NCBM0709

JULY 2009

Water Management ■ Cow/Calf Panel ■ Mitigate Risk ■

U P to 840

STEP

One Number, Many Uses By choosing 840 eartags, you will be able to take advantage of all the opportunities that hinge on the official identification of your cattle, including: • Animal Health Programs • Marketing Programs • Genetic Programs and Breed Registries • Animal Movement

What is an 840 eartag?

The 840 eartags are the basis for livestock identification in the United States. These tags use a standardized 15-digit numbering system to Stat create the official animal identification number (AIN). The first three crea digits (840) represent the U.S. country code. The AIN stays with the digi animal throughout its life. anim

For more information visit

www.usda.gov/nais

United States Department of Agriculture Animal and Plant Health Inspection Service USDA is an equal opportunity provider and employer.

Photo courtesy Steve Crecelius for the Denver Metro Convention & Visitors Bureau

e c n e r e f n o C r e m m u S y r t s u d n I e l Catt

It’s where industry decisions are made and business gets done.

Join us in Denver, July 14-18, 2009

For more information visit www.beefusa.org National Cattlemen’s Beef Association

National Cattlemen’s Beef Association

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Capitol Concerns NCBA, Working for you in D.C.

Who’s Who at USDA

W

hile Agriculture Secretary Tom Vilsack makes most of the headlines for USDA, it is often the lower-level positions that interact most with members of the livestock industry and NCBA staffers. Here is a closer look at some of the influential appointees at USDA. The Senior Staff Staff members are important because they dictate who gets in to see the secretary and how long the meeting lasts. They are the gatekeepers for USDA. USDA Chief of Staff John Norris - In 1999 Norris was then-Iowa Gov. Vilsack’s chief of staff. He also chaired the Iowa Utilities Board. He has extensive political experience, having worked as Sen. John Kerry’s Iowa Caucus campaign manager and as national field director for the KerryEdwards campaign.

He was also the Democratic nominee for Iowa’s Third Congressional District in 2002.

USDA Deputy Chief of Staff Carole Jett - Jett was the Farm Bill coordinator for USDA’s Natural Resources Conservation Service before leaving to campaign for President Obama. She led the NRCS 2002 Farm Bill implementation effort and served on assignment with the U.S. House of Representatives Agriculture Committee.

USDA Chief of Staff to the Deputy Secretary Doug O’Brien The Office of the Deputy Secretary manages the day-to-day operations of USDA, with a budget of $120 billion. O’Brien has an agricultural

background, having served most recently as assistant director of the Ohio Department of Agriculture.

His responsibilities included development of the department’s biofuels, bioproducts and renewable energy efforts.

The Sub-Cabinet USDA Deputy Secretary Kathleen Merrigan - Deputy Secretary Merrigan came to USDA from Tufts University in Boston, where she was director of the Agriculture, Food and Environment M.S. and Ph.D. Program at the Friedman School of Nutrition Science and Policy.

She served in the Clinton Administration as administrator of USDA’s Agricultural Marketing Service. In the early 1990s, she was a staffer on the U.S. Senate Committee on Agriculture, Nutrition and Forestry.

In that role, she helped develop the Organic Foods Production Act of 1990, which mandated national organic standards and a program of federal accreditation. It was the first set of standards for organic production.

“I was a Senate staffer at the same time,” says NCBA’s Chief Environmental Council Tamara Thies. “Her background and focus is on organics. She’s smart and tenacious.”

USDA Senior Advisor to the Secretary for Environment and Climate Robert Bonnie Bonnie comes to USDA from the

Her background and focus is on organics.

She’s smart and tenacious.

4

July 2009 l National Cattlemen

Continued on Page 13

NATIONAL CATTLEMEN The Journal for America’s Cattle Producers

JULY 2009 Volume 24, Issue 10

2009 Officers

President

President Elect

Vice President

Chairman Federation Division

Chairman

Policy Division Chief Executive Officer NCBA Publishing Staff

Editor

Assistant Editor

Gary Voogt Steve Foglesong Bill Donald J.D. Alexander Tracy Brunner Forrest Roberts Curt Olson Joe Snyder

To Learn More About NCBA Call 1-866-BeefUSA (1-866-233-3872) or visit www.BeefUSA.org.

To receive e-mail updates from NCBA, contact Sheryl Slagle at sslagle@beef.org.

Contributors Mike Murphy, Heather Vaughan ABOUT THE COVER: Dr. Robert Gukich of the Florida Cattlemen’s Association, left, and Dr. Jerry Woodruff of Fort Dodge Animal Health and examine cattle near Lakeland, Fla. Photo by Marvin Kokes.

How To Contact National Cattlemen’s Beef Association: P.O. Box 3469, Englewood, CO 80155 (303-694-0305); Washington, D.C.: 1301 Pennsylvania Ave. N.W., Suite 300, Washington, D.C. 20004 (202-3470228). National Cattlemen is a monthly publication of the National Cattlemen’s Beef Association.

Published by Naylor, LLC 5950 NW 1st Place Gainesville, FL 32607 Phone: 800.369.6220 | Fax: 352.331.3525 Web site: www.naylor.com Naylor Publisher Kathleen Gardner Naylor Editor Elsbeth Russell Project Manager Troy Dempsey Publication Director John O’Neil Advertising Sales David Evans, Paul Woods Marketing Associate Lauren Williams Pagination Catharine Snell Advertising Art Elaine Connell © 2009 National Cattlemen’s Beef Association. All rights reserved. The contents of this magazine may not be reproduced by any means, in whole or in part, without the prior written consent of the National Cattlemen’s Beef Association.

