Commercial Cattle Issue 2011

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Western Livestock Journal

August 22, 2011 • Section Two

Western Livestock Journal - The National Livestock Weekly • Since 1922 • A Crow Publication • 7355 E. Orchard Rd., #300, Greenwood Village, CO 80111 • www.wlj.net • 303/722-7600 • FAX 303/722-0155

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• 21 AR ROUND UP 7005 • B/R NEW DESIGN 323 • B/R NEW FRONTIER 095 • BR MIDLAND • D H D TRAVELER 6807 • G A R PREDESTINED • GARDENS PRIME STAR • GDAR GAME DAY 449 • HARB PENDLETON 765 J H • HOOVER DAM G18 • MYTTY IN FOCUS • N BAR EMULATION EXT • O C C EMBLAZON 854E • R/M IRONSTONE 4047 • S A V FINAL ANSWER 0035 • S A V BISMARCK 5682 • S A V PIONEER 7301 • SITZ UPWARD 307R

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4064 Dodds Road, Oakdale, CA 95361 Ray and Mary Alger (209) 847-0187 Brent Alger (209) 988-2567

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Guide Issue â&#x20AC;˘ Section Two

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WELCOME

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CONTENTS

NHTC CERTIFICATION—With an increase in the amount of non-hormone treated beef allowed into Europe set to increase, the future looks bright for cattlemen looking to tap into the complex program........................................................................... 6 OUTLOOK—The staff at the Livestock Marketing Information Center in Denver, CO, examines the current trends influencing the market and forecasts what’s ahead for producers. ......................................................................................................... 17 STOCKER CATTLE—Considering taking advantage of the red-hot market for yearling cattle by holding this year’s calves back? WLJ Correspondent examines the pros and cons of adding a stocker operation to your ranch ................................................W3 SPADE RANCHES—Spade Ranches’ John Welsh brings a lifetime of cattle industry experience to the diverse ranch operation headquartered in Lubbock, TX ............. 26 FUTURE OF COOL—A recent preliminary ruling by the World Trade Organization is bringing the controversial U.S. mandatory country-of-origin-labeling back to the forefront for the industry. Is the program providing the advantages envisioned when it was implemented? .................................................................................................... 42

INDEX

Across-breed EPDs ............................................................................................ 53 Sale Calender .................................................................................................... 56 Advertiser Index ................................................................................................ 60

Photo by Andy Rieber, WLJ Correspondent

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August 22, 2011 • WLJ’s Commercial Cattle Guide Issue • Section Two

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NHTC

By Andy Rieber, WLJ Correspondent

The future looks bright:

NHTC certification unlocks lucrative European markets

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

T

hese days, more and more producers are exploring options to add value to their cattle. Many have taken the step to have their calves age and source verified. Others have tweaked their production practices to meet a natural protocol.

And some have even taken the plunge to becoming certified organic. But with the recent blossoming of export markets “across the pond,” some producers are finding that they can also earn premiums by tapping into Europe’s growing appetite for high quality American beef. For those interested in getting in on the action, take note. An NHTC certification is the key to gaining access to these lucrative European markets.

Of course, participating in NHTC, like most other value-added programs, involves some work. Diligent record keeping, paying for audits, and having a well-thoughtout marketing plan are all part of what is necessary for making NHTC certification a success. But for producers getting in on

6

the program now, the future looks bright.

Next summer, Europe is expected to more than double the quota for zero percent tariff NHTC beef—from 20,000 to 45,000 metric tons—meaning that NHTC cattle buyers are expecting to be scrambling for product. For producers with NHTC cattle in the pipeline when the quota is increased, the opportunities for cashing in on strong European demand for American beef could be excellent.

NHTC short course

NHTC stands for “Non-Hormone Treated Cattle.” Since 1989, the European Union (EU) has required all beef sold in EU countries to be free of any growth promotants and to be source and age verified at 30 months or younger. The NHTC program was created by USDA to ensure that American beef bound for export to the EU is in compliance with these European standards.

In addition to having documentation of age, source, and proof that they have not been exposed to any kind of growth promotant

August 22, 2011 • WLJ’s Commercial Cattle Guide Issue • Section Two

from birth to slaughter, NHTC cattle must also be given a program-compliant ear tag before they leave the ranch of origin and as soon after birth as possible. There must be a paper trail guaranteeing that every premise on which an NHTC calf has spent time, from birth to slaughter, is NHTC certified. Feed yards should also be aware that all NHTC cattle must be fed a 60.32 megacal per day diet for 100 days before processing.

American producers, feedlots, sale barns, and packers who wish to participate in NHTC program can do so by becoming certified by a third-party process verified program, or “PVP.” A PVP is an entity that has been approved by USDA to certify operations as being in compliance with NHTC standards—essentially to act as USDA’s proxy. Among the companies that provide this service are IMI Global Inc., Samson LLC, Micro Beef Technologies, AgInfoLink USA, and Verified Beef LLC, although Continued on page 10

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August 22, 2011 • WLJ’s Commercial Cattle Guide Issue • Section Two

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NHTC Continued from page 6 there are many others. An official listing of approved USDA PVPs can be found on the USDA website.

Although there are many PVP providers to select from, the process for becoming NHTC certified is essentially the same regardless of which one you chose. A producer must submit an application describing their operation, and the PVP provider will create a quality manual for the ranch outlining what that specific operation needs to do to comply with NHTC standards. The operation will be asked to keep records on calves, any feeds or minerals that are provided, and create a plan to ensure that NHTC cattle are not exposed to growth promotants (if these products are on the premise) and to differentiate NHTC cattle from any nonNHTC cattle that may be present on the ranch. The ranch will also have to provide NHTC cattle with a program-compliant ear tag, provide training to employees, and obtain guarantees from manufacturers of feeds, minerals, licks, etc., that the products are hormone free. In addition, each NHTC premise will require a yearly on-site audit by its PVP provider to remain in the program.

The certification and paperwork may

sound like a headache, but plenty of operations all along the supply chain have jumped on the NHTC bandwagon. And for many, it is paying off.

Doug Stanton, vice president of verification services at IMI Global, points out that although some producers may not be accustomed to keeping extensive records, now is a good time to start. “In our economic environment, in the cattle industry in the future, records are going to be key, and probably will become more important all the time,” says Stanton.

On the other hand, Stanton points out that although the requirements for getting NHTC certified may sound daunting, with a bit of practice, producers are able to manage them with little trouble.

Explains Stanton, “For the most part, our ranch customers… [are] pleasantly surprised that it’s not as difficult as it may have first sounded.”

Is it natural?

With all the value-added programs available these days, it’s hard to keep track of what makes each one unique. A common error is for producers to assume that the NHTC standard is the same as for a verified natural program. It’s not, although there is some overlap. The most important differ-

ence is that natural programs (as defined by the USDA’s Never-Ever 3 standard) do not allow cattle to be treated with antibiotics or any antibiotic-classified product, such as ionophores like Rumensin or Bovatec. In the NHTC program, however, antibiotics and ionophores are allowed, a difference that many producers still get wrong.

“There’s a lot of confusion that [NHTC] is natural,” Stanton points out. “In the industry, and with producers, … we constantly have to try to explain to them the differences between the two programs.”

Another important difference between NHTC and natural is that at this time, selling cattle as natural typically only requires an affidavit, not an on-site audit by a third party. NHTC is more demanding, requiring that each NHTC operation be certified by an on-site audit performed by a USDA approved third-party program. This part is key. As Stanton emphasizes, it is essential that NHTC cattle stay in the NHTC pipeline.

Otherwise, cattle fall out of the program, “If a rancher got NHTC approved and just went to a sale barn, and … that sale barn wasn’t an approved location,” explains Stanton, “then the cattle would be disqualified, and it would have been a total waste of his time and money.”

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Yet there are important points of overlap.

In particular, NHTC, like a natural program, does not allow any growth promotants to enter an animal from birth to slaughter. This includes implants and feeds, as well as the hormones used to synchronize heifers. A calf born to a cow that has been synched is eligible, provided that the calf itself has not been given any hormonal products from birth to slaughter. However, a heifer that has been synchronized with Lutalyse or a similar product and comes up open cannot be sold into the program as a yearling.

Trade winds

Some producers are currently making NHTC certification pay substantial dividends. But how much opportunity is there for newcomers to the NHTC market? It’s a key question, and the answer is: a lot— probably.

Here’s the story. Back in 1989, the EU banned the use of hormones in cattle production. From that time forward, any country had to guarantee that all cattle exported by them to the EU met the new non-hormone standard. Not happy with the rule, the U.S. sued the EU, claiming that the new trade restriction was not scientifically supported. The World Trade Organization (WTO) ultimately sided with the U.S., ruling that Europe had not been able to show

that hormone use poses a threat to human health.

But that wasn’t the end of it. According to Thad Lively, senior vice president of the U.S. Meat Export Federation, WTO authorized the U.S. to retaliate by imposing a 100 percent tariff on a rotating list of European exports like French cheese, Italian bottled water and other luxury products to compensate for the $117 million that the U.S. was losing every year in beef exports.

Explains Lively, “[T]he way the rules of the WTO work, you can pretty much thumb your nose at the WTO and say, ‘Yes, we understand your rules, but in this case, we’re not going to follow them.’ But you do have to pay a penalty.”

As it turned out, the crippling tariff on European exports to the U.S. got the EU’s attention. So they offered the U.S. a deal.

American beef producers could export 20,000 metric tons of hormone-free NHTC beef a year to the EU at zero percent tariff if the U.S. abandoned the punishing tariffs on European luxury exports. This was a substantial improvement over the existing import quota (the “Hilton Quota”) which imposed a tariff of 20 percent on all U.S. beef exports to the EU. The Europeans further sweetened the deal by allowing that the zero percent quota would increase over time.

“It’s an entirely new quota, and it’s a quota that’s worth a lot of money,” Lively points out.

Not everyone in the American beef industry wanted to accept the EU’s offer, arguing that the U.S. should hold out for the EU to drop its ban on hormones instead. But doing so, Lively suggests, might not only have been unrealistic, it would have left a golden opportunity sitting on the table.

“As much as I’d like to think that we were going to convince the EU to drop its hormone ban, I don’t see that happening any time soon,” Lively remarked. “So, we can basically stay on the sidelines and fight it, and say we’re unhappy, or we can say, ‘…If we can create an opportunity to move some of that beef into another premiumprice market … let’s do it.’”

The zero percent tariff quota is now entering the final year of its first phase, at the 20,000 metric ton limit. American product has been so popular, according to Lively, that exports are probably exceeding the 20,000 metric ton quota and spilling over into the Hilton Quota, which imposes a 20 percent tariff. The markup on that extra product does not seem to have dampened Europeans’ taste for American beef.

Continued on page 12

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

11

NHTC Continued from page 11 “There’s definitely demand. That’s been one of the really encouraging developments,” explains Lively. “[T]his is a premium-priced product; it’s the highest priced product in the market. What we’re seeing is that the mid-range of the market in Europe right now is pretty soft—not that different from here. But the top end is just red hot; it’s on fire. There’s a very strong appetite for the product we have.”

But here’s the big news. As of this time next year, the quota is scheduled to be expanded from 20,000 to 45,000 metric tons, more than doubling the amount of American NHTC beef which can be sold at zero percent tariff, and creating a major need for NHTC cattle.

“There’s a huge opportunity there,” observes Lively. “In my view, a year from now, we’ll be scurrying around looking for more cattle [and] trying to get more plants approved.”

Doug Stanton of IMI Global concurs. “If we can get that [quota] in place, the need for additional NHTC cattle will be incredible.”

But there is a catch. As with most trade arrangements, there is always the possibility

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that the scheduled increase of the quota will hit a snag, and be delayed. Things like that have happened before, and in the world of trade negotiations, nothing is written in stone.

“The key question is whether a year from now we will move to the second phase, and the quota will increase to the 45,000 metric tons,” explains Lively. “I think it will, but it’s not automatic.”

The take home lesson is that now is a good time to start looking at whether NHTC would work for your operation.

If you have been thinking about getting NHTC certified, there may be big opportunities opening up next year. If you have determined that NHTC is a good fit for your operation, consider that now may be an opportune time to get in on the ground floor by planning to get certified for next year’s calf crop. Producers who are ready to supply NHTC cattle when demand increases will be most likely to earn the highest premiums, and establish a reputation in a competitive field.

Marketing NHTC

Although the opportunities expected to open up next year in the NHTC market are extremely promising, earning a premium for

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

your NHTC cattle, like for any value-added program, is never a no-brainer. Producers interested in the NHTC program should think ahead about how they can most effectively market their cattle, whether that is through a video sale, through private treaty, or through an NHTC-certified sale barn.

Explains Stanton, “There has to be some kind of coordination. From the ranch side, what they normally do is make sure they get into some kind of a market, and the videos have been about the best. But there are some private treaty situations where ranches are being contacted by buyers from NHTC-approved feed yards that are seeking out approved cattle. The key thing we try to tell [people]: … make sure you get involved in a sale [where] buyers will be looking for that type of cattle.”

Successful marketing also requires that you make your cattle as attractive to prospective buyers as possible. One way to do this is by obtaining multiple third-party verifications, like being certified natural in addition to NHTC. This strategy makes your cattle desirable to a wider range of buyers, and can be done at no extra cost to your bottom line.

Continued on page 14

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

13

NHTC Continued from page 12 Letâ&#x20AC;&#x2122;s look at these marketing options in a bit more detail.

Most exposure: The video sale

Video auctions expose your cattle to the widest range of buyers and are the most common tool for connecting NHTC producers with feedlots and packers who are also in the program. All of the major video sales will work with producers to help promote their NHTC certified cattle.

Brad Peek, general manager of Western Video Market (WVM), has been helping

producers get the most exposure for their NHTC cattle for years. â&#x20AC;&#x153;I think thatâ&#x20AC;&#x2122;s the key to the video sale,â&#x20AC;? says Peek. â&#x20AC;&#x153;It just exposes you to more potential buyers. And usually those buyers of specialty cattle are very aggressive and forward thinking, and theyâ&#x20AC;&#x2122;re always looking for different suppliers of NHTC cattle, or whatever specialty cattle it may be. Theyâ&#x20AC;&#x2122;re always looking at the videos. Plus, weâ&#x20AC;&#x2122;ve got a pretty good relationship with a lot of the NHTC buyers going into the video sales,â&#x20AC;?

Peek added.

High exposure may be the biggest posi-

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tive of the video sale, but there is no denying that there is an element of risk when you send your cattle through. Premiums can be seasonal, sensitive to supply, and occasionally just donâ&#x20AC;&#x2122;t materialize if the right buyers arenâ&#x20AC;&#x2122;t active on the day you sell. â&#x20AC;&#x153;It seems like more and moreâ&#x20AC;? NHTC cattle have been going through the video sale, Peek said, and many are earning premiums.

However, Peek suggested that the premium on NHTC currently may not be quite as strong as it was six to12 months ago. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve had times where weâ&#x20AC;&#x2122;ve had $5-8 premiums for NHTC cattle â&#x20AC;Śand then we might have another sale where you might not see any premium [above] maybe $2. It really just depends on what the demand is at that particular time.â&#x20AC;?

What Peek points out is a basic truth about any value-added program. Participating in a program does not guarantee an automatic payoff. Rather, it should be viewed as an investment, which is expected to pay off over time. Inevitably, some firsttimers will jump ship if they donâ&#x20AC;&#x2122;t realize the premiums they were expecting on the first go-round. But expecting the market to pay off every time is simply unrealistic; there are too many variables involved. â&#x20AC;&#x153;Most of the time, [NHTC cattle] are [earning premiums], but itâ&#x20AC;&#x2122;s just like anything else,â&#x20AC;? says Peek. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s no guarantee youâ&#x20AC;&#x2122;re going to get it every time. If you stick with it, more often than not it will pay off for you.â&#x20AC;?

That said, when you are considering how to market your NHTC cattle, there are clearly some steps you can take to help stack the odds in your favor and mitigate risk. Perhaps the simplest of these is to ensure that your cattle are of the appropriate type for the greatest number of NHTC programs.

American beef sold in Europe is a premium product, and many NHTC buyers are purchasing for exporters that have high carcass grades in mind. For example, Creekstone Farms has an Angus-based NHTC product and seeks out cattle that are 51 percent black hided for its program.

In the video sale, Peek has witnessed a distinctive favoring of this type of cattle by NHTC buyers in general. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re primarily English cattle,â&#x20AC;? says Peek. â&#x20AC;&#x153;Most of the NHTC cattle we sell are English or English-cross cattle. Thereâ&#x20AC;&#x2122;s some English-Continental cross. I havenâ&#x20AC;&#x2122;t been aware of a lot of â&#x20AC;Śexotic-cross cattle, with ear.â&#x20AC;?

This is not to say that no exotic cross cattle can earn a premium in an NHTC program. Rather, the point is about keeping as many sale options open for your cattle as Continued on page 50

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

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Selective Â&#x2021; $1 Â&#x2021; Extreme calving-ease, super females, high-marbling

and high $W. Top 1% CED (+15), CEM, Marb (+1.02), $W and $G, Top 2% BW (-2.3) , Top 15% REA, Top 20% WW

6HOHFW 6LUHV $QJXV Â&#x2021; 'DWD 'ULYHQ 3HUIRUPDQFH %XOOV

:RUNKRUVH Â&#x2021; $1 Â&#x2021; Protege son whoâ&#x20AC;&#x2122;s moderate, thick and balances

numbers as well as any. Top 2% WW and YW, Top 10% BW, $W and $B

Limelight Â&#x2021; $1 Â&#x2021;

Sought-after data for calving ease with powerful growth and carcass. Top 1% WW (+70) and CW, Top 2% CED (+13), YW, SC, Marb, $W and $B (+71)

â&#x20AC;&#x2DC;Vernâ&#x20AC;&#x2122; Â&#x2021; $1 Â&#x2021; High WW bull thatâ&#x20AC;&#x2122;s extreme for length, muscle and performance. Use Vern to add pounds and dollars!

Top 1% WW, YW and $F, Top 4% $W

6HOHFWHG ZLWK WKH ,QGXVWU\ LQ 0LQG

$QVZHU Â&#x2021; $1 Â&#x2021; Becoming the â&#x20AC;&#x2DC;go-to-guyâ&#x20AC;&#x2122; for moderate, easy-keeping

quality calves and cows. Top 10% for WW, YW, $W and $F, Top 15% BW

Game On Â&#x2021; $1 Â&#x2021; Balanced strength from calving to carcass with excellent females. Top 2% YW and $F, Top 3% $B, Top 5% $W, Top 10% WW and $G.

Sterling Â&#x2021; $1 Â&#x2021; Stunning young sire that excels for Every $Value Index Top 2% WW and $B, Top 3% YW and $W, Top 4% Marb and $F.

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

15

Want a

$35/HEAD Premium?

