By Larry Stalcup Contributing Editor
Cattle prices are projected higher this year. So are input costs. As producers and feeders struggle to squeeze out more profits, the Texas and Southwestern Cattle Raisers Association (TSCRA) School for Successful Ranching provided answers to help cattlemen and women improve their herds and herd management.
The traditional school was again a key segment of March’s TSCRA Convention in Fort Worth. Some 4,000 people attended the Cattle Raisers 146tth Annual Convention, a statement of the solidarity of the legendary association. Sessions on legal aspects of ranching and owning land, water management, border security, ranch accounting and asset management were popular.
The school’s sessions typically range from providing information that many would term as Cow-Calf 101, to detailed sessions on animal health, price risk management, nutrition and other areas of production. One session highlighted cattle price premiums and discounts. It identified data producers can use to measure how shifts in their genetics, animal health and overall herd management can help them ramp up their return on investment.
John Hutcheson, Ph.D., nutritionist and Merck Animal Health director of beef cattle technical services, led the session. He used data from more than 2.5 million cattle marketed through Superior Livestock Auction in 2021-2022 to illustrate what adds value to cattle.
Hutcheson worked with Kansas State University ag economists who analyzed the data. The cattle were from about 15,000 lots, with an average of 168 head per lot and an average weight of 559 lbs. Their average price was $1.81 per lb. “If you want to increase value in calves, it’s about the numbers,” Hutcheson said, stressing that simply implanting cattle and becoming Beef Quality Assurance (BQA) certified can add substantial returns.
Calves implanted in the massive study gained an average of 23 more pounds per head, which amounted to an additional $7 per cwt., or about $40 per head. “About 50 percent [7,516 of 15,287 lots] of the calves were not raised for a specialty program that bans implants,” Hutcheson said. “The discount these producers created for themselves [by not implanting] was $7.13 per cwt.”
BQA is a program offered by most breed associations and general cattle organizations like TSCRA or Texas Cattle Feeders Association. Data from the 2.5 million study showed that BQA certification provided an extra $8 per head. Hutcheson chided producers who did not seek BQA. “It shouldn’t be a question. You have to get BQA certified,” he insisted.
In other data, the numbers showed that polled animals pay. Dehorned calves brought $20 per head more than horned animals. Frame size also matters, as shown by medium to medium-large frames that provided an extra $17 per head. “We’re seeing bigger carcasses that are often in the 1,450- to 1,475-lb. range,” Hutcheson said. “We need medium to medium-large framed cattle.”
For production areas further north, cattle with excessive Brahman influence can see a $41-per-head discount, the data showed. Production in southern, hotter and more humid regions, where cattle with more Brahman influence are often preferred, the breed discount lowered to about $21 per head (note that increased production in the hotter growing conditions typically adds value to Brahman-influenced cattle).
Feedyards Typically Prefer VAC Cattle
Hutcheson cited the profit potential available from calves in value-added calf (VAC) programs, which have proven successful since the 1990s. Most commercial feedyards look for these cattle. Those cattle usually grade higher, see fewer major health issues and have a better chance of bringing a premium from the packer. The highly successful VAC-45 program, in which calves are on a vaccine protocol, parasite control program and weaned 45 days before being sold, provided a $8.64 per cwt. premium, or about $48 per head in Superior’s 2.5-million-plus cattle marketings.
For the Texas, Oklahoma, Louisiana and New Mexico region, VAC-45 cattle provided a $55-per-head premium. These types of cattle are often sold in special calf sales with like cattle. The data showed that further profits are available from producers raising All-Natural ($32 per head), third-party-verified or other cattle grown under more specific conditions.
“Sales data like this is why buyers reach for their checkbooks and pay you producers for your calves,” Hutcheson concluded. “It’s a reflection of what buyers are willing to pay.”
Your Right to Farm
TSCRA is among ag organizations lobbying the Texas Legislature for action to protect crop and livestock producers near or within city limits from lawsuits filed by municipalities and individuals.
Melissa Hamilton, TSCRA executive director of government affairs, said “Right to Farm” statutes are designed to protect producers against lawsuits that claim ag production is a nuisance, whether it is due to smells, noise or other alleged infringement against city ordinances.
“Around 2015, we started to see traditional ag practices challenged in court,” she said, including sugar cane farmers in Florida and swine producers in North Carolina. “We’re trying to get ahead of that in Texas so we don’t get drug into court.”
She said proposed Texas legislation centers on two different situations that involve the same point: “There is the ‘urban sprawl’ issue, where urban areas are growing and cities are spreading out,” Hamilton said. “Once rural areas are now next to cities and are in the city jurisdiction. Cities can use their jurisdiction in order to enact different codes, fines, etc., on different ag operations. This is the “urban right to farm” concern.
“On the flip side is the ‘rural right to farm’ problem,” she explained. “With COVID there was more migration of people out of the city to the country. Someone moves in, doesn’t like the ag operation next to them and there’s a lawsuit.”
Texas House and Senate bills address both issues. “These bills are important for ag, both now and particularly in the future,” Hamilton said.
Other bills proposed in the Texas Legislature are aimed at helping reimburse producers on the southern border whose property or ag production is damaged by illegal immigrants crossing the border and trespassing on their land.
TSCRA members have provided testimony in hearings to alert legislators of the danger caused by illegals who cut fences and damage other property after crossing into Texas from Mexico.
