Canadian Cattlemen - Nov. 14, 2011

MIXED FARMING ON A GRAND SCALE • TAGS TELL A STORY • WHATʼS A GMR? • BEEF WATCH www.canadiancattlemen.ca

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ABOUT RISK JACK

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de

BOER, MONARCH, ALTA.

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PS I T G LES IN TA 3 V L D .4 A C AN G P BOVINE RESPIRATORY DISEASE, SHIPPING FEVER, PNEUMONIA…

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logos have white release built into artwork.

1. Tag qualifying cattle with Canadian Angus Rancher Endorsed Tags.

2. Give the Canadian Angus Association permission to share your contact information with buyers looking for Angus tagged cattle.

3. Sell Angus tagged cattle at Canadian Angus Rancher Endorsed Sales or contact licensed participants directly.

4. Cash cheque and appreciate the value and efficiency of the Angus breed and its superior meat quality.

Visit www.cdnangus.ca for details about Canadian Rancher logos haveAngus white release built intoEndorsed. artwork.

Canadian Angus Association 142, 6715 – 8 Street NE Calgary, AB T2E 7H7 Phone: 1-888-571-3580 www.cdnangus.ca cdnangus@cdnangus.ca CAA_Cattlemen_October#1-2011.indd 1

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November 2011

Volume 74, No. 12

Established 1938 ISSN 1196-8923 Cattlemen Editorial: Editor: Gren Winslow 1666 Dublin Avenue, Winnipeg, MB R3H 0H1 (204) 944-5753 Fax (204) 944-5416 Email: gren@fbcpublishing.com Field Editor: Debbie Furber Box 1168, Tisdale, SK S0E 1T0 (306) 873-4360 Fax (306) 873-4360 Email: debbie.furber@fbcpublishing.com

FEATURES Tags tell a story...............................................................8 What’s a gmr?................................................................. 10 Let’s talk about risk....................................................... 12

Advertising Sales: Deborah Wilson Box 19, Site 3, RR 1, High River, AB T1V 1N1 (403) 325-1695 Fax (204) 944-5562 Email: deb.wilson@fbcpublishing.com Head Office: 1666 Dublin Avenue, Winnipeg, MB R3H 0H1 (204) 944-5765 Fax (204) 944-5562

Bales and corn stretch the grazing season................. 14

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Mixed farming on a grand scale. .................................. 18

Publisher: Bob Willcox Email: bob.willcox@fbcpublishing.com

Receiver cattle get a boost with bio-mos. ................... 24

Associate Publisher/Editorial Director: John Morriss Email: john.morriss@fbcpublishing.com

Some thoughts on processing grain and forages for feedlot rations. .................................................. 26

Production Director: Shawna Gibson Email: shawna@fbcpublishing.com Assistant Production Manager: Farrah Wilson Email: farrah@fbcpublishing.com

Beef watch....................................................................... 33

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Verified beef production................................................ 39

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Departments

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COMMENT............................................... 4 NEWSMAKERS......................................... 6 LETTERS.................................................. 6 NUTRITION............................................ 22 VET ADVICE.......................................... 30 HOLISTIC RANCHING.............................. 32 STRAIGHT FROM THE HIP...................... 36 RESEARCH............................................ 37 CCA REPORTS...................................... 38 PRIME CUTS......................................... 40 NEWS ROUNDUP................................... 42 PURELY PUREBRED............................... 48 THE MARKETS...................................... 51 MARKET TALK....................................... 53 SALES & EVENTS.................................. 54

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Cattlemen / november 2011 3

c o m m e n t

by Gren Winslow

A report card on trade

The Federal Market Access Team goes on the record

T

he 2010-11 Agriculture and Agri-Food Market Access Report released last month by Agriculture Minister Gerry Ritz and International Trade Minister Ed Fast is interesting for a couple of reasons.

First it demonstrates this government’s commitment to gaining greater access to markets for Canadian products. That’s not really news though.

Both of these ministers have been active on the trade file for quite some time, culminating in the formation of the Market Access Secretariat within Agriculture and Agri-Food Canada in 2009. The secretariat co-ordinates market access negotiations on agriculture products involving staff of the Department of Foreign Affairs and International Trade Canada on the diplomatic front and the Canadian Food Inspection Agency in technical discussions on import and export protocols.

The image makers in Agriculture Canada have given them the label of the Federal Market Access Team, and this document is its first report card on the progress to date.

It also serves to remind us that trade is a federal government responsibility.

In the past government tended to shy away from this type of report card, allowing the different commodity groups to inform their sectors about the progress or lack of it on the trade front.

Beef producers, for example, were used to receiving regular reports from the Canada Beef Export Federation.

In fairness these commodity-based reports did give us a bit of a myopic view of the world. China, for example, signed a co-operative agreement last year granting access for imports of Canadian deboned beef from animals under 30 months of age and tallow for industrial use as a first stage to full access for other beef products. Seventeen months later we are still waiting for the negotiators to agree on import protocols that will officially open this market to Canadian beef.

This report gives us no clue as to why the beef negotiations have taken so long. But it does show us that at the same time as our negotiations were plodding along China had agreed to remove the maximum limit on selenium for imported foods such as Canadian peas, accepted a solution to the H1N1 ban on imported pork and swine and found a way to keep the door open to canola shipments despite the taint of blackleg.

Obviously there is plenty of competition for the attention of those people at the trade table, and that is a role for the various commodity

4 Cattlemen / November 2011

groups. In our case it will be up to Canada Beef Inc. and the Canadian Cattlemen’s Association to keep the negotiators focused on beef by supplying sound data and feedback to help move the negotiations along.

One example of this feedback loop occurred last month.

It had to do with European import quotas for beef. Last November the European Commission agreed to give Canadians access to the 20,000tonne duty-free quota on hormone-free beef negotiated by the U.S. as compensation to resolve their WTO dispute on beef hormones. In March Canada negotiated a 3,200-tonne top-up to this quota starting in August, 2012.

That sounded great but as noted in this space last issue, Canada Gold Beef stopped producing beef for Europe when it found the rising cost of traded import quota in Europe ate up the premium needed to make this market profitable.

The Canadian Cattlemen’s Association (CCA) raised this quota allocation issue with Minister Ritz in September who in turn brought it up in discussions with the German Agriculture Minister when the two met last month in Berlin. Where it goes from there is anyone’s guess but the speed with which this concern moved up the chain of command in two countries is a hopeful sign. Perhaps it will also filter down to the team negotiating the free trade agreement between Canada and Europe.

It’s been a mixed year for the Federal Market Access Team on the beef file in other priority markets.

• In Indonesia a temporary ban on Canadian boneless beef and rendered animal byproducts was rescinded. But bone-in beef, some offal and tallow and live cattle are still banned.

• In Japan despite prolonged negotiations trade is still restricted to beef from animals under 20 months of age.

• In Mexico negotiations are ongoing to remove the ban on beef over 30 months of age.

• In Russia access was granted in 2010 for bonein beef under 30 months and boneless over 30 months from approved establishments.

• I n South Korea the ban on Canadian beef remains, although we may see a thaw in this dispute by year-end.

• In Taiwan ractopamine restrictions on beef, export certification for fetal bovine serum and testing for leucosis in bovine embryos are ongoing issues.

• In the U.S., COOL says it all. www.canadiancattlemen.ca

M.C. Quantock 850 head “Canada’s Cow SALE”

Big-Bodied fleshy cows.

100’s bred to Fleckvieh Semi bulls.

Powerful black cows.

Milk… and lots of it.

SATURDAY, DECEMBER 10 2011, Nilsson Bros in Vermilion AB These are the females behind year after year million dollar bull sales built on solid commercial demand. These cows are the “real deal”. 850 head of homebred, “one-iron” unique genetics in volume-100’s of half sisters, 100’s of “hard nosed” purebred red and black angus cows in their prime, 100’s of hybrid heifers bred and open in all our hybrid lines, absolutely all our purebred red and black replacement heifers.

“Unpampered real world cattle” that make “real money” everyday. We’ll sell our entire spring calving cowherd bred to Fleckvieh Simmental and Red and Black angus bulls for April and May calves. Reputation purebred cows at commercial prices. All our 2009 replacement heifers will sell, Red and Black Angus, Red and Black Angus X Simmental hybrids, Hereford X Simmental hybrids, Red Angus X Gelbvieh hybrids. All bred to red and black angus bulls for April and May calves. Our entire 2010 replacement crop will sell as “extra age” opens (14 months at sale time). We’ll sell them in groups to suit our customers and we’ll offer some choice for seed stock breeders to access outstanding individuals. Reputation purebred cows, potloads of half sisters.

We’ll buy back the bull calves... talk to Mac

Mac & Pat Creech

Call Mac... 1-800-561-BULL (2855) Red/Black Angus X Semi “Super Baldies” - bred and open.

email: mcquantock@hotmail.com Jim Pulyk NBI 780-853-0626 Ted or Chris at TBarC 306-933-4200

Sale live on DLMS

Every 2009/2010 replacement heifer sells-bred and open-none retained.

We’ve kept our 500 fall calvers and we will still be Canada’s Bull Supplier for years to come.

“Canada’s Bulls” BULL SALE

450 bulls

SATURDAY, JANUARY 28 2012, Lloydminster AB

Bull buying made easy...

We’ve been in this business for years and we’ve learned a few things along the way. Most important… you don’t last unless you do right by your customers. We’ve made bull buying a whole lot easier. Our bulls are good quality, all of them, well culled, they’re easy keeping, good looking, durable bulls that sire those “fancy calves the order buyers keep talking about.” Our bulls are older fall and summer born twos (22-26 months when you need them), old enough to be tough and not give trouble. Our bulls can all be left with us till spring, you don’t want new bulls around till you need them, so let us look after them. Our bulls are all delivered absolutely free in Western Canada and cost shared in the East.

Our bulls can be purchased sight unseen, in fact about half always are. We help select your bulls and they’re guaranteed to be what you want… ”true satisfaction on arrival”. Our customers trust and confidence in us make it all possible. Our bulls are affordable – 75% sell from $2000 to $4000, almost half bring about $2800 and all sell to solid commercial cattlemen. Our bulls are guaranteed like no others…you’ll have a bull to breed your cows no matter what…hard to get better than that! As sale time approaches you can view all our bulls on video on our website or we’ll send you your very own DVD and catalogue and you can show the neighbors. In fact, it’s probably easier and simpler to buy our bulls than buying bulls locally. You get great service, the best guarantee, lots of selection and your calves will be sired by nationally known bulls. It all helps to get them sold!

Our customers like the fact that all our cattle are managed and fed just like most all commercial cattle. *Free DVD *Free Catalogue *Free Delivery “Great Bulls” Call Today

Mac & Pat

200 Black & Red Angus

120 Red & Black Super Baldies

25 Hereford

25 H-2

40 Super Guppies

30 Charolais

... 9,300 Bulls ... 43 sales ... 73% repeat customers ...

Call Mac... 1-800-561-BULL (2855) email: mcquantock@hotmail.com

www.mcquantock.com Box 10888, Lloydminster, Alta. T9V 3B1

NEWSMAKERS Brent McCannell is the new executive director of the Manitoba Forage Council.

He has over 33 years of agriculture experience behind him, much of it as a farm Brent McCannell management specialist with Manitoba Agriculture, Food and Rural Initiatives. He is also the chairman of the board of directors of the Keystone Centre in Brandon.

The Beef Cattle Research Council (BCRC) that allocates producer checkoff dollars to research is looking for an extension specialist to oversee its technol-

LETTERS Royal disappointment

My son is a new 4-H member this year and was enrolled in the National Junior Beef Heifer Show at the Royal Winter Fair to complete his 2011 4-H year. This is the Olympics of the Junior Beef show circuit and 4-Hers work hard all year for the chance to qualify and be a part of a national level show hosted at the world famous Royal Winter Fair in Toronto.

After double-checking rules and entries, we sent in our forms one week early to ensure prompt arrival. The excitement and preparations have been building at our home knowing the honour of being a part of this event. Then

ogy transfer and communications with industry stakeholders and researchers.

Anyone interested should apply to Canadian Cattlemen’s Association research manager Andrea Brocklebank at brocklebanka@cattle.ca by Nov. 18.

We were saddened to hear of the untimely passing of barley breeder Mario Therrien, 58 in late September.

He was at his home recovering from surgery following a heart attack. Therrien worked at Agriculture and Agri-Food Canada’s Brandon Research Centre, where his credits include a number of barley varieties including the FB105 germplasm, with characteristics meant for swath grazing under Canadian Prairie

conditions. At the time of his death he was working on new barley cultivars with reduced levels of fusarium head blight and improved feed and forage quality with better yields.

Audrey Treichel has quit her job as communications manager with the Manitoba Beef Producers (MBP) to take a similar job across town with Manitoba Pork. Treichel was instrumental in rebranding the MBP when the group dropped the Manitoba Cattle Producers Association name.

The processing crew from Highway 21 Feeders at Acme, Alta., won the 2011 Pfizer Feedlot Challenge held Sept. 26 at Schooten & Sons Farms near Picture Butte. The challenge was divided into three segments — pen checking, chute processing and a written test.

Eight teams were put through their paces under the eye of three judges, Nebraska-based feedlot consultant, Dr. Kip Lukasiewicz, and Pfizer veterinarians Larry Frischke and Les Byers.

this week in our mail my son receives a letter from the Royal office — 10 days before the Royal Winter Fair officially opens — stating he will not be allowed to show at the 2011 show. It was decided that the nine year old 4-H members would not be eligible to show at the 2011 show. We did not receive a phone call, apology or an explanation for this more than disappointing letter.

We as parents, 4-H leaders and mentors are here to teach our youth to be accountable for their actions and to commit and follow through with the projects they start.

As a family who has participated at the Royal Winter Fair for four generations, this is a huge let down in the integrity of the Royal Winter Fair and the National Junior Beef Heifer Show.

It’s been musical chairs for the politicians after so many provincial elections.

Evan Berger, who was first elected as the MLA for the southwestern riding of Livingstone-Macleod in 2008, comes to the Alberta ag portfolio with a resume of farming and ranching experience plus nine years as reeve of the Municipal District of Willow Creek. He hails from Nanton and up to now has served as parliamentary assistant for then-sustain-

S. MACDONALD

Continued on page 54

At the Blue Q Ranch outside Troy, North Carolina, farm manager Mitchell Scheer relies on CRYSTALYX®. “It provides the best quality, consistency, product flexibility and availability. CRYSTALYX® gives us an acceptable cost per head, per day of supplementation with confidence in the product. And the selection of products fulfills all our needs for supplementation.”

To learn more visit www.crystalyx.com/feedlimitfinder or call 800.727.2502. © 2011 All rights reserved.

6 CATTLEMEN / NOVEMBER 2011

RBO1030- Scheer Testimonial Ad - Canadian Cattleman - Nov. - 7” x 3.375” - BW

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BRD PROTECTION… IT’S NOT ONE SIZE FITS ALL.

Different cattle have different BRD challenges and require different levels of protection. Most are not in the extreme high risk category – a category that includes lightweight commingled feedlot calves for instance – so why pay more for extreme protection? Treat your calves on arrival with a product that gets to work right away and remains active in the lungs1.

(gamithromycin) Injectable Solution

Ask your veterinarian about ZACTRAN common sense BRD protection ZACTRAN™ is a trademark of Merial Limited. © 2011 Merial Canada Inc. All rights reserved. ZACT-11-7560-JA 1. Huang RA, Letendre LT, Banav N, Fischer J & Somerville, BA. Pharmacokinetics of gamithromycin in cattle with comparison of plasma and lung tissue concentrations and plasma antibacterial activity. J. Vet. Pharmacol. Therap. doi: 10.1111/j.1365-2885.2009.01125.x.

IDENTIFICATION

TAGS TELL A STORY

T

And you should be able to read it with a quick glance

ags can give us a lot of relevant information at a glance. Over the years as a veterinarian I have seen many different tagging systems that have had a lot of thought put into them. Many applications require multiple tags especially now that we need to apply RFID tags and age verify our cattle. These double or multiple systems also have some intrinsic benefits.

With any tagging system there is the inherent cost of the tags, a long-term investment in the tagger and the need to have extra pins plus an acceptable inventory of tags on hand.

The largest or maxi-type tags provide the best visibility especially if they are used in cattle that have lots of hair in their ears.

The three main marking systems are either prenumbered, those marked with tag ink and engraved tags.

Prenumbered tags are available off the shelf or they can be ordered ahead with specific farm information on them.

Blank tags should be marked with thick ink in a way that all the relevant information can be applied to the front and even the back of the tag. I have seen purebred producers get both the dam and sire number on the tag as well as the calf’s birth date on the back. The dam’s number is really good to have if mothering up the calf. Over time even with the best of inks these tags do fade and may need to be rejuvenated or at least wiped off when they come through the chute again.

Engraved tags are the most expensive but are very pliable even in very cold weather and remain readable for the life of the animal.

Be sure you have someone with good penmanship mark the tags. The ability to read the tags is an integral part of your annual management. Which cows to cull, divide into breeding groups, AI, foot trim, bring in for calving or treat are all based on the ability to read the tag. I find you can almost predict the management on a beef operation by the tagging system employed.

Colours can be used in many different ways. Commercial producers may use different colours to quickly identify steers and heifers or different owners in a multiple owner operation. When these coloured and numbered tags are crossreferenced to the RFID tags it is easy to correctly identify an animal when one of the tags is lost.

Feedlots may use different colours to denote home pen location. This makes locating cattle very easy. Purebred breeders use colour to identify different breeds if they run more than one, or percentage and hybrid cattle. With a lot of the breeds having both red and black lines different colours are much more useful than you can imagine.

You want to be able to glean as much information as possible from a quick glance at a tag in the chute or out on pasture. Some use tags in the opposite ear to mean something.

Left may be heifers and right for steers. Purebred operators usually tag in the opposite ear from the tattoo. They may break from this and use the tattooed ear to tag freemartins or definite culls. Others mark twin on a freemartin’s tag to keep them from being inadvertently saved as replacements. Tattooing is mainly in the right ear but a lot of Charolais and Salers cattle are tattooed in the left ear.

8 CATTLEMEN / NOVEMBER 2011

A good tagging system minimizes mistakes.

I still really like using the letter system for the year they were born, whether commercial or purebred. If you simply remember every five years you can fill in the blanks remembering they don’t use I, O, Q, or V. The year 2000 was K, 2005 was R and 2010 X. At a glance then the age is immediately known and I find this very helpful. Most purebred producers also match the tag number to the tattoo, which makes it easy when tags are lost.

Find the brand of tag that works well for you and stick with it. Application guns and the size of the pins vary so don’t mix and match. Have spare pins and even a spare tagger when doing a big job. Over time taggers wear down and break. You don’t want an entire processing operation slowed down because of tagger or pin failure.