A 10-year survey of a dozen U.S. auction markets shows calves of known Angus genetics received nearly $35/head more at auction in 2008 than non-Angus contemporaries.

Thatâ&#x20AC;&#x2122;s the power of a registered Angus bull.

Thatâ&#x20AC;&#x2122;s the power of

ANGU$.

'SFEFSJDL "WF 4BJOU +PTFQI .0 t XXX BOHVT PSH t

16

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

OUTLOOK

By: James Robb and Erica Rosa, Livestock Marketing Information Center

OUTLOOK:

U.S. beef cowherd shrinks again

Photo y Andy Rieber, WLJ Correspondent

S

everal forces are shaping the U.S. cattle and beef industry, all of which may have rather long-term implications. First, drought is reshaping the U.S. beef cowherd, which had already shrunk during recent years. Second, high feedstuff costs are very problematic, a situation that is likely to persist. Overall, three factors will continue to support cattle prices: 1) cyclically shrinking cattle supplies; 2) strong export markets (beef and byproducts); and 3) rather tight domestic supplies of competing meats and poultry.

In calendar year 2011, cattle prices will be record high. But the only real beneficiaries of those price levels will be cow/calf producers and breeding stock providers in non-drought regions. Some states will see breeding herd expansion this year while cowherds in drought states will shrink dramatically, especially in Texas and surrounding states. After a few good months in early 2011, cattle feeding began

to record huge losses. Even with higher fed cattle prices this fall, the red ink will continue on feedlot closeouts for at least the balance of 2011.

This year, fed cattle prices will average about 18 percent above a year ago while calf prices surge about 30 percent. Looking ahead to calendar 2012, additional gains are expected in prices of all cattle types, however, annual percentage increases are expected to moderate compared to jumps posted in 2011. Year-over-year increases in calf and yearling prices may not happen until after the first quarter of 2012 as very high cost-of-gain may limit feeder cattle bids.

Cattle inventory keeps declining

Heading into 2011, there was hope that the U.S. beef cowherd would begin to show signs of stabilizing, following several years of declines. But drought has taken that prospect away.

USDA-National Agricultural Statistics

Service (NASS) reported that the midyear U.S. cattle and calf inventory declined to 100 million head. As of July 1, the total number of all cattle and calves was 1.1 percent (1.1 million head) below a year ago. That was the fifth consecutive annual decline. At midyear, USDA reported the number of beef cows at 31.4 million head, a reduction of 1.1 percent (about 350,000 head) compared to a year ago. According to the report, the number of beef heifers held as replacements continued to shrink and at 4.2 million head was the lowest July 1 number since USDA began the midyear count in 1973. By historical standards, the number of replacement beef heifers in the U.S. herd implies further cowherd reductions are ahead.

As the second quarter of 2011 progressed, drought intensified in Texas and reached west to east from Arizona, to Georgia and north into Kansas. Southern Continued on page 18

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

17

Continued from page 17

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

Plains pasture and range conditions were devastated and hay costs surged to all time record highs. As of midsummer, over 25 percent of the U.S. beef cowherd was in major drought zones.

On a national basis, another significant year-on-year cattle inventory decline will be reported as of Jan. 1, 2012. Texas, for example, could easily record their largest annual beef cowherd decline ever in 2011. Many northern states increased their cowherds in 2011, however, if recent trends persist, the national herd will decline by about 2 percent this year.

A look back: Record-high cattle prices but surging feedstuff costs

Shrinking cattle numbers and improving domestic and foreign economic conditions set the stage for higher prices in 2011. But, cattle and wholesale beef prices exceeded even the most optimistic expectations in the first few months of the year. Calf and yearling prices were especially strong. During the first six months of 2011, several new alltime-high cattle and beef (wholesale and Continued on page 20

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s

300 Commercial BW +1.8

WW +64

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BW I+1.6

WW I+46

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WK Bobcat

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The Mytty cow herd has produced the he rd sires: â&#x20AC;&#x153;Nebraskaâ&#x20AC;?, â&#x20AC;&#x153;M ytty In Focusâ&#x20AC;?, â&#x20AC;&#x153;Mytt y Forefront 77Pâ&#x20AC;?, â&#x20AC;&#x153;Mytt y Thunderstruckâ&#x20AC;?,â&#x20AC;&#x153;M ytty In Lineâ&#x20AC;? and â&#x20AC;&#x153;Sitz Al liance 7544â&#x20AC;?.

Please P Pl lea ease se ccall all for al all f r more fo moorree information m inffor orma matitition ma o on BW -.7

WW +43

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WW +64

YW +120

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

19

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Merlyn Sandbulte District Manager: SD, ND, MT msandbulte@absglobal.com 712-470-4237

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

Continued from page 18 retail) prices were established even though the domestic economy was anemic, at best. The rather lackluster domestic beef market was more than counterbalanced by improving foreign demandâ&#x20AC;&#x201D;foreign demand caused record-high U.S. prices.

Foreign demand for U.S. beef began to recover in the second half of 2010. Byproduct values (hides, etc.) also strengthened due to strong exports. Overseas sales accelerated in early 2011 led by Asian markets. In fact, the tonnage of beef exports finally returned to pre-BSE levels.

U.S. imports of beef shrunk due to two major factors: 1) strong Asian markets absorbing Australian beef; and 2) the low value of the U.S. dollar.

In the first quarter of 2011, calf prices set an all-time high when 500- to 600-pound steers in the southern Plains averaged just over $150 per cwt., which was about $34 per cwt. above a year earlier. Feeder steers (700 to 800 pounds) and fed cattle prices set new highs in the first quarter and then headed even higher into the second quarter. Cull cow prices followed suit supported by strong U.S. Continued on page 22

21

Continued from page 20 consumer demand for hamburger and declining imports of lean beef products.

Cattle feeders pocketed good profits during the first four months of the year, but as the second quarter progressed, seasonally lower fed cattle prices collided with surging feedstuff costs. Cost-of-gain in feedlots shot up to well over $100 per cwt.

Corn costs set record highs and caused rather volatile calf and yearling prices.

Feedstuff costs set record highs during the first six months of the year. The preliminary USDA-NASS corn price received by farmers in July was $6.46 per bushel, about $3 per bushel above a year ago and $1 over the prior record set in June 2008. The national average price of all hay types was $170 per ton, $58 above 2010’s average.

Outlook for the remainder of 2011 Commercial cattle slaughter in the last quarter of 2011 is forecast at 6 percent to 7 percent below a year ago, with both fed cattle and cow slaughter dropping. If realized, that will be the largest year-on-year Continued on page 24

As the demand for Natural Angus beef continues to grow, Meyer Natural Angus is looking to identify cow/ calf producers that have “The Right Stuff.” i i i i i

Red or Black Angus i No Antibiotics Feed grade or treatment No Implants No Animal By-products i Herd Health Program Vaccinations & mineral Humanely handled i Born & raised in USA No Ionophores If you and your cattle have “The Right Stuff” or have questions about the Meyer program, please contact us at:

970-292-5006 www.MeyerNaturalAngus.com 22

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

23

California Never Looked So Good!

CALIFORNIA

BULLFEST /CTOBER

#ATTLEMEN S ,IVESTOCK -ARKET s 'ALT #ALIFORNIA Cattlemenâ&#x20AC;&#x2122;s Appreciation Dinner /CTOBER TH s PM s 0HEASANT 4REK 7ILTON #!

Pheasant Trek W I LT O N , C A L I F O R N I A The Danekas Family PO Box 391, Gridley, CA 9594 10660 Gay Road Carl, Susan & Tracy Wilton, CA 95693 (530) 846-4354 (916) 849-2725 Steven, Melissa & Joseph (916) 837-1432 (530) 864-2855 www.pheasanttrek.com www.schohrherefords.com pheasanttrek@aol.com ricencows@schohr.com

GL

GENOA LIVESTOCK

640 Genoa Lane, Minden, NV 89423 Dwight Joos (775) 240-6030 Bob Coker (916) 539-1987 Michelle Coker (916) 207-1142 Office (775) 782-3336 www.genoalivestock.com info@genoalivestock.com

SPEARS FAMILY ANGUS & HEREFORD Daron Spears & Family 6741 Balfour Road Brentwood, CA 94513 (925) 634-4984 (209) 988-7772

Maternal Performance with Carcass Quality

) 22 Elite Maternal Cows ) 6 Supreme Maternal Cows ) 1 Trait Leader Ribeye Area ) 1 Trait Leader Hot Carcass Wt. ) 1 Maternal Performance Sire

Beef-type American Gray Brahmans, Herefords, Gelbvieh, and F-1â&#x20AC;&#x2122;s ,OREN *OANNE 0RATT s 7 0APAGO 2D s -ARICOPA !RIZONA

24

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

Continued from page 22 decline for the fourth quarter since 2003.

Beef production in that quarter is expected to be the smallest since 2005. Besides lower beef production, the beef markets will be supported by strong pork and poultry prices. Dramatic production adjustments are occurring in the U.S. broiler sector due to high feedstuff costs and lackluster exports. For several months, every pound of chicken has produced significant red ink. In the fourth quarter of this year, U.S. broiler production will be the smallest of any quarter since 2010â&#x20AC;&#x2122;s first quarter.

Slaughter steer prices are expected to remain well above a year ago for the balance of 2011. Look for fed cattle prices to strengthen in the fourth quarter and on a quarterly average basis to set their annual high. Slaughter cow prices may not erode as much as normal in late 2011 as cow slaughter was pulled ahead by drought in the southern Plains.

The dominant influence on yearling markets this fall quarter will be corn prices.

Even with high fed cattle prices, on a cash basis, cattle feeding margins will likely remain well in the red. That may keep them Continued on page 25

OAK RIDGE GRID TOPPER 1829

OAK RIDGE NEW DESIGN 1889

Sire: Oak Ridge Grid Topper 167 â&#x20AC;¢ Dam by: Ironwood New Level

BW 67

Sire: Dalebanks Design 878 4569 â&#x20AC;¢ Dam by: C A Future Direction 5321

205 729

BW WW +1.0 +52 YW MILK +91 +25 CW MARB +15 +.41 RE FAT +.12 +.013 $W $F +30.31 +29.38 $G $B +24.65 +47.82 DAMS RATIO 365 1@105 1,254

OAK RIDGE RT TIME 1859

205 693

205 763

BW WW +3.2 +42 YW MILK +84 +35 CW MARB +16 +.37 RE FAT +.47 -.017 $W $F +24.37 +25.16 $G $B +30.27 +53.52 DAMS RATIO 365 7@103 1,325

OAK RIDGE SYDGEN 210

Sire: Five Star 8045 Rt Time 5070 â&#x20AC;¢ Dam by: Rito 2100 G D A R

BW 72

BW 74

BW WW +2.0 +42 YW MILK +81 +29 CW MARB +21 +.36 RE FAT +.12 +.003 $W $F +25.29 +23.37 $G $B +22.85 +48.90 DAMS RATIO 365 6@105 1,211

Sire: SydGen C C & 7 â&#x20AC;¢ Dam by: V D A R Ambush 1465 S A F

205 648

BW WW +3.5 +43 YW MILK +87 +21 CW MARB +27 +.18 RE FAT +.23 +.003 $W $F +19.62 +28.87 $G $B +16.19 +46.65 DAMS RATIO 365 10@103 1,286

BW 79

SELLING SONS of THESE GREAT SIRES: $

"

"

#

$ $ !

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August 22, 2011 â&#x20AC;¢ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;¢ Section Two

W17

They Go Together!

This is a typical Bell Ranch Polled Hereford cow. The result of generations of selection for middle-of-the-road cattle, she is productive, fertile and has bred-in calving ease. The bulls produced by Bell Ranch cows are known for their thickness and volume. Bred to work in tough country, they produce calves that grade and yield. There is a reason why Herefords are again so popular with the commercial cattleman: They work very well in any crossbreeding program. Bell Ranch has had the High Indexing Hereford Bull at the Snyder Bull Test the last two years.

Call or stop by. We always welcome visitors and will be happy to show you our Herefords.

Quart

Hor e and H ef rd

We raise both on our ranch and they both have to get out and work in tough country. Our horses are pasture bred and run outside in the hills and rocks. Exposed to all of the elements a ranch horse will see. They have good minds and are willing workers. We use our horses and we know what it takes to make a good solid ranch horse.

We also run black baldy commercial cattler and purebred Herefords in the same country. They are hard-working and productive cattle. We strive to raise the best Hereford genetics possible. Call us or stop by and weâ&#x20AC;&#x2122;ll show you what weâ&#x20AC;&#x2122;ve got. We are proud of them and know they will work for you.

Tom & Kathy DeForest 3387 Hwy 299 East P.O. Box 83, Adin, CA 96006

Lilla & Woodie Bell x

,P

530-299-3464

,N

deforestlivestock@frontiernet.net

775-578-3536

Itâ&#x20AC;&#x2122;s A Cattlemanâ&#x20AC;&#x2122;s Kind of Sale

10th Annual Production Sale February 8, 2012

At the ranch near Echo, Oregon.

Our production sale is the kind of sale every cattleman likes to attend and this year, the stands were ďŹ lled to capacity with reputation commercial cattlemen. We thank them for their conďŹ dence in our program and will continue to produce bulls with the traits that are important to our customers.

We are already working on next yearâ&#x20AC;&#x2122;s offering and have an excellent set of bulls that are the result of our intensive breeding and selection program. We use some of the breedâ&#x20AC;&#x2122;s top AI sires to produce the best genetics possible for you.

AI Sires Represented Include: Mytty In Focus, SAV Final Answer, GAR Retail Product, Missing Link, SAV Pioneer, Rito 6I6 of 4B20 6807, Conneally Lead On. Call For Information:

Richard Correa (541) 449-3558 Devon Correa (541) 379-0632 %QTTGC .CPG Â&#x2039; 'EJQ 14 OGCFQYCETGUCPIWU"OUP EQO Â&#x2039; YYY OGCFQYCETGUCPIWU EQO

W18

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

Continued from page W14 period of time, or a set amount for each pound of gain. According to Blasi, the beef research facility at K-State currently charges $65-$70 per head for a 90-day period.

“This way, we know in advance what the income from our grass is going to be,” he says. “I’m sure we’re leaving some money on the table, but we’re not incurring the risk of the market going the wrong way.”

Blasi points out that this type of relationship can bring a valuable second stream of revenue to ranches with grass to spare. “You bring ‘x’ number of head on, and you charge so much per acre, or so much for a set period of days and, at the end of the period, you have a guaranteed revenue that you can count on.”

In the scablands of eastern Washington, rancher Dick Coon has run stocker cattle profitably on his operation, using precisely this type of feeder/rancher relationship, for a number of years.

“I’ve never bought any stockers; I’ve always pastured them on gain for somebody else. That introduces a whole different dynamic than if you’re putting up the investment of a purchase yourself.”

Continued on page W21

We HAVE the Genetics You Can Count On Productive, Efficient & Attractive

HAVE ANGUS GENETICS PACK A POWERFUL PUNCH They cattle are bred to perform in the showring and in the pasture.

Bulls of the same quality as our 2010 California State Fair Supreme Champion that was also the 2011 Reserve Supreme Champion (at left) sell at the California Angus Breeders’ Bull Sale, Oct. 8, in Turlock, CA, and the Red Bluff Bull Sale, Jan. 28, in Red Bluff, CA.

HAVE Midland 107 H049

Co-Owned with Billy Grissom, Hilmar, CA

HAVE Midland 107 H049 Sire: PF 3164 Midland 5024

BW +.6

WW YW +55 +96

MILK MARB RE $W $F $G $B +16 +.37 +.20 $29.10 +33.23 +22.18 +50.46

PF 3164 Midland 5024

Females for Sale

1st Annual ‘Passion for Purple’ Internet Sale, Oct. 16, and California Angus Days, Dec. 3.

For details, visit us online at www.haveangus.com.

Hav

~ ¾Ä ?ÍÍ j .jÁÜ WjÄ V 8 8 ÜjÄÍ W .ßÄÍj Ä

Jim, Karen and Elizabeth Vietheer: (916) 687-7620, (916) 834-2669 jimvietheer@frontiernet.net

gus

Darrell Hansen: (707) 328-9349 darrellhansen1@hotmail.com Mel Hansen: (707) 838-4463

Wild West Angus

Thanks to all of our bull buyers ! u o yourthisconfidence past year. We appreciate Y s k n in our program. a h

T

2011 Winnemucca Angus Champion Bull sired by SAV Net Worth 7778.

2011 Red Bluff 3rd Overall Calving Ease Bull sired by Traynham’s Lead On. Thanks to Faith Ranch, Modesto, CA , for their purchase of this bull.

We have an excellent set of bulls coming on for next year. They are the result of our AI program and are selected for overall performance that will enhance your commercial herd.

Look for Wild West Angus bulls at Red Bluff, Klamath Falls, Snyder Livestock Bull Test and the Winnemucca Ranch Rodeo Bull Sale.

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

Wild West Angus

Mitch Cain

(WY %AST s $AIRY /2

541-545-6075

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W19

g: Sellin200 Bulls and 150 Fem Females

Thomas Bismarck 0536

BW -3.1; WW +63; YW +108; Milk +27; Marb I+.34 RE I+.37; $W +37.77; $F +42.41; $G +28.33; $B +54.08

Thomas Upward 0728

BW +.3; WW +64; YW +120; Milk +36; Marb I+.42 RE I+.33; $W +33.45; $F +54.91; $G +20.83; $B +62.51

Thomas Net Worth 0794

BW +2.3; WW +57; YW +102; Milk +25; Marb I+.39 RE I+.39; $W +30.19; $F +38.58; $G +20.25; $B +55.71

Females will sell immediately following the bulls SALE MANAGED BY:

W20

517-546-6374 www.cotton-associates.com

Thomas Upward 0637

BW -.5; WW +64; YW +118; Milk +37; Marb I+.40 RE I+.33; $W +34.00; $F +52.72; $G +24.39; $B +64.35

Thomas Ambush 28 0653

BW +1.3; WW +57; YW +101; Milk +20; Marb I+.88 RE I+.52; $W +32.39; $F +37.54; $G +39.65; $B +73.02

Thomas Upward 0790

BW +3.8; WW +63; YW +116; Milk +29; Marb I+.37 RE I+.42; $W +27.01; $F +50.96; $G +26.40; $B +63.80

4HOMAS !NGUS 2ANCH s /LD 4RAIL 2D s "AKER #ITY /2 2OB ,ORI 4HOMAS (OME s /FlCE 2OB S #ELL s ,ORI S #ELL

WWW THOMASANGUSRANCH COM s THOMASANGUS THOMASANGUSRANCH COM

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

Continued from page W19 According to Coon, this system allows him to gain revenue from forage that would be more costly to utilize using cattle that must be kept year-round. â&#x20AC;&#x153;In our part of the world, we grow highquality rangeland during April, May and June,â&#x20AC;? he says. â&#x20AC;&#x153;But by the end of June in a normal year, quality drops off dramatically, and you canâ&#x20AC;&#x2122;t get adequate gains.