Coming in August’s National Cattlemen

• •

Who Am I? Clint Richardson, formerly of Deseret Cattle and Citrus, is now manager of the Triangle Ranch near Paducah, Texas. Clint participated in NCBA’s 2009 Young Cattlemen’s Conference.

Differentiate Your Cattle Herd Health

Around NCBA Dr. Parker Assumes Leadership Post at Animal Ag Alliance

Dr. Elizabeth Parker, chief veterinarian for NCBA, on May 14 was named as the chair of the Animal Agriculture Alliance Board of Directors.

“Everyone involved in the food chain must combat the misleading — and sometimes outrageous — claims of animal rights extremists,” said Dr. Parker. “The Alliance is proactively working to explain how we ensure the well-being of the animals in our care.”

Dr. Parker praised the Alliance’s role as a forum for agricultural groups to develop common messages. “When anti-agriculture groups regularly exercise hyperbole to make their case, a reliable group needs to be able to correct the record,” she said.

Relief Efforts for North Dakota The National Cattlemen’s Foundation in April, in cooperation with NCBA, launched a disaster relief effort to assist farm and ranch families impacted by catastrophic spring flooding and blizzards in North Dakota. Many families were completely displaced from their homes. Livestock losses are estimated to be near 100,000 head.

Downed fences and other property damage have also added to the battle with Mother Nature.

“One of the greatest needs besides feed and hay is fencing materials.

Disaster relief funds can be utilized to assist producers in securing posts, wire and clips and rebuilding their infrastructure,” says Julie Ellingson, executive vice president of the North Dakota Stockmen’s Association.

Every dollar contributed will directly assist families struggling to keep their farms and ranches operating under these difficult conditions. In conjunction with the Foundation, the North Dakota Stockmen’s Association will manage distribution of all funds donated.

Contributions by check can be made payable to National Cattlemen’s

As NCBA’s chief veterinarian, Dr. Parker focuses on issues related to animal health, animal welfare and food safety and security, especially those being debated within the government agencies and in Congress.

YOUR NCBA

• •

Different Ways to Sell Feedgrain Storage

Paula Myers, Georgia

Gary Goes South NCBA President Gary Voogt, right, and his wife Shirley join former NCBA President John Queen of North Carolina and others for a crawfish dinner at a recent Region II meeting in Lafayette, La.

Foundation, with “disaster relief ” included on the memo line. Donation checks should be mailed to: National Cattlemen’s Foundation, 9110 East Nichols Ave., Suite 300, Centennial, CO 80112 Online contributions can be made by going to www. nationalcattlemensfoundation.org, then selecting “Contribute Now” on the left-hand side of the screen.

Donations are tax-deductible.

initiative is to raise several million dollars for an endowed general scholarship fund. Revenue generated from the fund will be awarded as academic scholarships in undergraduate and graduate programs, veterinary medicine and culinary arts.

For information on Bright Futures, go to www. nationalcattlemensfoundation.org or call 303-694-0305.

Bright Futures Scholarship Fund

The National Cattlemen’s Foundation is launching a new initiative to strengthen the future of the beef industry. The Bright Futures Scholarship fund will help develop future leaders and inspire young people to pursue careers in agriculture and the beef industry.

The National Cattlemen’s Foundation is seeking contributions from individuals, corporations, associations and foundations with a vested interest in supporting young people who will strengthen the beef industry. Every single gift, no matter the amount, is important.

The goal of the Bright Futures

NCBA’s Cattlemen to Cattlemen TV Show on RFD-TV Airs Tuesdays at 8:30 p.m.

Wednesdays at 10:30 a.m. and Saturdays at 9:00 a.m. (all times Eastern).

Check your local listings.

www.NationalCattlemen.com

5

Your Business

Staying Profitable in Tough Times

By Joe Snyder

W

hen it comes to seeking answers, NCBA has a wealth of resources. Chief among these are NCBA members, who include some of the smartest, most perceptive businesspeople in the nation. For a look into what some of the most successful ranches are doing to survive and thrive during these challenging times, NCBA turned to three well-respected ranch managers.

Mike Milisevic of Okeechobee, Fla., is general manager of ranch operations for Lyke’s Brothers, Inc., one of the largest land owners in the United States. Trey Patterson of Ranchester, Wyo., is chief operations officer at the Padlock Ranch, where 43 employees raise and market more than 11,000 calves a year on nearly 500,000 acres across Wyoming and Montana. Kenneth “Chip” Ramsay, Ashby, Neb., manages Rex Ranch, a stocker/cow-calf operation located in the western Sandhills of Nebraska.

NCBA: How are you adapting to these economic times?

Milisevic: We’re currently looking at trying to reduce input costs such as supplemental feed or fertilizer on the pastures, but we do it without hurting Mike Milisevic our production.

We’re doing soil and forage analysis to see what the soil needs, and a pH test is part of the soil test. If the pH is too acidic, you need to add lime to the pasture, but lime is cheaper than fertilizer so that helps us get more value out of the dollars we’re spending.

