North Star Farms old-fashioned, yet innovative, Page 2.
M & S makes products from recycled materials, Page 8.
Black Beards sells N.D. grains for wheat weaving, Page 12.
Minot Daily News
SATURDAY, APRIL 25, 2015
Agriculture/Pride of Dakota Ranchers enjoy good times in cattle market By JILL SCHRAMM
Staff Writer jschramm @minotdailynews.com Record cattle prices haven’t changed the routine on the ranch for John Thomas. He still braves the winter cold to ensure his herd’s protection during snowstorms, and he takes pleasure in watching developing calves frolic around their mothers in the warmth of summer. He raises cattle because he enjoys them, but the economics of ranching in the past few years have been a bonus. “It’s easier to make things work,” Thomas said of the cash flow. Having built a herd of 10 starter cows 45 years ago into an operation expected to calve at least 360 newborns this spring, Thomas is content with his herd size at a time when things are good in the ranching business. “We are pretty much maintaining,” said Thomas, who has brought two sons into the operation over the years. “We have been at the numbers we are at for the last couple of years.” Having experienced the ups and downs of ranching, he’s conservative with the extra income generated by current strong cattle prices, investing in a limited amount of livestock equipment. “I know what some of the lean years will bring so I try not going overboard,” Thomas said. The diversity of raising both livestock and grain helps manage the ebbs and flows. “Now that the grain prices are lower, you can rely on the cattle to carry a lot of the load,” he said. The drop in corn prices has been welcome on the input side of the cattle, too. “It’s a littler easier to treat your animals and use corn in the diet,” he said. Last year was phenomenal for the beef industry, said Tim Petry, livestock marketing economist with the North Dakota State University Extension Service, Fargo. “We had record high prices and record high profits. You may say the stars all aligned perfectly,” he said. “It seems like everything that can affect prices was supportive last year.” For several years, many of the large cattle-producing areas in the United States experienced drought and tight operating margins. Cattle numbers declined, reducing the market supply. At the same time, the export market for U.S. beef ramped up. High beef prices typically would stymie demand, but declines in cattle numbers occurred in many of the major cattleproducing countries, such as Canada, Australia and areas of South America, largely due to weather-related issues, Petry said. Between a stronger than expected export market and the improving U.S. economy, the demand for beef has been high. As short supply was forcing prices up, an abundance of corn was driving ranchers’ feed costs down. Competition from other meat sources can influence beef prices as well, but the expectation of a 3 percent
Jill Schramm/MDN
Cows come to graze as feed is spread at the John Thomas ranch near Velva April 6.
Technology results in better herds
A new calf lies in the hay on the John Thomas ranch April 6.
Beef cows that calved Dairy cows that calved All cattle, including calves Cattle, on feed Sheep, including lambs Hogs (December 2014)
904,000 16,000 1.65 million 44,000 64,000 139,000 — Source: USDA National Agricultural Statistics Service
N.D. Livestock Inventory January 2015
rise in hog numbers was dashed due to a viral disease impacting herds. Poultry growers suffered genetic issues in flock breeding. The peak of the beef market occurred last November, Petry said. Prices since have declined some, although they remain at record highs for this time of year, he said. The forecast is for prices to continue to fall off somewhat. Issues in the poultry and hog industries have
resolved, and those industries can rebound more quickly than the beef industry due to their shorter reproduction cycles. The USDA reports pork production should be up 6 percent over last year’s lower than expected numbers, Petry said. Pork and poultry will give beef more competition for the consumer dollar. Nationally, cattle ranches are producing more calves but they also are putting
more heifers back into replacement rather than sending them to market. “Beef production in 2015 is still going to be down about 1 percent over last year, which was down 6 percent,” Petry said. “From a supply standpoint, we are going to have less beef in 2015.” On the input side, ranchers are watching what happens with corn prices. Corn acreage is expected to drop
Jill Schramm/MDN
nationally by 1.4 million acres, according to the latest report from the USDA on planting intentions. In addition, Petry said, if continued dry conditions cut yields, that puts upward pressure on corn prices. “There’s a very direct relationship between fall calf prices and corn,” Petry said. A 10-cent increase in corn price can translate into a $1 less a hundredweight on calves. Petry estimated calf prices will be down $20 to $25 a hundredweight this fall. “That would still be the second highest price ever, and it would still be profitable,” he said. Higher prices and lower input costs aren’t much good if you don’t have the cattle, though, and that’s where many ranchers See RANCH — Page 4
Technology is changing what it means to raise cattle in America. “A lot of attention has been put into studying the genomics of cattle and tools for selection to selectively improve and breed cattle, and itʼs getting fairly commonplace now,” said John Dhuyvetter, livestock specialist with North Central Research Extension Center. Companies are offering DNA testing to identify genes for traits related to favorable production, such as carcass tenderness and marbling, fertility or growth curves. Dhuyvetter said it is used most extensively with breeders who offer bulls for commercial production. “Thereʼs research dollars being put into it for additional traits,” he said. Itʼs an area of science still being explored, but early adoption is occurring and potential is apparent, he said. Some of the reliance on technology is consumer-driven. DNA testing can reduce the need for other tools, such as antibiotics and growth promoters. Bulls with good genetics also are being cloned in some instances, Dhuyvetter said. With the strong market for beef cattle, ranchers are looking to invest in better cattle, which means good prices being paid for quality bulls, he said. “We are seeing people optimistic about the future and taking a time of prosperity to make investments to improve efficiency,” he said. “Thereʼs some good outcomes coming from good times.”