federal income tax under section 501(c)(5) of the Internal Revenue Code ; therefore, no provision for federal or state income taxes has been made in the accompanying consolidated financial statements. However, AHA, ABRA, CHB, and HLF are subject to income taxes on any net income from unrelated business activities. AHA, ABRA, CHB, and HLF have been classified by the Internal Revenue Service as organizations that are not private foundations under Section 509(a)(2).
HPI is a taxable entity, and is therefore subject to federal and state income taxes. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards; deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. HPI includes interest and penalties related to income tax liabilities, if any, in income tax expense. Income tax credits are accounted for by the flowthrough method, which recognizes the credits as reductions of income tax expense in the year utilized.
Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect certain amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, the reported amounts of revenues and expenses during the reporting period, and the disclosures in the consolidated financial statements. Actual results could differ from those estimates.
Implementation of New Accounting Standards On September 1, 2023, the Association adopted Financial Accounting Standards Board Accounting Standards Update 2016-13, Financial Instruments –Credit Losses, and all related subsequent amendments. This guidance significantly changed how the Association will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The most significant change in this standard is a shift from the incurred loss model to the expected loss model. Under the standard, disclosures are required to provide users of the financial statements with useful information in analyzing the Association’s exposure to credit risk and the measurement of credit losses. Financial assets held by the Association that are subject to this guidance were accounts receivable.
Evaluation of Subsequent Events The Association has evaluated subsequent events through October 3, 2024, the date the consolidated financial statements were available to be issued.
2 — AVAILABILITY AND LIQUIDITY
The Association is substantially supported by the services it provides its members. Revenue from services provided can be affected by the number of registered cattle and current economic conditions. The following represents the Association’s financial assets: August 31 2024 2023
Financial Assets – End of Year
Financial Assets Available to Meet Cash Needs For General Expenditures Within One Year $19,527,529 $17,051,155
The Association has $19,527,259 available for general expenditures. This would cover approximately two years of expenses, even without the income it has budgeted.
3 — ACCOUNTS RECEIVABLE –
NET
Accounts receivable consisted of the following: August 31 2024 2023
The accounts receivable, net of the allowance for credit losses of $5,119 was $601,034 as of August 31, 2022.
4 — FAIR VALUE MEASUREMENTS
The following tables set forth by level, within the fair value hierarchy, the Association’s assets at fair value:
5
6 — LEASE OBLIGATIONS
The Association leases a copier from an unrelated third party under an operating lease. The lease requires monthly lease payments of $306, with a termination or renewal date in December 2028.
The Association leased a copier from an unrelated third party under an operating lease. The lease required a monthly lease payment of $431, and had a termination or renewal date in January 2024.
The Association leases a postage machine from an unrelated third party under an operating lease. The lease requires monthly lease payments of $491, with a termination or renewal date in November 2028.
The Association leased a postage machine from an unrelated third party under an operating lease. The lease required a monthly lease payment of $540, and had a termination or renewal date in May 2023.
The Association leases an office building from an unrelated third party under an operating lease. The lease requires monthly lease payments that increase each March, according to a set payment schedule based on a price per square footage rented. The monthly lease payments through August 31, 2024 and 2023, were $22,638 and $22,329, respectively, with a termination or renewal date in March 2028.
Generally, the Association has elected to exclude any variable payments for non-lease components, such as maintenance and insurance, from lease expense. The operating lease does not specify an implicit interest rate. Therefore, the incremental borrowing rate was used, based on information available at the commencement date, to determine the present value of future payments when capitalizing the operating lease right-of-use assets and operating lease liabilities.
The Association’s lease expense was as follows:
Years Ending August 31 2024 2023
Operating leases
Amounts paid through cash were $295,191 and $293,402, respectively, for the years ended August 31, 2024 and 2023.
The aggregate minimum annual lease payments under operating lease arrangements and discount factors used in calculating minimum lease payments on right-of-use assets are as follows:
The Association applied for forgiveness of the PPP loan on November 30, 2020, with respect to these covered expenses, but was not granted forgiveness by the SBA. On November 11, 2021, the Association renewed the PPP loan with UMB Bank for the principal amount of $535,600. The note matures on April 21, 2025, and has a fixed rate of 1% per annum.