Use the slotted tag cutters for removing old, damaged, faint or fly tags. They are much safer than cutting the tag out with a butcher knife and quicker. The new tag can generally be placed in the existing hole with the cattle showing little concern.

Always be careful working around the head especially with fractious cows and all bulls. Keep at arm’s length.

Always have the tags ready and be prepared to retag some every time the cattle are processed.

Make use of the tags for other things. For culling we usually make a notch in the bottom of the tag. This brings to our attention to look up what the problem is in case it has slipped our minds. When preparing marker (gomer) bulls I generally notch the existing tag and we may put one in that says gomer on it.

A good tagging system minimizes mistakes either by your own crew or by people brought in to help with processing.

As tags have become more and more important as a herd identifier for age verification, traceability and as one of our eventual links to the consumer, it is to be hoped that tag retention will become less of an issue as manufacturers improve the quality.

Take pride in your tagging system. Remove extraneous ones and leave room for implants in the case of commercial cattle or room for the tattoo in the case of purebred cattle.

C — Roy Lewis DVM www.canadiancattlemen.ca

Hill 70 Quantock RancH

“Barn Burnin’ Bull Sale” Sat., Feb. 4, 2012

lloydminster, aB/Sk

1-800-665-7253 Times are one heck of a lot better... even though times are better, every decision is still very important. Sourcing your bulls at Hill 70 Quantock is the right decision. Each year our customer base grows... and the percentage of repeat buyers increases.

Our feeding and management programs are geared to NO problems for you and in turn NO problems for us.

Our hard nosed, no nonsense “dirt on the pants” approach sets us apart. When pondering your bright future... trust us... we’re here to help you succeed.

2011 was a good year in the beef industry, 2012 promises to be even more enjoyable!!

Horned Herefords Red & Black Angus Charolais Red & Black Angus X Simmental Red Angus X Gelbvieh (Primarily 2 year olds plus yearlings)

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Name

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# of Cows o Sight Unseen Purchase Plan o DVD of Sale Bulls o Red Angus o Black Angus o Charolais o Horned Hereford o Red Angus X Gelbvieh o Reg. Red Angus Females o Commercial Females (Bred & Open) o Black Angus X Simmental Hybrids Mail to: Hill 70 Quantock Ranch o Red Angus X Simmental Hybrids Box 756, Lloydminster, AB S9V 1C1 info@hill70quantock.com www.hill70quantock.com

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Reg. Red Angus Bred Heifers Plus Commercial Heifers (Bred & Open)… more head , more options

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Clip & Mail For Your Free Catalogue & DVD

Call, email or “clip and mail” to source your next bulls with us.

GRAZING

WHAT’S A GMR?

B

y late September our growing season was winding down here at Greener Pastures as my feeder pastures were starting to destock. I have three herds that were heading back to the feedlot soon and I’ll be down to one breeding herd left on pasture. I will give a little bit of supplementation as the winter sets in but I hope to keep them on the pasture and off the bale grazing until after Christmas.

If your grazing season is over, it is important to run some actual numbers and see how your pastures did this season. But we need to find out more than what they produced. We need to figure out the margin on each pasture. I have a simple Pasture Calculator to run a margin on each pasture. I use this in the spring to make some estimations of what the season should bring. Now that I have some actual numbers, I enter everything into my grazing chart and it calculates out my actual animal days/acre (ADA). This measurement is adjusted for animal type and size throughout the season. Once I have entered the data into my chart, it automatically calculates out my total animal days (AD) harvested and my ADA. It converts this to dollars per acre and then tells me my Gross Margin on each area, as well as my Gross Margin Ratio (GMR) and my Rent Ratio.

WHAT? No one ever told you that you are supposed to calculate a GMR? Then how do you know if you are making any money or not? You would not take off a crop of wheat without calculating the yield, would you? Why would you not calculate your yield on pasture land? For most, I suspect, it is because you might not want to know the answer.

My Gross Margin is calculated by taking the Gross Product from the pasture and subtracting all the direct costs.

The Gross Product is the amount of the grass grown in one season and we value it as if you are a custom grazer.

What is the market value of custom grazing in your area? You need to use market values in your margin. Let’s say we had grazed for 120 days with 100

10 CATTLEMEN / NOVEMBER 2011

The GMR on this pasture is 62 per cent and the rent ratio is 28 per cent. steers at a rate of $0.75/head/day. That is $9,000 in Gross Product.

The costs include any costs related to the grazing profit centre. These could include but are not limited to rent (or opportunity rent if you own it), water system costs, fencing costs and labour for spring set up and grazing. Don’t forget about your labour and equipment costs! That quad does not fix itself and yes it does depreciate. If rent was $20/acre and my other costs added up to $15/acre, this would give us a direct cost of $35/ acre. Your margin is the difference at $40/acre.

I might need to back up a bit here.

Some of you might be wondering what is an opportunity rent. If you own the land you are grazing, you still need to assign a rent value to the land. This needs to be set at market value for your given area specific to the type of land. What would someone else pay you in rent for your land? Or what are you paying in rent for similar land?

Remember, when you are calculating your gross margin, you are looking at economics. You use an opportunity rent on owned land, not your land payments. The land payments go into your financial calculations, not your economics. Clear as mud?

“So what the heck is a Gross Margin Ratio (GMR),” you ask. Well I’m glad you asked. It is a benchmark that I use to help me determine if I am making a profit or not. In any profit centre, it is calculated by dividing your Gross Margin by your Gross Product. If your pasture produced $75/acre and your costs worked out to $35/acre, then your GMR would be $40/$75= 0.53 or 53 per cent. In my business, I would

like to see my GMR at 50 per cent or higher. I need each pasture to produce at least double the value of the costs associated with it. If it can’t, then it is not contributing enough value to cover my business overheads and still produce a profit. And I am a believer that profit is more important than production.

I also use a Rent Ratio. This is another benchmark I use to see if my rent is reasonable for a given pasture.

This is simply the rental rate divided by the Gross Product. In this case, I like to see my Rent Ratio less than 40 per cent. In my example, this would be $15/$75= 0.20 or 20 per cent.

I am sure I have confused you enough for one day so I will wrap this up. I have made a lot of mistakes in my grazing management. I have paid too much for rent. I have put too much labour into a pasture. I rented pasture that was too far away. I have spent more on water systems than I should have. Simply put, I lost money. It was not until I learned how to calculate a margin on each pasture that I realized the mistakes I was making. Decisions are easy to make when you have the right information in front of you. Now thanks to my GMR, I turn down land that is not profitable, even if it has really good production. I believe that the most important part of any business is the management of the manager.

Education for yourself is well worth the investment. Do you know what your GMR is?

C — Steve Kenyon Steve Kenyon runs Greener Pastures Ranching Ltd. in Busby, Alta., www.greenerpasturesranching.com, 780-307-6500, email skenyon@greenerpasturesranching.com. www.canadiancattlemen.ca

Stromsmoe Herefords and Black Angus Video Sale!

Come early to view the cattle

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MANAGEMENT

F

LET’S TALK ABOUT RISK

aced with low grain prices for crops they were growing on rented land and interest rates soaring above 20 per cent in the early 1980s, the de Boer brothers of Monarch, Alta., took what they saw as a calculated risk and established a 2,400-head custom feedlot.

Thinking back on their entry into the cattle feeding business in 1983, Jack de Boer says going from zero to 1,800 head in the first year with no background whatsoever in the cattle business was on the risky side. He and his brothers, Dick and Simon, felt that if they were careful to control the risk, at least they could make a living and, hopefully, profit once in a while.

Speaking at the forum for young producers during the Alberta Beef Industry Conference, de Boer and his son, Darren, offered some insight into risk management strategies they’ve put in place through the years at Monarch Feeders.

Initially, they managed risk by expanding the business in small increments, adding pens to custom feed a few more head each year. Seeing that customers liked the job they were doing, they decided they might as well feed cattle for themselves and gradually worked into owning all of the cattle they feed.

It wasn’t long before the lack of cropland for spreading manure forced their hand to buy land of their own.

Not many of their grain-growing neighbours appreciated the value of the nutrients and organic matter in cattle manure back in those years, de Boer says.

Having their own land helped to mitigate feed supply and cost risks as 12 CATTLEMEN / NOVEMBER 2011

Jack de Boer

Darren de Boer

well. Since they weren’t too keen on expanding the grain operation, they purchased equipment to put up their own silage.

With lending rates still hovering in the double digits, they decided they needed to spend more time working on the business rather than in it.

To protect what they had established they created a holding company for the hard assets and an operating company for day-to-day business operations. Profits are transferred to the holding company, then given back to the operating company as a loan without interest.

The difference between the two business structures is important in the event of foreclosure, de Boer explains.

With the holding company, the shareholders are second in line after the bank to get paid; whereas, with an operating company, the shareholders

are last in line after the bank, Revenue Canada, and unsecured creditors. Another benefit of this structure is that if the operation is forced into bankruptcy for any reason, the land, buildings and equipment can’t be touched by the bank and creditors, giving you the ability to start a new operating company and still have your infrastructure in place to continue operating.

Whatever you do, he says its important to credit-proof your operation by negotiating with banks to give only what’s necessary for collateral — even though they might ask for everything. As you pay down the debt, ask the bank to return the land titles they are holding as collateral but no longer need to cover the outstanding debt.

Continued on page 13 www.canadiancattlemen.ca

Continued from page 12

Aside from having the land to grow their own feed, the best hedge to protect the operating company seemed to be selling and buying cattle every week to help spread market risk.

The first generation’s risk-management strategies served the family well. Today, Monarch Feeders is a 15,000-head feedlot, owning its cattle, with a land base of 10,000 acres in Alberta and Saskatchewan, and managed for the most part by the second generation.

Second generation saavy The second generation is equally well versed as the first when it comes to managing risk.

Darren says he saw the feedlot as a good business and one with which he wanted to be involved. Feeling that he could bring something more than labour alone to the business, he went on to obtain a bachelor’s Degree in finance from the University of Lethbridge. His cousins — Jason, Jeff and Dan — have also become involved in the family business since taking their post secondary training at Lethbridge or Olds College.

Identifying your risks is the first step, says Darren. The best way he has found to keep up to speed with what’s going on in the industry and understand the risks is to stay tuned to industry news and views and keep in touch with grain dealers, cattle buyers and others in the industry. These connections give him the background necessary to make educated decisions going forward.

The risks are many, he says, but the greatest risk for a custom feeder is not having customers. “We do take on the biggest risk by owning cattle, but having ourselves as our main customer and keeping the feedlot full of cattle, helps to mitigate the risk for the feedlot business,” he explains. “It’s easier dealing with yourself as the customer because you know the type of cattle you want to fit your feeding regime, so there won’t be surprises.”

Custom feeding does have an advantage in that you operate on margins so you know approximately what your income will be. That can also be a disadvantage because it voids any opportunity in the marketplace to make more than the set amount per head.

Darren identifies the biggest risks for Monarch Feeders in recent years as being the fluctuation in fat and feeder prices, exchange rates and input costs, specifically feed costs.

The farm still produces cash crops, mainly canola and wheat, barley grain to meet some of its feed requirements and, most importantly, it is self-sufficient in producing its own barley and corn silage.

Riding out the ups and downs by buying and selling every week is still one of the best ways to mitigate market risk. Now, they regularly use tools such as contracts with packers, options and hedging the Canadian dollar when selling fat cattle, and contracting grain to lock in at least part of their feed grain costs.

Purchasing cattle price insurance is something they consider week by week. It can be advantageous during downturns in market prices because it offers an opportunity to set a steady bottom price, yet leaves you open to take advantage of rebounds in market prices.

“It’s easier to take risks if you learn how to take calculated risks, that is, consider both the upside and the www.canadiancattlemen.ca

downside,” Darren says. For example, the farm recently diversified its holdings by making a major investment in something less risky than cattle — 5,000 acres of cropland that they’ve been converting to grass for pasture near Raymore, Sask.

“We have always been reliant on the fall run and that means you pay the going price when everyone else is in the market to buy. Now, as we go through the summer, we can buy lighter cattle for grass then package them up for the feedlot,” he explains. “We hope the land will appreciate in value, too, but when we were making the decision we asked ourselves whether if it went sideways or down, would it break the feedlot business.”

Another risk assessment scenario was the purchase of their own trucking outfit to gain more control over operating costs by reducing their reliance on custom haulers for cattle and hay.

He has heard people talk about the increase in labour costs and having to compete with high oil patch wages, however, that’s not a new trend for his generation — it’s just been a fact for as long as he has been involved in the family business. The challenge is more one of finding employees than losing them to higher-paying jobs because wage is just one consideration for those who choose to work at the feedlot.

He feels that today, it is more important than ever to hire people to work in your business so you have time to work on the business.

C — Debbie Furber

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GRAZING

BALES AND CORN STRETCH THE GRAZING SEASON

W

ayne Heinrichs doesn’t aspire to any one particular beef production philosophy, but pulls together information from many schools of thought to customize a winter-feeding system for his beef operation near Brandon, Man. His goal as the system evolves is to find the most economical way to winter his herd without sacrificing performance and without spending a lot of time feeding because he holds down a full-time job off the farm as well.

Standing against a backdrop of corn that will be grazed this winter, Heinrichs shared some of his insights with producers during the Manitoba Pasture Tour in early August.

By participating in local WADO (Westman Agricultural Diversification Organization) trials, he found a corn variety that offers the right combination of cob development and leaf retention for his growing conditions. It’s important to have kernels because they provide a large part of the energy in the winter grazing ration, but you don’t want them to mature and dry down as you would if harvesting the corn for grain, he explains. Ideally, they should be a little on the soft side when the first killing frost hits. At this stage, they are much more digestible than fully ripened kernels and won’t roll straight through the cows. By the same token, you don’t want the leaves so dry that they blow away on the first windy day after the frost.

He balances the ration with alfalfa and alfalfa-grass bales to boost the calcium and the protein levels. The hay is grown adjacent to the corn and placed alongside the perimeter of the corn field. Then it’s just a matter of setting them into the corn and removing the strings before the snow flies.

The corn provides great protection from the wind for the cows and the hay bales, while the bales become part of the temporary fencing system, holding pigtail posts horizontal to the 14 CATTLEMEN / NOVEMBER 2011

Wayne Heinrichs ground for the electric cross-wires as he moves them down the field during the winter.

Heinrichs uses two cross-wires, leapfrogging them with each move so that the next allotment of corn is already fenced off by the back wire when he rolls up the front wire. Moving the fence does take longer — maybe 30 or 40 minutes — as the snow gets deeper.

To make the job easier in those conditions, he uses the tractor to strike out the line for the new wire.

There’s an upside, too, to all of that snow trapped by the standing corn. Protected from the wind, it stays loose on the surface, making it easy for the cows to eat as their water source, and fluffy enough to provide warm, clean bedding.

In designing the system, he starts by estimating corn grain yield and determines how much area he will need for three days of grazing to provide at least 10 pounds and no more than 12 pounds of corn grain (18 pounds of whole corn plants) per head per day.

They do eat more grain the first day into a move, and, therefore, less on the third day, however, 10 to 12 pounds per head per day seems to work well

to meet their energy needs and yet prevent grain overload problems, Heinrichs explains.

He places the alfalfa bales to supply 10 pounds of dry matter per cow per day within the three-day allotment of corn. The quality of the bales progresses with the stage of gestation so that cows eat through the lower-quality bales earlier in the winter and work their way into the best-quality bales as calving approaches at the end of the corn-grazing period.

Straw completes the ration, but the bales are mainly there as a beacon of sorts to signal that the cows are running short on feed, he says. The winter grazing program is based on three-day moves, however, during cold spells the cows may increase their consumption and need to be moved more often.

When they start eating the straw, he knows it’s time to move on.

His objective is to maintain the energy level on an even keel so that the cows have adequate body condition to withstand the cold snaps. When the weather takes a turn for the worst, he ups the corn allotment a bit or provides extra hay bales. This works much better than cutting back on energy too much during mild spells, then bumping it up a lot during cold spells.

Bale grazing within the corn field offers flexibility in that it’s simple to make those kinds of adjustments by juggling the corn and hay to provide more or less of either to compensate for weather conditions, meet nutritional requirements, or extend the days on corn at either end of the corn-grazing season.

He estimates the corn and alfalfa ration costs a dollar a day per cow. It costs $200 per acre to sow the corn, which works out to 35 cents for 10 pounds of corn grain. Threshing the corn and feeding it daily by some other method in another type of system would cost about $1.20 for the 10 pounds of corn per head per day.

Continued on page 16 www.canadiancattlemen.ca

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Taking the corn for silage would present the same scenario, adding cost and time to harvest the silage and feed it back out.

Heinrichs doesn’t scrimp on corn inputs, figuring that if he is going to go to the work of sowing a crop and is relying on it for at least three months of winter grazing, it’s worth getting the most out of it as possible.

The corn seeding expenses include the price of the seed, fertilizer, herbicide and land costs. He keeps a lid on field equipment costs by running older, but reliable equipment and brings in a custom operator to combine a barley crop every few years to fill his bin as a backup grain supply.

The corn and hay are grown in rotation on the same parcel of land with 35 to 50 acres available for corn each year. He takes out some hayland every four to five years, sows corn for grazing on that piece for the next four or five winters, then puts it back into alfalfa or alfalfa-grass hay. During the last year of corn grazing on that parcel, he takes out another hay field to have it ready for corn the following year. This rotation maintains forage production at the highest level possible and meets some of the fertilizer requirements for the corn crop, while the manure left behind from the corngrazing rotation provides fertility and organic matter to get the forage crop off to a good start.

Generally, he takes a cut of hay then sprays and, or discs it out that fall and works it again in the spring.

This method helps to control weeds and open the surface of the soil to capture warmth from the sun in the spring before planting corn. Being a warmseason species, corn gets off to a much better start when it is sown into warm soil, he explains. In the Brandon area, that’s usually sometime from the middle to the end of May. The corn has never let him down.

In fact, this year was the closest he has ever come to not getting a crop due to the spring flooding that delayed and prevented seeding much of the land in the area. He was ready and waiting to take advantage of a small window of opportunity to seed on May 29.

Heinrichs counts on corn-and-bale grazing from sometime in late December or early January through to the second or third week in March when the 16 Cattlemen / November 2011

Bales are positioned to supplement the corn and double as fence posts. frost starts coming out of the ground.

He aims to have the cows in the yard at least a week before the start of calving on April 1 — that’s the only aspect that’s not flexible, he adds. The yard location offers a reliable water source and provides the highest and driest ground for calving.

