February | March 2022 • Vol. 61 | Issue 1 CALF NEWS THE FACE OF THE CATTLE INDUSTRY www.calfnews.net MARKET DRIVERS
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4 CALF News • February | March 2022 • www.calfnews.net FEBRUARY | MARCH 2022 Highlights On the Web www.calfnews.net Go Mobile Facebook https://www.facebook.com/ calfnews/ Twitter https://twitter.com/calfnews YouTube www.youtube.com/CALFnews Instagram www.instagram.com/calfnews/ Advertising Jessica Ebert National Account Manager (785) 477-1941 jess@calfnews.net Features In Every Issue 5 Gypsy Wagon 18 Chuteside Manner 33 Gatherings 35 On the Human Side 36 Recollections Opinions 8 Rumblings From the Great White North 9 All In 10 Prime Points 14 Whitt & Wisdom 28 Beyond the Ranch Gate 6 Market Drivers There’s no single fix-all for tough markets. But it’s important to know what factors affect prices and what you can influence within your business so you can control the controllables. Cover Stories 20 The Texas-Mexico Border in Crisis It used to be primarily migrants seeking work who were crossing our southern border, but many of those crossing now have far more nefarious intentions and are threatening local communities. 24 TCFA Won't Miss a Beat Under New Leadership A 25-year veteran of the Texas Cattle Feeder’s Association, Ben Weinheimer is more than ready to take over as the organization’s president and CEO. 37 Where’s the Really Exceptional Beef? 38 Baxter Black 39 CALF's Featured Lady 39 Index of Advertisers 27 Climate Change Frank Mitloehner's Mission Frank Mitloehner has tasked himself with a heavy but necessary burden – educating the public on cattle, climate and truth in science. 30 Meat Board Anniversary Current ag commodity checkoffs owe their existence to the National Live Stock and Meat Board, which began a century ago.
5 CALF News • February | March 2022 • www.calfnews.net Editor & Publisher Betty Jo Gigot | (620) 272-6862 National Account Manager Jessica Ebert | (785) 477-1941 Art Direction & Administration Kathie Bedolli, Lisa Bard Leslie McKibben | BluePrint Media Copy Editor Larisa Willrett | BluePrint Media Contributing Editor Walt Barnhart Contributing Editor Blaine Davis Contributing Editor Lance Geiger Contributing Editor David MacKenzie Contributing Editor Chris McClure Contributing Editor Burt Rutherford Contributing Editor Larry Stalcup Contributing Editor Will Verboven Contributing Editor Megan Webb, Ph.D. Contributing Editor Jim Whitt Contributing Editor Patti Wilson CALF News (ISSN 00077798) is published bimonthly for $40 per year by B.J. Publishing, 115 Wilcox Street, #1604 Castle Rock, CO 80104; (620) 272-6862 e-mail: bjgigot@calfnews.net Postmaster/Change of Address Send address changes to: BluePrint Media 2935 Little Salt Road Seward, Neb. 68434 (308) 440-8179 Please notify us of your change of address at least six weeks before the change. Include the address label from your latest issue. Give both your old and new full addresses. Please print legibly. Copyright 2022. B.J. Publishing CALF NEWS The Face of the Cattle Industry February | March 2022 Vol. 61 Issue 1 Published bimonthly by B.J. Publishing Gypsy Wagon From the Publisher ON THE COVER: Mingled steam and dust rise from a load of feeder cattle as they are weighed in the cold early morning light at Hereford Feedyard, Hereford, Texas. Photo by Chris McClure H ow refreshing to see the talking heads on TV this week solving the problem of the proper way to price our product – cattle – all the way to the beef on the plate. That is a question I and some very smart people have fumbled around with since the late 1960s. I bet some of you have for longer than that. In one paragraph and with total authority, in one fell swoop, we are out of the woods, according to the national press and a few upper-level government workers. Our questions are answered. It is all the packers’ fault. We almost had to find another topic for this issue of CALF News. I decided to go ahead and mention a few of the other market drivers that could have something to do with the price we receive and the price that is paid for beef on the off chance that simply crucifying the “BIG” boys will stop inflation and all will be right with the world. A quick government fix does it all. That and getting rid of some of those other “BIG” boys like Walmart and Amazon. To our way of thinking, issues like how we handle beef imports and exports, retaining ownership, decisions on climate change, applying for carbon credits and genetic selection specific to beef-dairy crosses