There is money to be saved in repairs and maintenance. Repair a fence as opposed to completely replacing it — make the repairs while

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July 2009 l National Cattlemen

it’s still functional and make it last longer but save replacement until prices come back.

Another more minor thing: We’re not going to as many meetings as we used to, not getting as many magazines or publications as we used to, trying to cut back a little here and there. If you get four different magazines all saying the same thing, do you need all of them?

We’re looking at holding labor hours down. We work a general work week but have reduced or stopped overtime and weekend work. If it’s calf work time, we got to do what we got to do. But in other instances, we’re trying to keep the hours down as much as possible.

Shop around and find the best prices, don’t go to same feed store you’ve always gone to without looking for better prices. Partner with a neighbor and buy in bulk.

Consider anywhere you can save money without hurting production.

Don’t sacrifice production because it will only put you further behind.

Maximize production and minimize costs wherever you can.

Patterson: In our case, the process of preparing for tough economic times started about seven years ago. When Wayne Fahsholtz took over as CEO, he began a Trey Patterson series of business practices to help the ranch in volatile times. There are three primary ways we are securing our business during tough times.

1) Risk management and marketing: We have a large portion of our feeder cattle committed through an alliance program, Country Natural Beef. This program allows cattle to be moved

through established markets and beef prices, mediating some of the fluctuations realized in selling cattle on a commodity market. We also breed first calf heifers to Wagyu bulls and establish contracts for those calves. We use a variety of marketing avenues on the balance of our cattle, selling some as yearlings and retaining ownership on some. We are opportunistic in this approach and use risk management techniques to protect break-evens when appropriate. We put a lot of emphasis on cull cow and bull marketing as well.

2) Generating business activity other than cattle. We have just initiated a “working ranch vacation” business that will generate additional income for the company. We are looking at other business ideas, such as selling gravel or other recreation ideas to generate additional income without adding significant overheads.

3) Drive towards efficiency. We have moved our calving season to May and June and range calve all cows and heifers. Most cows are wintered out with little to no hay feeding. We have converted some irrigated fields to pasture and run replacement heifers on these fields during the summer.

Instead of haying, we let the cattle harvest the feed. We are wintering some replacement heifers out on grass during the winter to lower production costs. We are also utilizing corn silage to put weight on calves in our feedlot at very competitive cost of gains.

In addition, we are using strategic supplementation practices, such as timing and amount of nutrients offered, to lower production costs.

Ramsay: There is no panacea that we can implement at this point to all of a sudden make us better. We Chip Ramsay

YOUR BUSINESS are constantly adapting to economic times by looking for ways to make our systems more efficient and profitable each year.

Over the years we have tried to: 1) hire and train quality people to think and adapt; 2) focus on reducing or spreading our costs over more units of output (examples: decrease labor and equipment needs, increase stocking rate but not at the expense of range health, reduce feed feeds through timing of calving with range nutrient availability); 3) retain as much flexibility in operations as possible in order to adapt to changes in weather and market variation (examples: 20-30% production from stocker enterprise, ability to retain ownership through the feedyard, utilize heterosis, do all we can to stay out of debt); 4) produce a quality product that works well for the buyer (examples: follow BQA guidelines, source and age, genetic progress); 5) develop income from enterprises other than beef production (examples: wildlife, perhaps carbon sequestration, mineral leases).

NCBA: What opportunities do you see for cow-calf producers at this time?

Milisevic: Producers ought to be looking at some kind of diversification on the ranch, whether it’s guided hunts, fishing on the property, renting out a cabin — any other type of income you can generate off the property besides cows.

For example, if you have a field in the back with a little extra grass, get it cut and baled for hay and sell it.

There are opportunities for cow-calf producers when marketing calves.

There are ways to maximize the value of calves through the natural program, certifying calves for source and age, or Beef Quality Assurance.

The sooner we enlist these into our programs, the better off we all will be.

Patterson: Out of tough times come better managers. These ideas of

improving efficiency, a focus on good marketing and risk management, and generating additional ranch income are practices that will improve profitability regardless of the economic situation. The market will fluctuate, but producers that are paying attention to production costs and break-evens, as well as those who are positioned to be opportunistic in marketing, will have some real opportunity for profit in years to come.

Ramsay: Invariably, hard times force us to think of ways to survive, which opens our minds to possibilities that we would have never considered before. Therein lies the greatest opportunity for those who have been unwilling to consider change to this point (examples: buy pregnant cows instead of raising replacements, move calving date, wean earlier or later, run stockers instead of selling calves or visa versa, retain ownership through the feedyard). For those who have managed their equity well to this point, expansion opportunities may present themselves over the next few years.

NCBA: What is your forecast for the cow-calf business over the next decade?

Milisevic: With the current cattle inventory, I think the cow-calf business is going to have a pretty bright future. Maybe not this year, possibly next year it will start looking better. As the economy starts picking up, we’ll start selling more beef.

Supply and demand will kick in and will stimulate more demand, so producers will begin to expand the herd again. By retaining heifers, they will put more of a pinch on supply so that demand will get even stronger for what product we have.

I think we’ll continue to struggle with high grain prices; the price range has moved to a new level. If inflation kicks in, we’ll have to struggle with that. It’s not clear sailing for the future, but we have a lot of bright spots. We’ll have to work through

the storms as they pop up.