This program lets me sell high-quality feed off the place, and our fall calving cow herd wouldnâ&#x20AC;&#x2122;t really benefit from stockpiling that forage through the summer months.â&#x20AC;?

Coon contracts with a feeder annually to bring in calves during this period of peak feed production. Like Blasi, Coon recognizes that this arrangement may be less profitable than actually purchasing the calves himself, but points out that it provides him with a source of income that is independent of market fluctuations. â&#x20AC;&#x153;I love the fact that heâ&#x20AC;&#x2122;s got the risk of ownership in those cattle, even though Iâ&#x20AC;&#x2122;m paid only about a third of the actual value of each pound of gain. The income is roughly equivalent to what I would gross if I replaced those yearlings with the same volume of feed to maintain a cow yearround. Basically, Iâ&#x20AC;&#x2122;m getting the same

BUILD YOUR BRAND THE 55TH ANNUAL

C AL POLY BULL TEST SALE S U N D AY

October 2, 2011 C A L P O LY B E E F C E N T E R

Where Only the BEST Pass the Test.

Continued on page W24

Please plan to attend our Annual Field Day, Saturday, October 1, 2011. â&#x20AC;&#x153;Building your Brand to Add Value to your Herdâ&#x20AC;?

Saturday night we will have our annual pre-sale dinner and auction to support our Animal Science programs.

TRADE SHOW BOTH DAYS

180 YEARLING BULLS ON TEST !NGUS s 2ED !NGUS s 0OLLED (EREFORD 3IM!NGUS s ,IMOUSIN s ,IM &LEX "RANGUS s 3IMMENTAL

Top 60% sell at 1pm Free transportation to central locations in California and surrounding states.

4RACK CONSIGNMENTS ONLINE AT HTTP BULLTEST CALPOLY EDU Great Selection of â&#x20AC;&#x153;low birth-wt.â&#x20AC;?

Angus Bulls and Hereford Bulls and many other great individuals of 8 breeds For more information, please contact: Mike Hall / Aaron Lazanoff Animal Science Department (805)-756-2685 / (805)-801-7058 mhall@calpoly.edu or alazanof@calpoly.edu

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

W21

FURTADO ANGUS A LEGEND IN QUALIT Y! Furtados Total 8149

2010 Madera Select Bull Sale Ideal Range Bull 0URCHASED BY 0EACHTREE 2ANCH +INGS #ITY #!

IMPOSSIBLE? But FURTADO ANGUS did it in 2010 ...

5 Consignment sales and 5 Champions!!!

Madera Select Range Bull Sale, Madera, CA â&#x20AC;˘ Ideal Range Bull Cattlemenâ&#x20AC;&#x2122;s Select All Breed Bull Sale, Visalia, CA â&#x20AC;˘ Champion Range Bull Tri-County Breedersâ&#x20AC;&#x2122; Choice Bull Sale, Templeton, CA â&#x20AC;˘ Champion Range Bull California Angus Breedersâ&#x20AC;&#x2122; Bull Sale, Turlock, CA â&#x20AC;˘ Champion and Reserve Champion Low Birth Division Western Stockmanâ&#x20AC;&#x2122;s Market All Breed Bull Sale, Famoso, CA â&#x20AC;˘ Ideal Range Bull & High Grading Performance Bull

60 FURTADO ANGUS BULLS AVAILABLE AT THESE SALES AND AT THE RANCH

Madera Select Range Bull Sale, Madera, CA â&#x20AC;˘ TUES., SEPTEMBER 6 Cattlemenâ&#x20AC;&#x2122;s Select All Breed Bull Sale, Visalia, CA â&#x20AC;˘ SUN., SEPTEMBER 25 Tri-County Breedersâ&#x20AC;&#x2122; Choice Bull Sale, Templeton, CA â&#x20AC;˘ SAT., OCTOBER 1 Cal Poly Annual Bull Test Sale, San Luis Obispo, CA â&#x20AC;˘ SUN., OCTOBER 2 California Angus Breedersâ&#x20AC;&#x2122; Bull Sale, Turlock, CA â&#x20AC;˘ SAT., OCTOBER 8 Western Stockmanâ&#x20AC;&#x2122;s Market All Breed Bull Sale, Famoso, CA â&#x20AC;˘ SAT., OCTOBER 15

FURTADO ANGUS

The â&#x20AC;&#x153;Kindâ&#x20AC;?

Consistent Quality From a Proven Program: YEARS OF !) "REEDING "ALANCED MATINGS FOR CALVING EASE GROWTH CARCASS

MATERNAL AND EYE APPEAL #OMPLETE !()2 DATA ULTRASOUND LIFETIME ANAPLAS AND TESTED 0) NEGATIVE FOR "6$

GREG & VELMA FURTADO

3 #ENTRAL s 4URLOCK #! s #ELL s &AX % MAIL &URTADOANG AOL COM

023 Charolais Bull sired by DR Stealth

The 023 Charolais bull pictured represents the â&#x20AC;&#x153;kindâ&#x20AC;? of cattle that we strive to produce in both our Angus and Charolais herds. He combines balance with an adequate degree of muscle and capacity and he is structurally correct and sound structured. In addition, he is complete or fault-free in terms of his genetic profile or EPDs. We do believe in using all of the currently available technology to breed better beef cattle. We continue to use and emphasize EPDs in our selection decisions and we will use DNA information once we believe it has significant value. However, we are also somewhat â&#x20AC;&#x153;old fashionedâ&#x20AC;? in that we believe that function follows form and beef cattle need to possess some basic phenotypic traits if they are going to be functional. In addition, traits like disposition, udder quality and longevity are extremely important to us.

Our Thanks â&#x20AC;Ś

To all the buyers and bidders on our recent Internet-based Private Treaty Bull Sale and to all the other individuals who have supported our program during the year.

CCA MEMBER

AGRICULTURAL FOUNDATION Randy Perry s (559) 278-4793 Ryan Thompson - Bull & Heifer Developement s (785) 477-3008 Anthony Suniga - Commercial Cattle s (209) 840-9541 Website: http://jcast.csufresno.edu/beef

W22

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

2010-2011 Student Assistants

s +YLE "OWER s *OE -ACHADO s -ARTIN #ASTRO s !MANDA -OORE s 3OLEDAD #HOCOTECO s :ACK 3AYLER s #ATHERINE #ORREIA

“As Good as the Best and Better than the Rest!”

e R d e A e n h gus P c M Annual Production Sale

2009 BIF Pioneer Award

1986 CBCIA Seedstock Producer of the Year

September 24, 2011

Bulls: Yearlings Females: Bred Heifers, Open Heifers & Commercial Heifers

Fem es e at 0 30 m • Lu c i th

SELLING PROGENY FROM THESE BREED-CHANGING HERDSIRES!

%

McPhee Pacic Pride 4127 Reg #112140 CED 3 HPG +11

BW WW YW MILK TM +6 +77 +130 +11 +50 STAY Marb YG CW +10 +0.47 -0.04 +86

Noon • Bu ls e at :00

DZA Joe Maker 705 Reg #1161743 ME +9 REA +0.85

CED +5 HPG +8

BW WW YW MILK TM +0.9 +60 +102 +18 +48 STAY Marb YG CW +8 +0.62 -0.04 +62

OakRidge Mission Statement 618 Reg #1295973 ME +9 REA +0.43

CED +2 HPG +12

BW WW YW MILK TM -0.1 +38 +78 +14 +33 STAY Marb YG CW +9 +0.15 -0.1 +47

ME +6 REA +0.36

bout Ask Aelivery Fr e e D i d s B Phonecome Wel

Buy with confidence from a herd built on performance bred in, not fed in.

Bulls sell with complete performance data, fertility, ultrasound carcass evaluation, and tested PI negative for BVD. Call or email to get a catalog.

Nellie, Mike, Mary, Rita & Families • 14298 N. Atkins Rd. • Lodi, CA 95240 Nellie: 209-727-3335 • Rita: 209-727-5033 www.mcpheeredangus.com • info@mcpheeredangus.com August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W23

LIKE FATHER LIKE SON - THE LEGACY CONTINUES AT THE SPANISH RANCH WITH BD CUYAMA BRIGHT SIDE 7201T. Continued from page W21 #ALVING %ASE s 4OP &% s 4OP 4ENDERNESS s &ERTILITY s $ISPOSITION

Daniel and Pamela Doiron 805-245-0434 Cell DOIRON SPANISHRANCH NET WWW SPANISHRANCH NET )""! 2EG .O 2 3EMEN AVAILABLE PER STRAW

SEPTEMBER 6, 2011

LUNCH NOON SALE 1 P.M.

33rd Annual

MADERA SELECT Range Bull and Replacement Female Sale

income, while only having to deal with those animals for three or four months out of the year.â&#x20AC;?

As an added benefit, Coon notes that his stocker calves utilize his range more effectively than his cattle do. â&#x20AC;&#x153;Their grazing pattern is significantly different than a cowâ&#x20AC;&#x2122;s,â&#x20AC;? he says. â&#x20AC;&#x153;They donâ&#x20AC;&#x2122;t know the pasture, and donâ&#x20AC;&#x2122;t have the same preconceived grazing plan that a cow that is familiar with the pasture would. Youâ&#x20AC;&#x2122;ll see them utilizing parts of the range that the cows donâ&#x20AC;&#x2122;t.â&#x20AC;?

This greater tendency to wander, says Coon, means that his pastures receive much more uniform utilization than they would with cows, resulting in a healthier rangeland.

Coon does agree that, for the producer thinking of adding stockers to their operation, getting started can be a daunting task. In particular, he stresses the need for constant monitoring and adequate health care. â&#x20AC;&#x153;If youâ&#x20AC;&#x2122;re bringing on yearling cattle, youâ&#x20AC;&#x2122;ve got to be set up to monitor conditions and process them if necessary.

Continued on page W26

Quality All-Breed Bulls

This outstanding selection of all-breed bulls will improve your next calf crop and keep you competitive in the 21st century.

All bulls sell semen- and trich-tested and many will be vaccinated for Anaplas.

Quality

OPEN & BRED FEMALES

Watch and Bid/Buy Bulls Online During Sale Day at www.cattleusa.com

MADERA, CALIFORNIA (559) 674-4674 Tim Sisil, Sale Manager (209) 631-6054

PRODUCERS STOCKYARDS

CALL FOR A SALE CATALOG OR VISIT OUR WEB SITE

www.producerslivestock.com W24

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W25

Quality Like The Big Boys!

Borges Angus Ranch

Our quality Angus program produces bulls and females that will stand with the very best and are commercial cattleman proven.

This fall, look for Borges Angus bulls at the following sales on the West Coast.

Cal Poly Bull Test Sale

San Luis Obispo, CA â&#x20AC;˘ Oct. 2

California Angus Breeders Bull Sale Turlock, CA â&#x20AC;˘ Oct. 8

Also bulls for sale at the ranch.

The sale cattle for this fall are sired by such premier Angus AI sires as:

Sitz Upward, SAV Final Answer, Networth, HARB Pendleton, G Bar 3407, Ironwood New Level, Predestine, Bismarck, Bear Mtn. Owyhee, and B C Marathon.

Borges Angus Ranch Joe and Patricia Borges

3130 BYER ROAD â&#x20AC;˘ BRYON, CA 94514 â&#x20AC;˘ 925-634-3072 OR 209-456-0632

CONSISTENTLY ON TOP We have topped two of the most prestigious bull tests for all the right reasons! /UR BULLS ARE TRULY THE COWMAN S KIND WITH SOUNDNESS

THICKNESS PERFORMANCE AND SOLID %0$S Amador Network 44 0124 3IRED BY #ONNEALY .ETWORK

Continued from page W24 Health issues will absolutely kill you if youâ&#x20AC;&#x2122;re not on top of them quickly.â&#x20AC;? He also has a few suggestions based on what he has learned over the years. â&#x20AC;&#x153;What Iâ&#x20AC;&#x2122;ve found useful is to bring the cattle on early, before the turnout.â&#x20AC;?

Coon explains that the feeder he works with vaccinates them before they are delivered and backgrounds them to get them through the stressful weaning period.

However, commingling groups of calves from different sources, and shipping them by truck are also stressors, and Coon points out that even the best backgrounding program doesnâ&#x20AC;&#x2122;t guarantee freedom from health problems when the calves arrive. â&#x20AC;&#x153;If the calves have any kind of weakness in them, that will show up about two weeks after I get them,â&#x20AC;? he says. â&#x20AC;&#x153;So I feed them at my place for a couple of weeks, just to make sure theyâ&#x20AC;&#x2122;re straightened up before they go out.â&#x20AC;? In this way, he is able to keep his death loss at 1 percent or less over a feeding cycle.

There are potential downsides to contract grazing in comparison to purchasing Continued on page W30

Bulls Available Sired by These Breed Leaders: 3ITZ 5PWARD 2 s 3 ! 6 "ISMARK s -YTTY )N &OCUS (YLINE 2IGHT 4IME s '$!2 'AME $AY

Watch for Amador Angus bulls this fall selling at ...

MID VALLEY BULL SALE Ă&#x192;Ă&#x192;Ă&#x192; Monday, Ă&#x192;Ă&#x192; September 12th - CLM in Galt, CA Ă&#x192; &

&

s #AL 0OLY "ULL 4EST 3ALE 3UNDAY /CTOBER

s &ALLON "ULL 3ALE &EBRUARY

s 3NYDER S "ULLS FOR THE ST #ENTURY 3ALE -ARCH

AMADOR ANGUS

Ed, Carlene, Joshua and Tiffany Amador

%D s *OSH ,AIRD 2D -ODESTO #! s !MADOR&ARMS MSN COM W26

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

DYNAMIC PRODUCER

Poly VRD Pride 2025

Our newest Doner Cow!

B +4.9, W +44, M +22, Y +96 Marb +.01, RE + .33 Sire: Vermilion Dateline 7078 Dam: VAR Pride 7204 (

Dam of â&#x20AC;&#x153;Sonnyâ&#x20AC;? - a Mission Herd Sire and 2005 Cal Poly Top Seller.

(

Dam of the High-Performing Growth Bull 2010 Cal Poly Test.

â&#x20AC;&#x153;2025â&#x20AC;? has been added to the Mission Donor Program with flushes by Sitz Upward 307R and SAV Final Answer 0035. Stay tuned for future exciting things by â&#x20AC;&#x153;2025.â&#x20AC;?

Just Look At What Sheâ&#x20AC;&#x2122;s Done At Mission...

A Son!

A Son!

â&#x20AC;&#x153;0514â&#x20AC;? â&#x20AC;˘ 1-26-10

B I +4.5, W I +48, M I +26, Y I +97 MARB +.88, RE +.48, $B +71.09 Sire: GAR Predestinedâ&#x20AC;&#x153;

A Grandson!

â&#x20AC;&#x153;0508â&#x20AC;? â&#x20AC;˘ 1-24-10

B I +4.5, W I +48, M I +26, Y I +97 MARB +.88, RE +.46, $B +64.18 Sire: GAR Predestinedâ&#x20AC;&#x153;

â&#x20AC;&#x153;9658â&#x20AC;? â&#x20AC;˘ 10-25-09

B +3.7, W +49, M +19, Y +91 MARB +3.5, RE I+.62, $B +58.01 Sire: BC Lookout 7024A

â&#x20AC;&#x153;0514â&#x20AC;?, â&#x20AC;&#x153;0508â&#x20AC;? & â&#x20AC;&#x153;9658â&#x20AC;?

Will Be Featured At The ...

Oâ&#x20AC;&#x2122;NEAL RANCH/MISSION ANGUS RANCH

PERFORMANCE PLUS

ANGUS BULL SALE September 5, 2011

At Oâ&#x20AC;&#x2122;Neal Ranch 16 miles East of Madera, CA

Mark & Tom Perez: s CELL s 0 / "OX s #ROWS ,ANDING #!

Justin Schmidt: /PERATIONS -ANAGER s

W27

W28

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

hese Bulls and More Sell ...

Five Star 3074 Pacific 0005

SIRE: Five Star Pacic 6008 • MGS:California Traveler

75 Angus Bulls

Su da Sep em r 8

SSpring and Fall Yearlings

September 18, 2011

1 P.M. at Five Star Land and Livestock • Wilton, CA We utilize the most proven and productive genetics in the Angus industry to produce bulls that excell in calving ease, performance, maternal, caracss and balance.

In addition, our bulls excell in the functional traits that impact your bottom line, like sound feet and legs, udder wquality and mothering ability of daughters, as wellas fleshing ability, disposition and longevity.

These cattle are definitely right for the times!

• Wulffs Git-R-Done 730 • S A V Pioneer 7301 • Five Star Pacific 6008 • Five Star 0101 Front Page 7068 • Five Star 4059 Ambush 6027 • Mytty In Focus • Sitz Upward 307R • Connealy Thunder • S A V Bismarck 5682 • S A V Net Worth 4200 • HARB Pendleton 765 J H • B C Marathon 7022 • Bar R Marathon 7094 • PF 3164 Midland 5024

Mark, M Ma rk, Abbie and Ryan Ryyan Nelson

12211 222111 P Pear Lane, Wilton, C CA A 95 9569 95693 693 69

Home 916-687-7108 Cell 916-804-4990

www.fivestarlandandlivestock.com Abigail5star@aol.com

Craig and J.J. Reinhardt 916-354-2962 Cell 916-712-3696

BAR R

6925 Bisbee Dr. Sloughhouse, CA 95683

M

$W +32.13

WW +57

$F +32.45

YW +96

$G +29.50

Milk +23 $B +57.97

Five Star 1080 Pacific 0030

SIRE: Five Star Pacic 6008 • MGS: Papa Forte 1921

530-633-418

CED +7 Marb +.56

REA +.63

BW +1.8

$W +31.49

WW +56

$F +26.26

YW +89

$G +35.82

Milk +23 $B +62.59

Five Star 7038 Mytty 0041

SIRE: Mytty In Focus • MGS: B/R New Frontier 095

CED +9 Marb +.69

REA +.05

BW +.8

$W +29.41

WW +50

$F +26.16

YW +90

$G +29.33

Milk +25 $B +58.81

Bar R 26 Bismarck 0084

SIRE: S A V Bismarck 5682 • MGS: B C C Bushwacker

Sammis Ranch

Joe and Michelle Sammis 530-397-3456 P.O. Box 625 Dorris, CA 96023

Matt Macfarlane Office (530) 633-4184 • Cell (916) 803-3113 mmacfarlane@cattlemen.net www.m3cattlemarketing.com C n ac M t M f

REA +.36

BW +.7

SELLING SONS OF:

FIVE STAR LAND & LIVESTOCK

HILARIO GOMEZ RANCH OPERATIONS 916-804-8136 SE HABLA ESPAÑOL

CED +7 Marb +.47

o eq s a sa

oo

CED I+10 Marb I+.25

REA I+.56

BW I+.5

$W +32.95

WW I+60

$F +35.33

YW +100

$G +26.01

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Milk I+21 $B +51.93

W29

MH Silverado 891 ET

Continued from page W26

BW WW YW MM M&G Fat REA Marb

+4.8 +65 +103 +24 +56 -0.01 +0.89 -0.04

SILVERADO ... for TOP RESULTS! One of the most complete bulls you can find, this son of the 2001 Denver National Champion Hereford Heifer was top bull in the 2009 and 2010 Reserve Champion Carload at National Western. With balance, eye appeal and the EPDs to back him up, this high performance bull can be used in any great cow herd to get you TOP RESULTS!

