2021 Fall Directions by NCBA

N A T I O N A L CATTLEMEN

The trusted leader and definitive voice of U.S. cattle and beef industry

2021 DIRECTIONS

THE OFFICIAL PUBLICATION OF NCBA

NCBA.org

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CATTLEMEN

THE OFFICIAL PUBLICATION OF NCBA 2021 NCBA Leadership: President President-elect Vice President Treasurer Federation Division Chair Federation Division Vice-Chair Policy Division Chair Policy Division Vice-Chair Immediate Past President Chief Executive Officer Senior Editors

Jerry Bohn Don Schiefelbein Todd Wilkinson Joe Guild Clay Burtrum Brad Hastings Mark Eisele Buck Wehrbein Marty Smith Colin Woodall John Robinson Jill Johnson

Editor

Sarah Drown

Contributing Writers

Wendy White

TA B L E O F

CONTENTS

Ashley Willits Hunter Ihrman Sigrid Johannes

4..................LETTER FROM THE PRESIDENT

Don Waite Dancinee Jennings

6.......................................LETTER FROM THE CEO

For ad sales, contact Shannon Wilson 303-850-3345, Nicole Bechtel 303-850-3465, or Jill DeLucero 303-850-3321.

10.........................................................STATE OF NCBA

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Contact NCBA: 9110 E. Nichols Ave., Suite 300, Centennial, CO 80112 (303-694-0305); Washington D.C.: 1275 Pennsylvania Ave. N.W., Suite 801, Washington, D.C. 20004 (202-347-0228). National Cattlemen’s Beef Association reserves the right to refuse advertising in any of its publications. National Cattlemen’s Beef Association does not accept political advertising in any of its publications. National Cattlemen’s Beef Association does not accept any advertising promoting third-party lawsuits that have not been endorsed by the board of directors. ©2021 National Cattlemen’s Beef Association. All rights reserved. The contents of this magazine may not be reproduced by any means, in whole or part, without the prior written consent of the National Cattlemen’s Beef Association.

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15...................................................................TAX UPDATE 18..........................SUSTAINABILITY UPDATE 22.................................STATE OF THE FEDERATION 32.......................................DIRECTIONS STATISTICS 58.............................................WEATHER OUTLOOK 62......................................................MARKET UPDATE 67.....................................DROUGHT MANAGEMENT 72.......................PRODUCER EDUCATION UPDATE 78...............................................CONSUMER REPORT

Jerry Bohn NCBA President Kansas

Clay Burtrum NCBA Federation Chair Oklahoma

Don Schiefelbein NCBA President-Elect Minnesota

Brad Hastings NCBA Federation Vice-Chair Texas

Mark Eisele NCBA Policy Chair Wyoming

Todd Wilkinson NCBA Vice President South Dakota

Buck Wehrbein NCBA Policy Vice-Chair Nebraska

DENVER OFFICE

9110 E. Nichols Ave. Suite 300 Centennial, CO 80112 303-694-0305 membership@beef.org

WASHINGTON D.C. OFFICE Joe Guild NCBA Treasurer Nevada

Marty Smith Immediate Past President Florida

Colin Woodall NCBA CEO Colorado

1275 Pennsylvania Ave. N.W. Suite 801 Washington, D.C. 20004-1701 202-347-0228

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LETTER FROM THE

PRESIDENT Jerry Bohn, NCBA President

The past year was a trying time for all of us in the cattle industry. Between COVID-19, drought, wildfires and new political headwinds in Washington, a challenge is always lurking behind a corner for our industry. Still, American farmers and ranchers have met every challenge head on while remaining a source of relentless optimism. For many of us, the Cattle Industry Convention in Nashville, Tenn., was the first big trip away from home in a while. Engaging in conversations with new and old friends reminded me of the uniqueness and resiliency of our industry. In Nashville, we rolled out cattle industry sustainability goals. Sustainability is Washington’s new focus, and our industry is prepared. For generations, ranchers have used practices that conserve land and water. We already understand how to be good stewards of our ecosystem. With these new sustainability goals, we can finally share that story and ensure those unfamiliar with our industry know how sustainable we truly are. Farmers and ranchers continually look for ways to improve their cattle and produce higher-quality beef. U.S. cattle producers raise the highest quality cattle and beef in the world and have worked hard for many years to build a brand consumers love and trust. One of NCBA’s top policy priorities is advocating for a business climate that will increase opportunities for producer profitability across the board. As part of that effort, NCBA is calling on the U.S. Department of Agriculture (USDA) to initiate reforms to enable producers to better capitalize on consumer demand by strengthening voluntary labels that educate purchasers and truly differentiate our products in the marketplace. Just as interest exists among consumers to know more about the food they purchase, U.S. cattle producers increasingly desire to market beef by highlighting information such as origin of the cattle to capture potential market demand driven by state, regional or national sentiment. Unfortunately, USDA’s longstanding “Product of the USA” (POTUSA) label serves as a major disincentive in that regard and is a disservice to American consumers and cattle producers alike. The POTUSA claim implies that a beef product is entirely of U.S. origin, but imported beef only minimally processed or repackaged in a USDA-inspected facility is eligible to be labeled “Product of the USA”. It is not subject to source verification, is not tied to any kind of food safety standard, and is applied by packers and retailers in a manner that does not deliver value back to the cattle producer. NCBA pushed back on this misleading label, and I was encouraged to see USDA announce a top-to-bottom review of the label based on a petition NCBA filed in June. 4

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It is our hope that USDA’s review—which should incorporate our petition seeking a change in the label from “product” to something more accurate like “processed”—will pave the way for regulatory updates supporting the use of only voluntary, source-verified origin claims through programs like USDA-AMS’ Process Verified Program. This will allow our producers to truly differentiate their products in the marketplace and capture more of the beef dollar. NCBA is also taking action to address processing capacity and price discovery issues in the cattle markets. Our Live Cattle Marketing Working Group developed a system of triggers that monitor the amount of cash trade occurring in different regions of the country. At the same time, NCBA is pushing for H-2A visa reforms to alleviate some of the worker shortages at ranches and packing facilities, strengthening the beef supply chain and keeping beef on grocery store shelves. Even with all the other issues facing our industry, none of it matters if producers are forced out of business because of high taxes. NCBA is leading the fight to protect key tax provisions that facilitate generational transfer of family-owned agricultural businesses, such as farms and ranches. While this is not a new fight for NCBA, we have taken an aggressive approach to this issue since President Biden announced his “American Families Plan” in July. Through the plan, Biden proposed changes to longstanding provisions in the federal tax code, such as stepped-up basis and capital gains tax rates, that serve as tools for families to pass their operation from one generation to the next. The team at NCBA is committed to working with members of Congress and the Biden administration to help them understand the complex structure of family-owned businesses, specifically farms and ranches. As a result of our grassroots letter campaign, we were able to send nearly 850 letters to elected officials. These letters make a significant impact, because as we have said time and time again — the most powerful advocacy tool in D.C. is the real-life impact stories of farmers and ranchers have. NCBA is involved in so many policies it is impossible to summarize them all in one letter. Most importantly, you should know that the NCBA team is working tirelessly on your behalf every day. We are in the halls of Congress, the White House and federal agencies sharing your story. I am especially proud that, even as government offices and other industry groups closed their doors at the start of COVID-19, NCBA remained open. Our team was in the office and working on your behalf day-in and day-out. This year especially, I have seen our industry’s no-quit attitude, and that is a message we are proud to share. DIRECTIONS 2021

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The cattle industry is all about innovation, hard work and continual improvement. Cattle production today is not the same as it was even five years ago.

LETTER FROM THE

CEO

Colin Woodall, NCBA CEO If you missed the Cattle Industry Convention and NCBA Trade Show in Nashville, Tenn., this past August, you missed a great time. Much fun was had seeing everybody inperson, and given the circumstances, it was a pretty normal convention experience. Convention is more than just having fun; it is where we conduct the business of the association. Part of that business was the roll-out of the Beef Industry Sustainability Goals. When NCBA’s Board of Directors passed the NCBA Strategic Plan last February, they made the decision that we needed to be a leader in the sustainability discussion by setting beef industry sustainability goals. Cattle producers nominated by our state affiliate partners were reviewed by our officers and selected to serve on a working group led by NCBA Past President Marty Smith. The working group spent months looking at data and discussing what these goals should look like. The discussions this working group had were intense, and the debate was healthy and robust. They were focused on developing bold and audacious goals that would showcase the great work being done by cattle producers across the country. Focusing just on the environment, however, was not their only priority. For us to continue our great stewardship of the land, our operations have to be sustainable, and the only way to make that happen is to find ways to help you be profitable. Furthermore, we discovered that when we ask consumers their thoughts on beef industry sustainability, they often bring up animal welfare. The working group factored that into their discussions, too. 6

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So, what do our goals look like? One of our four goals is illustrating how we care for the planet by demonstrating the climate neutrality of U.S. cattle production by 2040. Another goal is to clearly outline the care we show for our animals and land by enhancing trust in cattle producers as responsible stewards of their animals and resources; this is accomplished by expanding educational opportunities in animal care and handling programs to further improve animal well-being. We will talk about how we also care for our people through an additional goal to continuously improve our industry’s workforce safety and well-being. The final goal is about building our resiliency. To do that, NCBA will create and enhance opportunities that result in a quantifiable increase in producer profitability and economic sustainability by 2025. These are truly bold and audacious goals that will require a tremendous amount of innovation and work to achieve. The cattle industry is all about innovation, hard work and continual improvement. Cattle production today is not the same as it was even five years ago. We are always getting better at what we do, and that is how we will ultimately achieve our goals. This edition of Directions is one tool to help us continually improve. You will find an amazing amount of information and data in this publication to help you become a better producer. Continual improvement is what we have always done, and it is how we will keep cattle production sustainable. DIRECTIONS 2021

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CORPORATE MEMBERSHIP DIRECTORY

These are companies that have teamed with NCBA as corporate members, demonstrating their commitment to the beef industry. Their involvement strengthens our future. NCBA members are urged to support these partners in turn by purchasing their products and services. Those who would like to become corporate members with NCBA (securing premium booth placement at the annual convention and trade show as well as other membership benefits), please call the Corporate Relations team at 303-694-0305.

Animal Health International

Merck Animal Health

www.animalhealthinternational.com

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Boehringer Ingelheim Animal Health Inc.

Micro Technologies

www.bi-vetmedica.com/species/cattle.html

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Caterpillar

Moly Manufacturing

Central Life Sciences

New Holland Agriculture

Corteva Agriscience™

Purina Animal Nutrition LLC

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www.centrallifesciences.com

www.newholland.com

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Elanco Animal Health www.elanco.com

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John Deere

www.deere.com

www.ritchiefount.com

Roto-Mix

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Masey Ferguson

Zoetis Animal Health

Allflex Livestock Intelligence Bayer Environmental Sciences CHR HANSEN Farm Credit Council

Huvepharma, Inc. Lallemand Animal Nutrition Norbrook, Inc. Rabo AgriFinance RAM Trucks

www.agcocorp.com/brands/massey-ferguson

44 Farms ADM Animal Nutrition, Inc. Agri-Pro Enterprises of Iowa, Inc. AgriWebb Alltech, Inc. American National Insurance Arm & Hammer Animal and Food Production Arrowquip Bank of America Merrill Lynch Barenbrug USA Bass Pro Shops/Cabela’s Behlen Manufacturing Bimeda BioZyme Bush Hog Inc. Cargill Animal Nutrition Case IH CME Group DATAMARS Livestock Dell Technologies Diamond V ENDOVAC Animal Health Farmers Business Network Food Safety Net Services Furst-McNess Company Gallagher Gravely, an Ariens Company Greeley Hat Works Grov Technologies American Foods Group Cargill Meat Solutions Certified Angus Beef Culver’s Darden Restaurants empirical Fareway Stores, Inc.

Ritchie Industries Inc.

NATIONAL CATTLEMEN

Hayden Outdoors Real Estate Hyundai Construction Equipment IMI Global International Stock Food Jorgensen Land and Cattle Kent Nutrition Group Krone Kubota Tractor Corporation Kunafin “The Insectary” Laird Manufacturing Meat & Livestock Australia, Ltd. Micronutrients National Corn Growers Association Nationwide Neogen New Generation Supplements Noble Research Institute Novus International Parker McCrory PBS Animal Health

www.zoetis.com

Phibro Animal Health Pneu-Dart Priefert Ranch Equipment QualiTech, Inc Quality Liquid Feeds Red Angus Assoc. of America R&R Machine Works RFD-TV Roper/Stetson/Tin Haul Apparel and Footwear South Dakota State University Stone Manufacturing Superior Livestock Supreme International Syngenta Tarter Farm and Ranch Equipment The Hartford Livestock Insurance The Vit-E-Men Co. Inc./Life Products Trans Ova Genetics U.S. Premium Beef Vermeer Vitalix Vytelle Westway Feeds Y-Tex Zinpro Performance Minerals Five Guys McDonald’s Corporation National Beef Packing Omaha Steaks Performance Food Group Preferred Beef Group Tyson Fresh Meats

DIRECTIONS 2021

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DIRECTIONS 2021

NATIONAL CATTLEMEN

A Look Into Issues on the Hill Cattle Markets Fair, competitive and transparent markets are essential to the profitability of cattle producers in every sector of our industry. NCBA is working to support efforts that return market leverage to producers. The Regional Triggers Subgroup continues to implement and evaluate NCBA’s Voluntary Approach to Achieve Robust Price Discovery in the Fed Cattle Market that was developed following the 2020 Summer Business Meeting. This framework explores a voluntary, industry-led solution to achieving robust price discovery via increased levels of negotiated trade. The subgroup reported that a major trigger was tripped in Q1 of 2021, and no major trigger was tripped in Q2. If another major trigger is tripped in 2021, NCBA will pursue a legislative or regulatory solution to increase negotiated trade. Significant progress has been made on this front, and NCBA continues to lead the way to improve price discovery. At the 2021 Annual Convention in Nashville, Tenn., the Live Cattle Marketing Committee passed a policy directive to establish a working group that will explore potential improvements to the reporting and availability of market data. No matter how our members choose to market their live cattle, there is no one silver bullet solution to address these complex challenges. NCBA is tackling the issue from multiple angles by: •

Working with USDA and Congress to support the expansion of beef processing capacity, specifically among independent, regional and local packing facilities.

•

Working with Congress to secure reauthorization of Livestock Mandatory Reporting (LMR). This legislation requires packers to report market information to USDAAMS, who then report it to the public.

•

Applying pressure to the U.S. Department of Justice to release the findings of their investigation into whether the packing sector is engaging in anticompetitive or antitrust practices.

Transportation Transporting live cattle in a manner that is humane, safe and efficient is a top priority for our producers and livestock haulers. Transportation directly impacts animal safety and well-being, as well as the security of a reliable, efficient beef supply chain. The existing hours of service (HOS) regulations for livestock haulers limit on-duty time to 14 hours, with a maximum drive time of 11 consecutive hours. The driver must then rest for 10 consecutive hours before returning to duty. For the great majority of trips made by our livestock haulers, this is simply not enough drive time to accommodate the realities of hauling live animals across the country. NCBA is working hard to ensure federal regulations are flexible enough to allow our drivers to do their jobs safely and humanely, while keeping grocery store shelves stocked with beef. NCBA is doing this by: •

Asking Congress to provide another ELD exemption for livestock haulers through the appropriations process.

•

Securing an extension of the HOS exemption from the Federal Motor Carrier Safety Administration (FMCSA), the most recent of which extends through Nov. 30, 2021.

•

Ensuring the current 150 air-mile exemption allows anyone hauling agricultural commodities to be exempt from hours-of-service rules until they are outside of the 150-air mile radius (172 road miles) of their starting point for the day. We are working to permanently secure the same exemption for the back end of agricultural commodity hauls to provide added flexibility during the unloading period.

ESA/Wildlife Cattle producers play a vital role in the conservation of wildlife species and habitat, but the Endangered Species Act (ESA) creates significant additional burdens in these efforts. An imbalanced focus on the listing phase, unclear or constantly changing population targets, and inefficient procedures within the U.S. Fish and Wildlife Service (FWS), have left species languishing on the list long after FWS has publicly declared them as recovered. This wastes time, creates uncertainty for

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DIRECTIONS 2021

landowners and prevents limited taxpayer funds from going to the animals that truly need help. In June 2021, FWS and the National Marine Fisheries Service announced their intent to roll back ESA reforms that NCBA helped secure in 2019. As federal agencies consider changes to the implementation of the ESA, NCBA is focused on the following priorities: •

Cattle producers must have a voice in the process. ESA listings have a direct impact on cattle producers’ ability to be responsible stewards of the land and water. Federal regulators must consider the good work already done when evaluating a species’ status.

•

Cattle producers need the flexibility and incentives to pursue voluntary conservation projects. Ranchers and farmers do a tremendous amount of voluntary environmental work each day, even when it comes at a financial or personal cost to their operation. ESA listings discourage or prohibit much of this voluntary work, resulting in unintended residual harm to wildlife and the entire ecosystem.

•

Species must be efficiently delisted when they are fully recovered. Rampant litigation threatens FWS’s ability to ever delist species, despite successful recovery efforts. NCBA is involved in litigation to defend the delisting of the gray wolf, and we will continue to push back against the overreach and abuse that arises from failure to delist recovered species.

Product of the USA (POTUSA) In lieu of the “Product of the USA” (POTUSA) label, NCBA is advocating for a more appropriate generic label, such as “Processed in the USA.” In addition, NCBA requests FSIS to render all other claims relating to U.S. origin ineligible for generic approval. Further, NCBA hopes to work with USDA’s Agricultural Marketing Service (AMS) to proactively educate cattle producers, processors and retailers about the various opportunities that exist to develop voluntary, verifiable origin marketing claims that deliver tangible benefits to cattle producers without violating rules of trade.

DIRECTIONS 2021

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Voluntary source-verified labels represent investments made by producers to continually improve their product and meet consumer demand. Marketing through source-verification will provide a more accurate and truthful description of the product. This will reduce the potential for consumer confusion while increasing the ability for cattle producers to capture additional premiums for their product. •

In 2019, NCBA established the “Transparency in Labeling Working Group” to investigate producer concerns about the “Product of the USA” label.

•

After several months of investigation, research and discussion, the producer-led group recommended new policy for NCBA to address these concerns.

•

NCBA members approved the policy in 2020, strengthening NCBA’s support for the use of voluntary source of origin claims and USDA verification of any source of origin claim or label.