Patterson: I think we will see a period of tough times. Some producers will continue to exit the business. The future should be bright for those who are well positioned. I’m sure you will see more consolidation, primarily driven by the need to dilute overhead costs.

Ramsay: Partly cloudy with intermittent showers. Let’s face it, up until last fall, the market has provided cow-calf producers with a pretty good run of profitability. I can’t help but think that with the current increase in input costs the next decade may be tougher to be profitable than the last. While all of us will need to focus on improving every facet of our business, small to mid-size operators will need to put more emphasis on purchasing and marketing in order to take advantage of the market’s inefficiencies (examples: make money on the buy then add value, pool calves to form truckloads, be able to sell at any point the market offers you a reasonable profit). Large operators, who by their size may not be as nimble in entering and exiting markets, will need to continue improving production efficiencies that come from economies of scale (examples: large purchasing contracts, spread regulatory costs over larger numbers, vertical integration, genetic progress). We can only hope that survival and success over the next decade continues to be dependent on our innovation and abilities rather than government subsidies.

NCBA: Are you considering herd expansion — why or why not?

Milisevic: No, we’re not. I’m trying to maintain our herd size at the moment. We’re constantly looking at higher margin crops and other opportunities for us to utilize our property in a way that will return more than the cattle do. The ethanol programs, depending on what the Obama Administration does, may lead to us putting more Continued on Page 9 www.NationalCattlemen.com

7

YOUR management

Preparing for Your Future

By Curt Olson “More than anything, we believe the best way to predict the future is to invent it.”

-John Scully, CEO of Apple Computers t’s seems like a cliché to talk about change, but it may be the one constant anyone can count on these days.

Normally in these pages, talk about change is followed by talk about your business — risk management, the need for good records, etc. This article assumes you do that.

This piece attempts to pass along the highlights of a free, 45-page workbook developed by South Dakota State University and Texas A&M–Kingsville. In those pages, they supply some tools that will help you see where and how you and your business fit in the future, defined as 10 years down the road. You can find the full version online at http://agbiopubs.sdstate.edu/articles/EC924.pdf.

The book focuses on integrating strategic planning and scenario planning to help you achieve the vision statement that you write for your ranching business. The reader will be asked to use some tools discussed before, such as a SWOT analysis (strengths, weaknesses, opportunities and threats).

The vision statement is about your dreams for the business, a description of the situation where you want to be in five to 10 years. The authors say that the statement should include these three key points: 1. A statement about the business’ values and reason for being.

2. An envisioned future describing what the business will be like if it achieves its goals.

3. A recognition of how the business serves its stakeholders (which might include owners, employees, customers, community and/or society as a whole.)

The exercise requires you to take the time to think about what you want and put it down on paper, along with the steps you’re going to take to get there. To get started, answer these questions.

• W hat do we want?

• W hat is the family and business willing to make a strong commitment to?

In developing your vision statement, make sure everyone involved in operating the ranch has input into the process and that they express their dreams for the ranch. Getting comments from outsiders involved with the business might be helpful.

Here are some other questions from the worksheet to consider.

1. If our ranch could be anything we can imagine eight years from now, what would that be?

I

2. W hat new activities will our ranch business be pursuing? What business(es) will we be in? Are there new products we would like to produce or activities we would like to be involved in?

3. W hat will be the important concerns of our customers eight years from now? How do we meet their demands and desires?

4. How will our ranch business excel?

5. What will be the roles and responsibilities of family members and ranch employees?

6. W hat is of greatest value to family members? To the ranch business?

Once you come up with a vision statement that is the “shared vision” of those responsible for making the operation work, don’t just throw it in a drawer. You still have to come up with strategies that will get you from here to there. They will build the bridge to your vision of the future.

But this isn’t a perfect world and the plan isn’t chiseled in stone. It has to be a living document and you have to be able to adapt to unforeseen changes.

You have to begin putting the plan into action so start by looking at your strategies and determine which have the best chance for success and will deliver the best return.

You also have to play soothsayer.

While it’s important to know past performance and historical trends, it’s just as important to look to the future and try and anticipate the new trends and issues and how they might impact you.

For instance, what if consumers suddenly demand more natural beef or age and source verified cattle?

The clues to what is coming are everywhere — in government regulations, consumer concerns or even on your own operation. Finding labor may be a growing concern for you, or perhaps it’s pasture conditions.

Scenario planning allows you to identify issues and solutions for them before they become too big of a problem. Similar to the strategic planning process, select a couple of the scenarios that seem the most likely you’ll have to address. Pull your information together. Perhaps run a SWOT analysis. In the end, look for your solution.

The workbook provides a section where you merge your strategic and scenario planning. With everything in line, now you get to make it happen and make sure it’s going according to plan. You want to measure your performance and evaluate it. The workbook provides you

Planning won’t stop change, but it may make you better equipped to handle it.

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July 2009 l National Cattlemen

YOUR management with a tool called the Balanced Scorecard, a concept used by businesses that was developed by Harvard Business School professors. It categorizes key management areas into what it calls “perspectives.” For a ranch, the categories are: 1. Learning and growth 2. Natural resources 3. Ag commodities/production 4. Customers 5. Financial 6. Lifestyle Learning and growth is the foundation on which the other perspectives in the Scorecard are built. After using the worksheets provided, the Scorecard gives you a quick snapshot for measuring your success based on the goals

you defined and your strategies for achieving them.