Six weeks later, around the middle of May, the pairs are back out in the fields on stockpiled grass, which is a mix of mainly meadow brome and orchard grass. He sets out a few hay bales, mainly as an indicator as to whether they are getting enough to eat. Oftentimes, the bales are still there when the cows move on to summer pastures in early June. He finds that the cows really go for the green grass growing in the bottom of the stockpiled forage and the calves seem to explode in growth with the increase in milk production, clean environment and protection from the elements in the tall stockpiled grass.

Not only does the stockpiled forage benefit the cattle, but it gives the summer pastures time to get off to a good start. He might bring the cows back to the stockpiling pasture once during the summer rotation to skim the top growth, which promotes stooling, then it’s left to be ready for the calf crop the following year.

As summer grazing draws to an end, it’s on to swath grazing barley and, or millet. He generally sows the cereals during the first week or so of July and cuts them in late August or early September, depending on the growing season.

Heinrichs has been trying some alternative forage varieties, such as an orchardgrass-hybrid brome blend, and is considering tall fescue for some low-lying areas as he renovates pastures. Seed companies now offer a wide array of forage varieties and he says it’s well worthwhile to take advantage of the expertise of their agronomists and provincial specialists who can offer assistance with selecting forages that will meet your needs in your growing conditions.

His herd currently numbers 160 cows and 30 bred heifers of Angus, Red Angus and Simmental breeding.

He uses black Simmental bulls in combination with an artificial insemination (AI) program, which helps to reduce the number of bulls he has to carry and is a convenient way to introduce new bloodlines.

This year’s group of bred heifers is a special lot from his top 30 cows AI’d with female-sexed semen from a proven Angus bull to produce 30 heifers to build up his herd with quality females that are adapted to his management system.

Typically, he sells about two-thirds of the steers off the cows in late fall and backgrounds the later-born calves as well as the heifers through to March.

Until the bottom fell out of the beef market, there was fair local demand for crossbred heifers from his herd.

Now that the market for bred heifers is coming back, he plans to retain a few more heifers to sell into that market in the coming years.

C — Debbie Furber www.canadiancattlemen.ca

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MANAGEMENT

MIXED FARMING ON A GRAND SCALE

I

f Kevin Woods had a million dollars in the bank, he’d probably try to leave it there for one basic reason — it would make it easier to get more money to make more money farming.

“I have always loved farming.

That’s why I’m here, but it all boils down to the money,” says Woods who was raised on the family’s mixed grain and cattle farm — Westwood Land and Cattle Co. — near Moosomin, Sask. “That’s what it has to be for me because that’s my job. At the end of the day, I have to answer to the bank and a lot of people if things don’t go right.”

The number of people directly involved in the Westwood farming operation keeps growing right along with the number of acres, cows and calves, not to mention all of the people with whom the farm conducts business.

From 1990, when Kevin graduated from high school up to the present day, the family farm has grown from 3,500 acres and 500 cows, to 10,000 acres, 3,700 pairs and 1,300-plus bred heifers, some 200 bulls and a 10,000-head backgrounding feedlot. That requires a full-time staff of 12 to 15 employees and another six seasonal employees.

As Woods starts talking about how he manages all of this, he first acknowledges his dad, Ken, for his expert coaching through the years, and the employees, some of whom have been with Westwood for as long as 15 years.

18 CATTLEMEN / NOVEMBER 2011

“Our employees are everything to us because that’s what allows us to do what we do,” Woods says. The Woods family has made a conscientious effort to create an employeefriendly work environment, with a staff lounge area built into the office, a benefits package and regular time off. There are enough jobs that most of the time people can work at what they best like to do, and everyone is understanding about not booking holidays during peak times in their area of interest.

He and his dad make the decisions together, while he concentrates on the business end of the operation and his dad looks after organizing the day-today operations.

“It’s like a big factory. We manage what needs to be done each day, so the work gets done, but it never ends. There’s really no quiet time anymore,” Woods comments. “I really believe that, managed properly, there is strength in numbers, whether it’s cows or crops, because the margins are so tight nowadays that you have to have lots to make it work.”

Sometimes he regrets not being able to be as hands on as when the farm was smaller, but he still gets in on a fair share of the trucking because it’s something he can handle while keeping on top of business with what has become his most important tool — his cellphone. It’s how he manages to get time away from the farm with their

Kevin Woods four active kids, attend Saskatchewan Cattle Feeder Association (SCFA) meetings as a director for the past six years, and even take a holiday now and then.

Buy low; sell high When it comes to the cow side of the cattle business, Woods is a firm believer in investment icon Warren Buffet’s dogma: “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” In other words, stay out of the buying market when everyone wants the commodity and prices are high, and buy all you can when interest in Continued on page 20 www.canadiancattlemen.ca

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the commodity and prices are low. On the flip side, that opens opportunities for sellers to sell into high markets.

They have successfully expanded the cow-calf operation through some tough times post-BSE. Never imagining that the effect would be so long lasting, he says they stuck to the expansion plan and, with the drop in breeding stock prices, began culling hard to build their herd with the best cows. Now, prices for bred stock have improved and they’ve just reached their target of 5,000 topquality females.

“We’ve held out and hoped for eight years for the market to recover and I hope there’s more to go in the recovery, but it might be getting near the right time to sell and then start rebuilding when cow prices are lower,” Woods explains. “Farming is farming, but business is business. Our goal is to do as much as we can do and manage what we can until the point when the market tells us it’s the right time to sell.”

Selling all or a good part of the breeding herd would give Westwood its multimillion-dollar nest egg, which is important because there’s nothing like cash in the bank for security when you go to borrow money, Woods adds.

Integrated farming operations The expansion actually started back in 1998 with the addition of the backgrounding feedlot to diversify even further and add value to the grain and cow-calf operations. It was permitted for 4,000 head with the idea of expanding the cow herd to produce the majority of the calves to fill it. He well remembers the sweat equity that went into building that original section.

The extension was added in 2006 to boost the capacity to 10,000 head and there’s pen space to feed another 2,500 head at his parents’ yard. That was the year the bottom fell out of calf prices as feed prices skyrocketed.

With calf prices expected to be on the high side, along with all of the other operating expenses steadily cutting into margins, it remained to be seen whether or not they fill the lot to capacity this fall. They’ll definitely background their own calves, which typically account for 35 per cent of the inventory. Custom cattle make up 20 Cattlemen / November 2011

another 15 per cent and they purchase the remaining 50 per cent.

It really depends on the feed supply and market conditions, he says.

The cows get priority on the feed. Of the 10,000 seeded acres, 10 per cent is corn for silage, 10 per cent is barley and alfalfa silage and 80 per cent is sown to cash crops, mainly canola and wheat. Though the heavy clay soil in the area is highly productive, lots of it is marginal for crop production because of the potholes and has been converted to grass through the years.

Consequently, they prefer to lease grassland and put their money into owning cropland.

Despite 18 inches of rain in May and June, the land was a little on the dry side by early August, but with just one more inch of timely rainfall, he figured they’d be set for feed, though they only managed to get seven per cent of their cash crops sown. Hay is plentiful, so they will be able to purchase hay

“ It’s like a big factory.

We manage what needs to be done each day, so the work gets done, but it never ends.There’s really no quiet time anymore.” bales this year if needed, however, finding straw for the feedlot is going to be a real problem.

As for market conditions, Woods likes to have sale contracts in hand when he buys calves to background with the target of shipping them as yearlings at a base weight of 900 pounds. He uses the services of cattle buyers at key markets across the Prairies to purchase British-influence crossbred calves to background for the market south of the border. During the past five years, 80 per cent of the calves have gone into U.S. feedlots.

The custom-fed cattle go into Quebec and Ontario, and the remaining five per cent are sold to Alberta feedlots.

Their own calves go directly into the feedlot as the cows are brought home from summer pastures between mid-October and mid-November. At

weaning, the calves are vaccinated with the Pfizer Gold program, their radio frequency identification (RFID) tags are rescanned, and their weights are recorded and entered onto a spreadsheet for indexing the cows. Indexing is a new management tool started three years ago to assist with culling decisions and already trends are starting to emerge.

The cows are preg checked and the opens are shipped before the herd is turned out on stubble fields for fall grazing. Fall is also when the manure that has been pushed up in the feedlot pens during the summer is recycled onto the stubble fields as fertilizer for the following year’s crop. Westwood’s land base is large enough that all of the manure can be spread every year.

Woods adds that the assistance for feedlots in this year’s federal-provincial excessive moisture program for Saskatchewan, announced in early August, is much appreciated. The SCFA has supported the Saskatchewan Cattlemen’s Association’s lobby efforts since the summer of 2010 to include feedlots in the program. Feedlot owners are now eligible to apply for a rebate of up to 75 per cent to a maximum of $250,000 for expenses incurred for repair work done last year and this year on pens damaged by excessive moisture.

First thing in January, the cows are sorted into groups of 500-600 head and moved into stubble fields where watering systems have been installed.

Bred heifers are wintered separately in two groups.

In March, they are gathered, vaccinated with a scours vaccine, Pfizer Bovi-Shield 5, and treated for parasites, then sorted by due date into groups of 250 to 500 head to move to the calving pastures of native grass closer to home.

The cows have a 60-day breeding period and are bred to Simmental bulls to start calving around the middle of April. The heifers have a 40-day breeding period for a mid-May start to calving. The first and second calvers are bred Angus. They aim to keep the ratio at 20 to 25 cows per bull.

The replacement heifer group is 50-50 from their own herd and purchased from a couple of steady suppliers. A two-person crew is dedicated to handling the artificial insemination (AI) synchronization program and a technician comes out to do the AI. This year, more than 1,300 black heifers (shown on page 18) were in the program, www.canadiancattlemen.ca

3289-1

which is on the high side of average for the past three years and double the number of bred heifers they were raising before then, with the exception of 2003, when the grand total was zero.

A 10-person calving crew works full time in the nine calving pastures. The calves are tagged with RFID tags and dangle tags and documented at birth.

Branding takes place in the handling areas at each of the calving pastures when the calves are three to six weeks old, at which time they are vaccinated, dehorned, castrated with a knife and branded and each RFID tag is scanned to be downloaded into the computer.

An expansion of this magnitude would not have been possible without moving calving into the spring months, Woods says, though he can see the time ahead when people will get a reward for winter calving and that’s always open as an option again in the future.

Everything has gone well with the switch to spring calving, but this year’s April 29 to May 1 blizzard hit them hard. Woods says they are no

stranger to the Colorado lows that bring the late-spring snowstorms.

What was unusual was the intensity and duration of the 2011 storm and to make matters worse, it started out with six hours of freezing rain. It’s strange, but lots of times, the cows seem to get disorientated in a blizzard and don’t lead their calves directly to shelter, he explains. They turn their butts to the storm and keep walking with it until they hit a barrier. Hopefully, that’s a sheltered area, but oftentimes it’s just a fenceline and worst of all, water, in which case many just keep walking right into it.

He and his dad braved the storm on the first morning to check the calving pastures, but soon realized it only made matters worse because the cows would come out of the bush with their calves trailing along behind. They were just into their second week of calving out the cows and did suffer a significant loss, but percentage-wise, the hurt wasn’t as deep as it was for many other producers.

During the first part of June, the pairs are sorted into their breeding groups, then transported straight from the calving pastures to summer pastures in groups of 40 pairs per liner load. Eighty per cent of the cattle are placed on leased pasture and custom managed 50 to 350 kilometres away from Westwood. Spreading them out serves as an insurance policy of sorts against drought, which Woods says is the biggest fear when you have large numbers of cattle pastured in one locality. Purchasing their own liners has made the job of moving cattle back and forth much more manageable and cost efficient than hiring trucks.

The Woods family firmly believes in the diversity mixed farming brings to agriculture even though the current trend is to specialize in either crops or livestock. The grain farm, feedlot and cow-calf operations function well as a whole to compliment one another in this southern region of the parkland belt.

C — Debbie Furber

ADVERTORIAL

Calfhood Pneumonia Prevention StrategieS In Canadian studies, pneumonia ranks second only to scours as the most common cause of infectious disease and death in beef calves prior to pasture turnout. Beyond the costs of calf death and treatment, the cost of lost performance can be substantial. Calves that have been sick with pneumonia may have significantly lower weaning weights than their healthy cohorts.

Pneumonia is difficult to detect. Breathing difficulties, runny nose and eyes, fever, soft cough and depression are not easy to spot in large groups of cow-calf pairs.

If the pneumonia is severe, there may not be time to treat the calf before it is critically ill or dead.

There are many viruses and bacteria that can cause pneumonia in calves, and these pathogens often work in combination. Common viral causes include BRSV and IBR. Common bacterial causes include Mannheimia haemolytica and Histophilus somni. Lack of colostrum, dusty and crowded environments, and wide swings in temperature and humidity can weaken a calf’s immune

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Producers can minimize pneumonia problems by ensuring calves get sufficient colostrum at birth and are protected from temperature extremes and crowded conditions. Along with these sound management tools, vaccinating calves against specific causes of pneumonia can help them mount rapid, effective immune responses when they encounter pneumonia pathogens. Vaccines are available which offer protection that is gentle enough for young calves. Did you know that calves as young as 24 hours of age can be vaccinated against bacterial causes of pneumonia?

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N u t r i t i o n

by John McKinnon John.mckinnon@usask.ca

Have you had your feed tested this year?

John McKinnon is a beef cattle nutritionist at the University of Saskatchewan

F

eed testing! I can just hear the collective groan go out across the country. “Does McKinnon not have anything new to write about”? However, before you skip the page, I challenge you to read on and then ask yourself how you plan to answer this question.

First let me put the question in context. Last month I attended a meeting on nutritional issues of overwintered beef cattle led by Dr. Murray Jelinski from the Western College of Veterinary Medicine, the Farm Animal Council of Saskatchewan and the Saskatchewan Ministry of Agriculture. Specifically it was a round-table discussion on issues with starving cattle. This is a topic no one likes to talk about and is one that we can be thankful is quite rare. However, I was surprised and probably a better word shocked at the experiences of veterinarians, and other industry groups with this issue, both in Saskatchewan and Alberta (and quite likely across the country).

Veterinarians at this meeting talked about two types of cases they encounter. The first were those that involved obvious neglect, dead animals and ultimately offending individuals taken to court. The second and the focus of this article were those of experienced beef producers, people who had been long-standing clients, who had asked for help regarding dead or down cows with the thought that they had some type of disease issue going through the herd. In the case of one veterinarian, after a post mortem examination, it was pretty clear that these cows had literally starved to death, despite the fact that there was plenty of feed available. The issue was not feed quantity but quality. The feed was short on energy and likely protein and the cows simply could not consume enough dry matter to meet their needs for maintenance and pregnancy.

This resulted in the cows losing weight to the point where they were starting to die of starvation. When faced with this diagnosis, the clients were obviously upset that their cows were dying in such a manner, simply, because they did not know the quality of their feed! Information a basic $25 feed test would provide.

While feed testing seems “old hat” and a “no brainer,” it is surprising how many cattlemen skip this critical management tool year in and year out. It seems many would rather rely on visual appraisal (i.e. colour, plant species, and leaf content) or knowledge of cutting time to judge quality. While these are all indicators of forage quality, they do not substitute for a feed

22 Cattlemen / November 2011

test particularly when it comes to the energy content of that forage. For example, a feed test can generate two fibre values that reflect relative energy value — acid (ADF) and neutral detergent (NDF) fibre. High ADF values indicate that the hay was cut at a late stage of maturity and as a result it will be poorly digested by the cow.

This late-cut hay will be lower in energy than the same hay cut at an earlier stage of maturity with a lower ADF value. High NDF levels also indicate a more mature forage at harvest and more importantly is indicative of the degree to which cattle will consume the feed — high NDF values limit forage intake! Forages with high ADF and NDF levels can quickly lead you down the path that the beef producers above found themselves in last winter — starving cows despite there being plenty of feed in front of them! Ask yourself — does a visual appraisal truly suffice?

As a nutritionist, I cannot emphasize enough how critical knowledge of feed quality is to developing a sound feeding program. Your job as a cow-calf operator is to match the requirements of the cow as she moves through pregnancy with the appropriate quality and quantity of feed and to do so in a cost effective manner. We have discussed in past columns how these requirements change particularly in the last six to eight weeks prior to calving and how they are increased by prolonged cold stress. Meeting energy and protein needs during this time period is critical to preventing weight loss and to ensuring normal calf development. It will also influence the success of your subsequent breeding program.

Today’s laboratories use both wet chemistry and near infrared spectrometry to offer accurate results and rapid turnaround times. A basic forage analysis will provide you with moisture, energy (i.e. total digestible nutrients, digestible energy and/or net energy content) and crude protein values as well as a mineral package (calcium and phosphorus). More advanced analysis can provide you with details on all macro and trace minerals, acid and neutral detergent fibre content, nature of protein (soluble, degradable, bypass, heat damaged), fat content, nitrate levels, and the list goes on! This information can be used by you and your nutritionist to develop feeding programs that meet the requirements of pregnant, wintering beef cows and replacement heifers, as well as for targeting gains of growing cattle! At $25 to $30 a sample for a basic feed test, it truly is a no brainer! www.canadiancattlemen.ca

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SUPPLEMENTS

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RECEIVER CATTLE GET A BOOST WITH BIO-MOS

chooten and Sons Custom Feedyard has been pioneering the use of a natural feed supplement called Bio-Mos that has significantly reduced the sickness and mortality rates at their feedlots near Picture Butte and Diamond City in southern Alberta.

The Schootens participated in Alltech’s first feedlot performance trial on Bio-Mos in Canada in the fall of 2006 to demonstrate the response of calves to Bio-Mos in receiver diets. Liking what they saw, they have been using Bio-Mos ever since and have incorporated it as part of their receiving protocol for all calves and some yearlings, says John Schooten, who owns and operates the feedyard business with three sons, Shane, Justin and Cody.

Bio-Mos is one of several animal feed supplements derived from natural yeasts through proprietary processes developed by Alltech, a global animal feed and nutrition company established

in 1980 with headquarters at Nicholasville, Kentucky. It has been available to livestock producers and pet owners in Canada since 1993 and is routinely used in the swine and poultry industries, says Ty Yeast, managing direc-

“It seems to boost the immune system and help to alleviate health problems that I believe are secondary to BVD persistently infected animals.” tor of Alltech Canada. The Schooten feedyard trial was organized to introduce the company’s products to the beef industry.