might also affect prices. We discuss all of those in this issue, along with what the state and national associations are moving forward with in those problem areas. Back to the price of beef, little things like the price of fertilizer, seed and fuel to raise the crops we need to feed the cattle or even make FAKE beef could have an effect. Or the fuel to get the product to market and the trucks to do it might make a difference. Let’s not forget what those dreaded packers might have a problem with – maintaining the labor force they need to keep the processing lines moving despite COVID and its ugly ramifications. In other words, it is not just as simple as hitting a few people over the head. It is a very complicated process, from ranch to rail to plate, so let’s not forget it. If it was that simple we might have solved it years ago. Another issue that affects all of us is what is going on at our southern border. Burt Rutherford revisits that topic after Larry Stalcup teed it up in our Dec. 2021/Jan. 2022 CALF News. It is almost impossible to imagine what it is like for the people who live and ranch on that border. Be sure to read Burt’s story. On a lighter note, I just finished reading The Last Cowboys by John Branch. While watching the National Finals Rodeo the last few years, I discovered the Wright brothers out of Utah, as you all have I am sure. The family’s story is a fascinating read and worth your time. Next on my list is a new book by Mary Mertz called Feast of the Fields. Mertz and her family truly took the farm to town by hosting dinners with all of the trimmings in their Kansas cornfield with renowned chefs cooking the feast. On a personal note, the Geiger/Gigot family had to face COVID first-hand recently with the death of beloved son-in-law, Rod Stillwell, from complications due to COVID. Married to daughter, Gina, Rod was an expert on irrigation and sprinkler systems and was respected across the industry. With a passion for water conservation, NASCAR driver Kevin Harvick and an occasional beer, Rod was a quiet, thoughtful member of the family. We already miss him greatly. Betty Jo Gigot bjgigot@calfnews.net
6 CALF News • February | March 2022 • www.calfnews.net By Larry Stalcup, Contributing Editor With the forecast for higher cattle prices this year, most cow-calf producers will likely sell their calves and hopefully enjoy a little profit. If they have proven genetics and are preconditioned and vaccinated, there’s greater profit potential. Another option is retaining ownership of calves through the feedyard to help take advantage of their full value to packers and retailers. Whether or not to retain ownership (RO) depends on several factors. Calf prices, feed prices and cattle genetics are the keys. And the continued drought in the Southwest and whether those dry conditions creep toward the Midwest will impact all decisions. Major herd liquidation like that seen in the drought eight to 10 years ago will impact all cattle markets, says David Anderson, Texas A&M University Extension economist. “Does the drought resemble what we saw in Texas and Oklahoma a decade ago, and does it expand into the Corn Belt to hurt feed crop yields and force much higher feed costs? Those are key questions heading into 2022,” he says. Profit potential can vary for any set of calves or pen of cattle. In mid-January, fed cattle were trading in the $135 to $138 per hundredweight (cwt.) range. For cattle placed at 750 lbs. six months earlier, the typical closeout in the Southern Plains showed a profit of about $3 to $4 per cwt., or about $40 to $50 per head. For cattle placed in mid-January, there was a projected loss of nearly $7 per cwt., or $100 per head, based on higher feed costs. Mid-January feeder cattle sold for about $165 per cwt. for six- to sevenweight steers in Oklahoma City. Five-weight calves brought about $185 per cwt. There was a little profit there, depending on cattle quality and production costs. In all cases, cattle with higher performing genetics and high quality grades at the packer probably generated a premium. Cattle that didn’t perform may have seen lower profit margins. An RO program often rewards producers of cattle with strong-performing genetics. There is opportunity to capture added value through the production cycle. “I think there is a place for RO this year, but I think it will take a thorough evaluation of your particular situation,” Anderson says. “Cattle performance risk should be a major area for concern in RO, especially if you are new to it.” Tighter