Why Plan?

Remember what corn was doing just a year ago?

Ethanol has taken a bite out of just about everyone it touches, including those producing it. It looked like a “can’t miss” deal with the price of oil at a record high and a government mandate for production.

But oil prices have retreated dragging down ethanol prices with them. Still, the ethanol production mandate increases. What does this mean for your feed costs or cattle prices?

Planning won’t stop change, but it may make you better equipped to handle it.

Continued from Page 7 crops in for ethanol production than for cattle. We’re going to maintain what we’re doing and see what the Administration is going to do with ethanol. We are barely breaking even now on cattle. The situation we’re in with a corporate-type business — cattle have never had a high return on our operation — we’re always trying to justify the cattle herd.

Patterson: We destocked significantly in the early part of the decade due to drought. We have been building numbers back primarily because we have had some precipitation. We do not foresee a large expansion of our herd, but want the ranch to be fully stocked while maintaining or improving the range condition. Good grazing practices, such as planned, time-controlled grazing, allows for more efficient stocking of rangeland while allowing management of pastures for improved range condition. We will not expand numbers for the sake of expanding. We will continue to manage cattle for a low-input system, with minimal hay feeding and labor efficiency (high cow-man ratios).

Ramsay: We are always considering herd expansion within the parameters of the land we own. If we can figure a way to run more cows and/or stockers on the land that we currently manage without being detrimental to the long term health of the range or other enterprises that offer higher margins, we will do that regardless of our market opinion.

turnover on natural resources you control. You look for ways in your system, if it’s afforded to you, to lower fixed costs and have less reliance on fuel and labor. We are seeing a lot more activity in the marketplace for people who want to work. We get more applications because of our name and size, than we used to. Applicants have a wide variety of qualifications, from seasoned cowboys who have worked here in the past to people who have not ranched before but have always dreamed of doing it.

NCBA: Any other thoughts about this?

Patterson: You get to some point when you’ve realized all the big changes you can make. We continue to strive to be more efficient and lower costs. You need to continue to work on those things. But you reach a point when you realize you have to significantly impact the bottom line.

Simply changing calving seasons sometimes won’t do it, it won’t be worth the half a million dollars you need to save.

So you look at other areas. Marketing is one. Increasing 429854_Pride.indd 1

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9

YOUR management

Making Waves by Using Less

By Curt Olson

T

he water war between agriculture and cities is leading to tighter restrictions on water use and better use of technology to maximize what is used. There is increasing demand for water for recreation, sportsmen, environmentalists, developers, cities and, of course, the farmer. The end result is ag practices are changing to use water better and save money.

It is widely reported that agriculture uses 80% of all available water. It’s a figure that alarms many but can be reduced, sometimes by desire, sometimes by law. In Phoenix, local code prohibits irrigation on any land not irrigated between 1975-1979. The expectation was that as ag land urbanized, ag would need less water and this generally has come true.

California, the largest agricultural producer in the country, has greatly increased its water use efficiency.

It cites statistics that says ag there accounts for about 41% of water use and that efficiency continues to improve as crop yields increase.

There are many ways to increase efficiency, depending on where you live. The USDA Natural Resources Conservation Service says farmers who grow vegetables and small fruits are using some of the same irrigation systems as home gardeners — trickle irrigation systems. High-efficiency irrigation systems for row crops use less energy to pump water and, since they spray water downward, less evaporates before it reaches the crop.

Other ways require long-term investments of capital and labor. The Thaler Land & Livestock Company in LaGrange, Wyo., was the 2006 national Environmental Stewardship Award winner. The 20,000 acre ranch’s irrigation system has been built over 40 years. Dennis Thaler says his father and grandfather started

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July 2009 l National Cattlemen

it by laying underground irrigation pipe, which reduces evaporation. As the ranch only receives 13 inches of rain a year, conservation is a must.

That water feeds pasture tanks.

Having water more available improves the cattle’s use of grass in over 100 pastures.

“We worked 40 years to try and improve on all our irrigation management,” Dennis says. “We’ve leveled land, we used gated irrigation pipe, sprinkler systems with low pressure drops. We started with our irrigation management practices and did everything we could to improve those.”

No till fields is another system gaining use. The University of Nebraska Extension says that no till fields under a center pivot irrigation system can save 3 to 5 inches of water annually, compared to conventional tillage systems. The school also says that ⅓ to ¾ an inch of moisture are lost in each tillage pass.

The no till system reduces pumping costs, labor, fuel and

equipment costs, plus the wheel compaction you might find in a furrow system. Randy Pryor, an Extension Educator, wrote in the Jan. 7 UNL Crop Watch that the added profit from water savings can be $20.10 to $33.50 per acre. Another benefit is it returns organic matter to the soil, improving water use.

Nebraska Extension also discusses something called checkbook irrigation. Think of rain and irrigation as deposits. Crop water use is a withdrawal. The key is to strike the right balance in the soil. UNL says these are the factors to consider when you start the checkbook: soil texture, crop type and rooting depth, available water-holding capacity of the soil, minimum allowable balance, and an estimate of current soil water balance. (Read the full document at http://www.ianrpubs.unl.edu/epublic/ live/ec709/build/ec709.pdf.)