Other legislation aims to protect border-area producers from being sued for defending their property against illegals. Roy Boyd, sheriff of Goliad County on the southern border, said as a landowner and producer you have the right to “defend yourself in Texas. But make sure it is the last resort.
“If you live in a ‘liberal county,’ they will be coming for you [if you harm an illegal]. You need to have a good relationship with your county sheriff. And make sure your county representatives [think like you concerning private property rights].”
Boyd warned that Mexican cartels continue to present grave danger to people trying to illegally cross into the United States without paying an elaborate black market fee. “The border is secured – by the cartel,” he warned. “If you [an illegal] don’t pay the cartels, they will torture you or kill you. We are overrun by cartel activity. All we can do is mitigate it. We can’t solve it.”
Another bill before the Texas Legislature involves “truth in labeling, which we call the fake meat bill,” Hamilton said. It’s to prevent plant-based products from claiming to be “meat” on their labeling.
Legislation is also being proposed concerning the legalities surrounding carbon storage beneath landowner property. TSCRA CEO Jason Skaggs said carbon storage is an example of how economic development and new technology pressure landowners. The concerning point deals with landowners’ contracts with oil and gas producers and potential liabilities down the road.
If there is a future environmental issue, “the state may be on the hook to deal with that liability,” which could eventually be passed on to the property owners, Skaggs said.
The economic uproar caused by March’s banking uncertainties created a huge drop in live cattle futures open interest contracts, from about 367,000 down to about 310,000 in three weeks, noted Randy Blach, CattleFax CEO. He cited that as an example of economic headwinds facing cattle producers and feeders.
CattleFax estimates for 2023 cattle prices varied little from those its consultants presented during February’s Cattle Industry Convention in New Orleans (See April/May 2023 CALF News, page 16). Bred cows could approach $2,300 per head. Fed cattle are expected to average $158 per cwt. for the year, with 800-lb. steers pegged to average $200 per cwt.
The average price for 550-lb. steers is forecast at $225 per cwt. “Calf prices are up $40 to $45 per cwt. from a year ago – but cow-calf producers are still not making enough profit,” Blach said. “The increases in cost of production and money [interest rates] are hurting. We need calves selling for $3 per lb..”
He said the higher cost of production for cow-calf, stocker and finished cattle is about $125 per head. However, with projections for more corn acres this year, cost of gain may soften, with the CattleFax corn futures price estimated to drop to $5 to $5.25 per bu. later this year.
The lower cattle supply and higher retail prices could generate an overall reduction in beef consumption the next few years. But Blach pointed out that “beef is winning the battle” for consumer dollars spent on meat, due to the high-quality beef that’s available at the meat counter or restaurant.
Consumers Demand the Best Beef
Molly McAdams, Texas Beef Council executive director, moderated a panel that discussed “the sparks that accelerated beef demand.” It started with research into beef quality funded by the Beef Checkoff in the late 1990s. “One in four steaks was tough back then,” she said. “There were too many Yield Grade 4s and 5s.”
Mike Jarzombek, senior vice president of sales for H-E-B supermarkets, said the Texas retail food store giant now sees more “Yield Grade 2s and 3s and better marbling. Efforts by the cattle industry to improve genetics have helped us sell more beef,” he said.
Shalene McNeill, National Cattlemen’s Beef Association (NCBA) executive director of nutrition science, health and wellness, said there is “taste fat and waste fat. We have leaner and higher quality beef.”
Dan Halstrom, CEO of the U.S. Meat Export Federation, pointed out how better quality beef has helped many foreign buyers savor U.S. beef. “U.S. beef is better in quality and it is safe to eat,” he said. “It is the gold standard for beef safety.”
Mandy Carr Johnson, NCBA senior executive director of scientific affairs, noted the large reduction in needle injection site lesions has been rewarding. “It’s a success story,” she said, pointing out that, in 1998, more than 30 percent of beef carcasses had injection-site lesions in muscle areas, compared to 7 percent or less in 2017.
McNeill added that the attitude toward beef’s nutritional value from dieticians and consumers has improved since the consumer health scares concerning cancer and other diseases. Organizations that urged consumers to cut back on red meat consumption are now saying reasonable servings of red meat provide many nutritional benefits and are part of a healthy diet, she said.
Special Rangers Foundation
TSCRA Special Rangers annually help recover and prevent thousands of dollars in livestock and ranch property loss. They “ride the brand” for Cattle Raisers members. TSCRA President Arthur Uhl said the Special Rangers silent auction and other entities raised more than $107,000 in donations for the Special Rangers Foundation. Another $78,800 was raised for youth-specific programs.
About 250 exhibitors featured booths at the convention trade show. It’s always a winner that brings lifelong friends together. From boots to bridles, and chaps to cultivators, numerous products and services were on display at the Fort Worth Convention Center.
Along with steakhouses downtown, many convention goers rode up to the monumental Fort Worth Stockyards. For Taylor Sheridan fans, scenes from the Yellowstone prequel 1883 featured a tough Cowtown with numerous avenues that led to adventure.
One popular nightspot that’s been quenching thirsts for 140 or more years is the White Elephant Saloon on Exchange Ave. In the 1883 television series, an iconic Sam Elliot, with his gravelly voice, long mustache and all, sized up the saloon and the rest of frontier Fort Worth – with the White Elephant in the background.
Fortunately, there was no word of Special Rangers being summoned to round up convention cowboys. For more on TSCRA activities, visit TSCRA.org.