•

In June, NCBA submitted a petition to USDA-FSIS to eliminate the generic “Product of the USA” label.

•

In July, USDA announced a top-to-bottom review of the POTUSA label. NCBA stands ready to work with USDA throughout that process.

Infrastructure Infrastructure investments are a key component in ensuring the long-term viability of rural America, and specifically the agricultural industry. NCBA's goal for the “Infrastructure Investment and Jobs Act of 2021” has been straight forward — get key policy priorities that benefit farmers and ranchers included in the bill, while ensuring that the budget is not balanced on the backs of those same farmers and ranchers through changes to long-standing provisions in the federal tax code.

Included in the bipartisan infrastructure package were several key policy priorities for NCBA including: •

Additional flexibility for livestock haulers.

•

Rural broadband funding.

•

Federal commitment to improvement of the permitting process for water infrastructure projects.

Modernizing America’s transportation infrastructure is important to our cattle producers across the country, and the Infrastructure Investment and Jobs Act is a step in the right direction – investing an additional $110 billion in U.S. roads and bridges, $65 billion for broadband and hours-of-service reforms that provide flexibility for our livestock haulers who maintain a high level of safety on the roads while also ensuring grocery store shelves remain fully stocked with beef. In addition, historic drought conditions throughout the West serve as a reminder that water infrastructure investments are essential to prepare for changing hydrological conditions, expanding populations, pressing environmental needs and other challenges. International Trade This year, the U.S. saw gains in beef exports to Korea, Japan and China. Exports to Asia provide a way for American cattle producers to market the cuts of beef that are less popular in the U.S., such as tongues, short plate and liver. These products often sell for a premium in foreign markets, providing U.S. producers with added value for their cattle. U.S. beef exports reached a record pace during the first half of 2021. July beef exports totaled 122,743 metric tons valued at $939.1 million, a 45 percent increase from a year ago. According to the U.S. Meat Export Federation, January through July beef exports set records at 822,830 metric tons, with value up 30 percent to $5.58 billion.

Continued on page 14

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NCBA

12 NATIONAL CATTLEMEN CATTLEMEN

DIRECTIONS 2021

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Continued from page 12

•

Other countries crave American beef, and NCBA is working to expand market opportunities for American cattle producers by:

Climate and Sustainability

•

Building on numerous trade wins, including the U.S.Mexico-Canada Agreement, Japan Bilateral Trade Deal and U.S.-China Economic and Trade Agreement.

•

Supporting reauthorization of Trade Promotion Authority.

•

Working with federal agencies and trade negotiators to advance science-based trade policy that removes tariff and non-tariff barriers.

Waters of the United States  The 2015 Waters of the United States (WOTUS) rule allowed expansive government overreach which disrupted cattle operations and led to years of litigation. In 2020, the Trump Administration finalized the Navigable Waters Protection Rule (NWPR), a major win for cattle producers that addressed many of the issues caused by WOTUS. Recently, a federal court in Arizona struck down the NWPR and the Environmental Protection Agency (EPA) and Army Corps of Engineers halted implementation of the Navigable Waters Protection Rule and are implementing “Waters of the United States” consistent with the pre-2015 regulations until further notice. Earlier in the year, the Biden Administration announced its intent to repeal and replace the NWPR. NCBA will always work to protect cattle farmers and ranchers from federal overreach. NCBA will support cattle producers throughout this process by: •

Submitting comments and recommendations to the EPA and Army Corps.

•

Working with state affiliates and numerous producers to submit comments to the EPA and Army Corps during public listening sessions.

Monitoring rulemaking activity to ensure that the voices of farmers and ranchers are heard by policymakers.

Cattle producers have always been good stewards of our nation’s land and water. To underscore this message, NCBA released the U.S. Cattle Industry Sustainability Goals, a public commitment to continued environmental, economic and social sustainability. These goals were developed by a producer-led task force with grassroots input. By setting goals, NCBA is committing to continuous industry improvement while providing a way to measure and document those efforts.  The goals include: •

Demonstrating climate neutrality of U.S. cattle production by 2040.

•

Creating and enhancing opportunities that result in a quantifiable increase in producer profitability and economic sustainability by 2025.

•

Enhancing trust in cattle producers as responsible stewards of their animals and resources by expanding educational opportunities in animal care and handling programs to further improve animal well-being.

•

Continuously improve our industry’s workforce safety and well-being.

Learn more at NCBA.org/producers/sustainability.

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DIRECTIONS 2021 2021 DIRECTIONS

T A X UPDATE The Fight for Sound Tax Policy is a Fight for the Future of the Cattle Industry As lawmakers on Capitol Hill consider how to pay for massive spending proposals which align with President Biden’s “Build Back Better” agenda – farmers and ranchers across the country have become increasingly concerned about how changes to longstanding provisions in the federal tax code will affect the viability of their family-owned businesses.

land, equipment and livestock on the date of the owner’s death under a step-up in basis is critical for surviving family members. Discontinuing or restricting this benefit has the potential to create massive tax liability for heirs, either upon inheriting the family business or when they ultimately upgrade or transfer these assets. Another tool commonly used by farmers and ranchers are like-kind exchanges. Section 1031 of the Internal Revenue Code permits taxpayers to exchange business-use or investment assets for other like-kind assets while deferring taxable gain on the sale of old assets. This provision allows a taxpayer to reinvest a larger portion of realized gains upon disposition of an asset while deferring (not avoiding) taxation until a later date.

“When you tax a transfer – whether it’s a gift or at the time of death – it just devastates the operation,” said NCBA Vice President and South Dakota rancher Todd Wilkinson. “The changes that are being proposed are probably the worst possible changes that could hit the ag sector,” he continued. Family-owned businesses, specifically farms and ranches, serve as the economic backbone of rural America and are a critical part of a resilient food supply chain. With more than 40 percent of farmland expected to transition in the next two decades – now more than ever – it is imperative that Congress prioritize policies that support land transfers to the next generation of farmers and ranchers. “It’s the heart and soul of agriculture, the mom-and-pop operations, that run pretty significant assets that would just absolutely be devastated if they try to transfer it to the next generation,” added NCBA President-Elect and Minnesota cattlemen Don Schiefelbein. To preserve generations of environmental stewardship efforts, contributions to the economy and family tradition — it is crucial that Congress and the Biden administration consider the devastating effects changes to tax provisions, such as stepped-up basis, like-kind exchanges and capital gains taxes, will have on the next generation of producers. Tax Provisions are Critical Tools for Farmers and Ranchers A capital gain is a measure of an asset’s appreciation in value over a certain period of time. Essentially, this means that a capital gain is the difference between the amount received when an asset is sold and the asset’s original basis, or its purchase price (plus several adjustments like depreciation and the value of improvements). Typically, capital gains taxes are owed when an asset is sold. However, thanks to a long-standing provision of U.S. tax law, established under the Revenue Act of 1921, capital gains are not imposed on assets transferred at death. Instead, inherited assets receive a “step-up” in basis to fair market value and this becomes the tax basis for any subsequent sale by the heirs. Because assets in agriculture are typically held by one owner for several decades, resetting the basis on the value of the

DIRECTIONS 2021

LIKE-KIND EXCHANGES FOR FARMERS AND RANCHERS A FARMER WHO SELLS A PIECE OF PROPERTY

TRACT

and then BUYS A SECOND PIECE OF PROPERTY

DOESN’T HAVE TO PAY CAPITAL GAINS ON THE FIRST TRACT

UNTIL THE SECOND ONE IS SOLD,

TRACT

and THE FARMER WON’T OWE ANY TAXES IF HE OR SHE DIES WITHOUT SELLING THE SECOND TRACT

TRACT

N AT I ON AL C AT T L EMEN’ S BEEF ASSOCI AT I ON CENTER F OR PUBLIC POLICY

Other tax provisions important for farmers and ranchers include the estate tax (Death Tax) exemption limit, estate tax rate and Section 199A Qualified Business Income Deduction for small and family-owned businesses. The Tax Cuts and Jobs Act of 2017 (TCJA) temporarily increased the estate tax exemption amount to $10 million per individual or $20 million per couple — or, indexed for inflation, a basic exclusion amount of $11.7 million — and maintained a tax rate of 40 percent. Unfortunately, the exemption levels will revert to $5 million per individual or $10 million per couple (still indexed) on January 1, 2026. Section 199A provides an income tax deduction for unincorporated farms. Specifically, the provision allows non-corporate farms to receive a 20 percent deduction on farm income and is intended to provide parity for pass-through entities with the corporate tax rate. Studies Back the Importance of Long-Standing Tax Provisions When elected officials in D.C. consider proposals to long-standing tax provisions, it is important for them to understand why transfer taxes impact family-owned businesses in a unique, and often devastating way.

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“People who are writing the laws are damaging an industry they have no idea that they are having a consequential impact on — and it is consequential,” Schiefelbein said. “If any of the proposals happen, the real consequences would be a travesty.” “The decisions they are going to make will have a profound impact on producers across the land,” he added. NCBA is taking a comprehensive approach — sharing producer testimonials and backing those real-life impact stories with proven data. As part of the Family Business Estate Tax Coalition, NCBA commissioned a study to quantify the devastating impacts of repealing stepped-up basis. The study done by EY proves that family-owned businesses and the local economies they support would be hit hardest by a repeal. In a scenario, using a theoretical cow-calf operation, where stepped-up basis is no longer a tool for family-owned businesses to utilize when generational transfer occurs, the gains taxed at death would result in an immediate one-time tax liability equivalent to 280 percent of the farm’s annual income. In addition, this tax increase, whether via tax at death or carryover of basis, will have negative impacts on family-owned businesses, U.S. gross domestic product (GDP) and job creation both in the immediate and long term. Specifically, a repeal of stepped-up basis is: •

Estimated to decrease job equivalents by 80,000 jobs in each of the first 10 years and 100,000 jobs each year thereafter.

•

Estimated to decrease U.S. GDP by $10 billion annually or $100 billion over 10 years.

Recent research from the Texas A&M Agricultural and Food Policy Center builds on the EY report but with a focus on impacts across agriculture specifically. The study examines the consequences of two proposed bills: the “STEP Act,” which would eliminate stepped-up basis at the time of death of an owner, and the “99.5 Percent Act,” which would restrict the estate tax basic exclusion amount to $3.5 million and set a new top rate of 77 percent. The study proves, because of their unique structure, family-owned agricultural businesses are particularly susceptible to such changes in the tax code. In fact, if both bills were implemented, 98 percent of the representative farms used in the study would have seen an average tax increase of $1.4 million. (See graphic below.) Correcting the Narrative on Misguided Proposals Tax proposals from members of Congress and the Biden administration are misguided and target the very same familyowned agricultural businesses they have also claimed are an integral part of the U.S. economy.

very people they claimed to promote, Schieflebin added. “For all the talk they are doing about trying to help small producers and these young people getting started, nothing could be more damaging than these taxes,” Schiefelbein said. When making decisions, lawmakers must understand the complexity of family-owned businesses. Farmers and ranchers are typically “land rich and cash poor,” therefore, the implications the changes will have on them are vastly different than the implications these changes will have on traditionally wealthy estate owners. “We keep hearing these buzz words out of D.C., ‘We’re going to protect the farmer, we’re going to protect the rancher,’ well the proposals we are hearing now are going to flat put us out of business,” Wilkinson added. “People will talk about how the ag sector has a lot of value on a financial sheet, but when you take that operator and he has to have that pastureland or she has to have that farmland, it’s not like they can convert it to cash,” Wilkinson explained. “If they convert it to cash, they are out of business.” “Just like a plumber needs equipment to operate his business, the farmer and the ranchers’ assets – the cattle, the equipment, the land — those are tools of the trade, and unless you have those tools you aren’t going to be able to continue in business,” he added. NCBA’s Government Affairs team has made representing farmers and ranchers’ need for sound tax policy a top priority. Through new and existing relationships with members of Congress and the Biden administration, grassroots letter campaigns and a Hill-facing podcast — the NCBA team is deep in the trenches defending your ability to pass on your operation to the next generation. Planning for the Future One critical tool that producers have is to proactively plan for the future by investing in a generational transfer plan. When asked when producers should start planning for the future, Paul Neiffer, a certified public accountant and principal with CliftonLarsonAllen, explains, “They actually should start planning before they have kids. If you have a lot of time to plan and do it correctly, we can mitigate a lot of these estate taxes on a generational transfer.” “For farm and ranch families, the process should start early and be an ongoing process,” he continued. “Succession planning is a process, not a document.”

ECONOMIC IMPACT OF STEPPED-UP BASIS REPEAL

“Part of sustainability is economic viability. To follow through on Biden’s proposed plan . . . the economic viability, or the sustainability [of farms and ranches] will be lost,” Wilkinson said.

Upon death, would cause an immediate, one-time tax liability equivalent to 280 percent of the farm’s annual income

*Based on a theoretical, family-owned cow-calf operation

TAX LIABILITY

The administration is negatively impacting the 16

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FAMILY FARMS

Decrease US GDP by $10 billion annually or $100 billion over 10 years

GDP

Decrease job equivalents, by approximately 80,000 jobs in each of the first 10 years; and 100,000 jobs each year thereafter Nearly one-third of every dollar of revenue raised comes out of the paychecks of U.S. worker

JOBS

DIRECTIONS 2021

Although having a reliable succession plan can be costly, Neiffer explains that in a business, planning for the next generation should be viewed as an investment. “Doing the right estate plan . . . that can return 50 times, 100 times your investment,” Neiffer said. “This is an investment, it’s not a cost. If you want your next generation to be set up well, it’s worth making the investment now.” While there is uncertainty in D.C. regarding federal tax policy, and it is critical that farmers and ranchers communicate with their elected officials about the need for sound tax policy, it is also important to remember that when misguided proposals are made, business owners should understand the entirety of the situation and seek advice before immediately taking drastic action. “The key is you want to be prepared, but don’t pull the trigger,” Neiffer said. “You want to make sure you essentially have your gun, have your bullets, but you don’t need to shoot that gun if there isn’t a target to hit, and right now we don’t have a target to hit.” For producers looking for additional advice on planning for the future, Neiffer offers a wealth of knowledge through his “Farm CPA Today” blog and “The Farm CPA Podcast”. As producers continuously make decisions regarding the future viability of their operations, the Government Affairs team at NCBA is committed to fighting for your needs in D.C. and providing resources that assist in ensuring a future where the next generation of agriculturists can carry on the family legacy, contribute to environmental conservation and produce food to feed an ever-growing population.

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DIRECTIONS 2021

NATIONAL CATTLEMEN

SUSTAINABILITY

U P D A T E Cattle Production Exemplifies a Sustainable Approach

The topic of sustainability is one that the cattle industry has discussed for some time and with mixed response. But what remains steadfast is the love cattlemen and women have for their animals and affinity for taking care of the land. Producers have seen the articles and media claiming cattle production is the root cause of climate change and must be more sustainable to save the planet. There are presentations on consumer expectations, political ramifications, media hype and more. Every speaker has their own approach, their own appeal, and many times, their own science or facts. These inconsistencies in messaging around the topic of sustainability led to mixed reactions from consumers and bold statements from politicians who seem to power far too much of this discussion. The convergence of consumer opinions and political maneuvering was the tipping point for NCBA leadership to commit to stepping into the sustainability conversation in a big way and use this focus as an opportunity to tell the excellent story farmers and ranchers have to share. “We work hard to protect our natural resources, and it does not sit well when our own commitment is questioned,” said NCBA CEO Colin Woodall. “Our connection and dependence on natural resources is the reason we must lead and tackle sustainability head-on. Regardless of how you feel about climate change and sustainability, the issue is not going away.” As part of its strategic plan, NCBA leaders asked members to really dig into sustainability and recognize the strategic nature of the industry charting its own course on this subject rather than playing defense against more rules, regulations and restrictions. This strategic focus led to the organization of a grassroots, producer-led task force with the directive of setting cattle industry sustainability goals. On Aug. 12, during the 2021 Cattle Industry Convention and NCBA Trade Show, producers solidified U.S. cattle ranchers’ commitment to environmental, economic and social sustainability with the release of U.S. cattle industry sustainability goals. Beef producers in the U.S. are already the global leaders in sustainable beef production. Setting these goals further enhances the sustainability of the U.S. food system and

set targets demonstrating to the world that producers are committed to continued improvement. The goals for the U.S. cattle industry include: •

Demonstrate climate neutrality of U.S. cattle production by 2040.

•

Create and enhance opportunities that result in a quantifiable increase in producer profitability and economic sustainability by 2025.

•

Enhance trust in cattle producers as responsible stewards of their animals and resources by expanding educational opportunities in animal care and handling programs to further improve animal well-being.

•

Continuously improve our industry's workforce safety and well-being.

“Cattlemen and women have demonstrated their commitment to sustainability for generations,” said Marty Smith, a Florida cattleman and NCBA past president. “They work tirelessly to protect the land, water and air resources in their care. Through countless improvements in genetics, grazing management, manure handling and the adoption of many other technologies, this is just the next step on our industry’s path. Producers deserve recognition for their use of cutting-edge practices and technologies that minimize environmental impact. By setting goals, we’re publicly committing to continuous improvement and setting targets that allow us to measure and document those efforts.” Environmental Science and Sustainability First comes the stewardship of natural resources. Environmentally, the goal is to "demonstrate the climate neutrality of U.S. cattle production by 2040”. The U.S. already produces the most sustainable beef in the world as a result of decades of improvement and innovation. In fact, beef production in the U.S. has a carbon footprint 10 to 50 times lower than other regions of the world, and according to the Environmental Protection Agency, greenhouse gas from beef cattle only represents 2 percent of emissions in the U.S. “The focus here is demonstrating climate neutrality which means minimal or no effect on acceleration of warming in the atmosphere,” said Jason Sawyer, an associate professor and researcher at the King Ranch Institute at Texas A&M. “Managing methane along with ways ranchers can reduce emissions and sequester carbon become the priorities within the goal.” A point regarding the environmental goal members of the task force stressed is that it is rooted in science and based, in part, on modeling conducted by Sawyer. The 2040 target is based on an annual methane reduction of 1.5 percent per year.