A concern of those who work in the water field is something called evapotranspiration. With the proper measuring tools in place, it is possible

YOUR management to determine how much water a crop actually uses, and how much is lost to evaporation. Knowing this allows the water user to more accurately deliver the proper amount of water to the field.

If you use a canal to deliver water, lining that waterway will reduce seepage loss. According to Water 2025, a 2003 Department of Interior initiative, Bureau of Reclamation research has shown that for every $1 spent on canal modernization, an expected return of $3 to $5 in conserved water can be achieved.

Water 2025 said improvements in design and construction of new measuring devices allow water to be accurately measured in delivery systems. The Ochoco Irrigation District in central Oregon lost approximately 40 cubic feet per second (cfs), or 25.8 million gallons per day, at the end of its irrigation system. The District, in partnership with BLM, cut its daily losses by 75% after installing advanced water

Technology is available that will more accurately control the amount of water used in an irrigation system and during what time of day, both steps that can add to water savings. measurement equipment.

Technology is available that will more accurately control the amount of water used in an irrigation system and during what time of day, both

steps that can add to water savings.

Irrigated fields often have a portion of the field where water spills over, tailwater. Some states require that this be captured and pumped back to the top of the field for reuse.

Like anything else, to improve your system look at the easy fixes first. If you irrigate, check your system and make sure your pumps are working efficiently.

You also might want to visit with your local soil and conservation district. There are about 3,000 of them across the country. These are all local government agencies established under state law. They work to achieve local goals and work with the state and national governments to preserve the country’s natural resources, water among them.

To view other articles on irrigation, go to UNL Extension’s Lancaster County Web site at lancaster.unl.edu/ag/crops/irrigate.shtml or check with your own Extension office.

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11

CattleFax

Your MArket Update

12

Position Operation for the Future

By Mike Murphy

W

hen oppor­ tunity knocks, open the door. That catch phrase has been heard by all. And in the cattle business as in all walks of life, opportunities will present themselves.

The opportunities that producers in the cattle industry will have may be two-fold in the future. For some, it will be the opportunity to grow a business. For others, the opportunity will need to be captured just to sustain a business. But in both cases the common theme will be to position your operation for when the time comes that opportunity presents itself.

Obviously, it’s easier said than done, but going through the due diligence of examining how to position your operation for opportunity is critical to the viability of one’s operation.

All operations in the future will face more challenges as they relate to the cost of doing business. It is likely these will expand outside the realm we have known historically.

Unfortunately, today we can’t measure the impact in terms of what that cost will be for those added expenses.

The threat of inflation is real, considering the actions the government/federal reserve have taken to increase the money supply to levels never seen historically.

Inflation is a double-edged sword.

Costs will rise but so will revenue.

Whether or not costs will outpace revenue is unknown. But expecting and preparing for that unknown is critical.

The most important factor is to establish a large cash position for your operation going into this time

July 2009 l National Cattlemen

frame. This will help in all aspects related to managing your operation.

And a strong cash position will allow producers to take advantage of the opportunities behind the doors.

In the current economic conditions, with small operating margins, drought and other factors, how can you achieve a strong cash position? Every operation has to examine its business plan and look under every rock. For some, it might mean downsizing the amount of property owned to enhance the cash position, and then lease back the land to maintain production. Others may look at alternative income sources from the operation or even off the operation.

There are a whole host of items to measure as it relates to the production and marketing facet of your business. Some may need to review their estate planning. The bottom line is that producers must go through the evaluation process.

The timing of when inflation will start, how long it will last and to what degree revenue will exceed costs are all unknowns at this time. But a strong cash position will enhance a producer’s abilities to be sustainable in the future and potentially capture the opportunities that will present themselves. Thus, getting started on the prospects of improving one’s cash position sooner than later is vital.

U.S. Cattle on Feed Inventory Stays Down The cattle on feed inventory in May dipped when compared to the same time the year before for the 13th straight month. Since February 2007, only six months have had total inventory numbers above the previous year.

Cattle and calves on feed for slaughter in the United States for feedlots with capacity of 1,000 or more head totaled 10.8 million head on May 1, which was 3% below 2008.

April placements in feedlots totaled 1.6 million, 4% above 2008.

Fed cattle marketings during April were 1.87 million, 7% below 2008.

approved by the full Beef Board and by USDA. It includes: • $18.1 million for promotion, including advertising, foodservice, retail and veal promotion, and new-product development.

• $6.2 million for research programs, including beef safety, product enhancement, nutrition, and market research.

• $4.7 million for consumer information programs, including outreach to nutrition influencers.

• $2.9 million for industry information programs, such as beef and veal quality assurance and issues management.

• $5.3 million for foreign marketing.

• 1.8 million for producer communications about the results of their checkoff investments.

• $220,000 for evaluation of checkoff programs.

• $130,000 for program development.

• $255,000 for USDA oversight.

• $2 million for administration.

Proposed Beef Board Budget The Beef Promotion Operating Committee has recommended a $41.5 million Cattlemen’s Beef Board budget for Fiscal 2010, reflecting a slight decrease from the fiscal 2009 budget and down more than 15% from 2008. The 2010 budget recommendation still must be

Your Capitol Concerns Continued from Page 4 Environmental Defense Fund, where he focused on conservation incentives and markets that reward farmers, ranchers and forest owners for land stewardship. This advisory position is a new role at USDA, developed to help guide broad policy and program decisions with an emphasis on those concerning the nation’s natural resources and climate issues.