Supplies The January cattle inventory report was expected to indicate a smaller beef herd. Those tighter cattle supplies will mean higher calf prices, “which tends to mean a cow-calf producer is better off to sell and let someone else feed them,” Anderson says. “The impact of tighter supplies of calves will become increasingly important over the next couple of years by pushing calf prices higher. Tighter supplies will also force higher fed cattle prices as supplies decline. Given the strong beef demand situation, that allows the chance for even higher prices.” He says one effect of a smaller cow herd and fewer calves, feeders and fed cattle will be more packer capacity. “That means higher cattle prices and packers Retained Ownership Will It Work in Today’s Market? RIGHT: Texas A&M’s David Anderson sees profitable fed cattle in 2022. High fed cattle prices could help producers capture the full value of their genetics through retained ownership. Photo courtesy Texas A&M University Calf prices are stronger, but maybe it’s time to place them in a feedyard retained ownership program to determine how your genetics are performing. COVER STORY Market Drivers
7 CALF News • February | March 2022 • www.calfnews.net have to compete to operate at their most efficient full level. “So the opportunity is for higher prices. That would suggest more returns to RO, depending on how much of the higher prices are bid into feeder cattle prices.” Ready for Risk Management The drought situation could impact feed costs as dramatically as it does the lack of forage for grazing. Corn prices, already in the $5.50 to $6.50 per bu. range, could climb. “Feed costs will play a role in profits this year. Feed cost risk management and protection is important,” Anderson says. “Careful evaluation should be made on the risk of higher prices. Typically, corn prices this high would encourage more acres and ration demand. But high fertilizer and other production costs will cut into those acres. “While a lot of acres will be planted, the yield risk due to possible drought is important. The risk of drought extending into the Corn Belt is a real one. The drought monitor map looks pretty ominous and long-term forecasts would indicate some risk.” Feedyards look for calves with strong genetics. Many can provide pastures to extend preconditioning and add pounds before they hit the bunk. Feedyards see it as another marketing opportunity and are often eager to partner with producers interested in RO. There are also opportunities to sell calves other than normal months in the fall, which can see seasonal markets that are lower for feeder cattle. Of course, producers can contact feedyards that buy their calves to learn how they perform and possibly adjust their breeding program. “However, the signals are clearer if there is a direct economic link between cost of production, the price received at slaughter and the person controlling the genetic make-up of the cattle,” according to information from Iowa State University. Those signals are clearer when cattle are sold on one of many grids, which provide carcass quality sought by packers for various retail and food service markets. Another benefit of RO is to determine if your preconditioning program is producing results. If results aren’t what are expected, feedyard operators can work with you to develop a better value-added calf program. Anderson sees optimism for higher cattle prices.“I think fed cattle will remain in the black later into 2022,” he says.“But again, I would not want to be uncovered on the feed-cost side. Careful evaluation of the profit potential and what kind of risk you can stand is needed.” Hopefully, dry weather will be replaced by spring and summer showers, which will provide producers with greater options to profit from tighter cattle supplies and strong domestic and foreign demand. And retained ownership could be an added marketing tool to get more out of your investment in better performing cattle. 3 Sizes Available! The First Hydraulic Corral and still the Largest! • Pull on highway at speed limit. • Fits through any gate your pickup will. • Stable on uneven terrain. • Permanent sheeted adjustable alley. Rawhide Portable Corral 900 NORTHWASHINGTON ST., ABILENE, KS 67410 785.263.3436 www.rawhideportablecorral.com Rawhide Processor by John McDonald • Wheels on each panel and electric over hydraulic jack eliminates lifting—saves time. • Frame gates for sorting. • Transport wheels are permanent, no sliding off the axles and rolling out of the way.