Continued on page 20

18 NATIONAL CATTLEMEN CATTLEMEN

DIRECTIONS 2021

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Sawyer noted that methane emissions from livestock cannot be completely eliminated, and cattle have an advantage over other proteins by taking and converting forage into high-quality protein. “Methane cannot go to zero without removing beef production totally,” he said. “So, elimination of methane is not the goal; managing it is the goal.” While the metrics used to determine climate neutrality are still being determined and there is still a need for research in this space, Sawyer said that current technologies producers employ like feed additives and improved genetics can mitigate methane emissions and advancements in these technologies will increase. Continued efforts to increase carbon sequestered over the landscape of grazing lands will also make a positive impact. Economic Sustainability and Stewardship  The next pillar addresses economic sustainability and the important recognition that cattle producers cannot afford to see their operations choked out by burdensome regulations. NCBA is seeking to boost producer profitability and economic sustainability by 2025. To truly set the scene of how this could impact producers from an economic standpoint it is important to remember that sustainability is on the mind of a lot of people these days. More and more consumers are asking questions about where their food comes from and the impact it has on the climate. While the number asking those questions are still a minority among the total population, they are extremely vocal, and their numbers will grow. The vocal nature of these consumers, and the amplification of their message by activist groups, has the attention of retailers, restaurants, bankers and political leaders. Retailers and restaurant companies are looking at ways to demonstrate their commitment to the environment to both customers and corporate shareholders. Banks and lenders are considering whether they should factor sustainable practices into the loans they make. “These are the reasons why the issue is not going away,” Woodall said. “NCBA had a choice to make – either take a leadership role or be relegated to playing defense for years to come. Through the action on our strategic plan, we chose to lead.” For NCBA, leading on this issue means making it clear that the only way we make this work is by casting an eye towards creating opportunities for producer profitability and long-term success. If the industry’s work on sustainability harms the financial sustainability of farms and ranches, then the whole discussion of the industry’s positive impact on the environment is moot. “We must do everything we can to keep your operation viable for future generations,” Woodall said. “If we cannot keep you on the land, who is going to take your place? Doubtful it will be

somebody who will care for the land the way you do. For many closer to suburban areas, it means there is a high probability that developers put houses on that land. If we are going to have an honest conversation about sustainability, policy makers and consumers need to understand this. Yes, profit seems to be a negative word these days, but talking about preservation of nature and greenspace will help us make the point of why we need to stay on the land.” Sustainability of Our Communities  Consumers are pushing hard for sustainability in their food, but NCBA research and focus groups have determined most consumers still struggle to define what sustainability means. It is important to recognize that 62 percent of consumers say they find cattle producers credible, but 70 percent of consumers surveyed said they are not familiar with how cattle are raised. Further, when consumers were asked to define what sustainability means, they first cited animal welfare followed by environmental aspects. This insight is why the final pillar covers social sustainability, with goals focused on increasing trust in cattle producers as stewards, demonstrating strong animal welfare practices and expanding programs such as Beef Quality Assurance (BQA). These gaps in consumers’ knowledge and their high level of trust in livestock producers means they’re poised to be educated on sustainability and that there’s room for cattle producers to take control of the storyline to demonstrate their sustainability efforts. The focus on animal welfare presents an opportunity to continue expanding the recognition of animal care certifications like the BQA program. “The goals show that U.S. cattle producers are committed and accountable,” said Mike Williams, a task force member and cattle producer from California. “I am a BQA-certified producer and know that our responsibility to the animals in our care is vital. BQA’s guidelines, in combination with experience and environment-specific needs, help farmers and ranchers ensure animal welfare through daily husbandry and animal care. This is key for our first social sustainability goal.” An additional social sustainability goal was set that focuses on continuously improving the industry’s workforce safety and well-being. The shared story of U.S. cattle farmers and ranchers is one of perpetual innovation and improvement. Cattlemen and women are rooted in a proud history but are constantly moving forward. Showcasing producers’ daily stewardship, protecting financial sustainability, and showcasing animal welfare standards along with a commitment to strong rural communities is how NCBA will demonstrate that the cattle industry is part of the solution, not part of the problem.

SUSTAINABILITY

U P D A T E DIRECTIONS 2021 20 NATIONAL CATTLEMEN

NATIONAL DIRECTIONS CATTLEMEN 2021 20

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Dear Fellow Producers,  Even after a tumultuous couple of years, we have a lot to be thankful for. The Beef Checkoff commemorated its 35th anniversary, we organized in-person and virtual events without skipping a beat and the consumer demand for beef remains high.  Something else we should celebrate is the development of the new Beef Industry Long Range Plan (LRP) which outlines the vision, mission, objectives and initiatives to unite the industry’s efforts. At the 2021 Cattle Industry Convention in August, producers gathered to hear from potential contractors and provide feedback on proposed Authorization Requests (ARs). The work that will be funded in the new ARs ties directly back to the LRP. It is our roadmap for guiding work to accomplish our common goal of increasing beef demand through education, research and promotion.  I’m really proud of what the Federation achieved this past year including sponsoring the Beef. It’s What’s For Dinner. 300 at Daytona International Speedway in February. Although the pandemic created major disruptions, it also provided opportunities like this race. We could not have made this event possible without state beef council support, and this is one more example how the Federation of State Beef Councils leverages Beef Checkoff dollars to effectively increase beef demand. This project alone resulted in more than 850 media stories reaching a potential audience of 1.9 billion. When we work together, we cross the finish line first.  Sustainability continues to be a topic of conversation for both producers and consumers. Despite what you may hear through the media, remember that our industry is not the cause of climate change, but the solution for a brighter and cleaner future. NCBA, as a contractor to the Beef Checkoff, is sharing our story with the public to showcase how the environment, economy and community work together to support a sustainable food system, and the vital role beef farmers and ranchers play in making sure all three remain healthy.  The stories on the following pages provide an overview of the work NCBA is conducting as a contractor to the Beef Checkoff. With state input and direction, national programs are extended in local communities across the country and our united beef voice is being heard. Results matter and to-date, a total audience of 537 million has been reached through this year’s four primary campaigns. From e-commerce and sustainability to nutrition and consumer engagement, I think you will agree that despite recent challenges, the work of driving the demand for beef continues full throttle.  Sincerely,

Federation of State Beef Councils Executive Committee Chair

Clay Burtrum, OK

Vice-Chair

Brad Hastings, TX

Region I

Allan Robison, OH

Region II

Don Terry, TN

Region III

Al Lyman, IL

Region IV

Jess Kane, OK

Region V

Andy Kellom, MT

Region VI

Mark Wintch, UT

Region VII

Travis Maddock, ND

Rev. Seat

Barb Downey, KS

Rev. Seat

Jim Ramm, NE

Rev. Seat

Dan Gattis, TX

Clay Burtrum  Stillwater, Oklahoma  Chair, Federation of State Beef Councils

Federation Members - Beef Promotion Operating Committee

Front Row, L to R: Katie Brenny, MN; Chris Jeffcoat, PA; Clay Burtrum, OK; Brad Hastings, TX; Stacy McClintock, KS Back Row, L to R: Gary Deering, SD; Brett Morris, OK; Dan Hanrahan, IA; Jeff Rudolph, NE; Clark Price, ND 22

NATIONAL CATTLEMEN

DIRECTIONS 2021

NOMINATE YOUR NEIGHBOR FOR THE

2022 ENVIRONMENTAL STEWARDSHIP AWARD Do you know a fellow cattlemen who is an excellent steward of the land? Has a neighbor put outstanding environmental practices into place to better their operation? If so, nominate them for the 2022 Environmental Stewardship Award.

For more information on how to get started, contact esap@beef.org or check out the website at www.environmentalstewardship.org

NOMINATIONS ARE DUE MARCH 11, 2022

Contact your state affiliate, NCBA staffer or sponsor representative for more information and assistance in submitting an application.

FEDERATION

As a division of the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff, the Federation of State Beef Councils represents the 44 Qualified State Beef Councils (QSBCs). Collectively, these QSBCs include more than 700 state board members representing every segment of the beef industry. The vision of the Federation is to build beef demand by inspiring, unifying and supporting an effective state and national Checkoff partnership.

The Federation’s statement of beliefs includes believing in the success of a strong state and national partnership resulting in increased consumer demand for beef and higher consumer confidence; believing in producer control of Checkoff funds through the Qualified State Beef Councils, which are the foundation of the Beef Checkoff; and believing in the industry Long Range Plan as a guidepost for the Beef Checkoff and the principle of “one vision - one plan - one voice.”

Federation Budget  The Federation of State Beef Councils builds a larger, more impactful, coordinated plan that can be executed as a partnership between the Federation and individual state beef councils (SBCs). Over 50 percent of the Federation’s annual budget supplements tactics within Authorization Requests (ARs) approved by the Beef Promotion Operating Committee (BPOC). Supplementing these tactics helps the national Checkoff program have a larger impact on consumer demand.  In 2021, the Federation contributed $6 million toward projects that supplement the approximately $40 million national plan funded by the BPOC for promotion, research, consumer information and industry information. Specific programs made possible by SBC contributions to the Federation include, but are not limited to:  Promotion  $3,354,000  •

Conducted Beef Substitutes 2.0 which worked with celebrity chefs during seasonal moments to rework iconic dishes into beef dishes, such as Beef Parmesan.

•

Launched a sustainability campaign highlighting how beef farmers and ranchers around the country are implementing land-conserving, award-winning environmental efforts, as well as an interactive map on BeefItsWhatsForDinner.com featuring the sustainability work of producers in each state.

•

Kicked-off summer grilling with National Beef Burger Day; hosted a Summer of Giveaways and highlighted grilling recipes from across the country on an interactive map.

CATTLEMEN NATIONAL CATTLEMEN

•

Sponsored the first Beef. It’s What’s For Dinner. 300 at Daytona International Speedway as part of the NASCAR Xfinity Series.

Research  $775,000  •

Safety – Focused on Salmonella contamination in lymph nodes and efforts to reduce food safety concerns in beef.

•

Nutrition – Focused on understanding beef preferences during infant complementary feeding.

•

Product Quality – Focused on sensory and chemical characterization of ground beef and plant-based alternative proteins, plus understanding the influence of beef x dairy cross on sub-primal yields and muscle shape.

Consumer Information  $900,000  •

Developed the Beef in the Early Years campaign after the American Academy of Pediatrics, the Women Infants and Children’s Program (WIC), and for the first time ever, the Dietary Guidelines for Americans recommended beef for infants and toddlers.

Industry Information  $800,000  •

The Beef Quality Assurance (BQA) program developed a Daily Biosecurity Plan for Disease Prevention template which helps cattle producers implement daily biosecurity measures on their operations and began work on the National Beef Quality Audit, which occurs every five years.

DIRECTIONS 2021

You do it for the cattle. Now do it for your road ahead. BQA transportation certification helps increase consumer confidence in beef. Get BQAT certified online today. www.BQA.org

S T A T E

O F

T H E

FEDERATION Promoting Beef Where Consumers Shop

NCBA, a contractor to the Beef Checkoff, worked with major national retailers to support online retail beef sales for the 2021 summer grilling season by exposing them to inspirational beef messaging and imagery at the digital point-of-purchase using the Beef. It’s What’s for Dinner. brand. The goal was to strategically target message placement to those who are already shopping for beef and to those shopping for competitive proteins and complimentary products, like hamburger buns or condiments. Retail partners included:  Walmart - Digital media and messaging buy on Walmart’s digital platforms including on-site display on Walmart.com and on Walmart’s order pickup and delivery platforms, as well as offsite display.  Kroger - Digital media and messaging buy on Kroger’s digital platforms with nationwide reach in all Kroger divisions/ banners including King Soopers, Dillon’s, etc. The campaign included Beef. It’s What’s for Dinner. creative in targeted onsite display ads and video placement across the Kroger digital ecosystem.   Target - Digital media and messaging buy that included on-site display on Target.com and the Target app, search placements to reach intent-based audiences, off-site display and Pinterest social media placements.    Additionally, Beef. It’s What’s for Dinner. was featured through Sam’s Club during a ‘Kickoff to Tailgating’ e-commerce campaign to support beef sales for those stocking up on purchases for tailgating (or homegating) events. This campaign included on-site display and email marketing to club members.   This early tailgating campaign came on the heels of a very successful initial campaign with Sam’s Club called ‘Kickoff to Summer Grilling’ that ran from mid-April through Memorial Day 2021. This initial campaign exceeded all metric benchmarks including sales lift, impressions and new buyers to the beef category. The campaign also had a Return on Ad Spend (ROAS or ROI) of more than $34, which means every Checkoff dollar spent on this media returned more than $34 in beef sales.

Beef is King of Summer Grilling NCBA, a contractor working on behalf of the Beef Checkoff, had all the bases covered with beef grilling messages airing across a variety of advertising platforms. New Beef. It’s What’s For Dinner. ads were viewed on YouTube and across Smart TV channels like HGTV, Fox News, CBS, ESPN and other popular networks. And new audio ads welcomed back consumers to the grill, appearing on Spotify and on a wide range of Sirius XM programming, including College Gameday, The Herd with Colin Cowherd and MLB Roundtrip.   Nativo native advertising appeared on popular websites such as Taste of Home, Saveur and Health.com, and inspired consumers to build delicious and nutritious beef burgers. Google Search was used to drive traffic to the Beef. It’s What’s For Dinner. Summer Grilling website, which included beef grilling favorites and producer stories from across all 50 states.   Capping off this effort was a robust Food Network cable TV advertising buy, with over 200 Beef. It’s What’s For Dinner. ad airings, on popular shows such as BBQ Brawl: Flay v. Symon, The Kitchen and the new series, Grill of Victory.    Through additional state beef council funding, four statefunded regional media campaigns also kicked off, working to further ensure that consumers across the U.S. know that beef is, and always will be, King of the Grill!

Federation Timeline

Although not all inclusive, this timeline highlights selected industry and Checkoff events impacting the Federation of State Beef Councils.

1954 First Beef Councils Established

Federation of State Beef Councils Established

1963

26 26 NATIONAL NATIONAL CATTLEMEN CATTLEMEN

1986

Producer Referendum Approves Beef Checkoff

Beef Checkoff Established as Part of 1985 Farm Bill

1988

1992

After merger of National Cattlemen’s Association and Beef Industry Council of the National Livestock and Meat Board, NCBA becomes home to the Federation of State Beef Councils.

Checkoff-funded Beef. It’s What’s For Dinner. Brand Launched

1996

DIRECTIONS DIRECTIONS 2021 2021

Beef Enters Victory Lane at Daytona International Speedway With the iconic proclamation “Drivers, start your engines!” given by Florida Beef Council Chairman, Flint Johns, the Beef. It’s What’s for Dinner. 300 got underway on Feb. 13, 2021, at Daytona International Speedway. When the green flag waved, engines roared, and it was clear that beef was the center of the track on race day. The Federation of State Beef Councils, on behalf of the Beef Checkoff, partnered with Daytona International Speedway to sponsor the 40th season-opening race for the NASCAR Xfinity Series. The race served as a unique opportunity to put beef on television once again. With production support from NCBA, this historic partnership showcased the Beef. It’s What’s For Dinner. brand on broadcast television.   To get people “geared up” for the race, NCBA, a contractor to the Beef Checkoff, hosted a satellite media tour featuring celebrity chef Hugh Acheson. Chef Acheson, a James Beard award winner and former “Top Chef” judge shared beef recipes for tailgating and homegating. In total, there were 1,716 airings with a potential reach of 104.4 million. The multimedia press release, which accompanied the interviews, had a potential reach of 151 million.

Checkoff-funded muscle profiling research reinvented and added value to the chuck and round, which were previously underutilized and undervalued, giving us the Flat Iron Steak and Petite Tender, thus enhancing overall carcass value. .

2001

DIRECTIONS 2021

Throughout the day, the race was shared broadly on social and traditional media and received significant attention. The Beef. It's What's For Dinner. 300 was included in more than 850 traditional media stories, reaching a total of 1.9 billion people, via outlets like Yahoo! Finance, ESPN and USA Today. The Beef. It’s What’s For Dinner. 300 was also mentioned in more than 12,500 posts on social media, reaching 66.3 million people.    The Beef. It’s What’s For Dinner. 300 logo could be seen throughout the race, including on the jumbotron, the track and even the pace cars. State Beef Council staff from across the country also descended on Florida to help promote beef during the race. There were steak grilling demos for fans, giveaways, social media promotions and contests. In addition, a steak lunch was prepared for the U.S. Air Force Thunderbirds flight demonstration squad and members of the media.    When the checkered flag dropped, driver Austin Cindric in the number 22 Team Penske Ford claimed victory and celebrated with the Beef. It’s What’s For Dinner. 300 trophy and a cooler full of Tomahawk Steaks.  "Nothing like a beef dinner after a win at Daytona,” Cindric said. "Victory Lane has never tasted better."

The U.S. Supreme Court ruled 6-3 in favor of USDA and the Beef Checkoff, ending a years-long legal battle against the Checkoff, brought by those who claimed the forced payment into the program violated their first amendment rights. The Supreme Court ruled the Checkoff government speech, thus not subject to first amendment challenges.

2005

2012

The Checkoff-funded Beef in an Optimal Lean Diet (BOLD) study provided evidence that the inclusion of lean beef as part of a heart-healthy diet is as effective in lowering heart disease risk as the Dietary Approaches to Stop Hypertension Diet (DASH).

NATIONAL CATTLEMEN

S T A T E

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T H E

FEDERATION Beef's Role in a Resilient Food System  We often think of the end consumer as the ultimate beef customer, but we may tend to forget about the supply chain partners such as food manufacturers, foodservice operators, retailers and distributors who are necessary to get the product from gate to plate. These partners have questions about beef’s sustainability profile, and NCBA, a contractor to the Beef Checkoff, is working hard to answer those questions and to promote beef as the top protein choice.   Food companies are making commitments regarding  sustainability that can be difficult to tackle given the complexity of the supply chain, leaving customers with questions about how beef’s sustainability is defined and benchmarked. And, as operators are setting, or considering setting, product sourcing policies, they are looking for information and research related to beef’s impact on the environment.   In January 2021, NCBA hosted a two-part webinar series for supply chain partners about beef’s role in a resilient food system. The goal of the webinar was to help partners understand beef’s sustainability story, so they are better equipped to answer questions from their customers, investors and other stakeholders.  Part 1 of the series featured basic information regarding key components of beef’s sustainability and how it is measured. Part 2 looked deeper into ongoing research on beef sustainability. Speakers also discussed ways to leverage beef’s sustainability story to make customers feel even more confident about buying beef. Nearly 400 people participated in the sessions including retail and foodservice operators, processors and distributors, along with educators and producers.

Funded by the Checkoff, Beef. It’s What’s For Dinner. returns to broadcast television for holiday campaign.