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CALIFORNIA

BULLFEST

Carl and Susan Schohr • 530-846-4354 Steven & Melissa Schohr • 530-864-2855 Tracy Schohr • Doug and Jean Schohr P.O. Box 391, Gridley, CA 95948 ricencows@schohr.com

Discover why the best ranches in the west use our

ANGUS & GELBVIEH BULLS!

stockers. For example, under his contract agreement, Coon has no say in what type of cattle arrive at his ranch from the feeder.

“Occasionally, we do get some marginal calves,” he admits, adding that he is fortunate to work with a feeder who does work to consistently provide quality calves.

The key, he says, is a stable relationship with a feeder that he can trust. Though he doesn’t purchase calves himself, he has considered taking that leap, and points out that knowing and trusting who you work with in that arena is no less important.

“If you’re buying calves yourself, the ability to buy them in the fall and overwinter them, if you had the feed, would be huge,” he says. “That would put you in a position to buy calves from one or two trusted sources, rather than putting them together from smaller bunches in the spring. I think that the health and quality issues are so big in this business, it’s really worth chasing that quality.”

Whether purchasing stockers or contracting them, all three experts agree that a major key to success lies in forming relationships and in taking the steps necessary to maintain a reputation for quality in the end product.

“We are a small community in agriculture; reputation is everything,” says Paterson. “Things like a solid health program, a good mineral program, and accurate representation of what you have to offer will lead to better cattle that will keep buyers coming back year after year.”

Upcoming Sales Visalia, CA Templeton, CA Galt, CA

Sept. 25 Oct. 1 Nov. 12

Bulls available privately with delivery available

Kevin Potter 3740 County Line Road Emmett, ID 83617

(208) 365-0602 kpotter@q.com

View bulls online at www.cattleandsheep.com W30

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

M ID V ALLEY S ALE E

At Cattlemen’s Livestock Market our goal is to market your cattle for a premium. Today, more than ever, genetics have taken an important role and the bulls you choose can make a difference.

CLM will have a representative at every California bull sale this fall to help with your bull selection and purchasing needs.

A RELLANO B RAVO P RODUCTION S ALE M

D ISMUKES R ANCH B ULL S ALE EM

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AUCTION YARD 12495 Stockton Blvd. Galt, CA 95632 209-745-1515 OFFICE • 209-745-1582 FAX 209-745-2701 MKT RPT • www.clmgalt.com

LIVESTOCK MARKET

JOE GATES ........... 707-694-3063 JUSTIN TRICK ...... 916-240-4601 ABEL JIMENEZ ..... 209-495-0995

MARK FISCHER ... 209-768-6522 REX WHITTLE ...... 209-996-6994

JAKE PARNELL .... 209-495-1714 • 916-662-1298 GEORGE GOOK N ..... 209-482-1648

2009 Grand Champion Pen of 5

NOVEMBER 11TH & 12TH, 2011

CATTLEMEN’S LIVESTOCK MARKET, GALT, CA !NGUS s "RANGUS s 'ELBVIEH s ,IMOUSIN 2ED !NGUS s "EEFMASTER s #HAROLAIS (EREFORD s 0OLLED (EREFORD s 3ALERS 3HORTHORN s 3IMMENTAL

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

Continued from page 24

Continued on page 55

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

25

SPADE

By Ginger Elliott, WLJ Correspondent

Spade Ranches’ John Welch: Been there, done that ... and that ...

Photo curtesy of Jim Jennings

T

he Spade Ranches CEO and president, John Welch, has sampled just about every entrée on the bovine industry buffet. This journey through the cattle industry started as a kid in West Texas with about 100 cows his dad always kept. The circle Welch began in Texas has sent him from the corporate end of the cattle industry in Colorado to the management end of several sizeable ranches in his home state. Along the way, he and wife Bonnie have been able to put their own cattle and leases together, eventually acquiring their own ranch in southeastern Colorado. His circle’s made trips that provided important skills he depends on daily, be it on the Spades or the ranch his family owns. Welch’s footprints have been found every step of the way from the time the calf hits the ground until it winds up as

26

replacement stock or it enters the marketing and feeding arenas.

Graduating with a degree in agricultural economics from Texas A&M University in 1972, Welch and Bonnie moved to Colorado where they remained fixtures in the state’s ranching community for 30 years.

But in 2002, the Lone Star State came calling and the two left Colorado when Welch took the management position at the Spade Ranches in Lubbock, TX. Welch’s first job in Colorado was as a market analyst with Cattle Fax, a global leader in beef industry research. Working for this organization got his name recognized in the cattle industry. Five years later, he ‘moved down the hall’ and worked for National Cattlemen’s Beef Association in charge of their marketing, becoming a liaison for many cattleman affiliates and

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

organizations across the U.S. His next move was to Brighton, CO, spending two years managing a feedlot.

“After leaving the feedlot, I worked for Taurus Corporation, an investor feeding company. It was a time when lots of movie stars were feeding cattle for tax benefits. I then formed, with George Spencer, former executive officer of the National Cattlemen’s Association, and Bob Rufenacht, one of the founders of RB and T Commodities, a commodity trading company called Summit Commodities,” Welch explained.

Welch next worked for an agricultural commodities trading group and went on to own a commodities trading company in Littleton, CO. During those 30 years, Welch had opportunities to make personal contacts enabling him to start putting their

own cattle interests together.

In 1984, the Welches had a chance to lease a large ranch east of Colorado Springs where they raised their three boys.

Basically a cow/calf operation, they also ran yearlings. During that same time, they partnered on a ranch in the Nebraska Sandhills.

Eventually the Welches bought the ranch they now own near Trinidad, CO. Middle son Andy runs the ranch where he lives with his family. He also sees to their lease country in other western states and is in partnership with his brothers, Bob, editor of Spin to Win magazine, and Wesley, who also works for Spades.

After three decades living and raising a family in Colorado, what triggered Welch’s move back to Texas to work for Spade Ranches?

“I did lot of work with Dub Waldrip, past president and CEO of Spade Ranches, American National Cattleman past president and Cattle Fax member. After doing business together for many years, we became good friends. In ’92 we talked about a move to Spades but the kids were little ... It didn’t seem a fit. In ’02 Dub called me again. We’d had a terrible drought in Colorado and had to move all our cattle off. Our boys were either out of high school

or college, so we figured ... ‘Well, we’ll come talk. This might be interesting.’ So we came down; it just seemed to fit. Bonnie and I’ve been here since.”

Spade Ranches was established in 1889

by Isaac Ellwood, the original patent holder for barbed wire. Quite naturally, Renderbrook Spade, the original purchase, was one of the first ranches to be fenced in Texas. Spade Ranches is one of the few large ranches working today that has existed within three centuries and still owned by the original family. The board of directors includes six of the great-great grandchildren of Elwood.

Describing the ranch as ‘pretty much a cow/calf operation,’ Welch said Spades runs about 6,400 cows. Heifers, bulls and about 1,000 stockers bring that count close to 10,000 head scattered over 250,000 acres their ba six outfits On onhite kgro inn Texas.

Spades has about 500 fall calving cows and sells those calves in June. The rest of their cows, plus heifers, calve in spring and wean in the fall. The last eight years they’ve sold their calves. Prior to that, they’d retained ownership, feeding them out. But feeling that the market was so volatile and so unprofitable for cattle feeding, Spades made a change shifting real

strong to cow/calf the last couple of years, increasing their numbers because with market opportunities very strong, they felt it was the time to do it. Welch feels there’ll be a time when that profitability returns, but with such an overcapacity of feeding and competition, it has been really tough for smaller producers who have difficulties marketing their cattle where value added programs are appropriate and many people have just been forced out of business.

In regards to their marketing program, Spades does a little bit of everything. They hedge a lot, including this year as early as spring for October delivery. Aware of Welch’s vast experience in the commodities market and knowledge of the ins and outs of getting the finished product to the customer, one seasoned cattle producer said: “I’d like to take a 1,200-mile road trip with John locked up in the vehicle so I could pick his brain about the cattle industry!”

The majority of Spade calves are sold directly to feedlots, with video auctions usually being the second largest outlet.

Depending on market conditions and class of cattle, they realize it can be difficult to provide several thousand a year on video.

Continued on page 28

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CALL US TOLL FREE AT 1-877-579-5579 TO DISCUSS YOUR CATTLE MARKETING NEEDS OR TO FIND A REPRESENTATIVE IN YOUR AREA. August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

27

Continued from page 27

However, all in all, video has worked well for them. They have many repeat customers who like their cattle and have done business with them for years. Many of their cattle are sold to feeders and packers offering additional premiums if they outperform based on data analyzed at the end feeding and harvesting stage.

Throughout the industry, Spade cattle are ranked at the top for quality. The history behind creation of that product reads like this: In the 1960s, Spades began a calculated crossbreeding program in their cow/calf operation that continues today, making adjustments with changing market trends.

Nine years ago, Welch brought to the table his knowledge accrued from many years in the industry.

“Everybody’s going straight Angus,” Welch commented. “But Dub was always a big believer in heterosis and cross breeding and I am too.

I use two different composite breeds of bulls: a SimAngus bull which is 50 percent Angus/50 percent Simmental, and a Balancer bull which is 50 percent Angus/50 Continued on page 31

Photo curtesy of Jim Jennings

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Continued from page 28 percent Gelbvieh. Our heifers are all bred to low birth weight Angus bulls. After calving, those heifers go into the rotation breeding program to calve at the same time as our cows.”

Spades crosses the progeny of their cows and first calf heifers to either SimAngus bulls or Balancer bulls. For example, after their first calf, they breed heifers sired by a SimAngus to the Balancer bull and vice versa. Same with their cows. They’ll breed Balancer cows to SimAngus bulls and wind up with a black animal which is half Angus, a third Gelbvieh and a sixth Simmental, or half Angus, a third Gelbvieh and one-sixth Simmental.

All cows and calves are half Angus and half Continental, and that Continental is either more Gelbvieh and less Simmental or more Simmental and less Gelbvieh, making them all very similar phenotypically and in the way they perform. Spades keep their heifers which retain about 67 percent heterosis. Their black-hided calves qualify for the Angus premiums.

Calves are generally weaned the first of October then preconditioned, run on grass and caked for about 45 days prior to delivery. Spades also run their own stockers.

In regards to their herd health program, everything gets a 7-way vaccine, a modified live IBR PI3 BVD BRSV vaccine and pour-on deworming. Females and breeding bulls receive vaccines to guard against abortion. Weaned calves receive a multiple trace mineral injection and Pasteurella immunization. Heifercalves are bangs vaccinated. Prior to breeding purchased bulls are fertility tested. Trich testing is done on 25 percent of their total bulls, with that 25 percent being older bulls.

2011 has not been a normal year for feeding cattle on ranches. But in those ‘normal years,’ nutritional management consists of 2 pounds of cake per head per day for about three months in the winter. If fall moisture provides an abundance of fillery, Spades may not feed on their smaller ranches. Protein blocks are utilized where country’s too rough to feed cake.

But as good a management program that Spades implements, no ranch is immune to the fires and drought that plague Texas in 2011. Welch feels lucky that, so far, their ranch at Colorado City is their only place that’s burned, losing about 5,000 acres to fire.

Drought, however, has plagued all six ranches just as it has their neighbors in the Panhandle, the High Plains, West Texas and the Trans Pecos.

“This spring, our Borden County ranch had to be completely vacated because that country has only surface tanks that are either boggy or dry,” Welch said. “We’ve had no rain . . . Anywhere. I’ve not seen drought like this since ’02 when we had to liquidate. It was disastrous. 2011 is shaping up to worse; we’ve had an inch or less in eight months.”

“Spades has a drought plan. We got rid of all stocker cattle, opening up a little more country. Then we moved yearling replacement heifers to leases in Canadian and Shamrock, TX, and about 100 pairs to New Mexico and Colorado. We’ve managed to retain ownership of our cattle,” explained Welch. “The next deal is to early wean. We’ve already done steps one, two, and three... We’re down to end of the steps. If we get no rain this fall, we’ll have to start selling our bred cows or relocate. We can’t just wait for rain.”

Welch’s crystal ball regarding the future of the cattle industry?

“Prices are high as cow numbers have been reduced so much—they are about the levels of the 1950s. As a result, we’ve been real optimistic and have seen optimum record prices. But with drought, the national cow herd’s not going to expand and may be even smaller next year. I guess I’m really bullish if we get enough rain to hang on to our cattle. Some are able to do that if they started out in good shape.

But at the same time, numbers have been down, domestic demand has been tolerable, but foreign demand is just great. We are developing an export market for beef which is really what’s just carrying us,” explained Welch.

With much talk about the shrinking national cow herd, Welch has been on a cow/calf advisory council with JBS, the biggest packing company in the world, because they’re so worried. JBS sees it globally, not just the U.S. “I don’t know what the answer is; we know the average age of a cattle producer is 59-60. With so many variables and uncertainty, you don’t see as many people getting into the business or young people coming back into the cattle industry,” Welch said.

“For starters, it’s not as lucrative as many jobs and it’s hard work. There’s so much risk involved. This year is a good example; you have good prices, but no rain. A generation ago, a guy might be a doctor or lawyer, keeping 30 cows because his granddad had a ranch. He liked that and wanted to buy some cows

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Continued on page 34 August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

himself. Each generation has fewer and fewer people coming from agricultural backgrounds, so thereâ&#x20AC;&#x2122;s just not the interest in small operations like there used to be,â&#x20AC;? believes Welch. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s hard for young people not coming from a family operation to break into the cattle business, but not impossible. There are real opportunities and real profits to be made so I donâ&#x20AC;&#x2122;t want to be discouraging.

Many young individuals are approaching the corporate end of the business,â&#x20AC;? Welch feels. â&#x20AC;&#x153;Beyond management of ranches, I think communication and interaction skills are becoming increasingly important.

There are growing numbers of absentee owners who know so little about ranching and depend on their managers to educate them about the ranching industry.â&#x20AC;?

Other detriments include buying land thatâ&#x20AC;&#x2122;s becoming cost prohibitive. One has to lease land, which is getting harder to do.

Welch feels more land purchases for hunting are there than anywhere else, however, itâ&#x20AC;&#x2122;s everywhere. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s hard to pay for your cows if you have to give $1,000 per acre for recreational land thatâ&#x20AC;&#x2122;s maybe worth $150 per acre,â&#x20AC;? Welch figures. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s just a big disconnect between beef production value and its market value. â&#x20AC;&#x153;But weâ&#x20AC;&#x2122;re getting some landowners that realize they need grazing pressure on their country for their hunting, especially bird hunting. Quail need to put their feet on the ground, not on dead grass. Weâ&#x20AC;&#x2122;ve got a couple of places where owners will lease their ranch if you half stock it feeling itâ&#x20AC;&#x2122;s more balanced for the wildlife population.

Iâ&#x20AC;&#x2122;m hopeful thereâ&#x20AC;&#x2122;ll be a little more of that gradually coming around. However, if you lease a ranch and only have it half stocked, the fixed costs are the same but you can only spread around half as many cattle. So in some ways, itâ&#x20AC;&#x2122;s not as attractive.â&#x20AC;?

These days, Welch, an avid horseman, jokes that he spends less time in the saddle and more time pushing numbers around than cattle. Still, he values the importance of riding Spadesâ&#x20AC;&#x2122; country when he can. â&#x20AC;&#x153;But then thereâ&#x20AC;&#x2122;s always that conďŹ&#x201A;ict; Spades isnâ&#x20AC;&#x2122;t paying me to do a job that a day worker can do. By the same token, I think itâ&#x20AC;&#x2122;s good if I can be out there some, see the conditions horseback, getting a good feel for what the cattle and the country look like. Men need to know that I understand and appreciate what they are doing. So thereâ&#x20AC;&#x2122;s more intangibles there than just being a hand. I canâ&#x20AC;&#x2122;t be out there a lot,â&#x20AC;? says Continued on page 36

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Welch. “Wesley, my youngest son, is taking on the reins at Spades. He or I try to make all the shippings, which translate into ‘payday at the mines.’ Even if we can only be at a branding a day or two, it lets the men know we’re interested in what they’re doing and appreciate their efforts to make the deal work.”

To ‘make the deal work,’ Spade ranch cowboys do everything horseback, riding horses that are tough, cowy and athletic in country that can be rough and brushy. To produce horses with enough size and bone to hold up under heavy use, Spades has crossed progeny of Doc Bar with Mr. San Peppy.

“We keep about 25 brood mares but don’t sell many horses, maybe a few a year at the special sales in Abilene, Fort Worth and Wichita Falls. These geldings are usually about 10 years old, which we consider to have plenty of years of work left in them, but not a lot of hard work. For us, raising horses to sell is not a big profit center,” Welch said.

With a wide spectrum of responsibilities managing Spade Ranches, including keeping up with cattle futures, marketing trends, animal health issues, and ranching innovaPhoto curtesy of Jim Jennings

Continued on page 38

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37

SPADE Continued from page 36

tions, Welch is current on legislative issues concerning agriculture. Heâ&#x20AC;&#x2122;s one of the directors of the Texas and Southwestern Cattle Raisers Association and director of the Texas Livestock Marketing Association and states his experiences in these positions help him cope with the ever-changing cattle industry.

Despite the varying responsibilities that go with the territory, Welch keeps centered with the support of his family. When talking about their personal cattle, Welch does not speak in first person singular; Bonnieâ&#x20AC;&#x2122;s nameâ&#x20AC;&#x2122;s always on the program. When their wagon is out in Colorado, Bonnieâ&#x20AC;&#x2122;s emphatic about her main responsibility: keeping the crew fed! But when her cooking isnâ&#x20AC;&#x2122;t needed, she might be found helping with their cattle and horses. She shares the same love for the ranch as her husband.

Welchâ&#x20AC;&#x2122;s career has taken him from the climb up the corporate ladder, to the Spadesâ&#x20AC;&#x2122; branding pen, and back to their ranch in Colorado.

Not only has John Welch â&#x20AC;&#x2DC;been there, done that, got the T-shirtâ&#x20AC;&#x2122; . . . but heâ&#x20AC;&#x2122;s â&#x20AC;&#x2DC;been there, done that and got the T-bone!â&#x20AC;&#x2122;

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

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Beneath their Stetsons there is a lot of marketing savvy.