COST BENEFIT OF FEEDING BIO-MOS @ 20 grams/head/day for the first 21 days Number of calves in Number of calves out In weight Implant weight Days on feed Mortality Pulls Trial average daily gain Feed per head Feed conversion $/pound of gain Costs — injectable medications — pulls — chute charges — Bio-Mos Total cost Total cost per head Total mortality cost Total mortality cost per head

BIO-MOS

CONTROL

489 487 632.6 pounds 775.9 70.0 2 calves (0.44%) 89 calves (18.2%) 2.07 pounds/day 1,225.7 pounds as-fed 8.53 $0.35

413 402 627.5 pounds 760.2 92.3 11 calves (2.66%) 204 calves (49.4%) 1.54 pounds/day 1,677.6 12.47 $0.51

$2,335 $ 801 $ 89 $1,273 $4,499 $ 9.24 $1,526 $3.13

$5,026 $1,836 $204 $0 $7,066 $17.58 $8,200 $20.40

$12.37

$37.97

Total cost per head 24 CATTLEMEN / NOVEMBER 2011

A total of 902 newly weaned calves averaging 630 pounds were randomly assigned to five pens. Three of the pens were chosen at random to receive the control diet, which was a standard receiver ration of barley silage, barley grain, a commercial vitamin-mineral premix and chlortetracycline. The remaining two pens received the standard ration with the addition of Bio-Mos at 20 grams per head per day for the first 21 days after arrival. The calves were weighed in and again at implant, 70 to 90 days later. All treatments and mortality were recorded and feed intake was monitored daily with total feed intake calculated for each pen during the trial period, which was from arrival to implant.

In their experience during the past five years of feeding Bio-Mos at their preferred rate of 30 grams per head per day for 30 days after arrival, the most outstanding difference has been the reduction in their pull rate, treatment rate and mortality, Schooten says. That’s evident throughout the entire feeding period, not just during the first month while Bio-Mos is in the ration.

They notice that the calves get on feed more quickly after arrival. Getting the gut full and functioning is really the key to getting them off to a good start and keeping their immune systems primed.

“Our sick pens aren’t nearly what they used to be,” Shane adds. “It seems to boost the immune system and help to alleviate health problems that I believe are secondary to BVD persistently infected animals. We see way less mycoplasma and hemophilus. If we do have to treat them, they respond better to the medications and keep eating or get back on feed sooner and when they are eating, they get back to full strength and vigour sooner.”

Two side benefits are that they have been able to remove the tetracycline feed additive they formerly used as a preventive measure and, being a natuwww.canadiancattlemen.ca

ral product without antibiotic, there is no withdrawal period for Bio-Mos. “The benefits far outweigh the cost of $4 to $5 per head to include Bio-Mos in the receiving rations,” Shane says. “It’s an effective and economical way to get mortalities down.”

Schootens also use Alltech’s silage inoculant, Sil-All, with beneficial bacteria, plus sugar-reducing enzymes to optimize fermentation (the conversion of sugars to lactic acid) and create a stable, low-pH environment required for preservation.

Shane says they now have very little spoilage in the silage pit and they really like the way Sil-All handles without gumming up the equipment.

Animal health and nutrition are the foundation of the service Schooten and Sons Custom Feedyard offers. They work closely with Cargill Nutritional Services and with the Lethbridge Animal Clinic to develop feeding and health protocols that promote the animals’ well-being and ability to reach their full growth potential.

They own cattle and pen share with other customers and are building a solid custom-feeding business by providing a package of services that include business risk management, marketing, order buying and selling, age verification, performance tracking and trucking services.

A unique service is the ability to offer the latest in industry news related to the numerous producer groups with which John is involved at the provincial and national levels. Computer software programs for feed bunk management, health records, benchmarking and other feedlot management solutions are integral to their feedyard and feed mill operations.

Shane and Cody also own and operate S&C Farming, specializing in custom silaging, corral cleaning and manure and compost hauling.

The Schooten family has been in the livestock business for three generations since John’s dad started farming in 1966 and set up the first feedlot in 1979. Today, the farm includes the Picture Butte facility set up for 5,000 head and the Diamond City lot, purchased in 2006, which accommodates 10,000 head, along with 2,000 acres of irrigated cropland for barley, corn and hay production.

Though the Alltech name is relatively new to beef producers in Canada, the company has research and development BioScience Centres in three countries, manufacturing facilities in 31 countries, and offices and distributors in 128.

Bio-Mos is one of a number of Alltech feed supplements available in Canada that are of interest to beef and dairy producers. Many of the company’s brands have been shown to be beneficial for all livestock species. YeaSac1026, a live yeast culture, was introduced in 1983.

It was followed by Bioplex, a proteinated trace mineral product, SEL-PLEX, an organic form of selenium, NuPro, a functional protein from yeast, and Actigen, developed through research in nutrigenomics. Optigen was introduced three years ago as a non-protein nitrogen source specifically for ruminants that offers feed and environmental advantages.

More information about Alltech is available by calling the Calgary office at 1-403-735-3281 and at www.alltech.com.

For more information about Schooten and Sons Custom Feedyard, call 403-381-3883 or visit the website at www.johnschootenandsons.split5.com.

C — By Debbie Furber www.canadiancattlemen.ca

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NUTRITION

SOME THOUGHTS ON PROCESSING GRAIN AND FORAGES FOR FEEDLOT RATIONS

W

hile too much fibre in forages can limit feed intake in feedlot cattle, too little in the diet can destabilize the rumen and lead to digestive upsets.

This happens when rations include a high level of grain, typical of finishing rations. Overprocessing the grain, whether it be with a hammer mill, roller mill or steam-flaking (tempering with steam before rolling), to obtain a more consistent appearance can amplify the problems by increasing the rate of digestion, while doing little to increase the utilization rate.

All types of grains play the same role by providing energy in the diet.

We process grain to crack the kernel so rumen microbes have easy access to the starch to achieve a good level of digestibility, explains Murray Feist, provincial ruminant specialist with the Saskatchewan Ministry of Agriculture.

Processing can increase utilization of cereal grains by as much as 25 per cent, with the exception of oats, which have a different structure with more fibre content than barley, corn, wheat and triticale. Processing oats may only increase utilization by five per cent for calves and 10 per cent for cows because of the fibre content of oat hulls.

There’s no question of the need to process barley and corn grain in feedlot diets, says Dr. Greg Penner, assistant professor of ruminant nutrition at the University of Saskatchewan. About 30 per cent of the dry matter in unprocessed barley can end up in the feces and the cost of processing is currently lower than the cost of the lost barley.

However, research shows there is no benefit to processing barley beyond cracking the kernel. The same recommendation is commonly applied to wheat and triticale grain.

Overall, unprocessed corn is better utilized than unprocessed barley, though we do see differences in steamflaked or high-moisture corn as it is more available in the rumen than whole corn or dry-rolled (crack) corn.

“Forages are really an inconvenience from the feedlot perspective because they are bulky to handle, expensive on

26 CATTLEMEN / NOVEMBER 2011

a cost-per-energy basis, and decrease feed conversion,” Penner explains.

“But when we look at the essential role forage plays in maintaining healthy rumen function, not including forages in finishing rations comes down to an animal health and welfare issue.”

Feist says the fibre in forage stimulates cud chewing and with it the production of saliva that buffers the acid in the rumen. Feeding grain alone destabilizes the rumen because it increases the production of fermentation acids and lowers the pH level in the rumen, gradually leading to an increase in lactic acid.

In turn, this upsets the balance of rumen bugs as those that like an acidic environment survive and the others are wiped out. Excess acid can also have a burning effect on the inside of the rumen wall.

This can lead to ulcers on the rumen wall raising the potential for certain types of bacteria to enter the blood and cause liver abscesses or lameness.

There is definitely a dose and time relationship, Feist adds. An abrupt, excessive dose of carbohydrates in a short period of time can be dangerous, causing acute acidosis and death. In chronic cases, you may notice watery diarrhea, bloating, variable feed intake and signs of toxic shock, such as stiffness and depression. Cattle can tolerate being more acidic when carbohydrate levels are increased gradually over longer time periods.

Managing forage to optimize value Cereal silage is the most common forage fed by feedlots in Western Canada. Given its importance in the diet, and the cost, its quality should be as high as possible.

Total dry-matter yield is important, but harvesting for maximum digestible energy will optimize its feed value. The best energy and protein levels for cattle feed (for swath grazing, greenfeed and silage) is captured in barley cut at the soft-dough stage and oats at the latemilk stage, which is also the window to minimize fibre content.

The ensiling process relies on anaerobic fermentation caused by lactic acid bacteria quickly dropping the pH level of the silage, thus preserving its qual-

Greg Penner

Murray Feist ity — similar to the pickling process, says Penner.

Adding a commercial silage inoculant, most commonly natural lactic acid bacteria, at the harvester has been shown to help to improve the consistency of fermentation throughout the silage mound and reduce drymatter losses. To a lesser degree, it may improve animal performance by improving feed efficiency, dry-matter intake and gain.

An inoculant can be most beneficial when forage conditions are less than ideal, however, its effectiveness will depend upon many other factors that affect silage quality at harvest, in storage and when it is fed.

The ideal moisture content for ensiling is 60 to 65 per cent. Too wet and www.canadiancattlemen.ca

nutrients can leach out and concentrate at the base of the pile. Too dry and there is a risk of mould and heating, which destroys feed value.

Chop length is important when it comes to packing the silage. The ideal is three-quarters of an inch, though that depends on the type of forage.

Proper packing with a tractor to push the air out of the mound as the forage is delivered is critical. The idea is to form a dense mound that resists oxygen penetration during fermentation and feed out. The recommendation is to pack for one to three minutes per ton of fresh forage layered six to 12 inches thick.

There is no longer any question that a good, tight covering protects the

www.canadiancattlemen.ca

mound from air, water and wind to expedite anaerobic fermentation and goes a long way to preventing spoilage in stored silage. A plastic sheet or a tarp held down with about 20 tires per 100 square feet of surface is adequate.

Research shows dry-matter losses can be as high as 70 per cent in the top three feet of a mound. Fifteen to 25 per cent of the silage can be in the top three feet, depending on the shape of the mound. Spoiled silage at the top of the pile will be black with a slimy texture and a foul odour and has a high pH and fibre content. Spoilage at the bottom of the pile is usually yellow to orange in colour with a strong acidic odour and low pH.

Last, but of equal importance, is proper face management at feed-out, says Penner. Calculate how much silage will be fed each day to estimate the depth you have to go into the face at each feeding. The goal is to maintain a nice flat face in removing silage from the top to the bottom to minimize the area exposed to the air each day.

Tunnelling into a pit not only allows oxygen to penetrate into the mound, but can present very dangerous working conditions should the overhanging material collapse.

Contact Greg Penner at 306-9664219, or Murray Feist at 1-866-4572377.

C — Debbie Furber

Cattlemen / November 2011 27

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VET ADVICE

How are we doing?

O

n September 22, 2011 in Calgary, the Council of Canadian Academies released a report on Canada’s capacity to conduct animal-health risk assessments into the 21st century.

The event will go unnoticed by many in the livestock industry and given only a cursory glance by a large number of people who support it; veterinarians included. The basic concepts of scientific risk assessment and application of the science it encompasses are tedious and hard to understand. The academic label many tack on risk assessment quashes interest even though we, as humans, intuitively use risk assessment every day to navigate through life.

The value of developing the capacity to conduct animal health risk assessment accurately, consistently and in a timely fashion cannot be overstated. Nor can the importance of clearly communicating details of the process to stakeholders. Good risk management starts with intelligent and probing risk assessment. Without sound risk assessment at the front end, organizations often go astray right off the starting block to find themselves off track on issues years later. The byproduct of wrong assumptions and bad decisions early in the process of managing risk is discombobulation down the road.

Look at BSE. I think it is very safe to say that BSE should never have been an issue for the red meat industry had risk management been refined on both sides of the ocean. The foundation of preventing what actually happened would have started with sound risk assessment. Had the very things the Council of Canadian Academies recognized as weaknesses in Canada’s risk assessment capabilities in 2011 been in force in 1994, a year after BSE was diagnosed in a British import on an Alberta ranch, the sorry play of politics, bad science and industry’s aversion to change would have been forestalled. There is good reason to believe that the calamity a nondescript Black Angus cull unleashed in May 2003 could have been averted and saved the industry and Canada $10 billion in trade sanctions and diseaserecovery costs, not to mention the incalculable toll the so-called BSE crisis squeezed out of the human spirit and people’s ability to persevere.

In simple terms, risk assessment is nothing more than a systematic process that determines the likelihood an event might occur and the magnitude of consequences after exposure to a hazard. While risk assessment is science-based, it is not strictly a scientific process and hence the requirement for sound and reasoned thought by people who understand all sides of an issue. Two key calculations are used to measure risk: one, the magnitude of potential loss; second, the probability that loss will occur. A third and critical step is carefully explaining the product of mathematics and logic to stakeholders so they become advocates in the risk management process. These elements were never in line during the maddening road to BSE. The appearance of a novel animal pathogen that

30 CATTLEMEN / NOVEMBER 2011

became known as BSE presented a number of interconnected risks to the nations whose herds came to be infected. There were actually three different risks present: 1. Animal health risk (the probability of occurrence and consequence of BSE in the national herd) 2. Human health risk (declared to be “very low” by Health Canada) 3. Socio-economic risk (to a broad cross section of society assuming even one case meant export trade would immediately collapse) Although nearly a decade elapsed (1994 to 2003) from the first risk estimation to the appearance of the first case of BSE, in all that time the true risk was never fully and adequately assessed.

Economic policy between the first, crude, but insightful estimation in May 1994, and the more elaborate risk assessment published in December 2002, on the eve of May 2003, encouraged both expansion of the national herd and growth of the feedlot industry, especially in southern Alberta. Rapid expansion increased reliance on export trade with the U.S. Canada’s exposure to the economic threat of a sudden and long-lasting border closure rose steadily and dramatically between 1994 and 2003. The dynamic character of Canada’s unique risk profile was never captured in any analytical instrument used in the risk management of BSE. The BSE story is but one example of how critically important risk assessment can be. One of the most dramatic and damaging events to ever have affected red meat production in North America came about because risk assessment and subsequent management of risk were skewed from the very beginning.

Preliminary guidance on BSE could have been provided as early as 1994, when Canadian authorities became aware there was a “very high” probability that BSE was incubating in the Canadian herd. That potentially devastating information was never made public (World Health Organization 2006).

Producers and the cattle industry were woefully unprepared for the events that started to unfold in May 2003.

Key findings by the expert panel chaired by Dr. Alistair Cribb, dean of the Faculty of Veterinary Medicine, University of Calgary that would enhance risk assessment and managing animal health risks in Canada include: widening the range of consequences considered, expanding access to expertise, widen stakeholder consultation, transparency of decisions, improve means of prioritizing immediate and long-term threats.

The issue of who is responsible for carrying out effective risk management remains a contentious issues. Established practices would default most animal health risk management to federal authorities. Is it time to change?

Dr. Ron Clarke prepares this column on behalf of the Western Canadian Association of Bovine Practitioners. Suggestions for future articles can be sent to CANADIAN CATTLEMEN (gren@ fbcpublishing.com) or WCABP (info@wcabp.com).

www.canadiancattlemen.ca

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HOLISTIC RANCHING

Benefiting from better times

F

inally we are enjoying beting how having a third party involved in the discussion ter cattle prices. The difficult can move the discussion from an emotional level to a times started in 2002 for more rational level. The estate belongs to the parents. those in drought areas and Figure out what you want, what opportunities you for everyone in 2003 when BSE was wish to provide to the farming children and how you discovered. will deal with the non-farm children. Once the plan is Historically the past seven or eight clear it is time to involve the accountants and lawyers years have been the most difficult to make it happen. years since the 1950s. If you are still If you are the senior generation I think you have in the cow business I congratulate every right to ask your children, “Do you want to your resilience and perseverance. Now that things are farm?” If the reply is positive or negative you then better it might be an appropriate time to evaluate your need to structure your estate accordingly. If you are business with two questions. the younger generation you have every right to ask The first question is: what changes have you made your parents if there is a place here for you and what that allowed you to stay in business? I think we have all it looks like? If there is a place, begin to plan. If there made choices to structure our businesses to be more profisn’t, you are likely better to move on and create your itable. These might have included bale grazing, calving in own future. sync with nature, better grass management, extending the It’s a fact of life that as we age we have less energy. If grazing season, changing from cow-calf to cow-yearling you are 55 or older have you figured out how to strucproduction, more cows, fewer cows, marketing at a difture your business to give you what you want and to ferent time or reducing investment per cow. match your energy level? When you do this your busiIt is important to review the changes we have made. ness can give you a great deal of satisfaction for many There is a strong tendency to slip back into our old years. If you miss this step it is easy for your business to ways now that things are betbecome a millstone. Don’t get ter. I suggest that this would caught in this trap. not be a wise choice.

Information and solid It is important to review The second question is: numbers about your unique what changes can you make to business are essential to make the changes we have made. strengthen your business now good decisions. It is possible There is a strong tendency that things are better? We are to analyze our businesses by all in a better cash flow situaasking questions like: to slip back into our old tion today. We have an oppor1. Are cows or custom yeartunity to spend that money lings more profitable? ways now that things are wisely to strengthen our busi2. Is a cow-calf operation better. I suggest that this ness. But first we need to anamore profitable than a cowlyze our business to determine yearling one? would not be a wise choice where it is weak and how we 3. How many cows will be might best strengthen it. most profitable?

Think about your business. What are the strengths 4. Will improved pasture management increase profit? of your area, your operation, yourself and your fam5. Will it be profitable to extend my grazing season? ily? What do you need to do to capitalize on all these 6. How is calving time related to profit? strengths? Our future is much more likely to be positive if This is not meant to be an exhaustive list. These we work from our strengths rather than our weaknesses. are just some ideas to get you thinking. Make your What about the next generation? Do you have a own list. Challenge what you are doing with the idea son or daughter who wants to carry on the business? of making it better. There is always room for improveIf your family doesn’t want to continue in agriculture ment. Remember, thinking pays better than working. would you consider taking on an apprentice who could Don’t miss this crucial step in developing a profitable, eventually buy your operation? Have you made plans sustainable business. for how this will happen? Don’t ignore this situation.

I encourage you to take the time to analyze your Intergenerational transfer can easily be one of the most business and make positive changes. I think you will important decisions you will ever make. Done poorly enjoy the results. it can cause heartache and grief, done wisely it can be Happy Trails. a source of great joy, peace and contentment. Don’t be — Don Campbell afraid to get help. I think we all realize that lawyers and accountants can help us with the legal and tax Don Campbell ranches with his family at Meadow Lake, portions of the equation. Not all of us realize how useSask., and teaches Holistic Management courses. He can be ful it can be to get help on the people side. It is amazreached at 306-236-6088 or doncampbell@sasktel.net.