2020

For the first time ever, the Dietary Guidelines for Americans recommend introducing solid foods, like beef, to infants and toddlers, in order to pack in every bite with protein, iron, zinc and choline. Checkoff-funded research provided the foundational research to support beef’s nutritional role in various life stages.

28 NATIONAL NATIONAL CATTLEMEN CATTLEMEN 28

The path to sustainability is never complete. Rather, it is a continuous journey being carried out by the farmers and ranchers responsible for raising and supplying beef to the U.S. and across the world. To the beef community, sustainability comprises much more than environmental considerations. Today, a sustainable food supply balances efficient production with environmental, social and economic impacts.

New Tool Available to Develop Customized Biosecurity Plans Cattle producers across the country are dedicated to preventing disease, improving animal welfare and reducing production losses. The Checkoff-funded Beef Quality Assurance (BQA) Program developed a Daily Biosecurity Plan for Disease Prevention template to help cattle producers implement biosecurity measures on their operations. “We hope this tool helps producers understand what practices they already have in place to protect their herds, and set continuous improvement goals each time the plan is revisited,” said Kim Brackett, an Idaho cattle producer and chair of the BQA Advisory Group. “Developing a written plan now is much easier than developing one during an active disease outbreak.”  The goal is for everyone on the care team - farmers, ranchers, employees, owners, managers, family members, neighbors, and anyone who has a responsibility in the cattle operation to have this information and understand why biosecurity is so important. Simple preventive measures and documentation can reduce germs entering the farm and have a great impact on disease transmission.

Beef Checkoff Celebrates 35th Anniversary

2021

The U.S. Ninth District Court of Appeals ruled in favor of USDA and the Checkoff, closing a five-year legal challenge arguing state beef councils, organized as “private entities” and not government structured organizations, violates first amendment rights by turning over federal Checkoff funds to a private entity. The Court of Appeals ruled USDA oversight of the Checkoff extends to Qualified State Beef Councils, and thus are not subject to first amendment challenges.

DIRECTIONS 2021 2021 DIRECTIONS

Pediatrician Outreach Extends Beef in the Early Years Content The American Academy of Pediatrics, the Women Infants and Children’s Program and now for the first time ever, the Dietary Guidelines for Americans recommend introducing solid foods, like beef, to infants and toddlers, in order to pack in every bite with protein, iron, zinc and choline. Yet, many physicians lack awareness of the latest science, and many parents still need practical tips for how to introduce beef safely and nutritiously into their young child’s diet.    “Parents rely on their pediatricians for nutrition guidance for infants and toddlers,” said Executive Director of Nutrition Science, Health and Wellness at the National Cattlemen’s Beef Association, Shalene McNeill, PhD, RDN. “When we provide health professionals with science-based information about beef as an early complementary food, physicians then share that information with parents.”   The Beef in the Early Years campaign focused on educating physicians and other health professionals on the importance

of feeding beef to babies as an early complementary food and providing them with tools to support parents with the introduction of beef. With support from the Federation of State Beef Councils and several individual state beef councils, NCBA, a contractor to the Beef Checkoff, provided an educational toolkit and parent resources to a nationwide network of pediatrician offices and childbirth centers.   The toolkits included the Beef in the Early Years research brief, detailing beef as an important complementary first food, and a new consumer brochure that highlights the beneficial role of beef’s nutrients during the early years. These toolkits also offered simple infant and toddler feeding tips, providing practical takeaways for parents and caregivers. The toolkits were delivered to 2,300 pediatrician offices and childbirth centers in more than 20 states across the country.  To further extend educational information to health professionals, an advertorial entitled “Make Every Bite Count with NutrientDense Foods” was also placed in leading physician magazines, including the American Academy of Pediatrics and the American L Physicians.   Academy of Family

ore

DIRECTIONS 2021

NATIONAL CATTLEMEN

Sustainability Continues to Be Top of Mind for Consumers and Producers  NCBA, a contractor to the Beef Checkoff, continued its efforts to educate consumers that cattle are part of the climate change solution, and not the problem. The goal of the sustainability campaign was to help consumers feel good about how beef is raised by highlighting the commitment of farmers and ranchers to raising beef safely, humanely and sustainably.  To defend against Epicurious’ decision to no longer include beef recipes in the magazine’s properties, NCBA, on behalf of the Beef Checkoff, partnered with Food & Wine magazine to tell beef’s sustainability story. In a full-page advertorial, sustainability, nutrition and beef’s incomparable taste were highlighted, defending beef’s rightful place at the center of the plate. Print and digital versions of a beef-centric advertorial were featured in the June 2021 issue and reached more than 913,000 people.  Additionally, NCBA partnered with celebrity chef Lamar Moore and Dr. Tryon Wickersham, associate professor of animal nutrition at Texas A&M University, to pen opinion editorials (op-eds). Moore’s op-ed, which defended beef’s rightful place in cooking and dining, was featured in LA Weekly. Dr. Wickersham’s op-ed explored the science behind and benefits of cattle’s upcycling ability and was published in the Fort Worth Star-Telegram and in Yahoo! News Canada. Both op-eds reached more than 2 million people each.   With financial support from the Federation of State Beef Councils, a comprehensive public awareness campaign on sustainability was also launched for both consumers and producers. A special edition of the television show “Cattlemen to Cattlemen” was filmed at Feddes Red Angus in Manhattan, Mont., and featured a panel discussion about sustainability.   Panelists included Chaley Harney, executive director of the Montana Beef Council; Dr. Tryon Wickersham; Clay Burtrum, producer and 2021 NCBA Federation Division chair; and Jake Feddes with Feddes Red Angus. Panelists discussed why sustainable practices and sharing your sustainability story are

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vital to the industry. The conversation also focused on how the beef community is already – and has been for decades – implementing sustainable practices and why it matters. Perhaps most importantly, panelists talked about how sustainability is profitable. The television show, which has an average monthly viewership of 1.58 million, aired on RFD-TV in September.   Producer outreach was also the focus of an effort promoting sustainability through a full-page ad and editorial from Federation Chair Clay Burtrum. The two-page spread was placed in more than 30 publications including Successful Farming, Drovers and state affiliate and breed association magazines. This effort continued through the end of September and reached a potential audience of nearly 3 million.   The Federation-funded consumer component included digital, audio and print advertisements in the New York Times, The Washington Post and the Wall Street Journal, reaching a potential audience of nearly 12 million.   Another key component of the reputation management work has been engaging consumers in major metropolitan areas throughout the country to increase awareness of beef sustainability. Stories were written by local journalists and highlighted sustainability through the perspective of a local producer. These sustainability articles were published in Denver, Minneapolis, Seattle, Houston, Los Angeles, Philadelphia and New York City. As part of its work on behalf of the Beef Checkoff, the communications team at NCBA interviewed producers across the country about their stewardship and conservation efforts then drafted Letters to the Editor (LTE) to submit to local and regional publications. The core message of these letters was that farmers and ranchers practice sustainability because they care about the well-being of their land for both current and future generations.   This comprehensive campaign successfully educated consumers about the commitment beef farmers and ranchers have to conserving natural resources and protecting the environment. Farming and ranching families continue to improve the land for future generations, and the goal of these efforts was to highlight that positive work.

T H E

FEDERATION 30 NATIONAL CATTLEMEN CATTLEMEN

DIRECTIONS 2021

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DIRECTIONS STATISTICS

The National Cattlemen’s Beef Association is pleased to present the 27th annual edition of Directions. This special edition of National Cattlemen includes useful beef industry trends and statistics, as well as information about NCBA and current priorities. The information included in this section is compiled each year by the analysts at CattleFax over the course of several months. The information comes from open, voluntary and proprietary sources. While every effort is made to ensure the information contained within is accurate, some individual operations may have been overlooked and others may have chosen not to be included. If you would like to participate in next year’s listings, please contact NCBA at 866-BEEF-USA and request to be included in the 2022 survey. Please note that all listings must meet the rankings criteria to be considered.

Cattle and Calves on Farms (000 head) Jan. 1, 2021

Cattle and calf numbers were down from the previous year at 93.6 million head, down from 93.8 million head on Jan. 1, 2020. According to the USDA’s National Agricultural Statistics Service, cattle numbers decreased in all regions except Region IV and Region Region VII from the previous year. Region l 2020

Region V REGION V

ALASKA COLORADO IDAHO MONTANA OREGON WASHINGTON WYOMING TOTAL

2020 TREND 2021 12.3% 12.1% 17 2,750 2,470 2,500 1,280 1,200 1,320

FLAT DOWN UP DOWN DOWN DOWN DOWN

17 2,650 2,500 2,450 Region Vll 1,250 2020 TREND 2021 1,140 20.1% 20.2% 1,300 REGION III KANSAS 6,400 UP 6,500 11,537 DOWN 11,307 NEBRASKA 6,750 UP 6,850 NORTH DAKOTA 1,880 UP 1,950 SOUTH DAKOTA 3,900 UP 4,000 TOTAL 18,930 UP 19,300

2020 TREND 2021 9.6% 9.5%

UP FLAT UP DOWN DOWN DOWN

ILLINOIS 1,090 IOWA 3,850 MINNESOTA 2,260 MISSOURI 4,300 WISCONSIN 3,450 TOTAL 14,950

980 5,150 142 470 1,390 800

DOWN 8,932

NATIONAL CATTLEMEN

ARKANSAS OKLAHOMA TEXAS TOTAL

19,780

UP UP UP

TOTAL

10,886 DOWN 10,611

INDIANA KENTUCKY MARYLAND MICHIGAN NEW ENGLAND NEW YORK OHIO PENNSYLVANIA VIRGINIA WEST VIRGINIA

1,770 5,300 13,100

20,170

840 2,110 179 1,150 492 1,460 1,290 1,520 1,450 395

UP DOWN DOWN DOWN DOWN DOWN DOWN DOWN DOWN DOWN

11.3%

850 2,090 177 1,140 479 1,420 1,260 1,430 1,390 375

*Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, Rhode Island and Vermont

DOWN 14,590

l Region ll REGION II

2020 TREND 2021 21.1% 21.6%

1,730 5,150 12,900

1,050 3,650 2,140 4,300 3,450

2021

11.6%

Region lV REGION IV

DOWN DOWN DOWN FLAT FLAT

lll

Region Vl

ARIZONA 960 CALIFORNIA 5,150 HAWAII 140 NEVADA 480 NEW MEXICO 1,430 UTAH 820 TOTAL 8,980

2020 TREND 2021 REGION III 15.9% 15.6%

Vll

Vl REGION VI

Region lll

TREND

REGION I

ALABAMA FLORIDA GEORGIA LOUISIANA MISSISSIPPI NORTH CAROLINA SOUTH CAROLINA TENNESSEE TOTAL

2020 TREND 2021 9.3% 9.3% 1,300 1,680 1,090 780 920 810 340 1,810

DOWN UP FLAT DOWN FLAT DOWN DOWN DOWN

1,290 1,690 1,090 775 920 800 330 1,790

8,730 DOWN 8,685

DIRECTIONS 2021

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6 11 4

10 25 8

15 19

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TOP 25

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1 16 7 18 20

COW-CALF

Deseret Cattle & Citrus

St. Cloud, FL Owner: Farmland Reserve, Inc. CEO/Manager: Clint Richardson States of Operation: FL Breeds: Brangus, Simbrah, Angus

Ranch 6 Padlock Company

Ranchester, WY Owner: Scott Family CEO/Manager: Dr. Trey Patterson States of Operation: WY, MT Breeds: Stabilizer Composite, Angus

J.R. Simplot Co.

Boise, ID Owner: Simplot Family CEO/Manager: Thomas J. Basabe States of Operation: ID, OR, NV, UT Breeds: Angus, Hereford, Charolais

Ranch, Inc. 3 King Kingsville, TX

Owner: Descendants of Captain King CEO/Manager: Robert J. Underbrink States of Operation: TX Breeds: Santa Gertrudis, American Red, Red Angus

Spur Land Bros. Inc. 4 Silver 5 Lykes Tampa, FL and Cattle LLC Encampment, WY Owner: N/A

CEO/Manager: Thad York States of Operation: CO, NE, NM, WY Breeds: N/A

Owner:

Lykes Family

CEO/Manager: Johnnie P. James States of Operation: FL Breeds: Brangus, Beefmaster, Red Angus, Charolais

Cattle Co. Ranches Ranches, LLC 10 Matador Cattle 7 Lightsey 8 Singleton 9 Rollins Lake Wales, FL Lamy, NM Atlanta, GA Company Owner: N/A CEO/Manager: Cary & Layne Lightsey

States of Operation: FL, GA Breeds: Braford, Charolais, Brahman

NATIONAL CATTLEMEN

Owner: Singleton Properties LLC CEO/Manager: Alex Carone, President States of Operation: NM, CA Breeds: Angus, Hereford

Owner: LOR, Inc. CEO/Manager: N/A

States of Operation: FL, GA, TX Breeds: Red Angus, Brangus, Angus, Nelore, Charolais, Hereford

Wichita, KS Owner: Koch Industries CEO/Manager: Damon Cox States of Operation: KS, MT, TX Breeds: Angus, Hereford, Charolais

DIRECTIONS 2021

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TO P 2 5 C OW- CA L F Ranches LLC Ranch Inc. Ranch Inc. Feeders 11 True 12 Parker 13 Adams 14 Cactus 15 Spade Casper, WY Kamuela, HI Ft. Pierce, FL Ranches, LTD Amarillo, TX Owner: True Family CEO/Manager: David L. True

States of Operation: WY, CO, SD Breeds: Angus, Hereford

Owner: Parker Ranch Foundation Trust CEO/Manager: Neil "Dutch" Kuyper States of Operation: HI Breeds: Angus, Simmental, Charolais

Owner: Adams Family CEO/Manager: Michael L. Adams

Owner:

Lubbock, TX

FL, GA

States of Operation:

Chappell and Bassham Families CEO/Manager: Wesley Welch

States of Operation: Breeds:

Braford, Abeef Composite

100% Employee Owned CEO/Manager: Paul Defoor & Bradley W. Hastings

Owner:

TX, KS Breeds: Angus, Charolais, SimAngus

States of Operation: TX Breeds: Balancer/SimAngus

Ranch A Ranch Cattle Land & Maximo Ranch 16 Immokalee 17 Circle 18 Williamson 19 Pitchfork 20 ElMiami, Iberia, MO FL Immokalee, FL Company Cattle Co. Owner:

Immokalee Ranch CEO/Manager: C. W. "Buzz" Stoner, Jr.

Okeechobee, FL

Guthrie, TX

Owner:

Dave Gust Sr.

CEO/Manager:

Descendants of Williams Family

States of Operation:

Brooks Hodges

CEO/Manager:

States of Operation:

Breeds:

Co. 21 IXBigRanch Sandy, MT Owner:

Angus, Wagyu, Wangus

Brangus, Beefmaster, Angus, Charolais

Williamson Family Frank W. Williamson III AL, FL, TX

Breeds: Brangus

CEO/Manager: States of Operation: TX, OK

Breeds:

CEO/Manager: N/A

States of Operation: MT Breeds: Leachmans of Colorado

Owner: McCan-Cannon family CEO/Manager: Bob McCan States of Operation: TX Breeds: Victoria - Brafords

NATIONAL CATTLEMEN

Owner:

von Holt Family

CEO/Manager: Sabrina English

States of Operation: HI Breeds: Angus, Charolais, & Tarentaise

Owner: Optimum Agriculture FL, LLC CEO/Manager: Gaston Marquevich

States of Operation: FL Breeds: Beefmaster, Brangus

Angus

Enterprises Ranch, Ltd. Cattle 22McFaddin 23 Ponoholo 24 Maddux Victoria, TX Kohala, HI Company

IX Ranch Co.

Owner: The Gust Family

Imperial, NE Owner: Maddux Family CEO/Manager: John Maddux

States of Operation:

NE Breeds: Red Angus Composite

Livestock 25 Lacey Paso Robles Owner:

John and Mark Lacey

CEO/Manager: N/A

States of Operation: CA Breeds: Angus, SimAngus

DIRECTIONS 2021

d n o B e h T between humans and cattle is ancient and deep.

It’s a centuries-old promise to provide for them as they provide for you. It’s our duty to help protect that sacred bond. We provide solutions for every stage of production that help make the bond stronger, healthier and more robust. This is what defines us. We are born of the bond.

DIRECTIONS 2021

BornOfTheBond.com

NATIONAL CATTLEMEN

TOP 10 BEEF SLAUGHTER OPERATIONS 1

JBS U.S.A Greeley, CO

Owner: JBS S.A. CEO: Andre Nogueira

Tyson Foods, Inc. Springdale, AR & Dakota Dunes, SD Owner: Tyson Foods, Inc. CEO:

Donnie King, President & CEO

Cargill Wichita, KS

Owner: Cargill Family CEO: David W. Maclennan

National Beef Packing Company, LLC Kansas City, MO Owner: CEO: Tim Klein

American Foods Group, LLC Green Bay, WI Owner: Rosen's Diversified Inc. CEO: Steven W. Van Lannen

Subsidiaries:

Marfrig Global Foods S.A., U.S. Premium Beef, LLC

Subsidiaries: N/A

Subsidiaries:

Daily Slaughter Capacity: 27,000

Daily Slaughter Capacity: N/A

Daily Slaughter Capacity: 23,000

2020 Sales: $14.3 Billion

2020 Sales: $12.5 Billion

2020 Sales: $12.2 Billion

Daily Slaughter Capacity: 13,200

Slaughter Total: $7 Million

Slaughter Total: N/A

Slaughter Total: $6 Million

Number of Beef Plants: 9

Number of Beef Plants: 6

Caviness and CS Harris Ranch Beef Beef Packers Selma, CA Amarillo, TX & Kuna, ID Owner: Owner: Caviness Beef, JR Simplot Co. Brian Coelho CEO: CEO: Terry Caviness Brian Coelho

Subsidiaries: N/A Daily Slaughter Capacity: 3,700 2020 Sales: $1.2 Million Slaughter Total: $905,000 Number of Beef Plants: 3

N/A

Nebraska Beef Omaha, NE

Owner: Corporation CEO: William Hughes

Subsidiaries: Central Valley Meats

Subsidiaries: N/A

Daily Slaughter Capacity: 2,500

2020 Sales: N/A Slaughter Total: N/A Number of Beef Plants: 2

NATIONAL CATTLEMEN

2020 Sales: N/A Slaughter Total: N/A Number of Beef Plants: 1

National Carriers, Inc., National Beef Leathers LLC, Kansas City Steak Company, LLC, National Beef Ohio, LLC, Iowa Premium, LLC

2020 Sales: $9.4 Billion Slaughter Total: N/A Number of Beef Plants: 3

Greater Omaha Packing Omaha, NE

N/A

Daily Slaughter Capacity: N/A 2020 Sales: $3.9 Billion Slaughter Total: N/A Number of Beef Plants: 9

Agri Beef Co. Boise, ID

Owner: Henry Davis CEO: Henry Davis

Owner: Rebholtz Family

Subsidiaries: Trex, High Country, Progressive Protein, GO Express, Packers Hide Daily Slaughter Capacity: 2,250

Subsidiaries: AB Foods, LLC, Washington Beef, LLC, PerforMix Nutrition Systems

2020 Sales: N/A

Slaughter Total: N/A Number of Beef Plants: 1

CEO: Robert Rebholtz, Jr.