8 CALF News • February | March 2022 • www.calfnews.net Rumblings From the Great White North CALF VOICES By Will Verboven Contributing Editor The Electronic Cowboy Is Almost Here Feedlots Likely to Be at the Forefront of New Technology S ome years ago, I wrote a whimsical column about how cattle ear tags might be used to track their whereabouts and body temperature via GPS. I speculated that an operator using such high-tech ear tags would know precisely where cattle were at all times. That ear tag technology now either exists or is about to be released. It will undoubtedly be costly, but so is losing a cow or calf. Ear tags that determine individual cattle temperature would seem to have the most potential in feedlot situations. It would make life a lot easier for pen riders as sick cattle could be detected and sorted out even before showing other, more apparent symptoms. I expect with additional detection equipment, it could be determined when, how long and how often each bovine is at the feed bunk. This type of tracking is well established in high-tech dairy operations. When feed consumption data is tied to milk production data, the value of data becomes much more critical. I expect the same could be done in determining rates of gain if cattle are run through automated scales tied into the electronic ear tags. Utilizing feed pens with automated gates and other robotic devices, cattle could almost be moved around with a minimum of human involvement. Sounds pretty good, especially when many operators have trouble finding and keeping highly skilled livestock handlers. I expect savvy feedlot operators are already using or contemplating such technology. But there is even more technology that would be of use in feedlots. Recently, I came across image technology that records and analyzes dairy cattle movement over a 24-hour period. It has algorithms that can alert operators that something is not right when individual bovines deviate from their usual behavior. This technology is being used in large dairy operations where cattle are confined in large lots and it’s difficult to ascertain the well-being of one cow among many thousands. The technology uses facial, hide color patterns and ear tag recognition technology to identify and track each cow’s movement day and night. Researchers have found that dairy cows produce most of their milk while lying down in comfortable, free stalls. The idea is that the longer a cow rests, the more milk she produces; behavior recognition technology can record when, where and how long a dairy cow rests. Feeding and other activity are also recorded and analyzed. If there is any deviation in cow or herd behavior, operators are notified in real-time. It would seem that problematic, nervous, disruptive, unproductive cows could be quickly identified and culled. I suppose over time, such cattle behavior programs can identify ideal practices and handling that operators can use to improve cattle wellbeing and production for the entire herd. I suspect such overall cattle behavior information would be of real value to feedlot operators as well. It would be ideal for lowering stress levels in pens by identifying cattle prone to aggressive behavior. Heck, in the big picture, behavior data could affect the location, design and size of pens, feeding times and all sorts of cattle performance nuances that generally go unnoticed, even by skilled pen riders. However, if temperature-sensing ear tags connected to a GPS locater and tag readers at sorting gates are made feasible, it would make a world of difference in earlier and quicker treatment of sick cattle in feedlot situations. A side consequence of 24-hour behavior image technology is that human interaction with cattle is also regularly recorded. That could have both repercussions and benefits. I expect research is already looking at even more sophisticated cattle ID technology. In non-food animals, subcutaneous ID implants are already used in many applications but are costly for general commercial livestock situations. That will change. GPS-connected ear tags could be programmed to alert cow-calf producers that cattle have suddenly left an area or have been stolen, but clever rustlers could subvert that by cutting the ear tag off. ID implants are harder to tamper with by ignorant rustlers. I expect those with extensive grazing properties would see value in being able to instantly track every bovine on far-flung ranges without having to spend days counting cattle. Dead cattle would also be easier to find. Some folks are already experimenting with drones to locate and count range cattle. I expect drones could also be used to round up cattle and drive them toward collection areas. I can see potential in using drones with infrared technology to hunt and harass nefarious predators like coyotes and wolves. If only we could use sophisticated American military drone technology to lethally deal with problematic predators that so viciously attack and disembowel defenseless livestock. Did I mention I have a visceral dislike for livestock-killing predators? The day may yet come, if it hasn’t already, when motorized cowboy robots may be used to locate and move cattle in fields and pens. Maybe those robots could be used to detect trespassers and rustlers, even shoot at predators too, although the latter may be wishful thinking. As outlandish as all this may seem, it will happen; technology, crafty cattlemen, inventors and entrepreneurs will see to that. E-mail comments to willverboven@hotmail.com