Jerry York 208-863-1172

jerryyorkwlj@gmail.com f n

n t

Jerry Gliko 406-277-3001 (c) 406-860-3181 jlgliko@3rivers.net na e

In addition to traditional print advertising campaigns, WLJ’s staff can also advise you on the variety of digital marketing opportunities available, including online ads and direct e-mail marketing. Our fast-growing online presence provides you an opportunity to directly target those readers who prefer digital media.

So, to break away from the herd, get the WLJ team–and get results.

Contact the team that will answer your marketing needs.

rth

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Jim Gies 970-454-3836 (c) 970-590-0500 jgies@msn.com

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Pete Crow Publisher

800-850-2769 Subscr ib WLJ to e to day!

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pete@wlj.net w

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7355 E. Orchard Rd., #300, Greenwood Village, CO 80111 303.722.7600 • 800.850.2769

www.wlj.net

one yea r Call

1-800-8 50-276 9

“The Industry’s Largest Weekly Circulation”

40

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

We deliver market news, current events and management news for the livestock industry, an industry that has counted on us for more than 88 years.

TL

Turlock Livestock Auction Yard

The Central California Livestock Marketing Center

UPCOMING SPECIAL SALES

Early Fall Special Feeder Sale Early Special Fall Feeder Sale Consignor/Buyer Social & BBQ California Angus & Charolais Bull Sale & Fall Calving Female Replacement Sale Saturday, October 15th 5th Annual Fall Special Feeder Sale Tuesday, November 1st Special Feeder Sale Tuesday, November 15th Special Feeder Sale Saturday, December 10th TLAY 5th Anniversary Special Feeder Sale Sunday, December 18th California Female Expo Sale Tuesday, September 20th Tuesday, October 4th Friday, October 7th Saturday, October 8th

Weekly Sale Schedule

TUESDAY

9 am

FRIDAY

3 pm 1 pm

Feeder Cattle Followed by Pairs & Bred Females Slaughter Cows & Bulls Slaughter Cows & Bulls

Each Tuesday will feature large runs of calves and yearlings.

Stock Yards • 209-634-4326 or 209-667-0811 Market Report: 209-632-0765 Max Olvera: Cell 209-277-2063, Home 209-632-2544 Steve Faria: Cell 209-988-7180, Home 209-723-9269 Eddie Nunes: Cell 209-604-6848 • Bud Cozzi: Cell 209-652-4480 Chuck Cozzi: 209-652-4479 • John Luiz: 209-480-5101 Brandon Babba: 209-480-1267 • Reed Welch: 209-605-6136 Jake Bettencourt: 209-262-4019 P.O. BOX 3030 TURLOCK, CA 95381

WWW.TURLOCKLIVESTOCK.COM

WOrkING hArd fOr thE CALIfOrNIA CAttLE PrOdUCEr August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W1

W2

StockerS

By Jason Campbell, WLJ Correspondent

Stocker cattle

provide opportunities for profit, but not without risk

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

D

etermining the most efficient stocking rate for a pasture is a key element of running cattle on western rangelands. Turn out too many, and the forage base is damaged over the long term, while turning out too few means leaving money on the table in the form of unrealized potential. The most successful producers are those who can closely match the number of cattle on the range with the available forage resources, year after year. On a cow operation, however, this is easier said than done. Mature cows represent a sizable investment of time and money, which means that cow herds cannot simply be expanded or contracted in response to annual changes in available grass. This inflexibility makes a perfect match between animals and resources a sought after but seldom obtained goal.

During favorable years, producers may

find themselves leaving behind grass that could have been converted to dollars, while periods of drought or low production may find them forced to sell off running age cows, which are often just beginning to show a profit following a lengthy period of investment. To increase flexibility, and offset these peaks and valleys in forage production, many producers consider utilizing short-term grazing using yearling, or ‘stocker’ cattle.

On the surface, the process may seem relatively simple to many aspiring stocker operators. Buy a few steers or heifers, put them out on pasture, and wait for grass to turn into pounds of beef. However, experts point out that profitably managing a stocker operation is a complex undertaking.

While many ranches may see a clear path to expanding their operation to include a stocker enterprise, actually doing so repre-

sents a massive, often costly, undertaking that cannot be entered into lightly.

To begin with, says Dr. Dale Blasi, professor and extension specialist as Kansas State University (K-State), running stockers often demands a shift in focus from the traditional goals necessary to keep a cow operation profitable.

“It’s a philosophical difference and a change in mindset,” he points out. You don’t just flip a switch and become a stocker operator overnight.” While cow/calf operations typically focus heavily on reducing costs to increase profitability, money from a stocker enterprise is earned on the margin between the beginning and ending value of the calves. Rather than focusing on cost, a producer needs to be aware of the value of each pound of gain. In order to do this effectively, stresses Blasi, it is abContinued on page W4

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W3

Stockers Continued from page W3 solutely critical that a producer understand what their land base is actually producing in terms of forage and nutrition.

“You need to know how much total forage you are capable of producing,” he says. “That’s the most basic elemental question that needs to be answered.”

Blasi recommends that the first step a producer take when considering stockers is develop an accurate estimate of forage production on the ranch.

“You need to sit down and really map

WS

M

out your forage base, and know exactly what you have. Look at the highs and lows, and take a conservative estimate of what the forage production capability of the operation is.”

Determining the nutrient level of the available forage is equally important. Dr. John Paterson, beef extension specialist at Montana State University, points out that timing the use of stocker cattle with periods of peak grass production is critical, although matching that period to the seasonal availability of suitable calves may often be difficult.

46th Annual

Famoso Bull Sale October 13, 14 & 15 Thursday, October 13th 8 a.m.

PHYSICAL SIFTING OF BULLS

Friday, October 14th 8 a.m.

GrAdING OF ELIGIBLE BULLS 12 noon Grader Lunch 1 p.m.

SELECTION OF IdEAL rANGE BULL

Saturday, October 15th

9 a m.

10 a m.

Brunch INVITATIONAL FEmALE SALE 500 of the best Early consignments:

60 “fancy” blk 3-year-old pairs.

60 “fancy” 1st calf heifer pairs.

60 big “fancy” blk 1st calf heifers bred to low birth wt. bulls from H Cattle Co., Oxnard, CA. 40 1st calf bred heifers.

100 blk,charolais and rd 6- to 7-year-old cows bred to charolais,red and blk bulls.

100 “fancy” blk open and breedable replacement heifers.

“The availability of stockers when you’ve got grass ready to go could be a problem,” he says. “If you’re in New Mexico, and you’ve got grass that isn’t ready to go until June, most the stockers are gone. So you’ve got to bring those cattle in early, and you may even have to feed them for a while.”

Additionally, he points out that the grass that is available may not be of sufficient quality to maximize gains, making supplementation a necessity, often for a longer period than anticipated. “For example, the protein of native range is not always very good,” he says.

Both Blasi and Paterson agree that costs are a significant factor when considering the merits of adding stockers to an operation. This is particularly true if the ranch in question has never retained calves or run yearlings in the past.

“If you’re thinking about stockers, you need to be looking at your perimeter fences,” says Blasi. “Fences that might be fine for containing cows and calves are a different story altogether with yearlings.”

Handling facilities are another place, says Paterson, where early investment pays off in the long run.

Continued on page W6

Beef is Back!

The outlook for the beef industry is fantastic, but now isn’t the time to take risks with Genetics. Select from a herd that has proven that they work in the “real world”.

See you September 14th, Oakdale, CA

12 noon 46th ANNUAL FAmOSO BULL SALE

The bull demand is the best ever in California this year.

Cow herds are increasing and the calf markets are at record highs.

ER N

Consignments welcome!

STOCKM If you need information, AN ’ please call Debbie S

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... T R U LY ... A L L

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or Helen at Famoso 661-399-2981

Review EPDs as bulls are entered on our website.

Western Stockman’s Market Market Western Website: www.westernstockmansmarket.com Dwight Mebane (661) 399-2981

Frank Machado H “Skinner” Hardy Justin Mebane (805) 839-8166 (541) 837-3723 (661) 979-9894 31911 Hwy 46 • McFarland, CA 93250-9709

Always in the Lead

W4

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Come check out our Sim/Angus bulls!

Increase your hybrid vigor, performance, and profits.

Gonsalves RANCH Angus & Sim/Angus Cattle

The Gonsalves Family

7243 Maze Blvd. Modesto, CA 95358 Joey, Kristy, Riley, & Reese: (209) 526-3006 Mike: (209) 531-4893

Why do we spend countless hours A.I. breeding and tagging calves on the open range? Because. . .

IT MAKES BETTER BULLS! We make better bulls by keeping cows outside as much as possible where mother nature culls out the unsuitable and makes the suitable stronger.

5th Annual

“First Choice”

BULL SALE October 18th, 2011 Selling 100 Fall and Spring Yearling Bulls 40 commercial Angus cows WE MAKE IT EASY: Free wintering and financing

SAV Final Answer

GDAR Game Day

EPDs B -1.0

W 61

M 19

Y MARB REA $W 106 .41 .34 49.26

EPDs B -0.6

W 49

M 25

Y MARB REA $W 100 .42 .62 44.34

These two sires are the cornerstones of our breeding program. They produce moderate, muscular, early maturing progeny - the best balanced beef bulls in the business. They lie in the top 1% of the breed for $W, the index that combines the revenue derived from growth with the expense of feeding the cow. Our sale will feature more sons of these great sires than any sale this fall.

9 Peaks will donate the proceeds from the sale of one bull to Water For Life.

9 PEAKS RANCH Aaron and Rebecca Borror 541-923-3284 Cell 541-633-3284 70395 Lower Bridge Way Terrebonne, OR 97760 P. O. Box 38 Fort Rock, OR 97735

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W5

wlj.net Your weekly newspaper online If you’re a current subscriber, log on with your customer number from your mailing label and register.

California Cattlemen’s As ociation you: � ������� ���� �������� ������ ��� ���� ������� ���������� ����� ��� ����� � ������ ���������� ����������� ���� ������ ���� ��� �� ����� � ��� ��� ��������� �� ���������� ������ ����������� � �������� ��� ������� �� ��������� ���������� � �������� ������������ �������� ���������

CCA is looking out for you from pasture to plate!

We need your support - Join Today!

Working for California ranchers since 1917 ���������� ����������� ����������� �������������������� � ����� ��������

W6

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Continued from page W4 “You’re not going to do this with crummy facilities,” he says. “You’ve got to have a good setup for handling those calves.”

Handling stockers, which are typically more flighty than mature cows, is also likely to lead to increases in labor.

“It’s tough; it can be kind of a young man’s game,” says Blasi.

He also points out that stocker cattle require more constant attention than is typical with mature cows.

“If (stockers) get hurt or lost, you will bear that cost,” he points out.

Another factor to consider is the initial investment necessary to purchase the animals themselves.

“You’ve got to have a pretty good line of credit at the bank to buy yearlings, and they’re not cheap right now,” says Paterson. “It can take a ton of cash to make this work.”

Both experts agree that one place not to skimp on costs is in the area of health management. In addition to stress from weaning, many groups of stocker calves are assembled and commingled from various sources, exposing them to pathogens they may not have seen at their original ranches. When you add the stress of shipping them to their new home, health issues can drastically reduce gains, and cut into the profit margin of the enterprise.

“You absolutely have to have a top flight health program on these stocker cattle,” warns Paterson. “When you go out there and start buying calves through an order buyer, from auction markets or other places you don’t know, health issues can really keep you on your toes.”

“It can be a bloodbath if you’re not prepared for it,” agrees Blasi.

Whenever possible, he recommends obtaining calves from familiar sources and verifying that those sellers have adequate vaccination programs, and preferably a 30 to 40 day backgrounding period before calves are marketed. Paterson also stresses the need to maintain separation between purchased calves and a ranch’s existing cow herd.

“You darn sure don’t want that pen of stocker heifers that came from two states away over in your cow herd,” he says.

“Particularly when you may not really know anything about those cattle.”

Despite the expense and the risk, a well-executed stocker enterprise can be an asset. One of the primary benefits, according to Blasi, is the flexibility to rapidly Continued on page W10

Bar CK Cattle Company

Production Sale at Bar CK Ranch Feb. 19, 2012 1 PM

Profitable SimAngus Genetics

Excel for Net Proft Earning (API & TI) Bar CK Bulls C mp ll O m n He E y

• Increase heterosis & uniformity simultaneously • Large selection of calving ease heifer bulls • Bar CK bulls are affordable (average under $3,750) • Guaranteed 90 day first breeding season • The Phenotype Bar CK Selects for is Profit

VISIT OUR WEBSITE TO VIEW CATALOG & VIDEOS Look how our SimAngus Bulls excel!

Bar CK ave API $139 (Top 2%)

Predicted Profit to be in Top Ten Angus

Bar CK Herd Sire

TEX Ambush 9106

PUREBRED SIRES #2 Profit & #1 Marbling PB Simmental, Homo Polled

Breed ave API $109 Bar CK ave TI $79

(Top 5%)

Breed ave TI $64 Bar CK ave WW EPD 26 (Top 55%) Breed

Bar CK Herd Sire

ave WW EPD 27

Bar CK ave YW EPD 63 (Top 30%) Breed ave YW

EPD 55 WS Hot Beef X38

Bar CK ave MWW EPD 20 (Top 25%)

0

30

60

90 Bulls Available!

90

120

SIMANGUS SIRES

150

#2 Profit Composite Bull with Progeny Homo Black & Polled

(Top 1%)

Bar CK ave MB EPD .79 Breed ave MB EPD .34

Bar CK ave BW EPD -3.4 (Top 5%)

Bar CK Herd Sire Heifer Bull

-3.5

-3.0

-2.5

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

“Combining heterosis and profit index values (API & TI) Bar CK bulls will earn $13,000 more in net lifetime revenue than a straight bred breeding program with average profit indexes! When the best English breed is mated to the best Continental breed and the finest individuals are used superlative results are achieved!

Why do anything else?”

UI Flying H Resurrection T184

Mike, Margo and Crystal Alley Steve and Katey Farley 8925 SW Green Drive Culver, OR 97734 mjalley@madras.net www.barckcattle.com 541-948-3521

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W7

TEHAMA ANGUS Ranch

A Program and the People Committed to Customer SSu Succ Suc Success! ccess cces cce cess! ss!!

Join with many of the Westâ&#x20AC;&#x2122;s most Successful Cattlemen.

Make a genetic investment and let the Tehama Angus Ranch program work for you on

)5,'$< 6(37(0%(5 Â&#x2021; PM Sons off:

This yearâ&#x20AC;&#x2122;s Tehama Angus Ranch Annual

BULL EVENT WILL FEATURE:

B/R New Day 454 Connealy Forward CRA Bextor D R Sierra Cut GAR ND 5050 GDAR Game Day

180 YEARLINGS!

SPRING & FALL

MCC Breakaway SAV Final Answer Sitz Upward Sydgen CC&7 Tehama Lite R525 Tehama Total M811

Teham Te hama ha ham ama Game Ga G ame Day Day Y240 Y2 Y 240 0

Tehama eh ham a am ma Sierra Sieerr rrra ra Cut Cut Y188 Y1 Y 188

MILK 28

MARB 0.44

RE 0.51

$W 31.71

$B 61.47

BW 1.2

WW 69

YW 119

MILK 28

MARB 0.48

RE 0.43

$W 33.34

$B 60.09

Tehama hama ha h ama a Final Fiin inal na all Answer A Ans nsw n swer weerr Y825 Y8 Y Y82 82 WW 58

YW 102

MILK 25

37th Annual

MARB .52

RE .39

$W 33.60

WW 62

Tehama eham hama ma m a 454 45 54 4N New eew w Day Dayy Y Y881 881 88 81

SAV Final Answer x Retail Product

BW 1.6

BW 3.3

MILK 32

MARB 0.53

RE 0.56

$W 26.52

BW 2.4

WW 62

YW 110

MILK 28

MARB .59

RE .56

$W 31.62

Sydgen CC & 7 x Tehama Band P301

$B 68.72

BW .4

WW 56

YW 96

MILK 35

MARB .47

RE .48

$W 34.43

â&#x20AC;&#x153;Generations of Performanceâ&#x20AC;? Bull Sale )5,'$< 6(37(0%(5 Â&#x2021; 30 Call or email today to request a sale catalog!

Ranch

Gerber, California ZZZ WHKDPDDQJXV FRP Â&#x2021; ERUURU#WKHVN\EHDP FRP Video's of bulls available online

W8

$B 70.40

Tehama Teh ha h ama C C & 7 Y829 Y8 82 29

B/R New Day 454 x Tehama Band 876

$B 57.73

YW 118

Reg # 16912278

YW 104

Sitz Upward x Tehama Gridmaker L234

Reg # 16912265

WW 57

Teha Teh hama ham ma a Upward Upw pwa ard ar rd Y238 Y2 Y Y23 238

DR Sierra Cut x Western Design

Reg # 16922403

GDAR Game Day x Tehama Band 876

BW 1.8

Reg # 16760354

Reg # 16759540

Reg # 16760322

l! ll!

These Bullls Selll

Ranch: (530) 385-1570 Kevin (530) 624-6564 Bryce: (530) 624-6542 Mike: (707) 249-7885 MARKETING Rance Long: (918) 510-3464

'ULYHQ E\ 3HUIRUPDQFH 6LQFH

August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

$B 57.83

C Chandler 0100 formerly C Nitro 0100 is our newest star.

Modern phenotype coupled with our unsurpassed feed efficiency and fertility taking you into the 21st century

BW WW YW MM MG REA FAT

21 59 17 47 .56 005

C Chandler 0100 is a trait leader in WW, YW, REA and CHB. He is a moderate frame bull with lots of class. We expect great things from this bull when bred to our elite cows

Selling calves from these sires in 2012

Check us out on the web www.chandlerherefords.com

Videos of our cattle are on YouTube username: dcpro1970 search for Hereford cattle or Chandler Herefords

17528 Chandler Lane Baker City, OR. 97814 www.chandlerherefords.com email gchandlr@uci.net ge

541-523-2166 Mobile 541-403-0125 ua e 541-403-0124

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W9

Continued from page W6

Bull sAle

Monday, october 10, 2011 • McArthur, M Arthur, CA Bulls sell By these featured sires and more ...

S A V Net worth 4200

Sire: S A V 8180 Traveler 004 Dam’s Sire: SAF 598 Bando 5175 Bw +4.7•ww +59•Yw +112•milk +29 mARB +.57•RE+.35•FAT +.060 •$B +56.90

limeStoNe dArkhorSe u322

JAk l1 domiNo p121

Sire of the Red Bluff Range-Ready Champions!

Sire: GB l1 Domino 935C Dam’s Sire: JA l1 Domnio 8088 Bw +2.8•ww +48•Yw +87•milk +25 RE+.20•mARB +.27•SChB +28

Sire: BC 7022 Raven 7965 Dam’s Sire: PAF 741C 0137 Bw +3.4•ww +41•Yw +87•milk +20 mARB +.32•RE+.41•FAT +.004 •$B +52.38

upS domiNo 6162

One of the breed’s most complete sires!