Daily Slaughter Capacity: 1,650

Slaughter Total: N/A Number of Beef Plants: 1

DIRECTIONS 2021

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11 18

22 19

9 13 25

3 21 2

TOP 25 SEEDSTOCK Ranches 1 Express Yukon, OK Owner: Robert A. Funk Mgr./CEO: Jarold Callahan Subsidiaries:

# Registered Females: 5,250 Total Marketings: 4,670 Breeds Utilized: Angus, Hereford

Stock Farms 6 Ludvigson 7 Billings, MT

Angus Ranch, Inc. Cattle of Colorado 2 Gardiner 3 Leachman 4 Ashland, KS Fort Collins, CO

Express Cattle Feeding, Express UU Bar Ranch, Xcel Feedyard

Owner: The Ludvigson and Newberry Families Mgr./CEO: Ryan Ludvigson Subsidiaries: LN Cattle Company # Registered Females: 1,004 Total Marketings: 1,326 Breeds Utilized: Red Angus, Red SimAngus

Owner: The Henry Gardiner Family Mgr./CEO: Mark Gardiner Subsidiaries: GAR Allied Producers # Registered Females: 1,142 Total Marketings: 4,628 Breeds Utilized: Angus

Shaw Cattle Co., Inc Caldwell, ID Owner: Greg Shaw Family Mgr./CEO: Sam Shaw/Tucker Shaw Subsidiaries: N/A # Registered Females: 1,750 Total Marketings: 1,125 Breeds Utilized: Hereford, Black Angus, Red Angus

NATIONAL CATTLEMEN

Owner: Lee Leachman, Mike Browning, Tim Watts Family Mgr./CEO: Lee Leachman Subsidiaries: Leachman, Leachman TopLine, and cooperators # Registered Females: 12,800 Total Marketings: 3,275 Breeds Utilized: Angus, Red Angus, Charolais, Stabilizer R.A. Brown Ranch Throckmorton, TX Owner: Donnell & Kelli Brown Mgr./CEO: Donnell Brown Subsidiaries: N/A # Registered Females: 0 Total Marketings: 1,117 Breeds Utilized: Red Angus, SimAngus, Angus

44 Farms Cameron, TX Owner: Bob McClaren Mgr./CEO: Tracy Woods Subsidiaries: 44 Steaks - Prime Pursuits # Registered Females: 1,850 Total Marketings: 1,960 Breeds Utilized: Angus

Angus Ranch 9 Connealy Whitman, NE

Owner: Connealy Family Mgr./CEO: Jerry Connealy Subsidiaries: N/A # Registered Females: 3,050 Total Marketings: 1,061 Breeds Utilized: Angus

Ranch 5 Vermilion Billings, MT

Owner: Pat Goggins Family Mgr./CEO: Joe Goggins Subsidiaries: N/A # Registered Females: 2,360 Total Marketings: 1,400 Breeds Utilized: Angus

Charolais 10 Eaton Lindsay, MT

Owner: Eaton Family Mgr./CEO: Lee Eaton Subsidiaries: N/A # Registered Females: 2,500 Total Marketings: 1,050 Breeds Utilized: Charolais

DIRECTIONS 2021

THE 2021 FALL

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208.590.6167

TOP 25 SEEDSTOCK Herefords Charolais Ranch, LLC Bieber Red Angus Ranch Schaff Angus Valley 11 DeBruycker 12 Langford & Hybrids 13 Hoffman 14 15 Dutton, MT Thedford, NE Leola, SD St. Anthony, ND Okmulgee, OK Owner: DeBruycker Family Mgr./CEO: Lloyd DeBruycker Subsidiaries: N/A # Registered Females: 2,200 Total Marketings: 1,045 Breeds Utilized: Charolais

Owner: Jason & Denny Hoffman Mgr./CEO: Jason Hoffman Subsidiaries: N/A # Registered Females: N/A Total Marketings: 970 Breeds Utilized: Hereford, Angus, SimAngus

Owner: Watson Langford Mgr./CEO: Watson Langford Subsidiaries: N/A # Registered Females: 800 Total Marketings: 1,040 Breeds Utilized: Hereford, Angus, Black Hereford, Maine Anjou

Angus Ranch Farms Ltd 16 Thomas 17 Nichols Bridgewater, IA Baker City, OR Owner: The Thomas Family Mgr./CEO: Robert E. Thomas Subsidiaries: N/A # Registered Females: 775 Total Marketings: 886 Breeds Utilized: Angus

Owner: Fink Family Mgr./CEO: Galen Fink Subsidiaries: N/A # Registered Females: N/A Total Marketings: 654 Breeds Utilized: Angus, Charolais, Red Angus

Owner: Clint Stevenson Family Mgr./CEO: Clint Stevenson Subsidiaries: N/A # Registered Females: 1,350 Total Marketings: 729 Breeds Utilized: Angus

Hudgins, Inc. 23 J.D. Hungerford, TX

Owner: Riverview LLP Mgr./CEO: Mitch Fehr Subsidiaries: N/A # Registered Females: 2,271 Total Marketings: 593 Breeds Utilized: Limousin, LimFlex, Angus

NATIONAL CATTLEMEN

Owner: Kelly & Martie Jo Schaff Mgr./CEO: Kelly Schaff Subsidiaries: N/A # Registered Females: 1,066 Total Marketings: 918 Breeds Utilized: Angus

Schiefelbein Farms LLC Diamond Dot Heart Brand Cattle Co. Cattle Co. 18 Stevenson's 19 20 Kimball, MN Harwood, TX Hobson, MT

Owner: Family Ownership Mgr./CEO: J. David Nichols Subsidiaries: Ayers Stock Farm, Havens Cattle Co, Lincoln Center Partnership # Registered Females: 2,000 Total Marketings: 730 Breeds Utilized: Angus, Simmental, South Devon

Beef Genetics Cattle 21 Fink 22 Wulf Randolph, KS Morris, MN

Owner: Craig & Peggy Bieber Mgr./CEO: Craig Bieber Subsidiaries: N/A # Registered Females: 1,220 Total Marketings: 925 Breeds Utilized: Red Angus

Owner: J.D. Hudgins, Inc. Mgr./CEO: Coleman H. Locke, President Subsidiaries: N/A # Registered Females: 1,900 Total Marketings: 580 Breeds Utilized: Brahman

Owner: Schiefelbein Family Mgr./CEO: Don Schiefelbein Subsidiaries: Schiefelbein Feeders LLC # Registered Females: 1,200 Total Marketings: 710 Breeds Utilized: Angus, SimAngus

Owner: Beeman Family Mgr./CEO: Jordan Beeman Subsidiaries: Beeman Family Ranch # Registered Females: 3,000 Total Marketings: 675 Breeds Utilized: Akaushi

Silver Spur Operating, LLC Saratoga, WY Owner: John & Leslie Malone Mgr./CEO: Thad York Subsidiaries: Silver Spur Ranches; Silver Spur Feeders, LLC; Silver Spur Farms, LLC # Registered Females: 1,200 Total Marketings: 475 Breeds Utilized: Red Angus, Angus, Charolais

Diamond Cattle 25 Cross Company Bertrand, NE Owner: Scott and Kim Ford Mgr./CEO: Scott and Kim Ford Subsidiaries: N/A # Registered Females: 582 Total Marketings: 470 Breeds Utilized: Red Angus

DIRECTIONS 2021

IT’S TIME TO RAISE YOUR GRADE.

AND YOUR PREMIUMS. 1. Raise HeartBrand-sired cattle. Use fullblood Akaushi bulls crossed with your cow-herd (live coverage or semen).

6. HeartBrand sells Akaushi beef. Above-market price on superior beef = higher premiums for ranchers.

5. Improve USDA quality grade. The past 55,000 head of HeartBrand Akaushi cattle harvested graded: 45% USDA prime, 52% USDA choice and 3% USDA select and no roll.

Ranchto-Table Buyback Program

2. Verify breed with DNA. Verify parentage with the American Akaushi Association.

3. Follow management standards. No hormone implants and finished with no growth promotants.

4. Earn your buyback bonus. $100 to $150 premium for weaned calves and yearlings. $.20/lb. to $.25/lb. premium for finished fed cattle.

CATTLE

Visit heartbrandcattle.com or call 830-540-3955 to source Akaushi genetics for your herd.

7 18

19 7 3 2 11 1515 20

TOP 20

FEEDLOTS Rivers Cattle 1 Five Feeding, LLC

Johnstown, CO Owner: Pinnacle Arcadia Cattle Hold Co. Mgr./CEO: Mike Thoren Capacity: 900,000 Number of Yards: 11 States of Operation: AZ, TX, OK, KS, CO, ID

TIE

Cattle Co. 5 Foote Bucyrus, KS

Owner: Bob Foote Family Mgr./CEO: Bob Foote Capacity: 280,000 Number of Yards: 5 States of Operation: KS, NE

Feeders 2 Cactus Amarillo, TX

Owner: 100% Employee Owned Mgr./CEO: Bradley W. Hastings and Paul Defoor Capacity: 603,000 Number of Yards: 11 States of Operation: TX, KS

R. Simplot Co. 7 J.Boise, ID

Owner: Simplot Family Mgr./CEO: Thomas J. Basabe Capacity: 230,000 Number of Yards: 2 States of Operation: ID, WA

NATIONAL CATTLEMEN

Friona Industries, L.P. Amarillo, TX Owner: Privately Held Mgr./CEO: Donald Gales Capacity: 589,000 Number of Yards: 8 States of Operation: TX, KS

TIE

7 Oppliger Feedyard, Inc.

Amarillo, TX Owner: Don Oppliger Family Mgr./CEO: Ben Oppliger Capacity: 230,000 Number of Yards: 6 States of Operation: TX, NE, NM

Green Plains Cattle Company, LLC Garden City, KS Owner: Privately Held Mgr./CEO: Joel Jarnagin Capacity: 355,000 Number of Yards: 6 States of Operation: TX, KS, CO

TIE Irsik & Doll Feed Services, Inc Cimarron, KS Owner: Privately Held Mgr./CEO: Scott Shill Capacity: 280,000 Number of Yards: 7 States of Operation: KS

Cattle Co. Livestock 10 Gottsch 9 Innovative Elkhorn, NE Services Inc. Great Bend, KS Owner: Privately Held Mgr./CEO: Jerry Kuckelman Capacity: 215,000 Number of Yards: 7 States of Operation: KS, NE

Owner: Brett and Bill Gottsch Mgr./CEO: Brett Gottsch Capacity: 195,500 Number of Yards: 3 States of Operation: NE

DIRECTIONS 2021

Driving Your Cattle Feeding Business Forward With a Special Breed of Financial Strength Helping your business thrive in today’s evolving industry is what our Agribusiness team does best. That’s why we’re proud to support the National Cattlemen's Beef Association. W. Ashley Allen Bank of America 806.463.3911

“Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2020 Bank of America Corporation. All rights reserved. 01-20-2676

TOP 20 F E E D L O T S

7 18

Tejas Feeding Group Amarillo, TX Owner: Mike Smith Mgr./CEO: Mike Smith Capacity: 155,000 Number of Yards: 4 States of Operation: TX

-G Feedyard 15 Bar Hereford, TX

Pinal Feeding Co. Laveen, AZ Owner: Northside Hay Company Mgr./CEO: Earl Petznick Jr. Capacity: 150,000 Number of Yards: 3 States of Operation: AZ

Harris Feeding Co. Coalinga, CA Owner: Central Vally Meat Holding Company Mgr./CEO: Brian Coelho Capacity: 135,000 Number of Yards: 2 States of Operation: CA, NV

TIE

Inc. Beef Co. 18 Agri 15 Barrett-Crofoot, Hereford, TX Boise, ID

Owner: Livestock Investors LTD Mgr./CEO: Johnny Trotter Capacity: 125,000 Number of Yards: 2 States of Operation: TX

19 7 3 2 11 1515 20

Owner: Barrett Families Mgr./CEO: Robert Barrett Capacity: 125,000 Number of Yards: 2 States of Operation: TX

NATIONAL CATTLEMEN

Owner: Rebholtz Family Mgr./CEO: Robert Rebholtz Jr. Capacity: 115,000 Number of Yards: 5 States of Operation: WA, ID

Adams Land & Cattle, LLC Broken Bow, NE Owner: Bill & Jerry Adams Mgr./CEO: Jerry Adams Capacity: 132,000 Number of Yards: 3 States of Operation: NE

TIE

Dinklage Feed Yard, Inc. Sidney, NE Owner: Shareholders Mgr./CEO: Rex Trumbull Capacity: 125,000 Number of Yards: 4 States of Operation: NE, WY, CO

Cluck Enterprises, Inc. 20 Dean 19 Hitch Guymon, OK Feedyard, Inc. Owner: Hitch Family Mgr./CEO: Chris and Jason Hitch Capacity: 111,000 Number of Yards: 2 States of Operation: OK

Amarillo, TX Owner: Stockholders Mgr./CEO: Monte Cluck Capacity: 105,000 Number of Yards: 3 States of Operation: TX

DIRECTIONS 2021

OPTIMIZE PERFORMANCE FROM THE START ProFusionTM Drench for beef cattle from Zinpro is designed to provide a multi-day dose of Performance Minerals® significantly improving trace mineral status without the need for a vet prescription or injection.

PROFUSION™ Drench

For more information on ProFusion Drench contact your local Zinpro sales representative or visit zinpro.com.

NATIONAL CATTLEMEN

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13 2,250 Million Pounds

2,220 Million Pounds

2,057 Million Pounds

2250

20 12

2500 3,342 Million Pounds

3,057 Million Pounds

2,999 Million Pounds

2,993 Million Pounds

3,012 Million Pounds

3,368 Million Pounds

2,947 Million Pounds

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

20 09

2,956 Million Pounds

3,022 Million Pounds

3,155 Million Pounds

2,860 Million Pounds

2,557 Million Pounds

2,265 Million Pounds

2,572 Million Pounds

2,588 Million Pounds

2,452 Million Pounds

2,785 Million Pounds

2,300 Million Pounds

1,935 Million Pounds

2750

2,298 Million Pounds

2,626 Million Pounds

1,996 Million Pounds

3250

20 11

2750

20 08

1,434 Million Pounds

3000

20 10

3000

2,538 Million Pounds

20 07

2250

20 09

3250 3,052 Million Pounds

2500

20 08

3500 1,145 Million Pounds

2000

20 07

1000 697 Million Pounds

1250

20 06

20 05

1500

3,085 Million Pounds

3,599 Million Pounds

Millions of pounds 1750

20 06

20 05

Millions of pounds

EXPORTS Mexico

Canada

2000

1750 Japan

S. Korea Others

750

500

250

IMPORTS

Canada

Nicaragua

Australia Mexico

New Zealand

Others

1500

1250

1000

750

500

250

DIRECTIONS 2021

CATTLE HERD INVENTORY

2007

Calf Crop

36.76

34.47

96.57 --- Total Cattle

41.79

Cows

2008

Calf Crop

36.16

41.70 35.94

Cows

2009

94.72 --- Total Cattle

Cows

33.52 Calf

Crop

88.24 --- Total Cattle

38.16 Cows

35.76

Calf Crop

40.53 Cows

93.62 --- Total Cattle

2018

Calf Crop 2016 94.29 --- Total Cattle 40.89 Cows

2019

35.59 Calf 41.12

2011

Calf Crop

35.06

91.89 --- Total Cattle

92.89 --- Total Cattle

40.07 Cows

39.48

30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Head (million)

2016

Calf Crop Cows

30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Head (million)

Crop

94.80 --- Total Cattle

Cows

2020

35.13 Calf

89.17 --- Total Cattle

Cows

36.31

Calf Crop

38.64

2017

Calf Crop

40.53

2015

34.09

94.08 --- Total Cattle

35.36

Calf Crop

90.09 --- Total Cattle 38.85 Cows

2010

35.74

2013

2014

Calf Crop

41.13

91.16 --- Total Cattle 39.52 Cows 33.63

96.03 --- Total Cattle

2012

Calf Crop

Crop

93.79 --- Total Cattle

40.68

Cows

2021

N/A

Calf Crop

93.59 --- Total Cattle

40.59

Cows

30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Head (million)

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DIRECTIONS 2021

NATIONAL CATTLEMEN

TOTAL RETAIL MEAT SUPPLY 1999 215.7

17.5

2000 215.0

17.4

2001 212.7

17.5

2002 219.5

17.7

2004 220.7

17.1

76.7

50.3

BEEF

RED MEAT

80.7

81.7

84.4

2006 220.4

16.9

85.9

17.5

2008 214.4

17.6

2009 209.3

16.9

2010 207.5

16.4

85.2

94.3 51.6

67.7

0.6

1.2

0.6

1.1

0.5

1.1

0.5

1.1

98.4 51.9

65.0

66.2

65.6 102.6

49.5

65.9

0.4

1.1

0.4

1.1

103.6 50.8

65.2 102.8

0.4

49.5

50.2

47.8

2014 200.7

15.9

2015 210.1

16.0

2016 213.5

16.7

2017 216.0

16.5

2018 218.4

16.2

45.7

0.3

0.8

MI CA 4.7% 18.2% MN 4.8% All Other PA 27.4% Top 10 5.0%

57.3

46.0

57.4

0.3

0.8

96.4 46.9

56.4

0.3

0.9

45.9

54.2

0.3

1.0

49.8

0.2

54.0

105.1 50.2

107.0 91.1

50.2

96.1

NATIONAL CATTLEMEN

57.0

51.0

0.2

1.1

57.3

0.2

1.1

108.7 52.4

111.9

111.4

107.5

109.7 95.1

1.0

106.5

108.5 92.6

0.2

55.6

58.1

0.2

1.1

0.2

1.1

111.1 51.5

DAIRY

U.S. Total *9,440

ID 6.6%

1.0

105.1

89.8

WI 13.3% NY 6.6%

99.3

89.1

72.6%

TX 6.5%

98.0

83.5

U.S. Total *93,595

NM 3.0% 3.6%

99.0

101.3

15.6

0.9

98.8

104.5

16.0

0.4

59.6

104.5 82.0

NE 7.3%

KS 6.9%

OK 5.7%

3.8 %

CO 7.8%

ID 2.0%

2013 202.5

16.0

TOTAL CATTLE

Top 10 58.7%

96.7

104.2 80.4

1.0

61.1

U.S. Total *31,158

TX 14%

% OK 2.3 % 2.7 % MN 3.1

16.0

MO 4.6%

2012 201.0

82.9

41.3%

OK 7%

MO 6.5%

CO WI 2.8% 3.7%

IA 3.9% SD 4.3% All Other

BEEF COWS

Top 10 59%

NE 6.1%

CA 5.5%

101.1

108.7 16.1

1.0

62.5

112.6

2011 203.2

SD 5.8%

101.5 50.0

TX 15%

All Other 41%

KS 4.7%

99.2 51.4

(*Thousands)

3.2% MT 4.6%

1.1

0.4

82.4

1.1

0.6

66.3

113.3 79.7

FL ND 3.0% KY 3.1%

94.2

117.5 83.5

0.7

67.8

116.8

2007 220.3

0.7 1.1

93.7

117.1 86.6

TOP 10 CATTLE NUMBERS

67.5

119.2 16.7

POUNDS PER CAPITA

51.2

POULTRY

118.6

2005 219.8

76.9 120.8

PORK

121.1 17.4

2020 223.1

52.6

VEAL LAMB

118.4

2003 217.7

2019 223.0

76.2 121.9

TURKEY CHICKEN

TX 19.6%

All Other 14.1%

Top 10 85.9%

IA 8.0%

CATTLE ON FEED NE 18.5%

U.S. Total *14,707

KS 18.1%

58.5 111.7

DIRECTIONS 2021

Introducing Purina® Plus, an all-new preconditioning program made to move operations forward. Combining Purina’s researchproven nutrition with vaccine and deworming protocols, Purina® Plus calves are preconditioned to perform. Reputation that stands strong. Value that adds up. purinamills.com/purinaplus ©2021 Purina Animal Nutrition LLC. All rights reserved.