32 CATTLEMEN / NOVEMBER 2011

www.canadiancattlemen.ca

BEEF WATCH

NOV E MBE R 2011

A service for cattle producers from the Canadian Cattlemen’s Association and CATTLEMEN magazine

CATTLE INVENTORIES

U.S. herd still contracting

Canadian herd stabilizing

The U.S. herd continued to shrink with the July total inventories down 0.8 per cent and beef cow inventories down 0.9 per cent while the dairy cow inventories were up 1.1 per cent. Profitability in the dairy herd has been positive but not significant enough to encourage large expansion. Hay and grain costs are expected to keep any expansion plans in check. On the beef front higher prices have not been enough to encourage expansion as drought has been the main driver of the liquidation in the south. Beef cow slaughter in the extremely dry south around Texas is up 23 per cent year to date despite several years of dry weather which has already shrunk the herd there. U.S. beef producers are in no condition to expand with beef replacement heifers down 4.5 per cent.

Source: Statistics Canada

www.canadiancattlemen.ca

09

06

03

00

97

94

91

88

85

82

79

76

Million head

Canadian Beef Heifers (Breeding) July 1

U.S. Beef Replacement Heifer Inventory July 1

Thousand head

Statistics Canada reported July 1 cattle inventories down 0.8 per cent at 13.87 million head. This is the smallest year over year decline since the herd began shrinking in 2006. Inventories are just below 1994 levels. The smaller inventories came from declines in beef cows (-2.1 per cent), yearlings (-1 per cent) and the calf crop (-0.5 per cent). Canadian beef cow inventories at 4.2 million head saw similar declines in most provinces; British Colombia (-3 per cent), Alberta (-2.6 per cent), Manitoba (-2.9 per cent), Ontario (-2.7 per cent) and Quebec (-2.7 per cent), with the exception of Saskatchewan (-0.8 per cent). Cow marketings for 2011 are projected to be 621,000 head, down 22 per cent from 2010 to be the smallest in history (excluding the record lows of ’03 and ’04). This puts the beef cow culling rate at 9.5 per cent just below the longterm average of 10 per cent indicating the industry is stabilizing the national herd and thinking about expansion. The question becomes how serious will that expansion be?

Beef replacement heifers were up 6.7 per cent at 662,200 head as higher calf prices last fall has encouraged retention. While beef replacement numbers continue to be down in the East there was a significant increase in the West with B.C. up 0.6 per cent, Manitoba up 2.8 per cent, Alberta up 7.8 per cent and Saskatchewan up 12.3 per cent. The difference in optimism reflects feed availability and relative cost as barley continues to be significantly cheaper than corn. Any serious expansion moving forward will depend upon feed availability, credit availability, and producer appetite for risk. While the Canadian number is up from year ago, it is still 12 per cent below the historic average of 752,000 head. Therefore, the increase does not indicate expansion but stabilization of the cow herd.

It should also be remembered that the replacement heifer number is always soft at this point as some of these heifers will be open and therefore marketed. While the upward trend is encouraging producers continue to be cautious compared to other turns in the cattle cycle when heifer retention was much higher.

Source: USDA, Cattlefax

THE CATTLE CYCLE Beef Production DOWN With the fifth consecutive year of downsizing winding down, high cow marketings and reductions in feeder cattle exports can no longer mask the decline in the calf crop. Beef supplies have declined dramatically over the last year. Total beef production (including slaughter cattle exports) is projected to be down 17 per cent in 2011 with fed production down 16.5 per cent and non-fed production (from cows and bulls) down 21 per cent. This is well below the dip seen in 2009. A smaller production base combined with higher heifer retention has already set the stage for smaller fed production over the next two years.

As beef cow culling rates drop non-fed beef production will also contract.

Larger declines have occurred in live exports (-36.5 per cent) compared to domestic production (-13 per cent) as local packers are able to keep cattle in Canada for processing. Maintaining this trend will be critical moving forward in order to sustain plant utilization at levels competitive with U.S. counterparts.

Continued on page 34 CATTLEMEN / NOVEMBER 2011 33

BEEF WATCH Canadian Female to Male Disposal Ratio Slaughter + Exports - Imports (All Classes)

Canadian Beef Production

Source: Canfax Research

The cattle cycle is usually 10-12 years and since the Canadian herd has been contracting since 2005, expansion should occur over the next two to three years. The end of the consolidation phase (where inventories bottom) and move into expansion will be triggered by a combination of factors: higher cattle prices, lower cost of production, and growth in competing meats. Current indicators suggest cattle inventories will continue to shrink in the U.S. over the next year.

North American Herd Expansion?

In Canada we have seen one good year of prices and are already seeing higher heifer retention. In contrast the U.S. has seen no response even after several years of higher prices encouraging expansion. Why is that the case? Approximately 50 per cent of beef cow inventories are on smaller operations (<100 herd) with limited land base to expand and are dependent on other income sources. Along with prolonged drought and feed issues, this has limited the U.S. beef industries response to market signals for expansion. Therefore, Canada with its large land base is expected to turn the corner before the U.S.

Cycle Indicators Slaughter ratios drifting slowly lower We use several tools to monitor the cattle cycle. The number of heifers disposed of (slaughtered or exported) per 100 steers is an excellent indicator of what producers are doing as a whole with their heifer crop. A small percentage of heifers in the slaughter mix indicate more are being held back in the herd for replacement and herd growth. The long-term annual average heifer to steer ratio is 66 per cent. Since 1996 the ratio has been above the long-term average every year except 2003, with the peak occurring in 2008 at 77 per cent. In 2011, the ratio has dropped back to the long-term average and is projected to be 67 per cent, similar to 2005. A smaller proportion of heifers indicate producers are retaining more heifers to maintain herd size after five years of reducing the national herd.

34 Cattlemen / november 2011

Source: AAFC, CBGA, CanFax

Another cycle indicator is the female-to-male disposal ratio. This ratio includes cows and bulls not just steers and heifers. The projected ratio of 0.99 females to one male in 2011 indicates a static herd. In order for expansion to occur this ratio needs to fall lower with smaller cow slaughter and larger heifer retention.

Consumption and demand Beef consumption is lower in North America with U.S. per-capita consumption at 27 kg. down eight per cent from 2006 while Canadian per capita consumption at 20.2 kg is down 7.3 per cent. Retail beef prices reached a high of $13.79/kg in June up 8.4 per cent from a year ago. Prices have since declined to $13.58/kg in August, up 7.6 per cent from a year ago. In August pork prices were 11.5 per cent higher than year ago while poultry prices were only two per cent higher. Higher retail prices are testing domestic consumer resilience. However, consumers are holding up well with food-service sales in Canada moving higher. Total food-service sales increased by five per cent from June to July. Year to date sales are up three per cent. Early indications are that August and September have continued to see strong growth. Contrary to most growth since 2008 the leader in sales was in full service restaurants, which were up four per cent while limited service outlets only increased three per cent. Overall this lends support to the view that Canadian consumers are in a better financial position than U.S. consumers.

Retail Beef Prices

$/kg

Carcass weight (million lbs.)

Continued from page 33

Source: Statistics Canada

www.canadiancattlemen.ca

Beef Watch is prepared by the staff of Canfax and Canfax Research Services, divisions of the Canadian Cattlemenâ&#x20AC;&#x2122;s Association

REPLACEMENT RATIOS PRICES During the last price peak in 2001 the average price for 500-600 lb. steer calves reached $169/cwt in August 2001.

Yearling steers 800-900 lb. also peaked in August 2001 at $139/cwt. This was after fed steer prices had topped out at $118/cwt in March 2001, with seasonal highs of $110/ cwt and $115/cwt over the next two springs. Even though fed prices reached $110/cwt in April of this year all cattle prices are still below the highs seen in 2001.

The annual high for 500-600 lb. steers in 2011 was $155/cwt in March and has fallen back to $151/cwt in September. Yearling prices reached a high of $128/cwt in September. One could expect prices to surpass those in the last price peak considering the increase in the cost of production over the last decade. Look for prices to move higher over the next two years as heifer retention increases, limiting production.

FEED GRAINS The corn market was on a roller-coaster ride this summer. Concerns about poor weather resulting in smaller yields and overall production pushed prices higher since last summer. Ontario corn prices increased from CDN$150/tonne in June 2010 to a peak of CDN$330/ tonne the end of August 2011. The September USDA report showed higher prices resulted in rationing of supplies over the summer leaving the 10/11 crop year ending stocks well above the pre-report estimates at 920 million bushels. This increased the ending stocks to use ratio to eight per cent. Rationing predominantly came from reduced feed demand which was replaced with alternatives such as feed wheat.

Higher corn prices gave Western Canada a cost of gain advantage with barley increasing from CDN$165/ tonne to CDN$212/tonne over the same time period.

While Western Canada still has a feeding advantage it has shrunk from over $100/tonne in August to $60/tonne in October and is likely to shrink more in coming months as Brazil is expected to have a large corn harvest further easing world supplies.

Cdn $ per tonne

Lethbridge Barley vs Chatham Corn Price

The yearling steer replacement ratio in Western Canada was 1.28:1 in the third quarter up from 1.23:1 in the second quarter and up from 1.25:1 in Q3 2010. The yearling ratio is typically the strongest in the third quarter and 2011 was no exception. This simply means yearling prices were 1Âź times higher than the fed steer price.

Third quarter calf price ratios are gaining ground with steer calves at 1.45:1 in the third quarter while heifer calves are at 1.39:1. This is up from 1.37:1 for steers and 1.30:1 for heifers in Q3 2010. These are the highest third quarter replacement ratios for calves since 2006 when they were 1.55:1 for steers and 1.49:1 for heifers.

Replacement Price Ratio

(Replacement cattle price divided by slaughter price)

YEAR 2007

2008

2009

2010

2011

QUARTER Q1 EAST WEST Q2 EAST WEST Q3 EAST WEST Q4 EAST WEST Q1 EAST WEST Q2 EAST WEST Q3 EAST WEST Q4 EAST WEST Q1 EAST WEST Q2 EAST WEST Q3 EAST WEST Q4 EAST WEST Q1 EAST WEST Q2 EAST WEST Q3 EAST WEST Q4 EAST WEST Q1 EAST WEST Q2 EAST WEST Q3 EAST WEST

Heifer calves

Steer calves

Yearling heifers

Yearling steers

Shortkeep steers

(400500 lb.)

(500600 lb.)

(600700 lb.)

(700800 lb.)

(800900 lb.)

1.12 1.17 1.12 1.20 1.27 1.28 1.28 1.16 1.10 1.07 1.05 1.05 1.13 1.05 1.03 1.02 1.04 1.12 1.14 1.22 1.23 1.27 1.26 1.22 1.20 1.24 1.16 1.21 1.23 1.30 1.35* 1.35 1.32 1.36 1.22 1.35 1.26 1.39*

1.23 1.26 1.19 1.30 1.29 1.37 1.38 1.27 1.25 1.20 1.15 1.19 1.19 1.14 1.12 1.14 1.15 1.27 1.21 1.32 1.27 1.34 1.33 1.34 1.32 1.38 1.27 1.33 1.29 1.37 1.39 1.39 1.40* 1.43 1.31 1.44 1.31 1.45*

1.06 1.07 1.08 1.11 1.16 1.21 1.16 1.05 1.03 0.99 1.02 1.00 1.06 1.02 0.97 0.96 1.02 1.06 1.10 1.13 1.13 1.18 1.13 1.12 1.11 1.14 1.12 1.13 1.16 1.20 1.20* 1.18 1.20* 1.19 1.15 1.22 1.17 1.24*

1.10 1.13 1.09 1.25 1.16 1.31* 1.21 1.13 1.10 1.08 1.07 1.09 1.11 1.09 1.01 1.05 1.04 1.13 1.12 1.18 1.16 1.24 1.17 1.21 1.15 1.21 1.15 1.16 1.18 1.25 1.21 1.23 1.22* 1.20 1.18 1.23 1.18 1.28

1.06 1.06 1.04 1.06 1.17 1.21* 1.20* 1.11 1.07 1.03 1.03 1.02 1.09 1.07 1.01 1.02 1.01 1.08 1.07 1.10 1.15 1.18 1.14 1.16 1.11 1.15 1.10 1.09 1.14 1.18 1.15 1.17 1.16 1.14 1.11 1.13 1.16 1.21*

*Record highs, East and West Source: Alberta Ag, OCA

www.canadiancattlemen.ca

CATTLEMEN / NOVEMBER 2011 35

STRAIGHT FROM THE HIP

Empowering women through mentorship

A

s a recipient of the 2012 Canadian Nuffield Scholarship, I chose an area of study with a very specific impact on the future of agriculture both internationally and at home that may be used to build a stronger domestic agricultural policy.

The work will focus on the development and structure of agricultural support initiatives/groups for women in agriculture in developed, developing and underdeveloped countries. The purpose is an understanding of the production (hands on) through to marketing processes and challenges, the obstacles that limit women’s access to technology, education, credit, sales, land ownership, tools or expansion (and the opportunities that enable them). When finished, the information will be directed toward a model for a Canadian women’s mentorship program, as part of long-term agricultural policy. This will be delivered in part by WISE (Women in Search of Excellence) throughout Canada.

The reasoning for a gender specific project was driven by questions from women farmers in Canada and the statistical significance of women in the production, processing and marketing of food worldwide. Within the confines or our borders, nearly 30 per cent of women are owner/managers of their agricultural enterprises. In the beef industry this has been historically consistent. In many other areas of the world, women play a major role in the food production, processing and marketing. Globally, women make up 43 per cent of the agricultural workforce. In some countries, over 80 per cent of the women are in the agricultural workforce and more than 60 per cent are direct farm producers.

Access to information, education, credit, technology, tools, land ownership and markets are vital for many women in rural food production — but the lack of political will to address the problem they face and the absence of any form of support in agricultural policy is actually contributing to a decline in worldwide food production at a time when the world population is exploding.

Canada is not exempt from this discussion, most certainly not from the view of the World Bank, which makes its position very clear by proclaiming that “Until women have the same opportunity, society will be destined to perform below its true potential.” Most certainly the Canadian Federation of Agriculture would agree and has stated that “Empowering female farmers worldwide is important to ending world hunger and enhancing the quality of life among rural populations.” This is a complex issue but the need to advance agriculture on all soils is of paramount importance and Canada must play a role. To do so, we first have to look at our own inefficiencies and face our realities head on. In the recently released report entitled Canada’s Agri-Food Destination, the Canadian Agricultural Policy Institute (CAPI) says: “Canada is not realizing the full potential of a major strategic asset — the country’s

36 CATTLEMEN / NOVEMBER 2011

agri-food sector. The consequences of falling profitability, lost opportunity, and declining relevance are impairing the nation’s agri-food industry. Current policies and practices across the sector, and fear of changing the status quo, are holding Canada back. This is in vivid contrast to what Canada needs to achieve in order to provide the higher quality and volume of product demanded by a growing world population and increasingly aware consumers both in Canada and abroad.”

If education were the only solution then most certainly Canada would lead the way as nearly 80 per cent of students in most university faculties are women. Indeed, 50 per cent of all university students worldwide are female.

This alone, does not ensure the success of the graduate in or out of agriculture despite personal drive and talent. In many cases, the system does not support the advancement of women and that has proven incredibly costly.

The Conference Board of Canada finds that women in senior management have flat-lined. Although educated and bright, the report found that the system failed the women, not that the women failed in the system. And like the CAPI findings that strongly suggests we need long-term systems in place and we need to challenge the status quo, the Conference Board also identified that the environment had to change not only for the sake of the gender but for the economic health of companies.

Companies that are inclusive of female employees and upper management enjoyed a 35.1 per cent higher return on equity and a 34 per cent higher return to shareholders. This is consistent with the findings of other similar studies. In agriculture, providing women with a support system in which they had access to information, education, tools, technology, credit and ownership has proven to increase production by a whopping 20 per cent.

Canada does not have designated assistance, mentorship or support for women farmers, managers or executives in agriculture. A collective voice that represents and addresses the issues of women in agriculture that are truly Canadian is silent. Those organizations that have branches for women face fiscal hardship, a huge demographic area and a constantly changing economic landscape. At no juncture is there mentorship or coaching for women in agriculture or related industries or business.

As women in agriculture, our responsibility is the empowerment of each other, increasing the political, social, spiritual, and economic growth of each individual. To do this effectively, we need a systems approach to all things agriculture with a well researched model that works and the political will to support it through long term policy.

— Brenda Schoepp Brenda Schoepp is a market analyst and the owner and author of BEEFLINK, a national beef cattle market newsletter. A professional speaker and industry market and research consultant, she ranches near Rimbey, Alta. Contact her at brenda.schoepp@ cciwireless.ca.

www.canadiancattlemen.ca

RESEARCH

How does feeding DDGS affect manure nutrient levels?

W

hen bio-ethanol is produced from corn, wheat or other grains, yeast microbes convert the grain starch into glucose, and ferment the glucose into ethanol. The nonstarch components of the grain are not converted to ethanol, and end up in distillers dried grains with solubles (DDGS) and other byproducts. Fibre, protein, fat, and mineral levels are about three times more concentrated in DDGS than they were in the original grain.

High feed grain prices and increased availability of DDGS have increased the use of these byproducts in North American feedlot rations. Cattle can use the fibre, protein and fat found in DDGS for energy, but the increased protein (and mineral) levels may pose a problem. If cattle consume more protein than they need, the excess protein can be metabolized for energy. But protein metabolism also releases nitrogen (N), which is converted to urea in the kidneys and excreted (primarily in urine).

Similarly, if cattle consume more phosphorus (P) than they can absorb, much of the excess P will be excreted in the manure. Provincial nutrient-management regulations are increasingly focused on levels of N, P, or both. As a result, it is important to know how incorporating DDGS into beef cattle finishing diets may impact manure nutrient levels. Several recent National Check-Off funded Beef Cattle Research Council projects have examined this issue.

What they did In three metabolic studies, feeder steers or heifers averaging 925 to 1050 lb. were fed finishing diets containing varying levels of DDGS. A different diet was fed to each animal (or pair of animals) for a three-week period. After two weeks of adaptation to the diets, nutrient digestibility was evaluated from a series of intensive feed intake, rumen, urine and fecal measurements. The animals then were rotated to another diet, and this was repeated until all animals had been fed all of the diets. Two university studies examined whether replacing grain with DDGS affected N and P excretion.

Kendall Swanson (at the University of Guelph before moving to North Dakota State University) compared an control diet (80 per cent dry whole corn, 10 per cent haylage, 10 per cent supplement) to three diets that replaced some of the corn grain with 17, 33 or 50 per cent corn DDGS. At the University of Saskatchewan, John McKinnon and Lee-Anne Walter compared a control diet (89 per cent rolled barley, six per cent barley silage, five per cent supplement) to four diets that replaced some of the barley grain with 20 or 40 per cent corn DDGS, or 20 or 40 per cent wheat DDGS. In the third study at AAFCâ&#x20AC;&#x2122;s Lethbridge Research Station,

www.canadiancattlemen.ca

Wenzhu Yang and Tim McAllister compared a control diet (83 per cent temper-rolled barley, 15 per cent barley silage, two per cent supplement) to three diets that replaced 20 per cent of the barley and five per cent, 10 per cent or all of the silage with 25 per cent, 30 per cent or 35 per cent wheat DDGS.