Sire: UPS Domino 3027 Dam’s Sire: BCD 721G knight 4k Bw +1.4•ww +56•Yw +90•milk +23 RE+.48•mARB +.25•SChB +30

75 Bulls

Angus ANd Herefords two-YeAr-oldS ANd loNg-YeArliNgS

Plus

react to changes in range condition, both good and bad.

“Let’s say you have an operation capable of running 500 pair,” explains Blasi.

“What you might have to think about doing is back off the number of cows you have.”

Blasi acknowledges that this may seem counterintuitive with current calf prices.

“But I challenge people to think about the situation many ranches are in now (on the Great Plains), where they may be destocking as many as half of their cattle. If you were to back off 100 pair, and replace them with an equivalent number of stockers, you have greater flexibility. In periods of drought, you can forego the stockers for a year or two and maintain your normal cow herd.”

Because investment in stockers is short term, relinquishing that revenue can seem relatively painless when compared to selling off mature cows that required multiple years of investment to yield a profit.

Marketing is another key aspect to consider if a stocker venture is to be profitable. As a first step, Blasi recommends managing stockers in numbers that will be attractive to a potential buyer.

“When you look at whatever resources you have, you need to be thinking in truckload increments,” he explains. “If you’re pulling calves off of a pasture, and can fit 60-70 head on a truck, you need to be thinking about that so that you don’t get caught with split truck lots. You need to Continued on page W14

BullS BACked BY:

Ultrasound Testing PI Negative for BVD Semen Tested and Trich - Tested Complete Herd Health Program

efficient Bulls that will work for you! deliVerY AVAilABle

Affordable Wintering Options

Bred heiferS ANd firSt-CAlf heifer pAirS

luNCh SpoNSor:

Central Oregon Ranch Supply

BullS for CAttlemeN BY CAttlemeN

Contact either breeder to receive a 2011 sale book. Sale books available online in late August!

Registered Horned Herefords Since 1928 Alan Parks: (541) 576-2651 • Dan Parks: (541) 408-0088 59234 Fort Rock Rd., Silver Lake, OR 97638 email: dan@poplarsranch.com www.poplarsranch.com

W10

Home of the 2010 Red Bluff Bull Sale Grand Champion Haltered Angus!

Brad and Buckley cox 1881 Brophy Road • Eagle Point, OR 97524 (541) 840-5797 • (541) 826-3650 email: info@traynhamranch.com www.traynhamranch.com

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

FLYING Angus Ranch We offer for sale each year 250 BULLS all sold by PRIVATE TREATY.

We have been selling bulls to customers in California for more than two decades. We have hundreds of bulls working in the Harris Ranch Partnership for Quality Program, Country Natural Beef Program, Painted Hills Beef Program, as well as Certified Angus Beef® and other local branded beef programs.

We take great pride in the genetics and customer service we offer. Here are a few comments from three of our long time, satisfied customers ...

BuLLs AVAILABLe By these BreeD LeADers: S A V Bismark 5682

Hoover Dam

BW WW VW MILK MARB RE SW SF SG SB +.2 +57 +100 +17 +.15 +.64 $31.35 $38.52 +23.16 +46.02

BW WW VW -.3 +50 +94

MILK MARB RE SW SF SG SB +35 +.57 +.86 $31.14 $33.17 +39.06 +62.39

Connealy Impression

H A Program 5652

“I have purchased bulls from Mike Umbarger since 1991. I have found them to be good range bulls, and they have proven to be very durable. I use them as yearlings and get five years of use out of most of them and six years from a large percentage.

In addition, during the time we have used Mike’s bulls, our carcass quality has increased by leaps and bounds. Our steers grade 85-88% Choice and our heifers grade between 90-95% Choice consistently.

I strongly recommend looking Into the genetics available from Flying U Angus Ranch.”

- Mark Lacey, Lacey Livestock, Independence, CA “We have had the pleasure of buying Flying U Angus bulls for the last 10 years and, as a result, the quality and consistency of our calves has continued to improve. Last year, our weaning weights were the highest ever. We run our cattle In the high desert of Inyo and Mono counties, and the bulls have adapted well.

Mike Umbarger has bulls to fulfill our needs - everything from calving-ease heifer bulls to growth bulls for our cow herd. He is extremely easy to work with and he stands behind everything he sells.”

- Mark Johns, Four J Cattle Corp., Bishop, CA

BW WW VW MILK MARB RE SW SF SG SB +.4 +66 +133 +28 +.40 +.63 $28.76 $67.83 +21.44 +55.56

B/R New Day 454

BW WW VW MILK MARB RE SW SF SG SB +1.0 +61 +106 +24 +.36 +.66 $35.09 $43.22 +27.83 +61.74

250

Bulls available bY

BW WW VW MILK MARB RE SW SF SG SB +1.8 +55 +108 +24 +.67 +.82 $32.55 $45.69 +40.59 +71.03

private treatY

Mike Umbarger • (541) 771-6100 10881 S.W. Powell Butte Hwy. • Powell Butte, OR 97753

“I make my living on a ranch on the Central Coast of California. I have raised my own replacement heifers since 1980 and have used Charolais, Brahman, Composite, Hereford and Angus bulls over the years to produce a quality end product, while at the same time raising replacements that will make productive cows.

In 2007, I began using Flying U Angus bulls, and I have never looked back. These bulls are the complete package — moderateframed, easy-fleshing and eye-appealing — all with bred-in carcass value. In addition they have increased the fertility and efficiency of my cow herd.

- David Fiscalini, Green Valley Cattle Co., Cambria, CA

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W11

You Can Git’ R Done with Sammis Bulls W

fs Git-R-Done 73 f l u 0

20+ Spring and Fall yearlings sell in the 2011 Heritage Bull Sale, Sept. 18, in Wilton, CA. Our 2011 offering features the B C Marathon 7022 son pictured at left, plus sons of: s 3ITZ 5PWARD 2 s 3 ! 6 0IONEER s #ONNEALY 4HUNDER s 3 ! 6 "ISMARCK s " # -ARATHON s "AR 2 -ARATHON BELOW s 0& -IDLAND

BAR R TANK 0047

4/3/2010

B C Marathon 7022 x B C C Bushwacker 41-93 BW I+3.3 WW I+60 YW I+96 MILK I+18 CW I+31 MARB I+.28 RE I+.60 $B +57.15

Sire: GAR Retail Product

Ä Ý?ÍW w Á ? ¬? Á w ÖÁ Í ¬ MÖ Ä W Ä ~ ja Í Í j 2012 National Western Angus Bull Sale in January!

SEPTEMBER 18

BW +.4 WW +48 YW +96 Milk +23 Marb +.45 RE +.28 Fat -.003 This fall we will be selling bulls in the Heritage Bull Sale, September 18, 2011 at Five Star Land and Livestock, Wilton, CA.

There will be a top group of calving-ease bulls with excellent growth numbers. Be sure to plan to attend this reputation bull sale.

Sammis Angus Ranch Joe and Michelle Sammis P.O. Box 625 • Doris, CA 96023 • 530-397-3456

CRAIG AND J.J. REINHARDT ® ¤É¯ Ïy| Ô ÉÔ V M?ÁÁÉ ÔyKÄMW~ M? ± jÍ É Ôy ÄMjj Á± V . Ö~ ÖÄj^ yÉoÏ

IPSEN AAA©

BAR R MARATHON 7094

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W12

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

W13

Bagley Bulls ... You Know Them!

This fall we will have a strong offering of Angus and Polled Hereford bulls for sale.

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We a e continuing e legacy o t e Thunder i l Angus he d by aintaining he consis en b eeding progra and he stric se ec ion of ge e ics ha as made t is he d a e iab e sou ce of bu s or he comme cia ca t eman or ma y years Mytty in Focus S e SA Foc s of ER D m by S tz A i nc 6 BW WW YW MILK MARB RE $W $F $B -1.3 +54 +100 +25 +.61 -.07 $38.43 +37.71 +44.15

Continued from page W10 be able to get units off and on the ranch easily.”

As Blasi explains, this also means accounting for the weight gain while the cattle are on your operation. A group of cattle that arrived on two trucks may necessitate three on the outgoing end, due to the increased weights. Ideally, Blasi recommends developing a marketing program with a familiar feeder, with whom a relationship has been established.

“I’m really apprehensive about just putting an ad in the newspaper and having everybody and their brother call up,” he says. “Those calves can be picked up and moved quickly, and I’ve known people that have had to go to court to get their money out of the wrong kind of feeders, guys that are crooks. Developing relationships and getting to know the records of people is really valuable.”

According to Blasi, such relationships may also provide an opportunity for a producer to gain income from available grass without the expense of purchasing calves. Many feeders will contract with landowners to run feeder-owned stocker calves for a prearranged price.

“Rather than incurring the risk of going out and buying calves, it may be possible to contract the grazing with someone who is reputable and already has them; then you’re in the game together,” he explains.

Contract agreements of this type typically pay on a per head basis for a set Continued on page W19

This fall we will have an excellent selection of Angus bulls for sale.

Y J ANGU Z A

The Bulls are available for viewing at Thunder hill rAnch 5150 Hwy. 162 • Willow, CA 95988

L

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Y J ANGU Z A tested for BVD, PT & AMF. They are negative J ANGU Y Z Please call or stop by.

A

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Jill La Grande • 530-304-2456

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR.

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Calving Date

CE

BW

WW

YW

MILK

M&G

MCE

SC

FAT

REA

MARB

BMI

CEZ

BII

CHB

3/24/10

2.1

2.6

50

83

19

44

1.3

0.9

0.02

0.31

0.21

20

16

17

26

0.3

3.6

43

71

17

38

0.7

0.7

0.002

0.22

0.04

15

14

14

18

AHA BREED AVERAGE

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W15

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Look for us at the following consignment sales: Madera All Breeds Bull Sale, Madera, CA, September 6, 2011.

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We have an excellent offering of Charolais bulls for sale, so please give us a call.

Also offering a few select Hereford bulls.

A Special “Thank You” to all our past customers.

We do appreciate your confidence in our program.

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W16

WSBBA Bull & Female Sale, Tulare County Stockyard, Dinuba, CA, 09/24/11 Collier Farms Performance Bull Sale, Brenham, TX, 11/19/11 Live Oak BBA Bull Sale, Three Rivers, TX, 01/07/12

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Phone/Fax 707-448-9208 piersons@castles.com

&'2'0&#$.' -019.'&)'#$.' 241('55+10#.

The WVM Founders Ellington Peek and John Rodgers are every bit as faithful to the original concept of WVM today as when they first started. That is to provide a reliable market place for the west’s commercial cattleman that will expose their cattle to the widest possible price discovery.

The WVM staff, representatives and associated markets all stand ready to help you market your cattle in the most professional manner possible.

Call WVM now for more information about how to utilize our services.

UPCOMING SALES:

MONDAY, SEPT. 12TH & TUESDAY, SEPT. 13TH: Haythorn Ranch • Ogallala, NE

FRIDAY, OCT. 14TH:

Internet Live Video Sale • Shasta Livestock Auction • Cottonwood, CA

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TUESDAY, DEC. 6TH:

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WATCH & LISTEN TO THE SALE AT: For details, call our office at 530-347-3793 or e-mail us at wvm@wvmcattle.com LOOK FOR THE CATALOG & PICTURES ON OUR WEB SITE: www.wvmcattle.com

Market your cattle with the professionals!

41

COOL

By John Robinson, WLJ Editor

WTO says mandatory COOL is a violation.

What’s next for labels?

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR

Y

ou may have thought that the debate over mandatory country of origin labeling (COOL) was over but a recent preliminary ruling by the World Trade Organization (WTO) threatens to bring the issue back into the limelight. One of the primary concerns prior to the implementation of the regulation in March 2009 was that it appeared to violate the terms of the North American Free Trade Agreement (NAFTA). According to a preliminary ruling by WTO, Canada and Mexico are unfairly harmed by the terms of COOL and if the ruling is formalized later this year, it could lead to trade sanctions being placed on U.S. products, particularly meat and other agricultural products, by two of the largest U.S. trading partners. Those damages, usually levied in the form of retaliatory tariffs, could place a significant burden on U.S. producers who have benefitted

42

greatly from cross-border trade between the two nations.

Background

COOL was mandated by the 2002 Farm Bill, however, it took USDA another six years to craft the language of the final rule. That rule, after significant challenges, finally took effect March 16, 2009. Prior to the rule’s enactment, there were dire predictions about increased costs for the industry and increased prices for consumers, who would be saddled with the lion’s share of the price of implementation, many industry analysts warned.

The regulation was first proposed as a means of improving food safety and consumer awareness. In fact, consumer groups were among the primary drivers of the push for mandatory COOL regulations. Those groups argued that by giving

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

consumers more label information, they could make better choices about where their food comes from. They also pushed the food safety aspect, despite the fact that imported foods, particularly the meat and vegetable products covered by COOL, are subject to a rigorous inspection process.

Some livestock producers also pushed for passage of mandatory COOL, stating that consumers prefer U.S. beef and would seek it out at the meat counter over meat from foreign producers. There is little evidence to date, two years after implementation, that consumers are including the label information in their purchasing decisions. Some believe that is because of how the meat industry labels packages under the law. Many meat products, particularly products such as ground beef, are labeled as: “Product of U.S., Canada and Mexico.” There are few products, mostly

whole muscle cuts, which are labeled solely “Product of U.S.,” and fewer still which are labeled as being a product of a single foreign country.

In fact, the mandatory COOL law, which went into effect for seafood in April 2005, likely plays little roll in how consumers choose their meat products. Foreign shrimp is a prime example. Farmed products from Asia have been widely accepted by U.S. consumers, and U.S. fisherman have been faced with a marketing and public relations campaign to fight back against the inroads made by foreign competitors who can offer an acceptable product at a lower price point than what can be offered by domestic fisherman who face significant regulatory hurdles and competition.

Does COOL provide market benefits?

While it isn’t clear that the same battles which are taking place in the seafood market are impacting beef, pork and poultry markets, the battle over COOL may come to that in the future.

Mandatory COOL is aimed at providing more information for consumers. However, it isn’t clear that consumers desire the added information.

Dr. Glynn Tonsor, assistant professor of agricultural economics at Kansas State University, has been studying the impact of COOL for the past year and he said that although the ongoing study won’t be complete for a year, initial results indicate that the majority of consumers don’t even look at origin labels.

“As a result, the average consumer may not be benefitting from the mandatory COOL law,” said Tonsor.

The preliminary research does show that there is a small percentage of consumers who are highly aware of origin label information and they are very willing to pay for that knowledge.

“There is some evidence to suggest that the small percentage of consumers who want origin labels are willing to pay more for it,” said Tonsor.

He acknowledged that many studies conducted prior to the law being finalized determined that in most cases, the free market would and could have satisfied the demand for origin-verified products through some existing USDA process verified programs. However, those studies found that there were no products being produced under those programs and concluded there was little actual demand, or at least willingness to pay more for products produced under the existing protocols.

However, the law, which Tonsor noted could stay in place, serves another purpose.

“That percentage of people who see the added value of mandatory COOL may also prescribe a certain value to having a national law that keeps USDA involved or simply place value on associated protectionist measures,” said Tonsor. “To them, there may be a perceived benefit of keeping meat safer or limiting access to foreign meat both for themselves and their neighbors.”

What’s the benefit?

Because of the additional cost required for implementation, customers may be paying more for information that they aren’t using.

A number of studies have been conducted on the subject of consumer labeling and while consumers may demand information, how, and in fact even if, it influences purchasing decisions isn’t entirely clear.

Prior to the implementation of the COOL law, USDA estimated that recordkeeping costs during the first year would reach $641 million. Subsequent years were expected to cost the industry $506 million for all covered commodities. The direct cost for firms required to comply with the new rules were estimated at $2.6 billion.

Most of those costs were passed along to consumers in the form of higher prices, despite the fact that USDA said “... that the measurable economic benefits of mandatory COOL will be small.”

According to USDA, the cost to the economy in the form of higher food prices and decreased production was expected to fall to $212 million in the tenth year after

implementation. At a time when prices are already rising and the economy is still struggling, it seems a high price to pay for a label.

Although consumers say they want to know the origin of the products they buy, it isn’t clear that they are willing to pay for the information. A survey of consumers conducted by the National Cattlemen’s Beef Association in 1999 found that 78 percent of the consumers polled support COOL. However, a study conducted in 2002 by agricultural economists Maria Loureiro and Wendy Umberger found that consumers may be willing to pay more for premium cuts of beef carrying a U.S. origin label, or that of another country which also provides premium beef, such as Canada or Australia. However, that willingness to pay declined as the quality of the cut declined.

For example, the willingness to pay a premium for U.S. origin ground beef was less than the willingness to pay for U.S. origin middle meats. The study found consumers faced with a baseline price of $4 per pound for a steak of unspecified origin would pay as much as $5.90 for the same steak if it were labeled as U.S.-origin. However, that willingness to pay a premium fell sharply when asked about ground beef. Consumers in the study said they would be willing to pay a premium equal to about 10 percent of the overall price for U.S.-origin ground beef. The results are interesting considering that only 15 percent of all beef sold in the U.S. is of imported origin and most of Continued on page 44

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

43

COOL Continued from page 43 that is destined for the ground beef market, where consumers are less willing to pay for origin information. The bulk of the whole muscle cuts sold in the U.S. are of U.S. origin.

The study also found that in certain instances, COOL may work against U.S. producers. In some cases, consumers, albeit a small minority, were willing to pay a premium for grass-fed beef of Argentinean origin. If that trend were to spread beyond that small niche, it could serve to lower

demand for U.S. beef among domestic consumers.

Overall, what the research determined was that consumers were not willing to pay a significant premium for what was classified as locally-produced beef products. It was one of the least significant attributes identified in consumer purchasing decisions. Overall, 23 percent of consumers listed price as the most significant consideration when making beef purchasing decisions while 41 percent listed quality as the most important factor. An additional 25 percent identified health and food safety as

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

a primary concern.

Surprisingly, the study’s authors found that COOL label claims were less desired by individuals shopping for high-income households, an indication that those consumers may already see the food chain as safe and, as a result, do not place much value on COOL. That finding is somewhat contrary to the trend toward locally-grown or sourced products that is pushing niche retailers to post strong growth and profits each year.

In fact, the study’s authors concluded: “Although surprising at first glance, more educated and wealthier consumers are less likely to support mandatory countryof-origin programs and labeled products.

Thus, wealthier and more educated consumers do not place any additional value on country-of-origin labels.”

What is the future of COOL?

If WTO rules against the U.S. in its final decision due later this year, as many expect, there are a few possible outcomes that may impact how the ruling affects the market. The U.S. could drop mandatory COOL and, although this is probably unlikely, it is the outcome most desired by our NAFTA trading partners.