CATTLE INVENTORY BY CLASS - STATE AND UNITED STATES JAN. 1, 2020 AND 2021

Beef Cows That Have Calved State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming United States 52

NATIONAL CATTLEMEN

2020

Milk Cows That Have Calved

(1,000 Head)

2021

Perecent of Previous Year

(1,000 Head)

2020

(1,000 Head)

2021

Perecent of Previous Year

696 7.7 194 915 655 771 5.5 2.2 904 519 75.3 490 378 194 905 1443 1021 455 11 47 5.5 93 365 482 2,083 1,428 1,922 249 4 9.3 480 105 369 995 298 2,109 533 220 1.2 179 1,783 909 4,570 358 13 626 228 199 310 724 31,338.7

697 7.3 194 925 670 659 5 1.8 929 509 76.4 474 356 194 890 1,477 983 445 10 45 7 100 345 482 2,035 1,419 1,900 245 4.5 8.6 463 95 370 975 302 2,189 525 215 1 168 1,799 900 4,685 345 14 595 221 190 310 702 31,157.6

100% 95% 100% 101% 102% 85% 91% 82% 103% 98% 101% 97% 94% 100% 98% 102% 96% 98% 91% 96% 127% 108% 95% 100% 98% 99% 99% 98% 113% 92% 96% 90% 100% 98% 101% 104% 98% 98% 83% 94% 101% 99% 103% 96% 108% 95% 97% 95% 100% 97% 99%

4 0.3 196 5 1,725 189 19.5 3.8 116 81 0.7 640 82 176 215 167 49 10 28 42 10 427 445 8 77 12 58 31 11 4.7 330 625 41 15 252 41 127 480 0.6 11 127 31 580 97 124 74 282 6 1,260 6 9,342.6

3 0.2 196 5 1,720 201 19 3.7 111 81 0.6 646 84 191 220 173 47 10 27 43 10 440 455 8 75 11 60 30 11 4.4 337 625 40 15 258 41 125 475 0.5 10 141 30 615 95 120 75 279 5 1,260 8 9,440.4

75% 67% 100% 100% 100% 106% 97% 97% 96% 100% 86% 101% 102% 109% 102% 104% 96% 100% 96% 102% 100% 103% 102% 100% 97% 92% 103% 97% 100% 94% 102% 100% 98% 100% 102% 100% 98% 99% 83% 91% 111% 97% 106% 98% 97% 101% 99% 83% 100% 133% 101%

DIRECTIONS 2021

When your prevention plan fails – reach for

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Watch for what’s next from Norbrook®. Contact your veterinarian for details or see our latest line up at Norbrook.com

0821-000-M04A

The Norbrook logo, Norfenicol, Enroflox, Noromycin and Cefenil are registered trademarks of Norbrook Laboratories Limited.

BEEF PRODUCTION

Bil. lbs.

COLD CARCASS WEIGHTS

lbs 840

27.00

830

26.50

820

26.00

810 800

25.50

790

25.00

780

24.50

770

24.00

PER CAPITA SPENDING

Dollars 800

Beef

650

Pork

600

Broilers

550

Total

500 400

20 20

$772.57

700

450

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 11

20 20

20 19

20 18

20 17

20 13

20 11

20 16

740 20 15

23.00 20 14

750

20 12

23.50

20 12

760

% Beef 45.10% 46.41% 46.22% 45.94% 45.20% 45.01% 45.57% 46.34% 45.64% 46.58% 47.05%

47.10%

47.16% 47.24% 47.10% 48.36%

$373.58

350 300 250

$207.66 $191.33

200 150 100

2005

2006

2007

2008

2009

2010

2011

2006

2007

650 lb

$185.23 $156.13 $125.86 +2%

$83.23

-10%

2010

$130.77 +13% $113.43 +13% $95.42 +15% 60 80 100 120 140 160 180 200 220 240 260 280

NATIONAL CATTLEMEN

Fed Steer

2012

$122.86 -6% $105.61 -5% $92.71 0%

2009

2015

2016

+13%

$177.32 $151.01 $120.74 -18%

$271.42 $223.24

$148.00

+23%

$282.93 $227.41

-4%

2020

2019

-34%

-37%

2017

+17%

$178.55 +1% $153.95 +2% $121.29 +0.5%

2018

+1%

$186.39 $160.30 $116.89 -3.6%

2014

2015

2018

2016

2013

$154.37

2017

% Change from Previous Year

2011

$183.79 $155.46 $122.93 +7%

$115.93 -6% $100.66 -5%

2014

$157.42 +20% $137.76 +21% $114.91 +20%

$130.30 -6% $111.28 -4% $92.66 +8%

2008

2013

STEER PRICES

450 lb $138.50 -1% $115.33 -2% $85.97 -2%

2012

+43%

+47%

+2%

60 80 100 120 140 160 180 200 220 240 260 280

+4%

2019

$176.17 $152.67 $116.66 -0.2%

-5%

2020

$172.70 $146.62 $108.71 -6.8%

-4%

+4%

-5%

-2%

60 80 100 120 140 160 180 200 220 240 260 280

DIRECTIONS 2021

FEEDER IMPORTS

CANADA

104,140

2011

2019

8,981 26,748 32,650

103,939

1,430,222

307,264

622,893

374,449

1,304,166

185,075

12,757

110,999

2018

185,137

9,811 34,425 26,893

182,128

11,786

329,023 336,043 336,074

1,255,184

78,341

6,070

2017

193,814

112,474

333,336

541,626

290,763

1,165,725

10,137 13,954 29,225

119,168

6,561

2016

118,544

172,484

275,008

427,820

232,310

935,138

179,045

17,886 41,212 34,736

186,810

7,104

2015

12,038 10,469 11,626

705,387

343,552

118,181

280,644

264,604

484,878 404,311

1,153,793

287,748

19,699 32,785 60,858

326,870

917

440,212

285,099

466,189 333,695

1,084,983

14,639 37,452 31,829

225,689

1,741

309,609 311,350

21,174 41,078 19,142 51,441 2,143

2013

441,129

2012

2013

2014

2015

2016

2017

2018

2019

14,041

379,282

2020

60,038

2014

25,470 12,516

132,835

294,495 398,556 282,859

307,797

485,132

975,910

655,313

1,448,242

655,720

1,401,750

134,978

19,764 25,102 5,284 24,234 1,780

2011

2020

6,116

MEXICO

74,384 76,164

330,718 415,312

# of cattle Washington Idaho Montana North Dakota Total Featured States Total All Other States U.S. Total

DIRECTIONS 2021

# of cattle Arizona

New Mexico

Texas

U.S. Total

California had no imports.

NATIONAL CATTLEMEN

LIVE CANADIAN IMPORTS IMPORT OF TOTAL SLAUGHTER CATTLE 2007

824,588

2008

836,286

2009

750,522

2010

839,256

2011

597,285

2012

675,521

2013

724,015

2014

723,181

2015

508,202

2016

576,344

2017

515,723

2018

427,688

2019

528,157

2020

536,287

FEED AND GRAIN

$/Bushel 8.0 7.5

Barley

7.0

Sorghum

Corn

Wheat

6.5 6.0 5.5

Wheat $4.86 Barley $4.71

5.0 4.5 4.0

Corn $3.50 Sorghum $3.42

3.5 3.0 2.5 2.0 1.5 1.0 0.5

NATIONAL CATTLEMEN

0 20 2

19 20

18 20

17 20

16 20

5 20 1

4 20 1

3 20 1

2 20 1

11 20

0 20 1

9 20 0

8 20 0

7 20 0

6 20 0

20 0

0.0

DIRECTIONS 2021

2005

61% of Total

Total By Product --- $8.32 Hides --- $5.31

2006

64% of Total

Total By Product --- $9.94 Hides --- $5.56

2007

56% of Total

Total By Product --- $10.49

2008

48% of Total

Hides --- $5.00 Total By Product --- $7.61 Hides --- $3.30

2009

43% of Total 50% of Total

Total By Product --- $10.73

2010

Hides --- $5.37

2011

Hides --- $6.16

2012

Hides --- $6.34

Total By Product --- $13.19

47% of Total

Total By Product --- $13.17

48% of Total

Total By Product --- $14.20

2013

Hides --- $7.20

2014

Hides --- $7.92

51% of Total

Total By Product --- $15.88

50% of Total 48% of Total

Total By Product --- $12.92

2015

Hides --- $6.14

2016

Total By Product --- $11.23

46% of Total

Total By Product --- $11.28

41% of Total

Hides --- $5.17

2017

Hides --- $4.66 Total By Product --- $9.59

2018

Hides --- $3.63

2019

Hides --- $2.59 Hides --- $2.08

2022 REDBOOK

2020

BY PRODUCTS

Total By Product --- $8.15 Hides --- $4.97

DIRECTIONS 2021

Total By Product --- $8.88 Total By Product --- $8.01

38% of Total 29% of Total 26% of Total

For over thirty years cattlemen and women have used the IRM Redbook to enhance profitability by keeping better records, and to track the productivity of their cow-calf operations.

Features of the Redbook include: Beef Quality Assurance Best Practices Injection Site Quality Control Calf Information Health Records

Customize your Redbooks in quantities of 100 books or more. Contact gwebb@beef.org for more information. Non-customized redbooks will be available for purchase online starting October 5th at store.ncba.org.

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WEATHER OUTLOOK Fall, Winter and Spring Outlook Hinges Upon Another La Niña

drought as well as sharply cold conditions during the winter for the central U.S.

By Matt Makens, Atmospheric Scientist

Although last year will be looked at, I believe 2013 and 2017 are stronger candidates as similar years to what we should expect this go-round.

La Niña will spread its impact across the country for the second year in a row leaving the West in dire need of water. Ocean conditions point toward continued drought for the western U.S. as another La Niña event is expected this fall, winter and spring. La Niña, and its counterpart El Niño, get a lot of attention this time of the year, and for a good reason. Both create recognizable weather patterns across the globe.

These analogous years show similar ocean and atmosphere conditions, and therefore, are the historical basis for which to build this outlook. In this case, the combination of the most similar years yielded the following results for wet (green) and dry (orange) areas from September through May.

The fall through spring 2021-2022 forecast will jog your memory on La Niña years of the past, most recently last year, which recorded a rapid intensification of the western and northern U.S.

Temperatures took on the following combined look of those analogous years with cooler than average areas in blue and warmer areas in red.

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DIRECTIONS 2021

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ahead for water. The best chance to boost snowpack for available water supply will come during the spring. Temperatures will be warmer-than-average. Northern Rockies: Montana and northwestern Wyoming will likely fare the best in terms of moisture for this region. Overall, for the period, this region has a 60 percent likelihood of wetter-thanaverage conditions. The driest areas are historically eastern South and North Dakota, which will lead to further drought conditions here. Although somewhat evenly split between the seasons, the spring is likely to be the best opportunity for moisture. Model projections are less optimistic about moisture for this region and keep this area in an equal chance for above or below average moisture. Temperatures east of the mountains will be cooler-thanaverage, with several dangerous cold snaps possible. However, fall may be warmer-than-average, with the cooler weather holding until winter and early spring. I am not trying to imply that all La Niña or El Niño years will produce the same result for your area; however, there are distinct trends that we will look at now. Part of the recent trend is to note ocean conditions elsewhere that will, in this case, work toward reinforcing La Niña’s grip on the West. Cool water is observed southwest of California and warm water in the northern Pacific near Alaska, which both lead to reinforcing drier-than-average conditions across the West. This effectively limits the needed moisture for the Pacific Northwest to the Desert Southwest. Some factors will need to be watched closely over the next several months, mainly that goes to watching when this La Niña fades, and El Niño develops. As of this writing, that is most likely for later 2022, but an earlier onset would be an ideal scenario for providing water to the drought-stricken West. As it stands now, La Niña will control us through early and mid-2022, which is a lousy situation for water in the West. The first-ever federally declared water shortage was issued in August for those utilizing the Colorado River, and recommended conservations/restrictions are certainly prudent considering this outlook. Now to the outlook for September 2021 through May 2022: Northwest: The northeastern parts of the region will fare better for water than for those elsewhere. That part of the Northern Rocky Mountains may see an uptick in snowfall in the winter and spring. Wetness here is more frequent than dryness in similar years. Much of Idaho’s lower country as well as Oregon and Washington will more frequently end the run being drier-than-average. Fall (September through November) is more frequently drier-thanaverage, as is early to mid-winter. Late winter through spring will see an increase in moisture. Of the three seasons, spring has a higher probability of moisture versus fall and winter. In total, this entire region is 30 percent likely to be wetter-than-average for this period. There is some model data to indicate that the Pacific Northwest will be wet throughout the period. That same modeling suggested the same wetness for last year, which didn’t pan out, and should not be counted on as a reliable data input at this time. Temperatures are likely to be near to warmer-than-average. West: These states have a 10 percent probability of ending this period wetter-than-average. The ocean situation near-to and farfrom this region is too powerful a drought signal to hope for much moisture. Improvement can come when, and if, El Niño establishes itself, but that will be well into 2022. Plan on another bad year 60

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Southwest: The driest of these states will be Utah and Arizona, which have a historically low likelihood of moisture throughout the period. Northern and northeastern Colorado has the highest chance for moisture and historically has a 70 percent chance of a wet period. The region in total, however, only stands a 30 percent chance of a wet period. Temperatures for eastern Colorado will have the potential to be cooler-than-average, with some dangerous cold periods to come through for producers. Most of the region, however, will be warmer-than to near-normal. Upper Midwest: This region in total will end near-average in terms of precipitation. The region's northern half is likely to be wetterthan-average; meanwhile, drier-than-average conditions are more typical in this setup for the southern half, which is much of Iowa. Temperatures will be cooler-than-average, with several dangerous cold snaps possible. South: Kansas, Oklahoma, and western Texas lean drier-thanaverage in this setup. These areas have less than a 30 percent likelihood of a wet outlook. Parts of eastern Texas, Arkansas, Louisiana and Mississippi favor some periods of wetness and historically have a 70 percent chance for above average moisture through spring. Computer modeling agrees with the historical assessment. Temperatures may end up cooler-than-average during the period; look for strong cold fronts to push south occasionally. Dangerous cold is a possibility as it was in early 2021. Ohio Valley: Missouri is likely to be the driest of these states, followed by Tennessee. Moisture will favor southern Illinois, Kentucky, Indiana, and Ohio – with western Kentucky being the most wet. West Virginia leans slightly wetter-than-average, historically. In all, this region will break even; moisture will favor the eastern areas. Temperatures will be normal-tocooler-than-average. Northeast: This region will break even in terms of moisture. Historically, and in forecast modeling, these areas will experience hit and miss pockets of moisture. Nor’easter events will need to be watched for significant moisture in a short time along the coasts and for parts of inner New England, too. Far northern areas of this region are most likely to be warmer-than-average. Southeast: Tropical systems through fall will be the best chance for moisture here, and that was the primary source of moisture in those most similar years in the past. Barring tropical activity, this region has a 40 percent chance of a wetter-than-average period. South Florida is usually the driest of all zones. Wetness has been more frequent for those in the northern parts of this region. Temperatures are likely to be near normal. DIRECTIONS 2021

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MARKET UPDATE Drought Conditions and Weather Forecast Drive Continued Liquidation By Kevin Good, CattleFax Vice President of Industry Relations Liquidation of the nation’s beef-cow herd seen in 2019 and 2020 continues. The July 1, 2021, USDA Cattle Inventory report showed the current U.S. beef-cow herd is 650,000 head smaller compared to July 1, 2020. The La Niña weather pattern, which developed in mid-2020, continued in 2021 and is forecast to extend into 2022. It is a major reason why the beef-cow herd continues to experience liquidation. This is especially true in the western third of the U.S. as well and the Northern Plains where the drought is most severe.

other than drought have played a role in producers’ decisions to cull more cows through the first half of the year. Producers could be motivated by the highest summer cull-cow values since 2016. Utility cow prices are averaging more than $70/cwt this summer. Furthermore, pandemic challenges, processing availability and market volatility have exhausted some producers.