What they learned In the two studies that replaced grain with DDGS, dietary crude protein and P levels rose as the amount of DDGS in the diet increased. Feed intake did not change a great deal, so this meant that the animals consumed more N and P as more and more grain was replaced with DDGS. Manure and/or urine production also tended to increase as the DDGS content of the diet increased. Greater amounts of N and P were excreted as DDGS inclusion rates rose. The University of Saskatchewan study also reported that the manure had higher N and P values when cattle were fed wheat DDGS than when they were fed corn DDGS. When silage was replaced with DDGS, dietary crude protein and P levels also rose as the amount of DDGS in the diet increased. But (as noted in last monthâ&#x20AC;&#x2122;s column), feed intakes dropped as more and more silage was replaced with DDGS. So even though the dietary N and P concentration increased as silage was replaced with DDGS. This was balanced out by the drop in feed intake. As a result, cattle ate about the same amount of N and P, and excretion rates for both nutrients were fairly stable as dietary DDGS level increased from 20 to 30 to 35 per cent DDGS. But if manure output decreased (due to reduced feed intake), the concentration of N and P in the manure may have increased.

What it means Incorporating DDGS into feedlot finishing diets can increase the amount of N and P excreted by beef cattle and could increase the land base needed for spreading.

When DDGS replaces increasing amounts of grain in the diet, manure N and P levels rise steadily. When DDGS replaces silage in the diet, manure N and P concentrations increase, but this may be partly offset by lower manure production. Under commercial conditions, the N and P content of feedlot manure will also be influenced by bedding, weather conditions and other factors that affect nutrient runoff and ammonia volatilization.

Ongoing BCRC research is examining nutrient losses in composted vs. non-composted manure from DDGS-fed cattle, as well as impacts on N and P release in different soil types. This will help develop more appropriate recommendations for valuing and applying beef manure. â&#x20AC;&#x201D; Reynold Bergen Reynold Bergen is the science director of Beef Cattle Research Council.

CATTLEMEN / NOVEMBER 2011 37

C C A

A

Travis Toews is president of the Canadian Cattlemen’s Association

r e p o r t s

s I write this column, I am attending the Five Nations Beef Allliance meetings in Mexico. Cattle industry associations from Canada, the United States, Australia, New Zealand and Mexico make up the Alliance. We get together every 18 months to collaborate on common issues, such as international trade protocols, sustainability issues and environmental challenges and opportunities.

In October, the Canadian Cattlemen’s Association (CCA) held its first Town Hall meeting in Prince George, B.C. in conjunction with the B.C. Cattlemen’s Association (BCCA). The town hall meetings provide the opportunity for producers to meet CCA executive and managers and hear the latest reports on the many activities the CCA is involved in on behalf of Canada’s 83,000 cattle producers. They also provide an opportunity for CCA to hear from our provincial members and producers directly.

The event in Prince George was well attended and provided a good opportunity to meet with producers at a grassroots level. Presentations by CCA executive and managers were well received by participants. The level of engagement from producers, many of whom are BCCA directors and industry leaders in B.C., was impressive.

Sponsorship from Farm Credit Canada (FCC) enables the CCA to host town hall meetings across the country.

The CCA also launched the Beef InfoXchange System (BIXS) to cow-calf producers nationwide.

The BIXS concept is based on the premise that an improved flow of information between producers and packers can enhance industry competitiveness. The launch marked the successful conclusion of more than two years of effort to advance a concept developed by the CCA into the BIXS program. BIXS also met its goal of opening to cowcalf producers in time for the 2011 fall calf run.

BIXS is an individual animal and carcass data information exchange system developed by the CCA with funding provided through Agriculture and Agri-Food Canada’s (AAFC) Agriculture Flexibility Fund. AAFC Minister Gerry Ritz officially announced the funding contribution at the CCA annual meeting in March 2011. To participate in BIXS, go to http://bixs.cattle.ca/.

There has been steady activity on the trade front over the last few months. The Canada/EU trade negotiations continued with the latest round held in Ottawa in October. The CCA has been in regular communication with our negotiators, Ministers and MP’s to ensure that the importance of this negotiation to the cattle industry is clearly understood.

The CCA maintains that the Canada-EU Comprehensive Economic and Trade Agreement (CETA) may be the most important new trade opportunity in a generation. Europe is a huge market for beef and we currently have only a

38 Cattlemen / November 2011

by Travis Toews

share of a small quota. Canada is seeking unlimited duty-free access and resolution of a number of technical restrictions. The small quota we currently share has been administered in a way that has made it difficult for Canadian exporters to access with predictability. We have put forward a suggested methodology change and Minister Ritz raised this issue with German Agriculture Minister Ilse Aigner during a recent trade mission to Germany. Minister Ritz also made clear to his German counterpart the importance of the CETA negotiations and its benefit for Canada’s farmers.

On the country-of-origin labelling (COOL) issue, the CCA has been actively advancing a potential solution to U.S. industry interests and the U.S. government ahead of the public release of the WTO panel decision.

A number of important agreements and milestones have been reached. Recently, Canada reached an agreement with the U.S. to make Canadian blood meal available in the U.S. market.

The agreement removes the last remaining barrier from the 2003 BSE market closure. Vietnam reopened to live breeding cattle, the CanadaColombia Free Trade Agreement (FTA) came into effect, and Canada reached a science-based technical agreement with South Korea as a step toward restoring market access for Canadian under-30-month (UTM) beef. Under the agreement, Korea agreed to commence UTM shipments by the end of 2011. We are watching the process carefully, and will advise the Canadian government to request the WTO case be reinstated, if the Korean process begins to stall. Of course the full restoration of access for beef products from cattle of all ages to top priority markets is crucial.

We remain very active in Ottawa. The CCA’s Annual Fall Picnic on Parliament Hill was a huge success. Included were approximately 100 MPs and 15 Senators, MP and Senator Staff, VIP guests and cattle producers from almost every province across Canada. In addition to the discussions producers engaged in during the picnic, more than 20 meetings were held with MPs and other key influencers. Producers brought forth policy recommendations on issues including market access, suggestions for the next budget, including investment in research and market development, Growing Forward II policy suggestions and other issues.

Many of these issues were raised again when the CCA appeared before the Senate Standing Committee on Agriculture and Forestry to discuss the issues, as well as challenges and opportunities around research and innovation in the Canadian cattle industry.

Even with all the positive news in the industry, significant challenges to our competitiveness remain. On behalf of Canadian cattle producers, the CCA remains committed to pressing for improvements to the competitiveness of the cattle and beef industries. www.canadiancattlemen.ca

BUILDING TRUST IN CANADIAN BEEF

Beef’s image counts at historic Reesor Ranch VBP fits this ranch’s direct-to-consumer marketing plan

More than 100 years ago Scott Reesor’s great grandparents left Ontario for the beautiful rolling Cypress Hills of southwestern Saskatchewan.

Today, Scott and his wife, Theresa, and their children are building on the beauty and history of their ranch with a diversified business plan. They have established a thriving guest ranch, built around an historic theme that enables them to share their heritage with visitors.

They sell a small amount of beef off the ranch to guests and have expanded into selling bottled water from a spring on their land under the Reesor Springs label.

With many direct-to-consumer opportunities, the Verified Beef Production (VBP) program has become an important part of their marketing story.

Building on VBP At the year-round guest ranch, the Reesors have an opportunity to connect directly with consumers that most beef producers never get. VBP complements the conversations and illustrates their commitment to livestock production.

“With our combination of tourism and the cattle business, we just thought it was a win-win for us. It gives us a chance to educate visitors about beef, onfarm food safety and to build consumer confidence as a Verified Beef Production operation,” says Theresa who is a passionate advocate for the cattle industry and their way of life.

“People expect to eat beef when they come here so it is a great opportunity to talk about our beef and for them to take some Reesor Ranch beef home,” she says.

VBP ambassadors The Reesors have become a standard bearer for the VBP program, discussing it with family, friends and neighbours.

“People see the sign on the property and on our website www.reesorranch.com and ask what that means. We are always looking for good things that we can talk about and good stories in the beef industry,” says Theresa.

“We get a lot of questions like ‘What’s that all about? Is that organic?’” she says.

They take the time to explain how they

raise their 100-150 head of cattle in a very natural setting.

Industry ready The VBP process proved easy to adapt for the Reesors. After completing the workshop, they took the sample records and manual home to the ranch and haven’t found much additional effort required in keeping things up-to-date. “They were all things we were doing already, it was just a matter of recording it,” says Scott.

After completing their initial validation audit they were happy with the process. “It was a really good day with our auditor. We went through the checklist and covered all the food safety issues, medication, and withdrawal times in just a couple of hours,” says Theresa. Aside from reinforcing the best practices already in place, they picked up a few useful tips.

Scott believes the majority of beef producers are already well versed in the Best Management Practices that are the basis of the VBP program. “They may not realize it and look at VBP as more work, but it fits within most programs.”

There is real industry potential if the marketplace recognizes the additional value to consumers of having a strong VBP program, Theresa adds. “Market recognition of good stewardship practices could encourage consumers to eat more beef.

That would add value to the producer’s business and to the industry as a whole.”

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by Steve Kay

Where’s the beef?

A North American view of the meat industry.

Steve Kay is publisher and editor of Cattle Buyers Weekly

A

mericans still love their beef. But for August was $4.49 per pound, up four cents they’re not eating anywhere near as from July and up 47 cents or 11.7 per cent much as their parents. This seems a from August 2010. contradiction but the dramatic decline A similar increase by August next year would in per-capita beef consumption over the last 35 put the average price above $5. Such prices years has little to do with preference. It’s all about could meet resistance from consumers unless available supplies. the economy has improved significantly by then.

These supplies, which we also call disapPrices might increase sharply well before then. pearance, are calculated by adding together The All Beef retail price would have to advance domestic production and imports, subtracting to $4.88 to fully reflect the price of fed cattle in exports, and then dividing the total by the latmid-October ($119 per cwt). est population figure. Americans in 1976 conThe main reason for USDA’s lower per-capsumed a hearty 94.3 pounds of beef per person. ita forecast is because of lower production next Production was a record that year, exports year. But it also cut 2012 imports and increased were minimal and the U.S. population was 218 its 2012 export forecast. USDA says strong million people. demand in a number of countries is expected to Consumption has been on a steady decline support continued growth in U.S. exports. since then but the trend has accelerated since Its statement came the same day that a rare 2007 as exports continue to increase and, more bipartisan vote by the U.S. Congress passed latterly, imports have fallen sharply. Also, the three free trade agreements, with South Korea, U.S. population has Panama and Colombia. grown to nearly 309 The FTAs, notably that million. USDA’s latest with Korea, could add forecast is for per-capita While everyone looks more than $2 billion supplies in 2012 year to to the value of U.S. red drop to 54.3 pounds per forward to a potential meat exports over the person. This is down a increase in exports to next 15 years. Estimates startling 3.4 pounds from vary from $1 billion to this year’s forecasted 57.7 Korea, and other markets, $1.8 billion per year as pounds and down 10.7 to what the added annual pounds from 2007. The the result will be even less beef trade to Korea might supply might well be the beef supplies at higher be once the FTA is fully lowest since USDA began implemented. prices for Americans calculating it.

The increase, whatSuch a decline in perever it amounts to, prescapita supplies has enormous implications for ents a conundrum for the U.S. beef industry. all in the U.S. beef chain and consumers. End While everyone looks forward to a potential users, whether at retail or food service, will have increase in exports to Korea, and other markets, to compete more for tighter supplies. They will the result will be even less beef supplies at higher have to pay more for all types of beef and try to prices for Americans. One solution, albeit a pass on the added costs. long-term one, is that the FTAs will provide an Wholesale beef prices are already much incentive for cow-calf producers to expand their higher than at this time last year. USDA’s herds. But until it rains, and rains and rains, in weekly composite cutout the week ended OctoTexas and surrounding states, any expansion is ber 7 was $179.10 per cwt. This was 19.2 per out of the question. cent higher than the same week last year. A similar increase by this time next year would Cattle Buyers Weekly covers the North American meat put the cutout at $213.49. Retailers and restauand livestock industry. For subscription information, rateurs this year have attempted to minimize contact Steve Kay at P.O. Box 2533, Petaluma, beef price increases to consumers. But retail CA 94953, or at 707-765-1725, or go to www. prices continue to rise. USDA’s All Beef price cattlebuyersweekly.com.

40 Cattlemen / November 2011

www.canadiancattlemen.ca

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NEWS ROUNDUP HEALTH SASKATCHEWAN BVD PROJECT UNDERWAY The Saskatchewan Stock Growers Association (SSGA), in response to direction from members at its 2011 AGM, has launched an initiative to demonstrate the advantage of implementing bovine viral diarrhea (BVD) control measures in cow-calf operations.

The two-year project began in October with funding from the Saskatchewan Ministry of Agriculture’s (SMA) Agriculture Demonstration of Practices and Technologies (ADOPT) program. It is being led by Dr. Wendy Wilkins of the SMA’s animal health unit, with input from SMA livestock specialists and SSGA’s veterinary advisor, Dr. Andy Acton of the Deep South Animal Clinic at Ogema.

The first step will involve screening herds for eligibility from now through calving next spring. Participating veterinary clinics will take skin samples for BVD testing from aborted fetuses, sick animals and dead animals through the course of their everyday work with producers. The samples will be submitted for testing to Prairie Diagnostic Services’ lab in Saskatoon to identify persistently-infected (PI) animals. A limited number of herds with confirmed PI animals will be

STAMPEDE

By Jerry Palen

“Flo, that’s not helping.”

42 CATTLEMEN / NOVEMBER 2011

offered the opportunity to participate in the project.

Even though BVD may not be the apparent cause of illness or death, it is often an underlying cause, Acton explains. BVD PI animals are born from unprotected cows that contract the BVD virus during pregnancy. The fetus accepts BVD as part of its body and, therefore, will never be able to mount an immune response to the virus after birth. Most PI calves are poor-doers that die before or shortly after weaning, but some appear normal and live to become part of the breeding herd, in which case, their offspring will be PI. The concern in cow-calf operations and feedlots is that PI calves perpetuate the disease cycle by continuously shedding large amounts of the BVD virus through their saliva, nasal secretions, feces and even their hides. It is believed that the virus can weaken the immune response to other infections in normal cattle.

Step number two will see further testing of the 2012 calves, replacement heifers and breeding bulls in participating herds before the start of the breeding season. Timing is of the essence, says Acton. “If a newborn calf tests negative, then it is guaranteed that the mother is not a PI animal. Testing open animals, such as replacement heifers and breeding bulls, at the same time would complete a whole-herd screening test without having to sample all the mother cows. After breeding, all bets are off because you don’t know the status of the unborn calves.”

The veterinarians will work with the producers to establish BVD control measures by identifying the risk factors on each operation and looking at changes in management practices to reduce the risk. Some common risk factors include not vaccinating the breeding herd against BVD prior to breeding, buying bred cows and heifers of unknown BVD status because they could be carrying a “Trojan” BVD PI calf, buying in calves to background or yearlings to grass without effectively separating them from the breeding herd (including having separate watering bowls), and communal grazing.

“Feedback from people involved in BVD control programs in the U.S. is that you can’t test your way out or vaccinate your way out of BVD —

both have to work together,” Acton says. Even if you do vaccinate regularly, it will be worthwhile to routinely test animals that get sick or die because that’s where you will be most likely to find PI animals. Testing can help to validate the effectiveness of your control program.

The final phase of the project will be to test all 2013 calves and aborted fetuses for PI animals.

A cost-benefit analysis of the BVD control measures will be calculated for each participating herd. The producers will also offer their opinions as to the benefits and practicality of implementing a BVD control program.

A video and printed material highlighting the findings will be presented at industry meetings and made available to other industry groups and media.

FINANCES TAX TIPS When farmers are experiencing good crop yields at a time when both grain and livestock prices are historically high, their thoughts just naturally turn to taxes.

Alberta Agriculture tax specialist Merle Good recently offered several strategies farmers can employ to better manage their income tax liability in a higher than average income year. These include: • Prepaying for supplies — A farmer may make a payment on account at one of his suppliers and leave this payment as a credit towards purchases to be made in the subsequent year. For the Canada Revenue Agency (CRA) to consider a pre-payment as a deductible expense in the year it is made, actual supplies should be purchased.

“This may be as simple as transferring title to the purchased inventory to the farmer, with delivery to take place at a later date,” says Good.

• Deferring agricultural commodity sales — It is relatively common for farmers who report income on a cash basis to request a deferral of income from the sale of various commodities to the next fiscal period by way of a post-dated cheque. “The CRA has expressed concern with these kinds of transactions when the purchaser was www.canadiancattlemen.ca

clearly in the position to pay for the products,” cautions Good.

• Increasing inventory — Cash expenses can be increased (and farm income reduced) in a fiscal year by purchasing additional farm inventory. Farm inventory may include items such as crop inputs, machinery parts, and livestock.

• Payment of wages — Paying wages to family members is tax deductible and may be one of the best strategies for offsetting farm income. The first $10,000 of wages paid to a child is not taxable. In some instances the child can then “lend” a portion of the money back to the business to sustain working capital, provided there is an adequate paper trail for the wage and loan transactions.

“There are also a couple of possible tax-planning and management strategies specific to the livestock producer,” says Good. “First, livestock producers may defer livestock sales through a public auction mart to a subsequent taxation year. Second, feedlots or purchasers of cattle who place their cattle in a custom feedlot, are required to own cattle for at least 60 days and/or increase their weight by 200 pounds

Continued on page 44

Tips & Tales

We need your...

to be considered by CRA to be in the business of farming. If you purchase cattle before your year-end, the 60 day holding period or 200 pound weight rule does not have to be met in the year of purchase, but can straddle two fiscal years.” Good suggests Alberta producers considering year-end cattle purchases should also look at the new Cattle Price Insurance Program (CPIP) offered by Alberta Financial Services Corporation (AFSC) to manage risk.

Grain farmers also have a number of potential tax planning strategies specific to their operations.