USDA Under Secretary for Farm and Foreign Agricultural Services Jim Miller - Under Secretary Miller left his job as chief of staff for the National Farmers Union to join USDA. He worked with NCBA’s Chief Economist Gregg Doud earlier in his career as vice president for government relations for the National Association of Wheat Growers.

“Jim has an understanding of production agriculture and commodity issues,” Doud says.

“NCBA signed a letter of support for his confirmation because we value the experience he brings to this job.”

USDA Under Secretary for Marketing and Regulatory Programs Edward Avalos - Under Secretary Avalos served with the New Mexico Department of Agriculture for 29 years where he established the New Mexico Specialty Crops Program. He has extensive foreign experience and worked in Mexico, Japan, China, Canada and Latin America promoting New Mexican crops and livestock.

USDA Under Secretary for Rural Development Dallas Tonsager Under Secretary Tonsager came to USDA from the the Farm Credit Administration. His experience in rural development dates back to his service as South Dakota State Rural Development Director under President Clinton. He also served as executive director of the South Dakota Value-Added Agriculture Development Center, where he

coordinated initiatives to better serve producers who developed valueadded agricultural projects.

USDA Under Secretary for Research, Education and Economics Rajiv Shah, MD Dr. Shah was the director of the Agricultural Development Program at The Bill & Melinda Gates Foundation, where he worked to reduce global hunger and poverty and raised $5 billion for child immunization.

NCBA signed a letter of support for his confirmation because we value the experience he brings to this job.

REE guides USDA’s research efforts and encompasses the Agricultural Research Service (including the National Agricultural Library), Economic Research Service, National Agricultural Statistics Service, and Cooperative State Research, Education and Extension Service.

USDA Under Secretary for Food, Nutrition and Consumer Services Kevin Concannon Under Secretary Concannon has served as director of health and human service agencies in Iowa, Maine and Oregon. In these positions, he worked to make food

stamps more accessible to needy populations.

Major Players in Livestock Issues USDA Administrator of the Agricultural Marketing Service Rayne Pegg - Pegg most recently served as deputy secretary of Legislation and Policy for the California Department of Food and Agriculture. Prior to that, she worked for the California Farm Bureau.

Matt Byrne, executive director of the California Cattlemen’s Association, was supportive of her nomination. “We’ve had good experiences working with Rayne,” Byrne says. “I believe she will be a good addition to the department and will serve as a knowledgeable voice on livestock issues.”

AMS focuses on ensuring a level playing field for U.S. agricultural exports in the world marketplace. The agency is in charge of implementing country of origin labeling.

USDA Administrator for the Grain Inspection, Packers and Stockyards Administration Dudley Butler - A trial lawyer from Mississippi, Butler is an active member of R-CALF. He also claims membership in the Coalition for Sustainable Agriculture and the Organization for Competitive Markets. He has testified before Congress on matters involving agriculture and arbitration and served on a mandatory price reporting task force that lead to the passage of a mandatory price reporting law by Congress.

GIPSA facilitates the marketing of livestock, poultry, meat, cereals, oilseeds, and related agricultural products, and promotes fair and competitive trading practices for the overall benefit of consumers and American agriculture.

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Your Capitol Concerns NCBA Supports Free-Market Principles for Livestock Industry Senators Mike Enzi, Byron Dorgan, Chuck Grassley and Tim Johnson introduced a bill that would severely hinder the ability of the U.S. cattle industry to compete in a free marketplace. The so-called “Livestock Marketing Fairness Act” (S. 1086) would impose dangerous government intrusion on the livestock industry — potentially destroying the value-added marketing alliances that the U.S. cattle industry has established.

Cattle producers focus on consumer preferences has led to many innovative marketing programs that have improved the quality of beef, given consumers what they want, and made many of America’s ranchers more profitable and efficient.

These marketing arrangements offer producers the freedom and flexibility to market their cattle in ways that provide the best return on their investment.

The Packers and Stockyards Act has been successful in combating anti-trust, collusion, price fixing and other illegal activities that damage the viability of the market and interfere with market signals. At the same time, it preserves producers’ rights to market their cattle in a way that ensures the highest quality product to meet the current consumer demand.

The Livestock Marketing Fairness Act would take away that right by amending the P&SA so that it limits producers’ opportunities to participate in alternative marketing arrangements — such as forward contracting — and negotiate private business transactions.

Mexico and Canada File WTO COOL Complaints In formal complaints filed with the World Trade Organization (WTO), Mexico and Canada claim that the U.S. country of origin labeling law appears to be inconsistent with U.S. obligations under the WTO.

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July 2009 l National Cattlemen

Capitol Talks Jeff Nogan, Dick McElhaney, Pennsylvania Sen. Arlen Specter, and Dave McElhaney discuss cattle issues of interest recently in Washington, D.C. NCBA is concerned about the impact of COOL on relationships with our top two trading partners.

Beef trade with Mexico was worth nearly $1.4 billion in 2008, and trade with Canada came in at $716 million.

Together, the markets account for 58% of U.S. beef export trade.

NCBA Continues to Call for Transportation Reform NCBA and nearly 50 national agriculture associations are urging Congress to support efficient and safe rules for agricultural production and transportation. The groups sent a letter to the chairman and ranking member of the House Committee on Transportation and Infrastructure and the Subcommittee on Highways and Transit. They urged Congress to maintain the agricultural hoursof-service exemption within the transportation authorization bill, and pledged their assistance in ensuring that this exemption is maintained with the highest possible regard to safety.