Presently, nearly 30 percent of the U.S. beef-cow herd is in moderate or worse drought conditions. Yes, there were several years that were worse, particularly during the mega drought cycle between 1998 and 2013 (a timeframe when the beef-cow herd liquidated every year except two). But historically, the percentage is high and would suggest that the cow herd will continue to liquidate until weather conditions improve. Liquidation is continuing even though calf values are trading $20/cwt higher moving into the fall run compared to the past two years, and for the average cow-calf producer, would offer some level of profitability. Unfortunately, if you are located in a region with limited moisture, the lack of feed and the high price for roughage is more than offsetting the stronger calf values as the decision-maker for keeping or culling females. Year-to-date in 2021, beef-cow slaughter is running 10 percent above last year’s high numbers and well above the five-year average. Elevated cow slaughter is noted in not only the drought effected regions but also in regions like the Southeast that had adequate moisture. This would suggest that factors

62 NATIONAL CATTLEMEN CATTLEMEN

Year-to-date, the implied U.S. beef-cow culling rate is at 11.2 percent, substantially higher than last year. By comparison, this year is larger than 2012, but less than levels in 2010 and 2011. Those three years were in the middle of a massive cow herd contraction and drought cycle that was nearing its end. From 2009 to 2014, the U.S. beef-cow herd declined nearly 2 percent annually. The 2020 and 2021 drought is young by comparison, but obviously, it is taking its toll.

Continued on page 64

DIRECTIONS 2021

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Look for the REGISTRATION NUMBER. Bring the Power of Angus to your herd. Angus.org/PBA.

Continued from page 62 7

The number of heifers in feedyards and the number of heifers in the slaughter mix are elevated. In 2019, 2020 and year-to-date in 2021, the percent of heifers in the fed cattle slaughter mix is higher than 37 percent. Historically, a percentage of 36 or higher indicates liquidation of the cow herd due to lack of heifer replacements, below those numbers indicate some expansions. Moreover, the number of heifers moving in the country through auctions and video sales is also elevated. Many of these heifers were intended to be bred this year, but as weather conditions deteriorated producers had to make the tough decision and send replacement quality heifers to town to preserve their dwindling supply of feed resources. 6

All these factors would suggest the beef-cow herd liquidation will continue through 2021. In addition, with the current weather forecast for La Niña to continue and with the amount of heifers that have already moved from the county into feedyards, it is very likely that more beef-cow herd liquidation is in store for 2022. This will be primarily in regions of the country that are being adversely affected by drought. At the same time, due to greatly improved calf values, producers in some regions of the country with adequate feed resources are expected to keep back heifers and start expanding in response to profitability.

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DIRECTIONS 2021

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DROUGHT M A N AG E M E N T Making it Through the Winter Without Destroying Future Grazing Resources

U.S. Drought Monitor

By Hugh Aljoe, Noble Research Institute Director of Producer Relations Looking at the Drought Monitor dated Sept. 9, 2021, we see over 55 percent of the U.S. is currently experiencing abnormally dry to exceptional drought conditions (see adjacent graphic). Most of the drought conditions are in the West and Northwest. While the weather drives one part of the story, management decisions drive the other. In drought situations it is not just about the next significant rainfall event, it is also about managing through the next two or more growing seasons. Many cattlemen and other agricultural producers in the Western and Northwestern U.S. have faced drought conditions for most of this year. In fact, most of these producers have experienced at least two dry growing seasons. Drought affects the land, the grasses and grass productivity, which impact livestock production and a rancher’s bottom line. Contingency plans for drought should be a part of a ranch’s overall operational management plan, so when drought conditions occur, one has a protocol of decisions to be assessed and decided upon. This approach minimizes the adverse impacts and stress associated with the decisions to be made. Hopefully, the cattlemen affected this year had a good drought contingency plan and have made good use of it. B:7.6325" Regardless, there needs to be a plan in place to get through the winter T:7.6325" and into spring. In this article, we will focus on pasture management during drought conditions for the winter and early spring. S:7.6325"

(Released Thurs. Sept 9, 2021) Valid 8 a.m.

SL SL L

Drought Impact Types:

Intensity:

Delineates dominant impacts S = Short-Term, typically less than 6 months (e.g. agriculture, grasslands) S

L = Long-Term, typically greater than 6 months (e.g. hydrology, ecology)

None D0 Abnormally Dry D1 Moderate Drought D2 Severe Drought D3 Extreme Drought D4 Exceptional Drought

Authors United States and Puerto Rico Author(s): David Simeral, Western Regional Climate Center

“If we’re being truthful, we’re grass farmers. We manage the land so cattle can harvest it.” KEVIN YON YON FAMILY FARMS, SOUTH CAROLINA

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DIRECTIONS 2021

Start with a Pasture Assessment The first place to begin is with an assessment of the pasture grazing condition. Take inventory of your pastures and score the condition of each. A simple categorization of ‘poor’, ‘fair’, ‘good’ and ‘excellent’ is all that is required. It is important to visualize pasture grazing condition. For example, a poor-condition pasture has been grazed severely, perennial grass plants are weak or dead, and little residual forage remaining. Fair-condition pasture is described as having a healthy plant community with some residual but no additional forage for grazing going into winter. Good-condition pasture has a healthy plant community and a good amount of grazeable forage remaining at the end of the growing season. Excellent condition has a stockpile of reserve forage, perhaps due to more favorable moisture conditions during the growing season.

substitute-feeding hay. All options have costs, and every rancher must weigh each option carefully in relation to their own context. To prevent damaging the pastures by over-utilization, destocking is the best option. One should never carry more livestock than the pasture resource can comfortably support. While drought conditions often make us consider the capacity to carry the animals we have, carrying capacity should be a principle that we constantly evaluate. That principle should be adhered to in the short- and long-term and evaluated throughout the year. Stocking rate should be routinely adjusted based on pasture or range conditions, which are largely affected by moisture conditions. Focus on Each Pasture’s Condition

Once we have a good mental picture of our range and pasture condition based upon our assessment, we can then determine Once condition is established, determine how much grazing is how we need to manage our pastures through winter and into available in the good and excellent condition pastures, assuming spring. Pastures in poor and fair condition do not have forage to there is adequate livestock drinking water in those pastures. Most graze during winter. They also have perennial grasses that are cattlemen have a good idea of how many weeks or months of subject to winterkill from two main factors — depletion of energy grazing is ahead of them relative to the cattle numbers being reserves within the root system, and exposure to the elements carried. Ideally, there is more than enough to get the existing herd due to a lack of residual plant material that helps insulate through the winter, or a slight adjustment can be made to match growing points. Producers should avoid grazing these pastures cattle numbers to fit the amount of forage available for winter altogether during the winter and should delay grazing in the grazing with hay feeding limited to the inclement weather periods. spring until after spring full — flush has occurred. Depending on the severity of use over the last growing season, poor condition If livestock numbers exceed the grass and hay reserves, pastures may need a full growing season of rest to restore the cattlemen face more difficult decisions. Choices will likely be between destocking by selling some or all cattle, relocating them B:7.6325" health and vigor of surviving plants and to allow recruitment of new plants. Often annual grasses and weeds/forbs emerge early to areas with forage, or purchasing hay and feeding through T:7.6325" in the spring following a season of over-utilization or drought. the winter or longer. Destocking and relocating cattle are often better options to prevent damaging the grazing resource than S:7.6325" A surplus of these annuals can inhibit growth of the desirable

“Weeds rob me of my investment — taking up nitrogen and water and crowding out grass.” DR. NANCY JACKSON, DVM SOUTHERN CROSS FARM, MISSISSIPPI

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DIRECTIONS 2021

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perennial grasses as well. There may be a window of opportunity in the spring to graze the annuals, but defer grazing for all or most of the growing season once the desired perennials start growing well. Be prepared to address invasive or nuisance weeds if they appear on key pastures early in the spring. Pastures in good condition should not be over-utilized during the winter. Adequate residual should always be maintained to ensure health and vigor of existing grass plants next spring. Come spring, these pastures should be able to tolerate grazing early, but manage stock numbers such that grass grows faster than cattle can graze it. This is called ‘graze the grass up,’ which is a normal occurrence if the pasture is stocked appropriately. Drought-stressed pastures will respond differently in the spring, in that the desired grass plants may ‘green up’ later than usual. As a result, expect to fully stock drought-stressed pastures a little later in the spring after vigor and regrowth capacity is assessed. With spring moisture, pastures well-managed during drought conditions will usually respond very rapidly, but that can be delayed if they are over-utilized during the winter. Excellent-condition pastures heading into winter are best suited for winter grazing, even in a drought. They respond early in the spring and usually accumulate forage more rapidly than pastures in lesser conditions. Having managed these pastures so there is standing reserve forage for winter grazing, and by maintaining good residual after grazing, these pastures will be the ones ready to graze early next spring, and they should be the first ones grazed.

Substitute-Feeding Guidelines It is rarely recommended to feed through a drought because it is expensive and usually cost-prohibitive. If you are experiencing drought, so are your neighbors. Unless already in storage, hay must be trucked in from a region where hay is more plentiful, often several states away, which adds to the cost. Although substitute feeding is not the preferred option in pasture management during drought, here are guidelines and recommendations for producers who choose to substitute feed. When feeding hay as a substitute for a prolonged period, attempt to purchase hay that meets or slightly exceeds livestock requirements for the physiological stage of the cattle being fed during the anticipated time frame. Below is a table listing the dry matter intake (DMI), energy (as total digestible nutrients – TDN) and crude protein (CP) for a 1,200-pound beef cow as an example.

B:7.6325" T:7.6325" S:7.6325"

“Grass production is the center of our universe. It’s the foundation for everything we do.” TOMMY BRANDENBERGER 96 CATTLE COMPANY, TEXAS

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DIRECTIONS 2021

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When feeding hay, consider the feeding location carefully. Some producers may opt to feed in a dry lot in order to impact a small area. The largest issue related to a dry lot is mud during periods of moisture, which may not become an issue until spring or when the drought breaks. Have a plan in place to move the cattle out of the lot prior to calving, or use a fresh calving lot for freshening cows. In any case, one will want to place new cow-calf pairs on fresh areas, preferably on pasture, to minimize potential health issues such as scours and pneumonia in the calves. Another option is feeding hay on a sacrifice pasture. Knowing that the location will be heavily contaminated with manure and hay residue, select an area that would benefit from the concentrated waste materials or that would recover rapidly during the next growing season with a little additional management. An ideal sacrifice area would be one with low plant density, lots of bare soil and is not prone to erosion. Such a pasture could use the extra waste materials to cover the soil and supply extra nutrients for forage production in the future. A shallow, rocky site or a weak, sandy site are examples of good sacrifice areas within a pasture setting. Other sites that often make good hay feeding areas are pastures with perennial introduced forage, or no-till croplands that with a little light renovation and weed control would recover rapidly. Spring Pasture Considerations for Grazing We hope next spring we will see the drought abated and favorable moisture conditions return. If so, we still need to be cautious about restocking pastures too early. Assess if your pastures respond next spring with the vigor and health of pre-drought conditions. If so, determine the management needed to shape up each pasture, prioritizing the most productive pastures. If investments of time, money and/or labor are needed to improve or restore pastures, the best investment is usually with the most productive pastures. However, the two most important management activities next spring are: 1) stock cattle in proportion to forage production as it occurs, and 2) provide adequate rest and recovery to the droughtstressed pastures. As one comes out of a drought, do not expect to return immediately to the pre-drought stocking rate. Allow for the perennial grasses to regrow and recover before attempting to fully restock, especially if some or most of your pastures were in poor or fair grazing condition going into winter. If destocked, allow most of the pastures to grow to full-flush before adding stock

numbers in the spring. Even then, stock conservatively to allow extra reserve forage to accumulate before next winter. Provide for adequate rest and recovery of the drought-stricken pastures next growing season to improve rate of recovery. In more arid areas, which describes most of the drought-affected region today, growing season deferment for the most impacted pastures is a viable consideration. Give these pastures a “Sabbath rest”, where the land is to be given a full year rest before being grazed. For pastures in good-to-excellent grazing condition going into winter, adequate rest and recovery next growing season means to graze the pastures taking only the top half of the forage plants and then allowing the pastures to fully regrow again before re-grazing. In arid areas, this may mean using a rest-rotation system where a grazing event will be followed by extended periods of rest and recovery, with some pastures only being grazed once a growing season or year. In less arid regions and in operations using adaptive multi-paddock (AMP) grazing or other forms of managed rotational grazing where multiple grazing events occur each growing season, focus on allowing pasture grasses to fully recover from previous grazing before being re-grazed. Again, when grazing, care should be taken to top-graze early in the growing season and maintain adequate pasture residual through the remainder of the growing season and in the dormant season. Concluding Remarks Drought is a regular obstacle in most of our grazing land environments. As cattlemen and grazing land stewards, we need to be prepared with contingency plans for droughts. As we experience drought conditions, we need to focus even more on our pasture management. The cows may be the factory of many of our operations and the calves our product; however, the pastures supply the foundation and utilities to the factory. How well we plan and intentionally manage our pastures before, during and immediately after a drought often determine the rate of recovery and the future carrying capacity of the ranch. As in all management activities that matter, to manage them well we need to continually monitor, assess and adapt. Pasture management is no different. In times of stress such as drought, more active management is required to preserve the operation and the land resource. Planning now for winter management of pastures will increase the odds of a better spring season.

DROUGHT M A N AG E M E N T 70

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DIRECTIONS 2021

Don’t let resistant flies come back to haunt your cattle next spring. Put a big dent in resistant fly populations with a fall application of BRUTE®. Studies show that the best way to stop resistant flies from attacking your cattle next spring is to hit them with an application of BRUTE® Pour-on for Cattle this fall. BRUTE® controls horn flies, face flies and other biting flies, as well as Gulf Coast ticks and lice. Best of all, BRUTE® protects your cattle for as little as 48 cents a head. So make sure resistant flies don’t come back to haunt your herd next spring by treating your cattle with BRUTE® this fall.

DIRECTIONS 2021

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PRODUCER EDUCATION Creating Opportunities for Learning and Continuous Improvement

Cattle producers are continuously looking to improve everyday practices on the farm or ranch and tell their beef production story to consumers. It is more important than ever for producers to have the most up-to-date information and resources. This is where the National Cattlemen’s Beef Association, a contractor to the Beef Checkoff, Producer Education and Sustainability team comes into play. The Producer Education team oversees two Beef Checkofffunded programs, the Beef Quality Assurance (BQA) program, and the Masters of Beef Advocacy (MBA) program. Additionally, the team manages the Cattlemen’s College program, Cattlemen’s Webinar Series, the Stockmanship & Stewardship program, the Rancher Resilience Grant and the development and distribution of the Integrated Resource Management Redbook. Serving as the administrator for the U.S. Roundtable for Sustainable Beef is also an important role of the team. Now let’s take a deeper dive into how these programs are serving you and how you can engage. Beef Quality Assurance The Beef Checkoff-funded national Beef Quality Assurance (BQA) program, started in 1991, improves and enhances the desirability of beef by educating producers on best management practices to improve beef quality and provide consumers with a safe, wholesome and healthy beef supply. The nationally-coordinated, state-implemented program partners with BQA state coordinators

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across the country to organize and execute BQA training opportunities. Not only can producers and transporters attend in-person trainings, certification can also be accomplished in the comfort of your own home. The BQA online modules provide a way for people to get certified anytime at no-cost. The online modules take two to three hours to complete and are a convenient way to learn. Once an account is created, producers and transporters have full access to all the modules. The online system saves your progress in the module so you can easily pick up where you left off, and your account also stores your BQA certificates for easy access. The combination of training and certification modules, new partnerships for expanded reach of the BQA program, and the diligent efforts of state BQA coordinators has increased the number of documented certifications and reached hundreds of thousands of beef producers. In 2017, the BQA program formed a partnership with and began recognizing the National Milk Producer Federation’s Farmers Assuring Responsible Management (FARM) program as an equivalent to BQA certification for dairy producers. Working with the FARM program, BQA information and priorities were added to the FARM 3.0 evaluation as well as a new annual Employee Training requirement. BQA training, as well as other dairy specific quality assurance training programs, satisfies this requirement. The NCBA Producer Education team continues to work with FARM to develop sector relevant training resources. Also in 2017, BQA established a partnership with the Youth for

DIRECTIONS 2021

the Quality Care of Animals (YQCA) program as meeting the guidelines for BQA certification. This program is a joint effort of various livestock groups to provide a multi-species youth quality assurance training and certification platform. Because BQA did not have a youth program, this filled a gap in programming with age-appropriate educational material. These partnerships allow the BQA program to offer better educational opportunities for those in the dairy industry as well as youth under the age of 21 who raise and handle cattle. Calf Care and Quality Assurance More recently, the BQA team is working with the National Dairy FARM program, the Dairy Calf and Heifer Association, and national Veal Quality Assurance, to develop a suite of resources for farmers and ranchers who raise calves intended for dairy and/ or beef production systems. The Calf Care & Quality Assurance (CCQA) program, partially funded by the Beef Checkoff, recently released a manual which highlights best management practices for those raising calves. In addition to the manual, the CCQA program offers resources specific to the needs of calf raisers such as protocol templates and animal observation scoring reference guides. Online and in-person opportunities for individuals looking to be CCQA-certified, as well as a facility self-assessment, will be available later this year. Information and resources for the CCQA program can be found at www.calfcareqa.org. Daily Biosecurity Plan The BQA program also recently developed a Daily Biosecurity Plan for Disease Prevention template. The template, which helps cattle producers implement daily biosecurity measures on their operations, is available digitally as a PDF or can be printed for handwritten plans. The template was specifically designed to be customizable, giving producers flexibility in determining management practices that work best for their operation and covers everything from animal movement to worker training. In addition to providing basic information, the tool emphasizes why biosecurity is vital on cattle operations and provides an opportunity for producers to converse with their herd veterinarians, extension agents and state BQA coordinators about biosecurity preparedness. The Daily Biosecurity Plan for Disease Prevention template was created in collaboration with the national Secure Beef Supply plan which was created so that our industry is prepared in case of a Foreign Animal Disease outbreak. By intersecting these resources, producers who already have biosecurity steps in place for day-to-day operations can easily create an enhanced biosecurity plan to prepare for a potential foreign animal disease. BQA Advanced Education Modules BQA has also developed and released the first of several planned Advanced Education Modules. Don’t know where to start in completing the Daily Biosecurity Plan for Disease prevention mentioned above? This initial module, focused on biosecurity, will deliver details on the basics of disease transmission and prevention practices. It was developed so anyone who is involved in raising cattle — from the operation manager to personnel to family members — can understand how biosecurity principles are integrated into their farm or ranch and plan for continuous improvement in the future. Interactive and real-world examples are provided for a variety of topics such as new bull or replacement purchases and manure management to reducing feed contamination. Best of all, as part of the training, producers can fill out the Daily Biosecurity Plan for Disease prevention and walk away with an operation specific biosecurity plan. DIRECTIONS 2021

HELP US

HELP YOU

APPLY TODAY!