• Deferred cash grain tickets — The use of a “deferred cash grain ticket” allows crop inventories to be sold in one year but not taxed until the subsequent year. When grain is delivered to a licensed public elevator or process elevator, a storage ticket, cash purchase ticket or a deferred purchase ticket may be issued. If a storage ticket is issued, no sale has taken place; therefore, income has not been received at that time. If a cash ticket is received, the sale has taken place, and the farmer is considered to have

calving

Friends and neighbours, we are once again looking for your best calving tips and tales for Cattlemen’s expanded January 2012 Calving Special. We’re looking for good ideas, practical advice, or humorous tales and photos to share with fellow readers. A reward will be sent for Tips & Tales printed in this special. www.canadiancattlemen.ca

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Cattlemen / November 2011 43

News Roundup Continued from page 43

received payment at that time regardless of when the ticket is presented for payment. If a deferred cash purchase ticket is issued, and the ticket provides for a payment date after the end of the fiscal year in which the grain is delivered. The income for a deferred ticket may be reported in the following fiscal period.

• U sing deferred cash grain tickets to “pay” for expenses — In some situations, a farmer may transfer a deferred cash grain ticket (“DCGT”) to a supplier, and the supplier accepts the DCGT as a payment on a purchase. In this situation, the CRA will still allow the deferral of income under the DCGT to the following fiscal period. This creates a tax advantage as the farmer could deduct the expense for the supplies purchased with the DCGT in the current year, yet not report the income under the DCGT until the following year.

• CWB advances — Cash advances received from the Canadian Wheat Board in this tax year are not taxable receipts and are treated as loans.

The sale of grain to repay the advance should be reported in farm income at the gross amount before the reduction for the repayment of the advance.

“These are just a few strategies that farmers should be considering prior to December 31, 2011, to make sure they celebrate a Happy New “Fiscal” Year at midnight!”

marketing CAB sales up for fifth straight year Certified Angus Beef LLC, for the fifth consecutive year, reported record sales for its signature brand of beef reaching 807 million pounds by September, an increase of four per cent over the previous record in 2010 of 777 million pounds.

The brand’s sustained growth, particularly during a period of significant economic downturn and rising costs across all segments of the industry,

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We’d appreciate it if you could tell us a little about yourself. It makes it easier for us to keep your main interests in focus  I’m ranching or farming Enterprise Total beef cattle Yearlings on feed/pasture Registered cows Fed cattle (sold yearly) Commercial cows Horses Calves on feed/pasture Other livestock

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44 Cattlemen / November 2011

what you like about the magazine, and what you don’t like. There’s also some space for you to tell us what you would like to see in future issues.

ClIp And enClose your mAIlIng lABel. each month, we will draw one name from all the surveys sent in and send that person a Cattlemen cap.

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shows its value to consumers and producers, said company president John Stika.

A new Kansas State University study indicates demand for the CAB product has risen 56 per cent since 2002 compared to a 20 per cent increase for commodity Choice beef.

Stika noted the brand’s growth was balanced, with increased sales of steaks, end meats and ground beef.

Sales surpassed the 70 million pound mark each month during June, July and August of this year.

In the U.S. the brand’s nearly 8,000 licensed restaurants enjoyed an 11 per cent increase in food-service division sales totalling 250 million pounds through September while 5,900 licensed retailers posted sales of more than 395 million pounds — 49 per cent of the total.

Licensed CAB partners outside the U.S. netted record international sales of 90 million pounds — a increase of 13 per cent over last year. Canada and Mexico are the strongest foreign markets.

Sales of branded value-added product including cooked, frozen sliced steak for fajitas, and meatloaf sliders,

Regular Columns News Roundup Purely Purebred The Markets

5

4

3

2

1

Market Talk Sales and Events

2 1 Nutrition Comment Research Special features 5 4 3 2 1 Newsmakers Letters Calving Issue (Jan.) CCA Reports Custom Feedlot Guide (Sep.) Prime Cuts Stock Buyers’ Guide (Aug.) Straight From The Hip Animal Health Special (Sep.) Holistic Ranching Beef Watch (May & Nov.) What would you like to see? __________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ How much time do you and your family spend reading 1666 Dublin Avenue Canadian Cattlemen?  Under 2 hours  Over 2 hours Winnipeg, Man. R3H 0H1

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also set a sales record of 18.5 million pounds.

On the supply side the acceptance rate for CAB beef rose to 24 per cent in the U.S., the highest in 24 years, supplying 3.4 million head for the program.

MANAGEMENT BIXS IS OFFICIAL The Beef InfoXchange System (BIXS) is officially live nationwide for cow-calf producers to use heading into this year’s fall calf run.

The system was created by the Canadian Cattlemen’s Association as a means of improving the flow of performance and carcass informa-

tion between producers and packers in hopes of making the industry more competitive on the world stage.

BIXS allows cow-calf producers to use individual animal ID numbers from the Canadian Cattle Identification Agency (CCIA) to record herd health management protocols, vaccination records and other data, and later, to call up detailed carcass information.

“This type of information will help producers refine production methods to produce cattle with specific attributes that the market demands,” the CCA said in a release.

The program is voluntary. To take part cow-calf producers need to keep records of their animals’ CCIA tag numbers and birthdates, either a calving start date or an actual birthdate, even if the cattle are sold.

That information is required at BIXS’s cow-calf level for the animals’ producers to take part and, in turn, get carcass data later as the cattle move through the system.

Producer Judy Madden of Dawson Creek, B.C. said the system will give her a “more complete picture of how her animals measure up” by providing data on weaned calves. She can then add that to individual animal records already kept on birth, weaning and sale weights.

“What we’re missing is information on how those calves feed out and how they slaughter,” Madden said in the CCA release. “If we have that information to put with the rest of our information, then we could see what Continued on page 46

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work we need to do on our breeding program.”

Madden also noted the system’s “ease of use” for any producer who wishes to take part. Those who don’t have ready access to the Internet can have a third party enter their data in the BIXS system, she said.

The CCA has previously said it’s working on tools for use within BIXS tailored to auction markets’ use. The association also has tentative plans to allow markets to provide “strategic messaging” on pending sales and events to producers who have specific animals and protocols, or are in specified geographical areas.

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The spread cannot be explained by any change in carcass weights as weights appear to be trending right around the average for this time of year.

“Instead,” he says, “it appears to be a Wal-Mart issue. The company has begun to focus more on a Choice beef program, buying large quantities of upper two-thirds Choice beef. Packers are scrambling to meet demand, and at the same time, there is now relatively more Select product on the market than normal. This has not yet appeared to have much impact in Canada, but it should eventually result in a wider AAA-AA spread here. Choice product will be less available for food service purveyors, which should increase domestic packer pricing on AAA product. In addition there should be more Select product looking for a home that will be more available for Canadian grocery distributors.”

trade We need an FTA with South Korea The Canadian Red Meat Industry is calling on Ottawa to resume free trade agreement (FTA) talks with South Korea.

The move was not unexpected after the U.S Congress ratified three FTAs with South Korea, Colombia and Panama. The Canadian industry made its request to Ottawa on October 21, the same day President Obama signed the three agreements bringing them into force.

Canada’s attention, however, is centered on South Korea.

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Meat Council warned the majority Conservative government that any further delay in concluding a free trade agreement (FTA) with South Korea is likely to seriously affect the competitiveness of their industry.

Pork producers in particular have immediate concerns now that they must compete against duty-reduced U.S. pork. Canadian Pork Council chair Jurgen Preugschas says, “An American study evaluated the benefits for the U.S. pork sector of an FTA between the U.S. and South Korea at US$10 per hog. Canadian producers will be foregoing a similar benefit and risk losing their existing position in the Korean market.”

He says Canada’s current pork trade with South Korea, projected at $300 million in 2011 could disappear, lost to competitors who enjoy FTA preferences.

South Korea has had a ban on Canadian beef since 2003 but there are signs it could be removed by the end of this year. At least that is the date Canada’s agriculture minister Gerry Ritz has set for imports to resume if the South Korean government does not want Canada to reopen its case against the beef ban at the World Trade Organization.

A WTO panel was about to rule on the case when both sides agreed to try for a negotiated settlement.

That makes the need for an FTA agreement all the more important to beef producers, says Canadian Cattlemen’s Association president Travis Toews. “Almost at the very moment we hope Korea lifts its prohibition on Canadian beef, they will be reducing the tariff on U.S. beef which could well negate our market access gain.”

Canada began negotiating an FTA with South Korea, a market of 50 million people, in 2005.

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CATTLEMEN / NOVEMBER 2011 47

purely purebred Suggestions are always welcome.

My phone number is 403-325-1695 Email: deb.wilson@ fbcpublishing.com

Deborah WILSON

◆ The photo for this issue features a historical event. “Beef in the Ballroom” is the title of the picture. So who can tell me the year and the location. I can already picture certain people going through old publications.

◆ Last issue’s photo created a lot of

interest with a number of people phoning in and emailing.

Kelly Sidoryk, from Alberta, identified both Edward Jupp as the Ringman and Herb Strandquist in the background.

48 Cattlemen / November 2011

Dale Stewart from Manitoba sent this: “Brent wants to tell you that the ringman is Edward Jupp and the gentleman in the red jacket is Herb Standquist. I am sure you will have lots of replies from us middle-aged kids that knew these men awhile back!” I can guess that Brent, her husband, doesn’t email. But I know he does a great job when showing cattle.

Sheila James, of Spring Valley Farms, Carleton Place, Ont., also emailed me, “In this month’s Purely Purebred mystery photo there is Ed Jupp taking bids and Herb Strandquist wearing the red jacket. The photo was taken at a Hereford sale, though I can’t tell which one.”

There was also a fellow with the surname of Hall, from Craven, Sask., but I didn’t catch his first name off my voicemail. He, also identified both men.

The Lishkas from Southern Saskatchewan also nailed the identity of these two gentlemen. Several people identified one of the individuals but couldn’t get both. Obviously many of us have not forgotten our Hereford roots.

◆ I recently attended a Summit for Animal Agriculture in Ottawa that was hosted by the Farm Care Foundation. The goals of the Summit were to increase animal agriculture’s profile, work towards developing a strong social contract and discuss key industry issues. The program focused on research and development, consumer needs, production opportunities and barriers, as well as production and societal balance.

One of the issues I find most troubling is that conventional agriculture, especially animal agriculture, is in danger of losing its social contract, or in other words the goodwill of society to operate in the manner which we accept as standard practice. The general population that is not involved in conventional agriculture (about 95 per cent) has lost any appreciation of the importance of agriculture in their lives. They take for granted affordable food and the abundance of it in our country. There is a lack

of support for agriculture-friendly policies. Because of this the general population is easily mislead by activist groups about our current industry practices. Our industry must address issues such as sustainability, animal welfare and food safety, if the industry is to remain sound and capable of meeting the food needs of the world’s growing population, which will reach a critical mass by 2050. I challenge cattle producers to increase awareness of the role of animal agriculture in your local communities. Make it a priority to convey how you care for your animals, and your passion to produce more efficient, healthy cattle, how you use sustainable practices on your farm and ranch, and your concern for the safety of the food supply in the future.

As producers we work to produce more, increase the quality and value of our products. In our production practices we need to exhibit strong ethics and transparency. We further need to understand the priorities and desires of the consumers, which are health and nutrition, natural products, animal welfare practices and sustainability. We need to do what we do better and more efficiently, while remembering the following: choice is the consumer’s right, food is a human right and sustainability is an environmental right. Even though food is a human right, consumers will make the wrong choices if we do not take the steps to educate them about our ani-

STAMPEDE

By Jerry Palen

“There’s been a lot of research written about it. Now I wish I’d read it.” www.canadiancattlemen.ca

mal welfare and sustainable practices.

Consumer trust needs to be carefully cultivated by demonstrating competency, creating confidence, using third party advocates and making sure we present science-based information. As producers we need to engage our contemporaries and industry groups in discussion, educate ourself about threats to our industry, the consequences of bad policy and meet with like-minded people to hone our message. Personalize the issues and embrace your messages. If we, as producers, can make it clear that we support ethical choices for people, animals and the planet we may be able to counteract the policies that the one per cent of food buyers or activists advocate for — the policies which will dramatically impact animal agriculture in a negative way.

◆ As part of continuing efforts to enhance the information provided from Simmental data, the search function on the Canadian Simmental Association’s website has recently been upgraded to include percentile rank graphs for all of the reported

EPD traits. These graphs provide an immediate picture of where an animal fits in the Simmental population for a specific trait. For more details visit: http://search.simmental.com.

conference co-ordinator, McArton Consulting Ltd., cell: 306-731-7610, office: 306-488-4725, email: shannon. mcarton@sasktel.net.

◆ Carol White has recently joined the

board of directors has purchased land in East Balzac, Alta., and will build an office building on it. The Canadian Angus Association office, currently located in Calgary, will relocate to the new building upon completion.

The association has been leasing office space in Calgary since 1996. Construction is expected to be rapid with move-in anticipated in the first half of 2013. The building will be located in the Wagon Wheel Park just east of Cross Iron Mills shopping centre. The site offers ideal accessibility and is conveniently located near the Calgary International Airport.

Although the building will be built and operated by the Canadian Angus Association, other Canadian breed associations and industry groups have expressed an interest in joining this

Canadian Simmental Association staff as office assistant/receptionist. Carol has extensive administrative experience and an outgoing personality.

◆ The 3rd annual Saskatchewan Beef Industry Conference will be held January 18-20, 2012 in Saskatoon. This premier beef event includes all aspects of the beef industry in the province with the support of the Saskatchewan Cattlemen’s Association, the Saskatchewan Stock Growers Association, the Saskatchewan Livestock Association, the Saskatchewan Cattle Feeders Association and the Saskatchewan Beef and Forage Symposium Committee. David Stuart is the Saskatchewan Beef Industry chair for 2012.

For information on how to become a sponsor, trade show exhibitor or delegate, contact: Shannon McArton,

◆ The Canadian Angus Association

Continued on page 50

Most in the Canadian cattle industry believe there is and will continue to be a shortage of Charolais bulls. Becoming a PROFITABLE PUREBRED CHAROLAIS BREEDER can begin here…

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www.canadiancattlemen.ca

Cattlemen / November 2011 49

Continued from page 49

project. CAA president David Bolduc calls the decision to purchase land and build an office building “one of the most significant decisions in the history of the Angus breed. He continues, “We have looked at options to own our own building for several years and feel that this is the best investment of our association’s resources on behalf of our membership. We are very excited about this tremendous opportunity and look forward to relocating with other Canadian beef breed organizations and industry groups.”

◆ The Angus Association is not the

only breed organization planning on moving into new offices. I understand that the Canadian Gelbvieh Association and the Canadian Limousin Association will shortly be relocating to the Canadian Hereford Association building. The Canadian Hereford Association offices are located at 5160 Skyline Way NE in Calgary.

◆ The Canadian Hereford Association is now on Twitter. Follow them @CAN_Hereford or view the Twitter feed on their website to see updates and current Hereford news. ◆ The Alberta Angus Association’s

Steak frys are underway at 15 auction marts in Central and Southern Alberta running from Oct. 15 to Nov.

STAMPEDE

By Jerry Palen

7. Angus producers and enthusiasts will be on hand preparing the steaks, grilling, serving and promoting Angus beef.

◆ The Quebec Junior Simmental Show took place on Friday, Oct. 7 with 31 members present. Kevin Dempsey of Shadybrooke Shorthorns judged the showmanship classes and the Champion Showperson was Rosalyn Grusnick of Ontario and the Reserve Champion Showperson was Nicole Gilles of Ontario. Congratulations to all the volunteers as well as the participants for a very successful day. ◆ The Canadian Simmental Asso-

ciation’s first group of feeder cattle, in their Genomic Innovations research project were unloaded in late July at the University of Guelph’s Elora Beef Research Facility. The 144 Simmental-influenced steers were sourced from Alberta and will be harvested in November. Individual feed intake data is being collected in order to establish efficiency values for each animal.

The second group of feeder cattle targeted to weigh 750 pounds is currently being sourced and will enter the research facilities in late November.

◆ The Olds Fall Classic was held in early October with six breed shows.

Congratulations to all the Champions as they qualified for the new Alberta Supreme at Farmfair and RBC Beef Supreme Challenge at Agribition. Other winners were: Kiefer Trailer Winner — Kolby Heaven of Whitecourt, Alta., Industry Leadership Award — Jean and the late Louis Latimer of Olds, Alta. Tyson Van Tighem “Spirit of Youth” Award — Sawyer Daley of Carstairs, Alta., (presented at Summer Synergy). Meyers Norris and Penny sponsored the exhibitor social showcasing Ty Christian Wilson. The 2012 Olds Fall Classic will be held Oct. 5-7.

◆ Canadian Cattlemen’s Association

“It’s a battle of wits, and it always ends in a tie.”

50 Cattlemen / November 2011

representatives were on hand at the Steaks for Soldiers event at CFB Valcartier Oct. 14, where nearly 4,000 Canadian Triple A, well-aged striploins were served to the troops and their families. Sponsor a Steak for a Returning Soldier campaign organizer Harvey Dann was also at the event, the largest of the four Steaks for Soldiers events held in appreciation of Canadian troops since 2007. Repre-

sentatives from Canada Beef Inc. and the Fédération des Producteurs de Bovins du Québec joined Dann and the CCA in assisting CFB Valcartier personnel in the preparation and serving of the steak.

CFB Valcartier is home to the largest Canadian regiment involved in the Canadian operation in Afghanistan.

Nearly twice as many steaks were served here than at each of the previous events, said Dann. “I am thrilled that contributions to the campaign will support this event as well as upcoming events at CFB Gagetown and planned repeats at CFB Petawawa and CFB Edmonton,” he said.

The CCA has supported the Steaks for Soldiers event from the outset.

When the first troop rotation came back from Afghanistan in 2007, the CCA sponsored the 1,700 steaks served to the returning troops of the Royal Canadian Regiment and their families at CFB Petawawa.

◆ Just a reminder about the YearRound Grazing Systems School coming up in Westlock, Alta., on Nov. 25-27. It is an agricultural business management school focused on the business of ranching, and is based on a grazing system for both summer and dormant seasons. The school is highly focused on the management side of your ranch and looks into how to use a gross margin analysis and a cash flow. Remember that grazing is only a production practice, therefore to make a living at ranching, you need to be good at business. This school gives you some great information to help your production component, but also gives you tools in human resources, economics and finances to help make your business profitable. You will receive some easy to use tools to help you see where your operation is and where it needs to go. Included at this school will be a tour of a winter grazing set up with dormant season grazing and bale grazing. For $800, two members of your farm can attend the school. For more information contact: Steve Kenyon of Greener Pastures Ranching Ltd., email: skenyon@greenerpasturesranching.com or phone 780-307 2275. ◆ The Beef InfoXchange System (BIXS) is officially live nationwide for cow-calf producers. This type of information will help producers raise cattle that the market demands.