The flexibility provided by this exemption is needed in the agricultural industry to ‘finish the job’ during busy planting and harvest season, when seasons and weather patterns do not comply with normal work schedules,” states the letter. “Elimination of this exemption would not only increase

agricultural operating costs and reduce transportation efficiency, but it may also create safety issues during harvest and planting seasons if producers are required to hire more temporary and possibly less-experienced drivers.”

The livestock industry relies on the ability to transport livestock across state lines, and non-uniform transportation laws are severely impacting the day-to-day operations of producers and haulers by causing confusion and added expenses.

NCBA is also urging support for current transportation legislation (H.R.1799 and H.R.1220) that would allow for increased truck weights for certain agriculture vehicles.

CWT Herd Retirement Cooperatives Working Together has tentatively accepted 388 bids representing 102,898 cows and 2 billion pounds of milk production capacity in the first of a series of herd retirements planned over 12 months.

Cows were to begin moving off dairies by late May. This amounts to roughly 4045 million pounds of beef, which if brought to market over a threemonth period, would be roughly 8,000 head of cows per week. An across the board (live cattle) market impact would be less than 50 cents/cwt. using

Your Capitol Concerns these assumptions, based on weekly averages earlier in the year.

The expected May-July time period for marketing these cows is certainly preferred to a period closer to fall.

The marketplace will be watching for any weakness in the milk market that could prompt dairymen to liquidate more cows on their own.

NCBA Urges Obama to Strengthen U.S.-China Trade Relationship NCBA joined with more than 30 companies and associations in urging President Obama to take steps to strengthen U.S. economic relations with China by supporting a robust Joint Commission on Commerce and Trade (JCCT). The JCCT — led by the U.S. Trade Representative and the U.S. Department of Commerce — is a results-driven and effective mechanism for promoting further access to the Chinese market and ensuring U.S.

companies have a fair trading structure with meaningful opportunities to compete in the Chinese market.

NCBA continues to push for greater advancements in liberalizing trade with China. China is currently closed to U.S. beef exports and represents one of the largest potential growth markets for U.S. beef — worth in excess of $100 billion. With 1.3 billion consumers, rising income levels, and rapid urbanization, growth in China’s per capita beef consumption outpaced all major beef-consuming countries during the last decade.

China demonstrates a niche demand for certain beef cuts, such as offal, that are underutilized in the U.S. and can be marketed in China as premium products. China officially banned U.S. beef and offal after the discovery of a single case of BSE in the U.S. cattle herd in December 2003.

NCBA Seeks Fair and Science-Based Trade NCBA joined a coalition of more than 50 national agriculture and business groups to urge President Obama to support open markets and level playing fields for international trade by upholding U.S. obligations under World Trade Organization (WTO) agreements. In a May 1 letter, the coalition expressed opposition to a provision (Section 727) in the 2009 Appropriations Act that effectively bans imports of some Chinese chicken products, without allowing the USDA Food Safety and Inspection Service to conduct a necessary and appropriate risk assessment on whether these imports pose any risk to American consumers. Because the provision specifically targets imports from only one country, it conflicts with the U.S. obligation to treat trading partners equally and has prompted China to request a WTO consultation.

Fighting for Western Ranchers

Public Lands Council Act Takes Public Lands Out of Public Use

The Public Lands Council on April 29 sent a letter to the House Committee on Natur al Resources opposing H.R. 980, also known as the Northern Rockies Ecosystem Protection Act (NREPA).

NREPA would set aside 19 million acres as wilderness areas in Montana, Wyoming, Idaho, Oregon, and Washington and create a new category of land-use designations, called “Biological Connecting Corridors.” These would be offlimits for livestock grazing. Nearly 8 million acres would be set aside as these corridors connect the wilderness areas. It also designates approximately 2,000 miles of river corridors for inclusion in the Wild and Scenic River system.

“This bill would make an area

nearly the size of South Carolina essentially off-limits for public use,” explains Skye Krebs, PLC president and a rancher from Ione, Ore. “It is a complete departure from the multiple-use tradition of our country’s shared federal lands.”

Joel Bousman, a PLC member and county commissioner of Sublette County, Wyo., testified before the House Committee on Natural Resources. “In a Western county consisting of 80% federal land, we thrive on multiple use of our natural resources, with the end result being a sustainable and diverse economy,” Bousman says. “Forcing more people into a smaller area available for multiple use will result in overcrowding and more resource management problems, as well as damages to the natural community.

“Many Western ranchers depend

on public lands for livestock grazing,” explains Krebs. “This bill would make it difficult for them to continue their operations.”

PLC Applauds DOI Decision on Polar Bear Rule

The Public Lands Council supports U.S. Department of the Interior Secretary Ken Salazar’s decision to retain a special rule related to the listing of the polar bear as a threatened species under the Endangered Species Act. The rule would have allowed incidental threats to polar bears — such as greenhouse gas emissions resulting from activities outside the bear’s range — to be regulated under the ESA. PLC agrees with Secretary Salazar that “the Endangered Species Act is not the proper mechanism for controlling our nation’s carbon emissions.”

www.NationalCattlemen.com

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