Anytime you leave the ranch it’s a big investment of your time and energy. That’s why the National Cattlemen’s Beef Association, in partnership with Cargill and the National Cattlemen’s Foundation, developed the Rancher Resilience Grant to help make it even easier by funding registration and housing costs for top education events like these:

Oct. 14 – 15, 2021 King Ranch Institute for Ranch Management, Sustainable Ranching Symposium Kingsville, TX

Oct. 22 – 23, 2021 Stockmanship & Stewardship Bowling Green, KY

Nov. 6 – 8, 2021 2021 Angus Convention Fort Worth, TX

Nov. 31, 2021 CattleFax 2022 Outlook & Strategies Seminar Centennial, CO

Dec. 6 – 9, 2021 Grazing Lands Conference Myrtle Beach, SC

Jan. 31 – Feb. 1, 2022 Cattlemen’s College at the Cattle Industry Convention Houston, TX

(available when Convention Registration opens Nov. 1)

Just visit NCBA.org – hit the “Producers” tab and look for Rancher Resilience Grant. There you’ll find all the info you need to apply for a Grant, as well the requirements to receive reimbursement. NATIONAL CATTLEMEN

As mentioned above all the producer-friendly resources available from BQA can be accessed on our website. To learn more about the BQA program, becoming BQA certified or to contact your BQA state coordinator, visit www.bqa.org National Beef Quality Audit How do we, at NCBA, check to see if BQA is making a difference? How do we know we are being progressive as an industry? The answers are revealed in the Checkoff-funded National Beef Quality Audit (NBQA). Conducted about every five years since 1991, the NBQA is a comprehensive survey that evaluates beef industry efforts to improve beef quality. It serves as a beef industry “scorecard” and tracks where we are as an industry in relation to beef quality. The NBQA also helps evaluate the effectiveness of the BQA program and informs any updates to the educational resources produced by the program. Results of the most recent 2016 NBQA are available on the BQA website. Currently, we are in the process of collecting in-plant data and hosting interviews of large beef buyers for the latest version of the NBQA with a projected release date of 2023. Masters of Beef Advocacy Program The Checkoff-funded MBA program was created 12 years ago as a self-directed, online training program to equip and engage beef advocates to communicate about beef production with consumers. This past year was exciting for the MBA program because of the launch of MBA NextGen, the next generation of beef advocacy training.

To become an MBA graduate, students complete five modules covering environmental sustainability, beef nutrition, animal welfare and beef safety while talking through the beef lifecycle. Upon completion, advocates gain access to a variety of continuing education resources. These range from online courses, delving deeper into specific topics such as beef sustainability and nutrition, to in-person top advocate training, and more. Graduates are also invited to join the Masters of Beef Advocacy Alumni Facebook group, a virtual community for MBA graduates to ask questions and get connected to the latest advocacy resources. Over the years, the MBA program hit many milestones, including 15,000 MBA graduates in 2019, launching MBA NextGen this year, and creating the Advocate of the Year Award, to recognize outstanding beef advocates. This past year, we recognized Kiah Twisselman Burchett for her work in sharing her beef story on social media and her efforts in reaching consumers. If it has been a while since you first became an MBA graduate or if you have not explored MBA before, head to www.mastersofbeefadvocacy. com to learn more and get involved! Cattlemen’s College

Delivered annually at the Cattle Industry Convention and NCBA Trade Show, sponsored by Zoetis, the mission of Cattlemen’s College is to provide cutting-edge information to the beef industry to improve profitability, sustainability and management practices for each sector. This two-day program hosts more than 1,000 cattle producers from across the country and has become the cattle industry’s number one resource providing education and advice for improving all segments of cattle production. Stimulating and thought-provoking sessions help generate positive impacts for cattle operations, as well as spark discussions leading to innovation and advancement in our rapidly changing industry. The Producer Education team works hard to ensure these sessions are delivered by industry-leading experts from academia, business, and fellow farmers and ranchers. Topics are selected through a “call for speakers” process and submissions are reviewed by a working group of cattlemen and women, business leaders, and academia. Cattlemen’s College has maintained its reputation as one of the most respected educational cattle events in the U.S. by providing attendees with a wide range of timely topics. Make plans now to attend the 2022 Cattlemen’s College in Houston where topics include cattle genetics, reproduction, nutrition, cattle Expanding Your Advocacy Influence panel discussion at Cattle Industry health and other trending subjects. Convention and NCBA Tradeshow.

74 NATIONAL NATIONAL CATTLEMEN CATTLEMEN

DIRECTIONS 2021

We realize it is impossible for producers to see every session at this content-packed event, which is why we record sessions and make them available for attendees to view after the event. To learn more about Cattlemen’s College PRODUCERS TAB visit the Cattlemen’s College page under the “Producers” tab on www.NCBA.org. Cattlemen’s Webinar Series The Cattlemen’s Webinar Series brings educational opportunities to the producer’s operation. These webinars reach thousands of cattlemen each year in a unique format that allows for audience interaction with presenters. Leading industry speakers from across the country present the latest information on topics ranging from grazing and risk management to genetic improvement. This year the Cattlemen’s Webinar series produced a three-part grazing management series, a policy update and a webinar discussing how producers can utilize hedging as a form of protection. For those that cannot attend “live”, the sessions are recorded and are always available – just visit the “Producers” tab at www.NCBA.org. Stockmanship and Stewardship With the ever-growing importance of practicing proper stockmanship principles, NCBA developed the Stockmanship and Stewardship program. The program, now in its fifth year, has reached new heights thanks to a partnership with Merck Animal Health. Beyond the demonstrations that have reached thousands of producers across the countryside, the program hosts multi-day regional events each year that draw larger crowds and provide attendees opportunities to interact with clinicians and learn during both live demonstrations

and classroom sessions. Attendees also can become BQA certified at every event. The Stockmanship and Stewardship program is partly sponsored by the National BQA program which is funded by the Beef Checkoff. This year the Stockmanship and Stewardship tour visits Elko, Nev; Durango, Colo.; Danville, Ind.; and Bowling Green, Ky. A schedule of the events and more information can be found at www. stockmanshipandstewardship.org. NCBA Integrated Resource Management Redbook Keeping records on a cattle operation is vital. That is why the Producer Education team produces the NCBA Integrated Resource Management Redbook annually. This pocket-sized, low cost, high value recordkeeping tool has been used by cattle producers for more than 30 years to record daily production efforts effectively and efficiently. The book has more than 100 pages to record calving activity, herd health, pasture usage, cattle inventory, body condition, AI breeding and more. It contains a Producers Guide for Judicious Use of Antimicrobials in Cattle, Beef Quality Assurance management practices and proper injection technique information. More than 75,000 copies of this book are sold every year to businesses and producers around the U.S. The 2022 Redbook will be available online early October. Visit store.NCBA.org to purchase your copy. Rancher Resilience Grant Now Available A new program just released in the past few months – the Ranchers Resilience Grant was designed to support cattle producer attendance at impactful education events. Specifically, attendees can apply to receive reimbursement for registration and hotel expenses at approved events by visiting the “Producers” tab at www.NCBA.org.

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A few examples of events already approved and available for producers to apply for grant support this fall include King Ranch Institute for Ranch Management Sustainable Ranching Symposium, CattleFax Outlook & Strategies Seminar, National Grazing Lands Conference and more events are being added each month. The grants are made possible by a partnership between the National Cattlemen’s Foundation and Cargill Protein and are administered by the National Cattlemen’s Beef Association. NCBA Sustainability Policy Initiatives NCBA acts as administrator for the U.S. Roundtable for Sustainable Beef (USRSB) and is also a USRSB member. The USRSB is a multi-stakeholder initiative formed in 2015 focused on supporting beef production needs of today, while improving the ability of tomorrow’s beef value chain to responsibly meet the needs of consumers in the future. With the support of the Producer Education team and many other ranchers, retailers, foodservice operators, land grant universities and packers, the USRSB developed a sustainability framework for the beef industry. The voluntary tools focus on maximizing profitability while prioritizing care of land, animals and people. Apart from implementation on operations throughout the beef supply, these tools can help producers discover ways to better communicate the positive work done on their farm or ranch. The framework drills down into air, soil and water quality; animal health; employee safety and operational viability. It highlights an individual operation’s unique role in sustainability. Please visit

www.beefsustainability.us to learn more about the framework. Since the launch of the U.S. Beef Industry Sustainability Framework, the USRSB has developed a comprehensive series of sustainability modules. Modules are sector-specific and are currently available for cow-calf/stocker/backgrounder, auction markets, feedyards and packers/processors. The modules contribute to the USRSB’s mission to advance, support and communicate continuous improvement of sustainability across the U.S. beef value chain and act as part of the USRSB framework outreach program. Each module series has multiple interactive videos covering topics relating to the respective sector. These resources are not just for owners and managers but can be used by any individual who plays a role in the beef supply chain. Visit www.usrsb.org/resources for more information. Today, the USRSB has begun a goals-setting process to advance the continuous improvement of the U.S. beef industry. This process aligns with the USRSB’s mission and vision to advance the U.S. beef industry’s sustainability in a meaningful way. This effort will set credible goals for the industry and practical targets for each sector of the value chain, helping the USRSB reach their vision of becoming the trusted global leader in environmentally sound, socially responsible and economically viable beef. To learn more about the U.S. Roundtable for Sustainable Beef, please visit www.usrsb.org.

PUT YOUR PERKS TO WORK!

MEMBER BENEFITS Proudly representing the cattle industry on Capitol Hill for more than 100 years, NCBA continues to represent America’s cattle industry by: •

Defending cattlemen’s private property rights against overreaching governmental regulations

•

Protecting cattlemen’s family legacies with estate tax relief

•

Adding value to cattle and beef by working to open international markets

•

Delivering cutting edge producer education opportunities to improve cattlemen’s bottom lines

•

Constantly watching for potential threats from animal rights groups

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CONSUMER R E P O R T The National Cattlemen’s Beef Association (NCBA), as a contractor to the Beef Checkoff, is continually tracking trends, monitoring issues, and surveying the general landscape that has the potential to impact the food industry. NCBA does this through a variety of tools, most notably by conducting consumer and market analysis, funded by the Beef Checkoff, while also scanning secondary research resources. Across the food landscape we continue to see some pandemic dynamics that existed in 2020 continue to play out, while also seeing signs of other behaviors reverting back to some degree to prepandemic norms. This article will touch on a variety of topics including the current state of consumers and beef, e-commerce, meat substitutes and sustainability. The Current State of Consumers and Beef

Consumer Comfort Apr-21 52%

53%

55%

Jul-21

54% 43%

41%

38%

39%

43%

38%

The retail and foodservice industries are beginning to show signs of moving back in the direction they were in prior to the pandemic, although there are still substantial gaps between what is traditionally seen. A typical year for fresh beef results in about 39 percent of volume being sold at retail, and 61 percent of volume at foodservice, whereas in 2020 this shifted to 45 percent and 55 percent respectively. When we look at the data through mid-July of this year, results are coming closer to 2019 than 2020, with 41 percent of fresh beef volume going to retail. Even with signs of shifting back, fresh beef at retail continues to show strong growth compared to 2019, particularly in dollars sold (+20 percent).2

One of the main reasons behind the continued elevated retail sales is that consumers, during this last year and a half, adapted to eating at-home more often. In fact, 74 percent of consumer meals are still being cooked at home1. This has decreased compared to 2020, but still provides evidence for the potential of retail to hang on to some of the share it gained over the last year, at least through the rest of 2021. E-Commerce

Online Grocery Ordering Sitting Inside at a restaurant

Attending/Hosting gathering (under 10 people)

Attending/Hosting gathering (10+ people)

Attending events (sports, etc.)

Traveling by airplane

Source: Summer Grilling and Comfort, Dynata Platform, April 2021

Before diving into specifics, it is important to understand the current consumer mindset. For many, there is still apprehension when it comes to comfort level engaging in activities out of the household. Most notably, less than half of the population is comfortable participating in larger gatherings, events and travel. While this has improved since the onset of the pandemic, it is going to take time for many consumers to get back to “normal” behaviors. It is hard to pinpoint an exact timeframe when this will happen; however, consumers who are not comfortable claim it will be at least six, if not 12 months before they plan to engage in several activities, most notably travel and larger gatherings/events.1

NATIONAL CATTLEMEN CATTLEMEN

63%

actively ordering groceries online

41%

are

ordering fresh beef +18% compared to May 2020

An area that continues to see tremendous opportunity and growth in the marketplace is e-commerce. Online retail sales increased in the second quarter of this year by more than $19 billion year over year and continue to be above the prepandemic levels.3 Asking consumers directly, 63 percent said they are actively ordering groceries online, with almost half stating this behavior will remain one of their shopping tools into the future. 3

Source: State of Consumer Survey, Dynata Platform, July 2021

Continued on page 80

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Continued from page 78 Beef is a big part of the success in this area, with 41 percent of consumers including beef in their online carts. This is up 18 percent since May 2020. Not only are consumers ordering beef more often, but they are also happy with the experience they are getting. In fact, only 8 percent of people said they were dissatisfied with the beef they ordered1. Similar dynamics can be seen in the digital foodservice space. There was a boom with the onset of the pandemic, with digital volume increasing by more than 1 billion transactions. As a share to all traffic to restaurants, digital makes up about 16 percent of total traffic, which is up 9 percent since before the pandemic.4 The second quarter of 2021 did see some slowing, primarily in full-service restaurants, but digital foodservice traffic continues to be a mainstay in the industry. Meat Substitutes The protein landscape, including meat substitutes, is continually monitored at NCBA. As of June 2021, meat substitutes represent less than 1 percent of both the entire protein market and the beef market specifically (meat substitutes with a product form description such as ground, chub and patties are used to calculate the beef substitute market).5 Most consumers choosing to eat meat substitutes are not doing it to replace meat entirely but to add variety to their diet. According to NCBA’s Consumer Beef Tracker, people who consume meat substitutes on a weekly-or-more basis also consume beef and other proteins as much as the average consumer. Additionally, over the last year, product launches supporting meat substitutes have subsided compared to years past, particularly as it relates to burgers6. On top of seeking to add variety to a diet, health perceptions of traditional proteins and meat substitutes continue to be the leading factor in terms of rationale behind consuming these products.7 Sustainability and Beef Sustainability is another hot topic sweeping the nation in a variety of media outlets and consumer groups. NCBA, on behalf of the Beef Checkoff, sought to better understand this topic with consumers throughout spring. The research included focus groups across the country, concept and messaging evaluation, and a 2,000-person quantitative assessment that would help explore the topic. When it comes to defining sustainability, without aiding the conversation in any way, most consumers talk about the idea of ensuring resources last for future generations, followed by environmental concerns. Only 3 percent of consumers bring up

Defining Sustainability for Beef 29%

Animal welfare

24%

Environmental aspects

14%

Sustain

Economic aspects

Social aspects Product information Production process

5% 2%

Don't know

27%

How would you define sustainability when it comes to raising cattle or beef for food? Please be specific.

the topic of food without it being brought to their attention. Once it is, consumers still struggle to define sustainability and food, particularly with beef. Those who are to expound on the topic of beef and sustainability focus on animal welfare first and foremost, followed by the environment.8 Animal welfare continues to be the top concern in the mind of consumers; they have concerns around the treatment and living conditions in which cattle are raised. Much of this is driven by the lack of knowledge consumers have regarding how the cattle industry operates. Only 30 percent of consumers claim to be familiar with how cattle are raised for food.7 The lack of familiarity is an important point NCBA is always considering when developing consumer content, to ensure the content will help address this need for increased consumer education. Sticking with animal welfare, even when it comes to sustainability, consumers felt it was the most important topic for the beef industry to address. Secondarily, the messages consumers felt were most impactful had to do with discussing the benefits that beef and cattle provide the land. Most notable in those messages was the idea of upcycling, such as turning plant leftovers or grazing land into high-quality proteins. One thing to caution in messaging is getting too complex or confusing; consumers are looking for simple, easy-to-digest points about sustainability. Any time clear, concise and relatable examples can be leveraged, messaging will be more successful with consumers.8 This research is continuously being leveraged by several program areas at NCBA as we look at continued efforts through 2021 and beyond to address sustainability. This is one example, regardless of topic, of how NCBA leverages a multitude of research to help guide its Checkoff programming, which assures us that we are keeping up with the trends and concerns of the consumer.

1. State of the Consumer Survey, Dynata Platforms, analyzed and summarized by NCBA, on behalf of the Beef Checkoff., July 2021 2. Source: Nielsen, Answers on Demand, Yearly Volume Data Ending Dec 2020 and Half-Year Beef Volume Sales, Data Ending June 2021, Processed 8/24/2021. 3. NPD, Category Sizing, Data Ending June 2021, Processed August 2021 4. U.S. Census Bureau, Quarterly U.S. Retail E-Commerce Sales (released on May 18, 2020), shared via Nielsen Consumer LLC. 5. Digital Online Ordering Foodservice Traffic Data, the NPD Group/CREST, July 2021. 6. NielsenIQ, Answers on Demand, 2021 Half-Year Meat Volume Sales Ending June; Foodservice - NPD, Category Sizing, Half-Year 2021 (Jan-June) Beef Substitute Forms: Brisket, Chubs, Ground, Meatball, Meatloaf, Patties, and Steaks 7. Food and Drink Platform for Global New Products Database, Mintel, August 2021 8. Consumer Beef Tracker; Directions Research, analyzed and summarized by NCBA, on behalf of the Beef Checkoff, July 2021 9. Sustainability Exploration, Dynata and Directions Research, analyzed and summarized by NCBA, on behalf of the Beef Checkoff, Jan-April 2021

CONSUMER

REPORT 80

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2021 Fall Directions

Articles inside

DROUGHT MANAGEMENT

CONSUMER REPORT

PRODUCER EDUCATION UPDATE

MARKET UPDATE

SUSTAINABILITY UPDATE

WEATHER OUTLOOK

STATE OF NCBA

LETTER FROM THE PRESIDENT