C www.canadiancattlemen.ca

The markets

Market Summary debbie mcmillin Fed Cattle

A lower Canadian dollar and increased buyer competition from the U.S. led to a strong fed market in the first week of October. Prices reached $110.73, an increase of $5.05 in one week. Fed steers in Alberta at the end of the second week averaged $108.94, up $17.81 per cwt from a year ago and more than $31 better than 2009.

A lower Canadian dollar and a slow reacting cash price led to a widening basis at the start of the month. By mid-month it was $13.09 under the U.S. market.

The Alberta and Saskatchewan cattle-on-feed for October 1 was up four per cent over last year. The year-todate total of 709,278 head sits three per cent above 2010 but 10 per cent below the 10-year average, a reflection

Deb’s Outlook

of the shrinking Canadian cow herd.

Placements through September are down six per cent due to the smaller number of available supplies and the nice fall weather that kept more calves on pasture.

Fed slaughter and exports continue to run lower. Steer slaughter to date is down nine per cent from 2010 and heifer slaughter is down 14 per cent.

Export shipments of slaughter cattle to the U.S. are down 37 per cent year to date at 307,904 head.

Feeder cattle Nice fall weather and good harvest conditions kept many calves on grass through September however, traditional fall run volumes were starting to hit auction markets as this column was written in mid-October.

Producers are eager to take advantage of a favourable market. Since August yearlings have hovered mostly between $126 and $128 per cwt but in mid-October the 850 steer average edged up to $130.70, which was $22 better than 2010 prices and up $40 from 2009. Calf prices were also up substantially with 550 Alberta steers averaging $159.67 at mid-month, compared to $127 a year ago. The feeder basis has widened since our

tainty and the instability of global markets.

Fed cattle

Feeder cattle

Carcass weights are up and pickup times stretched which generally means packers are secure in their inventories, however increased U.S. interest coupled with manageable fed supplies should lend support to the cash market. The basis should follow seasonal trends and tighten toward the end of the year as wholesalers look towards holiday needs in December. If the Canadian dollar stays at par or below it should maintain U.S. interest and support the local market in November and December. The biggest risks to the market are Canadian dollar uncer-

Corn prices dropped slightly when the harvest was in full swing, but the potential for higher prices on barley and U.S. corn continue to be a risk for the remainder of the fall run. As the end of the yearlings trickle in prices will remain strong on this class of cattle. And the increased interest in replacement-type heifers is expected to hold as good feeder calf prices generally trigger consolidation and growth phases in the cycle. Feeder prices may see a slight seasonal decline based mostly on quality however the demand to fill pens will remain strong, buoyed by live

www.canadiancattlemen.ca

last report. It averaged -13.32 so far in October, but tightened to -10.80 at mid-month. Feeder exports to date total 65,446 head, which is 64 per cent fewer than we shipped at this time last year.

Non-fed Cattle Cow prices dropped some since summer but are holding well when you consider the large U.S. kill over the past few months. Solid demand for grinding product and trim combined with the decline in fed supplies and non-NAFTA imports had D1,2 cows posting an overall average of $71.30 in 2011, but that slipped at bit to $67.83 at mid-October. Still, that is $13.38 better than 2010.

Butcher bull prices dropped over the past several weeks, but are mostly trading in the mid-$70 range. Cow slaughter in 2011 is down 14 per cent, bulls are off 17 per cent. Cow exports are down 28 per cent but bull shipments are up 18 per cent at 30,432.

— Debbie McMillin

Debbie McMillin is a market analyst who ranches at Hanna, Alta.

More markets➤

cattle futures that provide risk management opportunities, overall optimism and the shrinking supplies due to this year’s smaller calf crop.

Non-fed cattle Higher cow numbers are expected over the next few weeks as producers wean and cull their herds. Good forage stocks may keep some cows at home to put on added pounds and improve the grade but for the most part greater numbers will be coming to the town. Cow prices typically come under pressure through the fall and 2011 should be no different, however prices should hold comfortably above year-ago levels as the overall supply will be tighter.

Cattlemen / november 2011 51

Break-even Prices on A-Grade Steers 115

ALBERTA

150

105 95 85 75

Market Prices

160

140 130

western Market Summary

120 110

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

135

100

Steer Calves (500-600 lb.)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

85

ONTARIO

125

75

115

65

105

55

95

45

85 75 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2011

Canfax weighted average price on A-Grade steers

35

D1,2 Cows Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Ontario 2010 Market Ontario prices based on a 50/50 east/west mix Summary O ntario

2011

2010

A lberta

Break-even price

2011

for steers on date sold

2012

2011

Kevin Grier2010

Market Summary (to October 1)

October 2011 prices* Alber ta Yearling steers (850 lb.)............... $128.07/cwt Barley................................................. 4.51/bu.

Barley silage..................................... 56.38/ton Cost of gain (feed)........................... 60.56/cwt Cost of gain (all costs)..................... 84.90/cwt Fed steers...................................... 105.87/cwt Break-even (February 2012).......... 112.59/cwt Ontario Yearling steers (850 lb.)............... $132.24/cwt Corn silage....................................... 55.76/ton Grain corn........................................... 6.72/bu.

Cost of gain (feed)......................... 100.08/cwt Cost of gain (all costs)................... 125.68/cwt Fed steers...................................... 107.80/cwt Break-even (April 2012)................. 129.40/cwt *Mid-month to mid-month prices Breakevens East: end wt 1,450, 183 days West end wt 1,325 lb., 125 days

52 Cattlemen / november 2011

2011 Total Canadian federally inspected slaughter............. 2,238,457 Average steer carcass weight............................................ 848 lb.

Total U.S. slaughter.................................................... 26,644,000

2010 2,524,118 846 lb.

26,663,000

Trade Summary EXPORTS 2011 Fed cattle to U.S. (to Oct. 1).......................................... 307,904 Feeder cattle and calves to U.S. (to Oct. 1)..................... 65,446 Dressed beef to U.S. (to August)........................... 367.80 mil.lbs Total dressed beef (to August).............................. 494.77 mil.lbs

2010 492,100 179,388 482.90 mil.lbs 624.15 mil.lbs

IMPORTS 2011 Slaughter cattle from U.S. (to August) ...................................... 0 *Dressed beef from U.S. (to August).................... 244.19 mil.lbs *Dressed beef from Australia (to August)................. 12.63 mil.lbs *Dressed beef from New Zealand (to August)............ 43.84 mil.lbs *Dressed beef from Uruguay (to August)................. 9.36 mil.lbs

2010 0 181.67 mil.lbs 14.39 mil.lbs 39.02 mil.lbs 24.58 mil.lbs

Canadian Grades (to October 8, 2011) % of A grades AAA AA A Prime Total

EAST WEST

+59% 19.3 30.1 2.9 0.2 52.5 Total graded 437,892 1,593,203

Yield â&#x20AC;&#x201C;53% Total 10.2 51.4 2.5 43.3 0.0 3.0 0.5 1.1 13.2 Total A grade 98.8% Total ungraded % carcass basis 134,299 62.3% 73,063 77.2%

54-58% 21.9 10.7 0.1 0.4 33.1

Only federally inspected plants

www.canadiancattlemen.ca

market talk with Gerald Klassen

Fed cattle outlook

I

â&#x20AC;&#x2122;ve received many inquiries over the past couple weeks in regards to the fed cattle outlook for the first and second quarters of 2012. Feeder cattle prices have reached historical highs and barley prices appear to be percolating higher. Therefore, feedlot operators have a fair amount of risk moving forward. It is also important that cow-calf producers have a longer-term view of the fed cattle market.

The two main factors influencing the price of feeder cattle are the cost per pound of gain and the expected fed cattle price at slaughter. The cattle complex is a pure competitive market so feedlots usually bid up the price of feeders to the level where feeding margins are minimal. In this issue, Iâ&#x20AC;&#x2122;m going to discuss at the fed cattle fundamentals for the winter and spring timeframe.

The drought in the U.S. Southern Plains caused larger portions of feeder cattle to be placed sooner than normal.

U.S. feedlot placements during July were approximately 400,000 head larger than July of 2010 while August placements came in very similar to year-ago levels. Total U.S. yearto-date placements are above year-ago levels but should drop below 2010 in the final quarter of 2011. This will result in lower on-feed numbers in the first quarter of 2011 and market ready supplies should tighten. Another factor to consider is that average U.S. carcass weights have been increasing but not at the normal pace for this time of year. High corn and alternate feed grain costs have kept feedlots relatively current with production, especially as the fed cattle prices rallied in early October.

U.S. quarterly beef production (million pounds) Quarter 1 2 3 4 Total

2009 6,248 6,602 6,690 6,426 25,966

2010 6,251 6,547 6,768 6,741 26,307

Est. 2011 6,411 6,559 6,750 6,590 26,310

Est. 2012 6,150 6,330 6,420 6,125 25,025

**Source USDA

The USDA is projecting that fourth-quarter beef production will drop under 2010 by 150 million pounds. During the first quarter of 2012, we should see beef production drop by nearly 261 million pounds or 4.1 per cent in comparison to the first quarter of 2011. Notice a similar year-over-year decrease of nearly 3.5 per cent in the second quarter. Total 2012 beef production could be down 1.3 billion pounds in comparison to 2011.

Looking at the demand equation, there are many more factors to consider. First U.S. domestic consumption is the larger influence on the price structure and changes relative to consumer spending. A one per cent increase in consumer spending equates to a one per cent increase in beef demanded. Second-quarter spending was rather dismal coming in at a meagre 0.7 per cent over the first quarter howwww.canadiancattlemen.ca

ever, recent data suggests the economy is showing signs of momentum. Consumer spending is 70 per cent of U.S. GDP and projections now have third-quarter spending at 1.3 per cent and jumping to about 2.1 per cent in the final quarter of 2011. Therefore, analysts see an increasing domestic demand scenario going into 2012.

There is a very strong seasonal trend for restaurant and grocery spending to increase from January through May.

U.S. consumer spending Percentage change from the previous quarter

U.S. beef exports are projected to reach 2.735 billion pounds during 2011. This strong movement is expected to continue reaching 2.755 billion pounds in 2012. However, U.S. beef imports will be down due to the historically low cattle herd in Canada and lower imports from other major producers such as Australia and South America. The net change of exports minus imports is about 700 million pounds for 2012 evenly distributed throughout each quarter. This will further tighten beef supplies in the first half of 2012.

At the time of writing this article, April live cattle futures were hovering at contract highs near $128. The market appears to be incorporating a risk premium due to the uncertainty in production. The U.S. economy was bordering on the brink of recession in the second and third quarters of 2011 but it appears momentum is building for the economic environment to improve in the first half of 2012. Looking at past history, the cattle market usually makes fresh highs when the U.S. business cycle is moving into a full fledged expansion phase. June live cattle futures are only a $2 discount to the April contract. Usually, the fed cattle market trends sharply lower from April through summer but 2012 will not be as sharp of a decline due to the lower beef supplies and higher consumer spending.

Fed cattle prices are expected to percolate higher from October through April and then stabilize. The cash market usually leads the futures market higher when supplies tighten; therefore, basis levels in Canada and the U.S. are expected to strengthen in late winter and early spring of 2012.

Gerald Klassen analyzes markets in Winnipeg and also maintains an interest in the family feedlot in southern Alberta. He can be reached at jkci@mymts.net or 204-287-8268.

Cattlemen / November 2011 53

SALES AND EVENTS EVENTS November 21-26—Canadian Western Agribition, Evraz Place, Regina, Sask.

25—Canadian National Hereford Show, Agribition, Regina, Sask.

25-27—Year Round Grazing Systems School, Westlock, Alta., 780-307-2275, www.

greenerpasturesranching.com December 5-6—Manitoba Grazing School and Forage Symposium, Victoria Inn, Winnipeg, Man. 5-7—Alberta Beef Producers Annual General Meeting, Sheraton Cavalier, Calgary, Alta.

AD INDEX Page

By Livestock 49 Canadian Angus Assoc.

IFC Canadian Charolais Assoc.

OBC Canadian Hereford Assoc.

46 Canadian Limousin Assoc.

46 Canadian Red Angus Promotion Society 46 Canadian Shorthorn Assoc.

27 Canadian Simmental Assoc.

46 Canadian Welsh Black Society 46 Canadian Wheat Board 13 Cudlobe 31 Direct Livestock Marketing 49 Elanco Animal Health 19 Farm Credit Canada 23 Greener Pastures 43 Hill 70 Quantock Ranch 9 International Stock Foods 47 John Deere Ag Marketing Center 17 Lakeland Group/Northstar 12 a-p M.C. Quantock 5 Matchmakers Select 46 Merck Animal Health 28, 29, 39, IBC Merial Canada 7 Northwest Consolidated Beef 46 Novartis Animal Health Canada 21 Pfizer Animal Health 15, 25 Ridley Block Ops/Crystalyx 6 Stromsmoe Herefords and Black Angus 11 Willabar Ranch 45

NEWSMAKERS Continued from page 6

able resource development minister Mel Knight. Berger replaces Jack Hayden, who moves to tourism, parks and recreation portfolio Ted McMeekin, the MPP for Ancaster-Dundas-Flamborough-Westdale, has been appointed as Ontario’s new ag minister replacing Carol Mitchell who was defeated in the Oct. 6 election. The appointment marks a return to the cabinet table for McMeekin, who’d been dropped from Premier Dalton McGuinty’s executive council in January 2010. He is seen as a supporter of the province’s new risk management plan for farmers, which Ottawa has rejected.

54 CATTLEMEN / NOVEMBER 2011

6-8—Alltech Global 500, Lexington, Kentucky 7-8—Farm Animal Council of Saskatchewan Conference, Saskatoon Inn, Saskatoon, Sask., www.facs.sk.ca 13-14—Canadian Forage and Grassland Assoc. 2011 Conference and AGM, Radisson Hotel, Saskatoon, Sask.

15—Saskatchewan Forage Council — Forage Industry Stakeholder Forum “Assessing the Potential Impact of Roundup Ready Alfalfa,” Radisson Hotel, Saskatoon, Sask.

January 2012 18-20—Saskatchewan Beef Industry Conference, Saskatoon Inn, Saskatoon, Sask.

20-21—Canadian Bull Congress, Camrose Exhibition, Camrose, Alta.

21—Beef Symposium and FarmSmart, University of Guelph, Guelph, Ont. 26-28—Feeder Associations of Alberta Ltd. 2012 Convention, Capri Convention Center, Red Deer, Alta.

February 7-9—Canadian International Farm Show, International Centre, Toronto, Ont. 15-17—Alberta Beef Industry Conference, Capri Conference Centre, Red Deer, Alta.

June 13-17—Canadian Angus Association Annual Meeting, Lethbridge Lodge, Lethbridge, Alta.

July 8-25—2012 World Hereford Conference, Olds Ag Society, Olds, Alta.

11-13—National Junior Limousin Conference, Olds Ag Society, Olds, Alta.

11-13—Canadian Limousin Annual General Meeting, Olds Ag Society, Olds. Alta.

SALES October 21-22—Red Roundup Show and Sale, Westerner Grounds, Red Deer, Alta.

Dauphin MLA Stan Struthers was reappointed as the Manitoba ag minister, a position he has held since November 2009, and acting finance minister in place of the retired Rosann Wowchuk, another former ag minister in the provincial NDP government.

Canadian Western Agribition has announced the 2011 recipients of the five $1,000 scholarships given each year to past exhibitors at the Regina-based show. They are: Jamie Kinzie of Saskatoon who is studying veterinary technology at Saskatchewan Institute of Applied Science and Technology in Saskatoon; Logan Martinson of Midale, Sask., who is taking animal science technology at Alberta’s Lakeland College; Megan Rosso of Moose Jaw who is studying

22—All Star Classic Shorthorn Sale hosted by Alberta Shorthorn Association, Lacombe Research Station, Lacombe, Alta.

December 1—Peak Dot Fall Bull and Female Sale, at the ranch, Wood Mountain, Sask.

2—Silvertop Simmentals (Glenn Olson) Total Dispersal, Rimbey Auction Mart, Rimbey, Alta.

6—Stromsmoe Herefords and Angus 27th Annual Production Sale, at the ranch, Etzikom, Alta.

7—Peak Dot Bred Black Angus Commercial Heifer Sale, Heartland Livestock, Swift Current, Sask.

10—M.C. Quantock “Canada’s Cow” Sale, Vermilion, Alta.

20—Willabar Angus Total Herd Dispersal, Highwood Livestock, High River, Alta.

January 2012 28—M.C. Quantock “Canada’s Bulls” Bull Sale, Lloydminster Exhibition, Lloydminster, Alta., www.mcquantock.com , 1-800-561-BULL(2855), 28—Lazy S Ranch Bull Power Sale, at the ranch, Mayerthorpe, Alta., www.lazys-

ranch.ca February 4—Hill 70 Quantock Ranch “Barn Burnin Sale”, at the ranch, Lloydminster, Alta., www.hill70quantock.com, 1-800-6657253

March 25—12th Annual Saskatoon Gelbvieh Bull and Female Sale, Saskatoon Auction Mart, Saskatoon , Sask.

 Event listings are a free service to industry.  Sale listings are for our advertisers.

Your contact is Deborah Wilson at 403-325-1695 or deb.wilson@fbcpublishing.com

agriculture management at Olds College in Alberta; Kelsey Stewart from Russell, Man., who is taking a business management degree at Brandon University and Amy Tweedie of Delisle, Sask., who is enrolled in a Bachelor of Science degree program at the University of Alberta’s Augustana Campus in Camrose.

The winners of the Manitoba Beef Producers Bursary for 2011 are Erin Cathcart of Neepawa, Nicole Rae-Ann Blyth of MacGregor, Cody Fedak of McCreary and Justin Krisjansson from Forrest. Four bursaries are awarded annually to MBP members or their children who are pursuing a field of study related to agriculture or acquiring a skilled trade beneficial to the C rural economy. www.canadiancattlemen.ca

One implant. That’s it. You’re done!

Avoid the inconvenience and stress of re-implanting.

By delivering trenbolone acetate and estradiol in Canada’s first delayed-release combination implant, Revalor -XS: ®

- Eliminates disruption of feed intake due to reprocessing - Helps maximize efficient use of labour and time - Improves ADG and feed efficiency - Allows for optimal IBR-booster scheduling - Increases marketing flexibility

Do it right. Do it once.

For more information, talk to your veterinarian or call our technical service at 1-866-683-7838.

® Registered trademark of Intervet International B.V., used under license by Intervet Canada Corp.

Merck Animal Health (known as MSD Animal Health outside the US and Canada), operating in Canada as Intervet Canada Corp., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. MERCK and MSD are trademarks of Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. Copyright © 2011 Intervet International B.V., a subsidiary of Merck & Co., Inc., Whitehouse Station, NJ, USA. All rights reserved.

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