The U.S. could also change how it implements COOL. Under this possibility, the U.S. could alter the definition of significant alteration or processing. If that occurred, meat that was processed in a foreign country would be labeled as a product of that country when it arrived in the U.S., however, animals that were shipped to the U.S. for feeding and then slaughtered and processed here would be labeled as a product of the U.S. This option would likely present the most acceptable alternative for producers on both sides of the border. It would eliminate the need for segregating product on processing lines and it would also limit the price discount being applied to imports of live animals intended both for feeding and slaughter in the U.S. Tonsor noted that there is also another possible outcome, one that may not be in the best interest of the livestock industry.

“The way these things sometimes work is that there may be tradeoffs in trade negotiations across products as the U.S. may ease tariffs on products from Canada and Mexico in exchange for leaving COOL in place,” said Tonsor. “For example, treatment of softwood from Canada or tomatoes from Mexico may be adjusted in lieu of changing mandatory COOL domestically.

However, he also pointed out that there is a price for making such tradeoffs.

“When you do something like that, deContinued on page 46

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Continued from page 44 mand that we leave COOL in place at the expense of other imported products like lumber or tomatoes, you run the risk of losing the support of those industries when the next round of trade negotiations rolls around, and that’s one less ally the livestock industry has sitting at the negotiating table,” said Tonsor.

Monetary costs

Because of the structural changes in the marketplace since the implementation of COOL, it is difficult to assess the full cost of the program. While it is difficult to ascertain how much price impact COOL has had on the market, Tonsor said he expects studies to begin on that topic in the near future.

“Once the WTO makes its final decision, something that’s expected in late September or early October, the COOL law will likely be further examined and decisions made about how to move forward. Before that can happen, though, the true costs will have to be studied so the government can make a decision about whether it is going to drop the rule altogether or make some trade adjustments elsewhere,” he said.

Despite the fact that actual costs aren’t known, the estimates made prior to the

law’s implementation provide some clue as to how much impact COOL has had on livestock prices. The Canadian Cattlemen’s Association (CCA) declined to comment on the story, however, publications by CCA in 2009 estimated the cost to cattle producers north of the border at $90 per head for the period from October 2008 to March 2009.

CCA estimated that the annual cost for just cattle trade approached $400 million.

Although the group noted at the time that “interest in purchasing Canadian cattle has improved after the ‘final rule’ came into effect in March (2009), buyers continue to discount prices.”

The trade issue extends beyond the imports of processed meat products to include live animals. The importation of animals from Canada and Mexico has been a contentious issue, particularly in the southern tier of the U.S. where feeder steers from Mexico are an important source of cattle for U.S. feedlots. The number of feeder cattle being imported to the U.S. from Mexico is clearly down since the implementation of COOL, however, it’s difficult to determine how much of that decline is a result of market impacts and how much of it is environmental factors. Similarly,

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

imports of feeder cattle from Canada are also lower, although structural changes in Canadaâ&#x20AC;&#x2122;s beef industry and shrinking herds in all three nations also play a role in the decline in live cattle trade.

However, despite early concerns about the potential interruption of live animal trade and discounts for producers outside the U.S., trade data from USDA shows that after early interruptions, cross-border cattle trade has resumed to more normal patterns.

In the case of imports from Canada, they totaled 1.4 million head in 2007 and rose to 1.6 million head in 2008, the last full year prior to the implementation of mandatory COOL. In 2009, the year the regulation was implemented, imports of cattle from Canada fell to 1.061 million head and appear to have leveled off there, rising slightly to 1.062 million head last year.

Imports from Mexico declined from 1.09 million head in 2007 to just 702,000 head in 2008 ahead of the regulation as feedlots prepared for the implementation of the rule. However, when it was clear that the law wouldnâ&#x20AC;&#x2122;t have a significant impact on consumer demand, imports of cattle from Mexico rose to 940,000 head in 2009 and reached 1.22 million head in 2010.

Although the numbers tell a story of declining live animal imports, there are many factors which make determining the direct impact of COOL on livestock trade difficult. The economic stresses on the economy in the U.S. and Mexico have certainly had an impact on protein demand and resulted in a drop in both domestic and export sales during the same period COOL was being implemented. Structural changes in the livestock industry, particularly the cattle and beef segments, also contributed to the shift in trade. The herds in the U.S. and Canada and Mexico have been on the decline, so there have been fewer calves produced each year, meaning fewer were available to export.

However, there is likely some impact on the marketplace as a direct result of the COOL requirements.

Although there is clearly a shift in import patterns, the greatest impact may still be coming. If Canada and Mexico are allowed to place retaliatory tariffs on U.S. products, it could place U.S. producers in general, and livestock producers in particular, at a significant disadvantage.

In Mexico, there may be a substantial difference in protein quality between U.S. products and those derived from sources south of the border, but the market is

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Continued on page 48 August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

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Continued from page 47

Photo courtesy of Beth Harrell Mackenzie, Baker City, OR

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highly price-sensitive and any increase in price on U.S. products as a result of a retaliatory tariff would significantly lower the attractiveness of U.S. proteins. And, it’s important not to underestimate how crucial Canadian and Mexican markets are to U.S. producers.

One of the primary concerns voiced by cattle producers in both Mexico and Canada prior to the rule’s implementation has not come to fruition. There was substantial objection to the rule on the grounds that it would drive down feeder cattle prices across the border. However, a continuing decline in the beef cow herds in all three nations has negated any early price shocks in the market. COOL may have lowered prices in the short-term, but now there is very high demand for feeder cattle and prices have skyrocketed to record levels in 2011. The result has pushed prices for Mexican feeder cattle imports to levels 15 percent higher than year-earlier levels. Imports of Mexican feeder cattle for the year-to-date period through July 9 have also rebounded, rising 22 percent from the same period in 2010.

Similarly, prices for Canadian feeder cattle are up 20-30 percent or more from last year as supply concerns override nearly all other market factors, including COOL regulations.

Potential future impacts

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Beef trade in particular could face difficulties if the WTO case continues forward, leading to eventual sanctions against the U.S. Sales of beef to Mexico reached 103,808 metric tons for the year through May 2011, the most recent USDA data available. Shipments to Canada for the same period reached 69,225 metric tons.

Mexico is the largest single destination for U.S. beef, while Canada is third behind South Korea. Combined, Canada and Mexico provide substantial support for U.S. cattle prices due to export values.

The risk to the U.S., if WTO rules against mandatory COOL, is that it could spur a larger trade war between the three trading partners, one that could ripple throughout the agricultural trade and beyond. In just agricultural exports alone, the U.S. sent more than $16.2 billion in products to Canada in 2008, a number which has increased since then. If WTO rules against the U.S. labeling law, the government and agricultural sectors are going to need to examine which is more important, a consumer labeling law that provides little benefit to consumers, or two multi-billion dollar trading partners.

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49

NHTC Continued from page 14 you can. NHTC buyers are more likely to be interested in English and English crosses.

And if theyâ&#x20AC;&#x2122;re black, that can open up even more doors.

The personal touch: Direct treaty

Creekstone Farms has been a trailblazer when it comes to export markets. According to Ryan Meyer, director of cattle procurement for the Arkansas City, KS-based packer, Creekstone has been pushing the export envelope for years, being the first on the scene to comply with European standards, and the first to use third-party verification. â&#x20AC;&#x153;When we started shipping product to Europe,â&#x20AC;? explained Meyer, â&#x20AC;&#x153;the amount of product going out of the US was just minuscule. â&#x20AC;ŚItâ&#x20AC;&#x2122;s really been rewarding to see that a program that we started that many years ago has gotten the attraction that it has today. As a result, the U.S. is sending a considerable amount of product over there.â&#x20AC;?

Today, Creekstoneâ&#x20AC;&#x2122;s export volume to the EU is only exceeded by industry giant Tyson. Yet Creekstone has worked to maintain its own distinct identity in the European market as an ultra-premium product. According to Meyer, these efforts have paid off. â&#x20AC;&#x153;The demand for Creekstone products, specifically in Europe, is very, very high and growing.â&#x20AC;?

One of the secrets to Creekstoneâ&#x20AC;&#x2122;s success is buying cattle that specifically fit their Angus-based program. Although Creek-

NFAC

stone reps do purchase cattle in volume off the video sales, they also make an effort to funnel promising cattle directly into the Creekstone pipeline by â&#x20AC;&#x153;matchmakingâ&#x20AC;? individual producers with NHTC-certified feedlots that custom finish for their program. This involves up-close and personal contact with producers who are raising the kind of cattle Creekstone wants to pull in to its supply chain. â&#x20AC;&#x153;Creekstone has representatives all across the Midwest,â&#x20AC;? said Meyer. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve got field people looking for the type of high-quality cattle that are going to perform in the packing house on a Choice and Prime basis.

Then we try to coordinate those cattle back through the system through our feeding partners into the program.â&#x20AC;?

Getting into the pipeline of a specific NHTC program like Creekstoneâ&#x20AC;&#x2122;s can have some distinct advantages. In particular, a well-connected producer may have a better sense of the value his cattle will bring on a consistent basis if he has an established relationship with the buyer. Moreover, there is much less risk that the buyers simply wonâ&#x20AC;&#x2122;t be active, since Creekstone sets up the cattle they want with contracted feed lots. â&#x20AC;&#x153;We coordinate supply chains with feedlots,â&#x20AC;? explained Meyer. â&#x20AC;&#x153;So weâ&#x20AC;&#x2122;ll identify ranches that have cattle that fit the program, and we hook them up with different feeders that feed for our program. Thatâ&#x20AC;&#x2122;s the most efficient way to participate in the program, is to come through Creekstone.â&#x20AC;?

That said, despite the close contact, there is still no iron-clad guarantee that

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

NHTC cattle will bring top premiums all the time, even when working with a particular program. According to Meyer, although fat cattle consistently bring a premium of around a $150 a head, premiums for feeder cattle can be â&#x20AC;&#x153;all over the map,â&#x20AC;? ranging from $0 to $100 per head, depending on a range of variables. Moreover, because of the focused nature of Creekstoneâ&#x20AC;&#x2122;s program, not all NHTC cattle will fit their specific criteria for Choice- and Prime-grading Angus-based cattle.

Auction yard: NHTC and natural specialists

At this time, most auction yards are not certified to receive NHTC cattle. But there are a few notable exceptions. Dean Price, owner/operator of the 120,000-head-peryear Yankton Livestock Auction Market in Yankton, SD, is gaining a reputation as an innovator who specializes in the sale of NHTC and certified natural cattle. Judging from the fact that Price has increased volume through his sale almost four times from what it was in 2007 when he purchased the business, it appears that his auction yard has become something of a local hot spot for NHTC cattle purchasing.

Although Price was already participating in NHTC and a certified natural program through Yankton Land and Livestock, his 7,000-head feedlot, he perceived that local producers needed an outlet to market their value-added feeders. â&#x20AC;&#x153;I started asking â&#x20AC;Ś why canâ&#x20AC;&#x2122;t we sell these cattle through the sale barn, [and] why canâ&#x20AC;&#x2122;t producers buy these calves through a sale barn?â&#x20AC;? explained Price. The only problem was, there was little precedent for certifying a sale barn, as opposed to a ranch or a feedlot. Yet by working with IMI Global, Yankton Livestock Auction Market obtained their NHTC certification in November 2010, making it one of the first auctions certified to receive and sell NHTC cattle.

Producers from all over the region, from Wyoming to Nebraska to North Dakota, are now shipping their feeders to the Yankton Auction, which regularly draws buyers from some of the biggest NHTC exporters, including Creekstone and Tyson. They know that Priceâ&#x20AC;&#x2122;s sale draws the kind of cattle their brands seek out. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve sold off in every direction, back to Iowa, Minnesota, here in South Dakota, and, of course, Nebraska and Kansas,â&#x20AC;? remarks Price.

Price also shared his views on what type of cattle are bringing the most consistent premiums.

Continued on page 54

Still making up your mind on whether or not to source verify your calves? look. Cattle markets are changing and those calves are worth big money. All you need to do is watch the video sales and it will convince you.

Consistently, source verified calves trade $5.. Higher than non source verified cattle.

It’s really quite easy to do, and in fact if your buyer wants it you can do it after you sold the calves with that condition. Source verification is growing to the point where the premiums easily justify the cost and at some point source verification will become the norm. then all your looking at are discounts. There are a host of companies that will do the work at a reasonable cost. Mostly a onetime account setup fee and a ranch audit then a couple bucks a head. The government still wants to put a trace back system in place for the cattle business and it may be here before you know it. You already have the incentive to do it today but lets not

wait until the government requires it for disease trace back.

The Sterling Solutions Program provides a system for source verification that instills trust throughout the entire beef supply chain from the time a calf is born until the final beef product is presented to the consumer.

The trend toward marketing source verified beef is real and it is global. In fact, major trading partners for U.S. produced beef require both source and age verification, said John Navlika founder of Sterling Solutions, Our program not only allows for tracing age-verified cattle from the cattle pens at the packing plant, back through the feedlot to the ranch where the calf was born, it can also follow that source and age verified animal forward through the packing plant as a carcass and ultimately, as boxed primal and sub-primal cuts and beef trim. The program was audited and approved by the Japanese

government prior to re-opening the U S beef in 2005 Japanese market to U.S. as well as by a Japanese food safety auditing firm in 2008.

With regard to COOL, compliance with Sterling Solutions Program protocol also means being compliant with COOL requirements. Is this the intent of the Sterling Solutions Program? The answer is no. Again, the intent of the Sterling Solutions Program is to provide cattle raisers with an opportunity for value-added, export marketing..

Want to go natural or non hormone treated we can do that to with our “Never ever 3 program , no hormones, not antibiotics and no animal based feed protein. Sterling Solutions founded back in 2002 was the first third party verification systems endorsed by USDA. Call us today to add some value to your cattle, were sure you could use the extra revenue.

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

51

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August 22, 2011 â&#x20AC;¢ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;¢ Section Two

ACROSS-BREED EPDS The table of adjustment factors to be used to estimate across-breed expected progeny differences (ABEPDs) for 16 breeds was presented at the Beef Improvement Federation Annual Meeting in Bozeman, MT, on June 2, 2011 (see table). Acrossbreed adjustment factors have been calculated for growth traits and maternal milk since 1993. Adjustment factors for carcass traits have been calculated since 2009. To be included, breeds must have carcass data in the U.S. Meat Animal Research Center (USMARC) database and report their carcass EPDs on an actual carcass basis using an age-adjusted endpoint. Bulls of different breeds can be compared on the same EPD scale by adding the appropriate adjustment factor to the EPDs produced in the most recent genetic evaluations for each of the 16 breeds. The AB-EPDs are most useful to commercial producers purchasing bulls of more than one breed to use in cross-breeding programs. For example: In terminal cross-breed systems, AB-EPDs can be used to identify bulls in different breeds with high growth potential or favorable carcass characteristics.

As an example, suppose a Charolais bull has a yearling weight EPD of + 41.3 lb. and a Simmental bull has a yearling weight EPD of + 61.2 lb. The across-breed adjustment factors for yearling weight (see Table 1) are 48.9 lb. for Charolais and 24.5 lb. for Simmental. The AB-EPD is 41.3 lb. + 48.9 lb. = 90.2 lb. for the Charolais bull and 61.2 lb. + 24.5. = 85.7 lb. for the Simmental bull. The expected yearling weight difference when both are mated to cows of another breed (e.g., Red Angus) would be 90.2 lb. – 85.7 lb. = 4.5 lb.

Most breed associations publish EPDs on an annual basis. These EPDs predict differences expected in performance of future progeny of two or more bulls within the same breed for traits including birth

weight, weaning weight, yearling weight, and maternal milking ability (as reflected in progeny weaning weights). Normally, the EPDs of bulls from different breeds cannot be compared because most breed associations compute their EPDs in separate analyses and each breed has a different base point. The across-breed adjustment factors allow producers to compare the EPDs for animals from different breeds for these traits. These factors reflect both the current breed difference (for animals born in 2009) and differences in the breed base point.

They should only be used with EPDs current as of June 2011 because of potential changes in EPD calculations from year to year.

It is important to note that the table factors (Table 1) do not represent a direct comparison among the different breeds because of base differences between the breeds. They should only be used to compare the

EPDs (AB-EPDs) of animals in different breeds. To reduce confusion, breed of sire means (i.e., when sires from two different breeds are mated to cows of a third, unrelated breed) between 2009- born animals under conditions at USMARC are presented in Table 2.

The adjustment factors in Table 1 were updated using EPDs from the most recent national cattle evaluations conducted by each of the eighteen breed associations (current as of May 2011). The breed differences used to calculate the factors are based on comparisons of progeny of sires from each of these breeds in the Germplasm Evaluation Program at USMARC in Clay Center, Nebraska. These analyses were conducted by USMARC geneticists Larry Kuehn (email: Larry.Kuehn@ ars.usda.gov; ph: 402-762-4352) and Mark Thallman (email: Mark.

Thallman@ars.usda.gov; ph: 402762-4261).

ACROSS-BREED ADJUSTMENT FACTORS

BREED PD AVERAGES Breed

BW

WW

YW

MK

Breed

BW

WW

YW

MK

Angus

+1.9

+44

+81

+21

Angus

0.0

0.0

0.0

0.0

Beefmaster

0.6

11

17

2

Beefmaster

6.8

36.4

37.9

2.6

Brahman

2.1

16

26

7

Brahman

11.4

40.4

4.5

21.4

Brangus

0.8

23.6

43.2

10.8

Brangus

4.1

14.9

14.0

1.3

Braunvieh

-2.0

18

26

2

Braunvieh

5.7

18.5

22.6

30.0

Charolais

0.6

24.9

43.7

6.7

Charolais

8.5

40.1

48.9

4.6

Gelbvieh

3.8

3.9

-10.4

10.2

Chianina

2.2

39.8

72.3

7.1

Hereford

2.8

-1.5

-17.1 -18.7

Gelbvieh

1.3

41

74

17

Limousin

3.6

0.9

-31.3 -13.4

Hereford

3.6

45

74

18

Maine-Anjou

4.3

-9.8

-28.5

-3.7

Limousin

2.0

42.1

78.9

20.7

Red Angus

2.3

-1.5

-8.7

-1.5

Maine-Anjou 2.9

39.9

79.4

19.7

Salers

2.0

-0.3

-10.5

0.5

Red Angus

-0.3

32

61

17

Shorthorn

5.9

17.9

41.7

19.6

Salers

2

32.3

62.6

18.9

Simmental

4.8

25.9

24.5

15.3

Shorthorn

2

13.75 22.59 2.13

South Devon

4.2

3.8

-4.9

-5.8

Simmental

0.7

31.1

56.8

3.7

Tarentaise

1.8

34.8

22.5 22.97

Tarentaise

1.8

13.7

26.1

1.8

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

53

NHTC Continued from page 50 “Of course, black still opens up more markets for you,” observed Price. “You’re more limited with colored cattle. Black happens to be at this point bringing most of the premiums with minimum half Angus.”