Interest expense on long-term debt was $1,987 and $3,686 for the years ended August 31, 2024 and 2023.
The aggregate maturities of the above long-term debt for the years subsequent to August 31, 2024, are as follows:
Years Ending August 31
2025 $110,377
8 — LINE OF CREDIT
The Association has an unsecured line of credit with UMB Bank which provided a maximum available amount of $250,000 at August 31, 2024. The balance on the line of credit at August 31, 2024, was $-0-. The line of credit matures on November 30, 2024, and had a variable interest rate of 8.5% at August 31, 2024. Interest expense during the year ended August 31, 2024, was $0-.
The Association had an unsecured line of credit with UMB Bank which provided a maximum available amount of $250,000 at August 31, 2023. The balance on the line of credit at August 31, 2023, was $-0-. The line of credit matured on November 30, 2023, and had a variable interest rate of 5.5% at August 31, 2023. Interest expense during the year ended August 31, 2023, was $-0-.
9 — INCOME TAXES
The provisions for income taxes consisted of the following components: Years Ended August 31 2024 2023
Current Income Tax Benefit (Expense)
Income Tax Benefit (Expense)
Deferred Income Tax Benefit (Expense) Relating to:
7 — LONG-TERM DEBT
On April 21, 2020, the Association received a loan pursuant to the Paycheck Protection Program (PPP), a program implemented by the U.S. Small Business Administration (SBA) under the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) for an aggregate principal amount of $535,600. The PPP loan bears interest at a fixed rate of 1% per annum, had the first 10 months of interest deferred, and has a term of five years.
Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of HPI’s assets and liabilities.
The tax provision differs from the expense that would result from applying statutory rates to income before income taxes because of the valuation allowance applied against the deferred income tax assets.
The components of the deferred tax assets were as follows:
10 — COLLECTION OF ARTWORK
The Association has a collection of artwork, appraised at approximately $639,200 at August 31, 2024 and 2023, that is on public display at the Association’s headquarters. The most recent appraisal is as of April 2015 for new pieces added in 2015, and as of August 2011 for the rest of the collection. The Association has adopted a policy of not capitalizing the collection of artwork in its consolidated financial statements. Accordingly, no collection items are recognized as assets, whether they are purchased or received as a donation. Purchases of collection items are charged to expenses in the period when purchased. Proceeds from the sale of collection items are used to purchase new collection items. The Association plans to hold the collection items indefinitely. There were no pieces added to the collection during the years ended August 31, 2024 and 2023. There were no pieces disposed of during the years ended August 31, 2024 and 2023.
The Association insures the collections with a policy that has a face value consistent with the appraised values.
11 — RETIREMENT PLAN
The Association provides eligible employees with a 401(k) qualified retirement plan. The Association also established a profit sharing plan for all eligible employees. The plan provides for employer and employee contributions based upon a percentage of annual compensation. Employer contributions for the years ended August 31, 2024 and 2023, were $102,430 and $121,693, respectively.
12 — REVENUE RECOGNITION
The Association’s major revenues are all within the United States of America and recognized as follows:
Membership Services Membership services include registrations, dues, and service fees that fund research, advertising, and software development, as well as discounts for subscriptions and genetic services for the current fiscal year. Revenues are recognized over the term of the contract.
Advertising and Subscriptions Advertising and subscriptions include revenues earned from catalog and magazine subscriptions and advertising, generally for a term of 12 months. Revenues are recognized over the term of the contract.
Publication and Advertising Services Publication and advertising services include fees from advertising in Hereford World, as well as annual publications and banner ads on the website. Revenues are recognized as the services are performed at a point in time.
Genetic Services Genetic services includes revenues from improving the Hereford breed, DNA testing, blood typing, and genomic services. Revenues are recognized as the services are performed at a point in time.
Hosting Database Services Hosting database services include fees from hosting database services on the Association’s servers, generally for a term of one to three years. Revenues are recognized over the term of the contract.
Creative Services Creative services include revenues from promotional media services. Revenues are recognized as the services are performed at a point in time.
Marketing Services Marketing services include revenues from certifications and retail sales. Revenues are recognized as the services are performed at a point in time.