For a producer lucky enough to live within easy shipping distance of an NHTC certified sale barn, the advantages are obvious; they draw a group of competitive buyers who are aggressively seeking out NHTC product. Price, in his own way, is functioning as yet another “matchmaker” in the NHTC pipeline.

Apparently his efforts are paying off for local producers, with steady demand both for NHTC certified feeders and fed cattle keeping sales brisk.

“It’s been very good,” remarks Price.

“On the fat cattle, [premiums] are anywhere from $135 to $150 a head.”

With feeder cattle, the premium is more variable. “Forty dollars, $50, we’ve seen as much as $89 dollars a head,” said Price.

“The people that are doing [NHTC] are getting paid real well, especially [if their cattle are also] verified natural beef. That’s a good combination right now.”

54

Doubling up: NHTC plus natural

There is broad agreement that getting certified as both NHTC and verified natural is one excellent way to double your chance for premiums and mitigate market risk. This is because it makes your product eligible for two value-added markets, but also means that if a feedlot has to doctor your cattle, they will still qualify as NHTC instead as being sold as commodity beef.

Peek of WVM explains that one way feedlots can keep their options open is by buying cattle with multiple certifications.

“A lot of the same buyers will buy both NHTC and natural cattle,” says Peek. “If they buy them as both natural and NHTC, when they go to sell them to the next guy, they have two different outlets: they can go to a natural guy, or they can go to an NHTC guy.”

Peek also elaborated that the dual certification can save qualified feedlots dollars when cattle fall out of a natural program, should they require antibiotics. “[Feeders] like them to be both [NHTC and natural] because, say, 10 of them [may] have to be doctored at the feedlot. They fall out of the natural program, but still can remain in the NHTC program, whereas, if

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

[they were] just natural …and they fell out of that program, [the feeder] doesn’t have any other outlet.”

Dual certified cattle also have more value at the packer, where the different certifications allow the packer to distribute the different parts of a carcass across multiple supply chains.

“The packers are continuing to want multiple claims approv[ed] on slaughter cattle so that they can go into different markets with different parts of that carcass,” explains Stanton of IMI Global.

“Let’s say a carcass is source and age approved at 20 months and younger, and it’s NHTC approved. Part of that carcass will go to Japan for the products that they are looking for. Part of the products can then go to Europe. So it allows the packer to get carcass utilization going into different export markets. When you look at [natural], NHTC, and source and age, that’s taking the carcass and really going three different directions with it.”

The exciting news is that at present, some PVP entities are providing third-party natural certification at no extra cost over and above the cost of NHTC certification, essentially giving producers a free upgrade from one value-added program to two.

OUTLOOK Continued from page 25 cautious buyers of feeder cattle. For the second half of the year, southern Plains 700- to 800-pound steer prices may average slightly below recent levels, mostly in the lower $130s per cwt. if the U.S. corn crop does not deteriorate further. For the full calendar year, 700- to 800-pound steer prices will be about 20 percent above a year ago.

Besides corn price, calf prices will be influenced by the availability of forage this fall. As of early August, prospects

for wheat pasture in the southern Plains were not promising. High cost-of-gain will make cattle feeders more interested in yearlings and preconditioned calves than freshly weaned animals. Based on recent corn prices and other factors, for the summer quarter, 500- to 600pound steers are expected to average in the mid $130s this fall. On a per cwt. basis, at times this fall, southern Plains calves could bring very little premium compared to yearlings. For the year, Continued on page 58

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August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

55

SALE CALENDER ALL BREEDS

HEREFORD

Sept. 6 â&#x20AC;&#x201C; Madera Select, Range Bull & Replacement Female Sale, Madera, CA Oct. 2 â&#x20AC;&#x201C; Cal Poly Bull Test Sale, San Luis Obispo, CA Oct. 13-15 â&#x20AC;&#x201C; Western Stockmanâ&#x20AC;&#x2122;s Market, Bull Sale, Famoso, CA Nov. 12 â&#x20AC;&#x201C; Central California World of Bulls Sale, Galt, CA Jan. 7-22, 2012 â&#x20AC;&#x201C; National Western Stock Show, Denver, CO Jan. 24-28 â&#x20AC;&#x201C; Red Bluff Bull & Gelding Sale, Red Bluff, CA March 11 â&#x20AC;&#x201C; Bulls for the 21 st Century, Snyder Livestock, Yerington, NV

Oct. 10 â&#x20AC;&#x201C; Baldy Maker Bull Sale, McArthur, CA Oct. 16 â&#x20AC;&#x201C; California Bullfest Sale, Galt, CA Oct. 25 â&#x20AC;&#x201C; Strang Hereford & Angus, Production Sale, Meeker, CO

ANGUS Sept. 5 â&#x20AC;&#x201C; Performance Plus Bull Sale, Madera, CA Sept. 9 â&#x20AC;&#x201C; Tehama Angus, Bull Sale, Gerber, CA Sept. 10 â&#x20AC;&#x201C; RayMar Ranches, Bull Sale, Escalon, CA Sept. 11 â&#x20AC;&#x201C; Oak Ridge Angus Farm, Bull Sale, Calistoga, CA Sept. 12 â&#x20AC;&#x201C; Mid Valley Bull Sale, Galt, CA Sept. 16 â&#x20AC;&#x201C; Vintage Angus Ranch, Bull Sale, La Grange, CA Sept. 18 â&#x20AC;&#x201C; The Heritage Bull Sale, Five Star Land & Livestock, Wilton, CA Oct. 1 â&#x20AC;&#x201C; Leachman of Colorado, Bull Sale, Middletown, CA Oct. 8 â&#x20AC;&#x201C; California Angus & Charolais Breeders, Bull Sale, Turlock, CA Oct. 10 â&#x20AC;&#x201C; Baldy Maker Bull Sale, McArthur, CA Oct. 12 â&#x20AC;&#x201C; R.A. Brown Ranch, Bull, Female & Quarter Horse Sale, Throckmorton, TX Oct. 16 â&#x20AC;&#x201C; California Bullfest Sale, Galt, CA Oct. 16 â&#x20AC;&#x201C; HAVE Angus, Female Sale, Internet Oct. 18 â&#x20AC;&#x201C; 9 Peaks Ranch, Bull Sale, Terrebonne, OR Oct. 20 â&#x20AC;&#x201C; Thomas Angus Ranch, Bull & Female Sale, Baker City, OR Oct. 25 â&#x20AC;&#x201C; Strang Hereford & Angus, Production Sale, Meeker, CO Oct. 27-29 â&#x20AC;&#x201C; Summitcrest Performance Angus, Bull & Female Dispersal Sale, Grand Island, NE Nov. 26 â&#x20AC;&#x201C; Summitcrest Farm, Female Dispersal & Equipment Sale, Summitville, OH Nov. 30 â&#x20AC;&#x201C; Bentz Ranch, Bred Heifer Sale, Juntura, OR Dec. 9 â&#x20AC;&#x201C; Burgess Angus Ranch, Bull Sale, Homedale, ID Dec. 10 â&#x20AC;&#x201C; Leachman Cattle Co., Bull Sale, Wellington, CO Feb. 8, 2012 â&#x20AC;&#x201C; Meadow Acres Angus, Production Sale, Echo, OR March 5 â&#x20AC;&#x201C; Sunny Okanogan, Production Sale, Okanogan, WA March 8 â&#x20AC;&#x201C; Mytty Angus Ranch, Bull Sale, Florence, MT

RED ANGUS Sept. 24 â&#x20AC;&#x201C; McPhee Red Angus, Bull & Female Sale, Lodi, CA Oct. 1 â&#x20AC;&#x201C; Leachman of Colorado, Bull Sale, Middletown, CA Oct. 12 â&#x20AC;&#x201C; R.A. Brown Ranch, Bull, Female & Quarter Horse Sale, Throckmorton, TX Oct. 29 â&#x20AC;&#x201C; Pieper Red Angus, Production Sale, Hay Springs, NE Nov. 16 â&#x20AC;&#x201C; 5L Red Angus, Fall Production Sale, Sheridan, MT Dec. 10 â&#x20AC;&#x201C; Leachman Cattle Co., Bull Sale, Wellington, CO Dec. 12 â&#x20AC;&#x201C; Buffalo Creek Red Angus, Final Offering Sale, Buffalo, WY

SIMANGUS Oct. 12 â&#x20AC;&#x201C; R.A. Brown Ranch, Bull, Female & Quarter Horse Sale, Throckmorton, TX Feb. 19, 2012 â&#x20AC;&#x201C; Bar CK Cattle Co., Production Sale, Culver, OR

SIMMENTAL Feb. 6, 2012 â&#x20AC;&#x201C; Gateway Simmental & Lucky Crow, Bull Sale, Lewistown, MT

STABILIZERS Oct. 1 â&#x20AC;&#x201C; Leachman of Colorado, Bull Sale, Middletown, CA Dec. 10 â&#x20AC;&#x201C; Leachman Cattle Co., Bull Sale, Wellington, CO

COMMERCIAL

BALANCER

Sept. 12 & 13 â&#x20AC;&#x201C; Western Video Market, Haythorn Ranch Sale, Ogallala, NE Oct. 8 â&#x20AC;&#x201C; Turlock Livestock Auction Yard, Fall Calving Female Replacement Sale, Turlock, CA Oct. 15 â&#x20AC;&#x201C; Turlock Livestock Auction Yard, 5th Annual Fall Special Feeder Sale, Turlock, CA Nov. 11 â&#x20AC;&#x201C; Cattlemenâ&#x20AC;&#x2122;s Livestock Market, Special Commercial Female Sale, Galt, CA Dec. 6 â&#x20AC;&#x201C; Western Video Market, Silver Legacy Hotel Sale, Reno, NV Dec. 10 â&#x20AC;&#x201C; Turlock Livestock Auction Yard, 4th Anniversary Feeder Sale, Turlock, CA Dec. 18 â&#x20AC;&#x201C; Turlock Livestock Auction Yard, California Female Expo Sale, Turlock, CA

Sept. 10 â&#x20AC;&#x201C; RayMar Ranches, Bull Sale, Escalon, CA

HORSES

CHAROLAIS Oct. 8 â&#x20AC;&#x201C; California Angus & Charolais Breeders, Bull Sale, Turlock, CA March 13, 2012 â&#x20AC;&#x201C; Romans Ranches, Production Sale, Vale, OR

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57

OUTLOOK Continued from page 55 calf prices are expected to average over 30 percent above 2010â&#x20AC;&#x2122;s prices.

Looking further ahead to 2012, lots of unknowns

There are lots of questions about 2012; importantly, will the U.S. slip into another economic recession? How high will oil and corn prices be? Preliminary forecasts for 2012 assume modest economic growth in the U.S. and corn prices slightly lower than 2011â&#x20AC;&#x2122;s record high.

Many of the factors that have influenced the beef and cattle markets in 2011 will continue to have an impact 2012. Any price surprises that may occur, whether positive or negative, will most likely happen due to changes in the demand side of the market. For the beef and fed cattle markets, those demand aspects are rooted in the overall U.S. domestic economic conditions, foreign demand for beef and byproducts, and competition from competing meats and poultry in the domestic and international markets. In terms of demand for calves and yearlings, major crop Continued on page 62

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s r e pr e se nt e d ar e iraxe602-C SMMax C Proven Angus genetics for southwest cattlemen. After marketing the genetics of Basin Angus Ranch and representing Basin Angus genetics for over 17 years, we’ve recently taken the opportunity to bring 200 top-producing Basin Angus cows to our ranch in Southern Arizona.

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1-800-850-2769 August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

59

AD INDEX 5L Red Angus............................................................64 9 Peak Ranch...........................................................w5 ABS Global................................................................20 Allflex USA ................................................................57 Amador Angus........................................................w26 American AgCredit ....................................................14 American Angus Association ....................................16 American Angus Hall of Fame ..................................60 American Hereford Association ................................13 American Livestock Insurance Company .................31 American Shorthorn Association...............................30 American Simmental Association .............................57 Animal Health Express..............................................55 Anipro ........................................................................36 Bagley Bulls ...........................................................w14 Baldy Maker Bull Sale ............................................w10 Bar CK Cattle Company. ..........................................w7 Bar R Ranch...........................................................w12 Bar T Bar Ranch .......................................................47 Beefmaster Breeders United ....................................35 Bell Ranch ..............................................................w18 Bianchi Ranch ........................................................w16 BioTracking ...............................................................49 Booker, “Butch” CD ...................................................18 Booker, “Butch” CD ...................................................56 Border Tank Resources ............................................47 Borges Angus Ranch .............................................w26 Buffalo Creek Red Angus............................................5 Burgess Angus Ranch ...........................................w16 Cal Tag, Inc. ..............................................................49 California Bullfest Sale ..............................................24 California Cattlemen’s Association ..........................w6 California Polytechnic - Animal Scs. Dpt................w21 Cattlemen’s Livestock Market ................................w31 CB Ranch ...............................................................w12 Central California World of Bulls ...........................w31 Chandler Hereford ...................................................w9 Cherry Glen Beefmasters ......................................w16 DeForest Livestock ................................................w18 Dow Ranches ............................................................37 Duarte, Eric ...............................................................40

Eagle Grip Cattle Co. .............................................w16 El Rancho Espanol de Cuyama .............................w24 Flying U Angus Ranch ........................................... w11 For-Most, Inc. ............................................................46 Foster Commodities ..................................................21 Fresno State Agricultural Foundation ....................w22 Furtado Angus ........................................................w22 Gap Zapper Corporation ...........................................49 Gateway Simmental ..................................................48 Genoa Livestock ....................................................w15 Gonsalves Ranch.....................................................w4 Hardesty Cattle Company.........................................59 H.A.V.E. Angus.......................................................w19 Heiferpro.com (Kit West)...........................................22 Heritage Bull Sale ..................................................w29 Horton Feedlots, Inc..................................................20 Hutchison Western ....................................................62 Inosol Co., LLC .........................................................58 International Brangus Breeders ................................44 Kelly Trout .................................................................47 King Herefords, Angus & Charolais ..........................52 Lazy J Angus ..........................................................w14 Leachman Cattle of Colorado .....................................9 Leachman Cattle of Colorado - Topline Division.........8 Rozol Prairie Dog Bait..........................................insert Madsen Angus and Herefords ..................................40 McPhee Red Angus ...............................................w23 Meadow Acres Angus Ranch .................................w18 Mission Angus Ranch ............................................w27 Moly Mfg., Inc. ...........................................................45 Multimin .....................................................................38 Meyer Natural Angus, Inc..........................................22 Mytty Angus Ranch ...................................................19 National Western Stock Show ..................................28 North American Limousin Foundation ......................29 Oak Knoll Hereford ................................................w12 Oak Ridge Angus Bulls ..........................................w17 Origen Beef ...............................................................12 Performance Plus Angus Bull Sale ........................w25 Pieper Red Angus .....................................................46 Potter’s Emmett Valley Ranch ...............................w30

Powder River Livestock & Handling..........................54 Powell Scales Northwest ..........................................57 Pratt Farms ...............................................................24 Priefert Ranch Equipment .........................................11 Producers Stockyards - Madera ............................w24 R.A. Brown Ranch ....................................................63 Rancher’s Select Bred Heifer Sale (Bentz Ranch) ..w2 Ray-Mar Angus Ranch ................................................3 Red Bluff Bull & Gelding Sale .....................................2 Red River Farms .......................................................56 Ritchey Mfg. Co.........................................................18 Romans Ranches ..................................................w18 Roundup Internet Livestock Marketing .....................27 Running Creek Ranch Co. ..........................................7 Salt Creek Industries.................................................19 Sammis Angus Ranch............................................w12 Schohr Herefords ...................................................w30 Scott Mfg. ..................................................................56 SEK Genetics, Inc. ....................................................34 Select Sires ...............................................................15 Silver Bit Angus Ranch - Scott Whiteworth ..............10 Silver Spur Ranch .....................................................61 Snyder Livestock ....................................................w13 Sterling Solutions, LLC .............................................51 Strang Hereford and Angus ......................................50 Summitcrest Farms ...................................................39 Sunny Okanogan Angus Ranch ............................w28 Super-Sort/Heartland Ag Products ...........................34 Tehama Angus Ranch ..............................................w8 The Cattle Range ......................................................34 The Stockman’s Market - Rodgers & Machado.....w32 Thomas Angus Ranch............................................w20 Trent Stewart .............................................................59 Triner Scale ...............................................................58 Turlock Livestock Auction.........................................w1 Vintage Angus Ranch ......................................... 32-33 Western Feed Supplements .....................................23 Western Stockman’s Market ....................................w4 Western Video Market...............................................41 Wild West Angus ....................................................w19 Z Tags of North America ...........................................25

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60

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

Celebratin g Our 72nd Ye ar Business! in 1939 2011

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

61

OUTLOOK to decline further in 2012. This factor will most certainly support cattle prices.

The dominant factor influencing calf and yearling markets in 2012 will be grain prices. Crop-year ending corn stocks will only amount to a few weeks of usage in 2012. Grain prices are expected to remain quite volatile, causing potentially large price swings in calf and yearling prices.

But price swings could provide opportunities for producers with sound business and risk management plans to purchase calves sell

Opportunities to make and yearlings.

Continued from page 58 problems that raise costs of production may quickly result in lower prices.

Beef cowherd liquidation has set the stage for beef production to tighten again in 2012. That will be supportive of cattle prices. The decline in U.S. production will be combined with stable to increasing beef exports and for continued rather modest levels of beef and cattle imports.

Therefore, U.S. per capita availability of meat and

poultry

in 2010 is forecast

red

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August 22, 2011 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

money putting pasture-based weight gains on calves should continue given ongoing high cost-of-gain in feedlots.

Preliminary forecasts for 2012 put the slaughter steer price 5 percent to 8 percent above 2011â&#x20AC;&#x2122;s. The strongest fed cattle prices of the year are forecast to be in the second and fourth quarters, similar to the seasonal pattern of 2011. For the first time ever, quarterly average prices over $120 are possible.

In the southern Plains, forecasts call for yearling and calf prices in 2012 to post a small annual increase. It will be difficult to match the yearling and calf prices posted in the first quarter of 2011 given costs faced by cattle feeders. Over the calendar year, the weakest yearling prices could be in the first quarter of 2012, again assuming a normal growing season next summer. Still, a very strong fed cattle market should keep yearling prices above 2011 for the second half of the year. For the year, 700- to 800-pound steers in the southern Plains are forecast to average in the $129 to $137 per cwt. range, which would be slightly above 2011.

Calf prices could post modest year-onyear declines during much of the first half of 2012. But in the second half of the year, prices could post annual gains. In fact, calf prices in the fall quarter of the year could eclipse 2011â&#x20AC;&#x2122;s by several dollars per cwt.

August 22, 2011 • WLJ’s Commercial Cattle Issue • Section Two

63

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8/11/2011 9:50:40 AM