9 CALF News • February | March 2022 • www.calfnews.net All In It Boils Down to Supply and Demand CALF VOICES By Chris McClure Contributing Editor M y wife is a realtor. It isn’t the same thing as a packer, but for some reason, I see a parallel between what is happening in her industry and what is going on in the meat packing industry. The real estate business has been booming for the last few years and everyone seems to think the fastest way to get wealthy is to become a realtor, so they get their license. The problem is that there is an oversupply of realtors and an undersupply of properties available for sale – at least in some markets. When we moved back to the Amarillo area, she attended a local meeting of realtors and learned that there were approximately 1,000 of them in the local association and only 300 houses listed. The lack of available inventory makes it very difficult to garner a share of the market, but if you have a listing, it is not difficult to get it sold. I suspect there will be a lot of newly minted realtors who give up and let their licenses lapse. The meat packing industry has enjoyed a time of sizable profits in the last couple of years. Some of those quoted margins have reached what most of us perceive as obscene levels. I’ve heard many cattlemen complain about losing money on every calf born while packer profits have soared to more than $1,000 per head. It makes for some hurt feelings and knee-jerk reactions. Our memories are short, though. It hasn’t been too many years ago that those same packers were losing a significant amount on every head harvested. I don’t think the losses ever ran in the thousands, but they did dig quite a hole for a while. We are in an industry of cycles. There are annual cycles and there are longer cycles, such as the expanding and contracting cow herd. Once upon a time, we could expect the cattle cycle would be about 10 years, but recently it has been less predictable. Those cycles affect prices from the supply side of the supply-demand equation. Supply and demand is another area in which our memories are deficient at times. The supply and demand for cattle is not necessarily the same as the supply and demand for beef. That’s the primary reason those packer profits got out of line. Cattlemen supplied more cattle than the packers could harvest due to labor issues and aging plants at the same time that demand for beef outstripped the ability of the packers to meet the need. The combination of the two supply-demand equations meant that the price of cattle faced downward pressure while the price of beef enjoyed upward pressure. So, in our wisdom, we decided to do something about the situation. The efforts crossed a number of fronts, including sought-for government intervention with the packers, government funds to “fix” the problem and private investment to create competition. I think we’ve been down some of these roads before – both in our industry and in other industries. With the exception of a small number of plants, the packing industry is faced with aging infrastructure. Many plants are outdated and no longer efficient. New plants will theoretically be able to incorporate the newest technology and operate at levels of efficiency that will make them competitive – even against the legacy behemoths. Just like those “newbie” realtors who expect to grab a share of the booming market in real estate, the “newbie” packers expect to garner a chunk of those huge packer margins (which, by the way, are shrinking). “If they can do it, so can I,” is the typical cowboy response. When I look at the For Sale signs on properties in the area, I see a repetition of the same names, over and over. The “newbies” are struggling because they don’t have the experience or connections necessary to become one of the “big dawgs.”When the dust settles, the old names still dominate the market. How many times have we seen the newcomer go under? Are we about to see another cycle of that occur in the packing industry? I’ve always heard the best place to be is in a position to pick up the pieces at about 10 cents on the dollar. Maybe that’s how the legacy packers plan to replace their aging infrastructure. Yeah, I know this seems to be doom and gloom. We are pretty good in this industry about blaming our problems on someone else. I suspect the base issue is that we don’t know how to work together. Oh, there are a few cooperative efforts out there where partnerships or cooperatives are forming in order to build new packing capacity, but the reality is that our track record of rowing in the same direction isn’t particularly good. Even if the efforts to build new packing capacity succeed, we are still faced with aging infrastructure within the industry. Every few years, we hear of a plant being shut down due to lack of water, labor or something else – usually they are just worn out and not worth refurbishing. So, we build another 10,000-head-per-day capacity and someone else mothballs 11,000 head of capacity. The net impact on the cattle industry is still “Where are we in the cattle cycle?” If the herd has expanded and there is a greater supply than can be harvested, the cow-calf guy will lose money. If, on the other hand, we have contracted and demand exceeds supply, the cow-calf guy will make money. It’s all about supply and demand. E-mail comments to cpaladinmc@hotmail.com
10 CALF News • February | March 2022 • www.calfnews.net Prime Points CALF VOICES By MeganWebb, Ph.D. Contributing Editor Market Drivers Point to Future Integration M arket drivers like the weather, feed resources, logistics, animal disease and consumer behavior continuously influence the beef industry. Like any business, the cattle business must be market driven to remain stable and sustainable. Due to the unfortunate circumstances of Mother Nature’s events – namely droughts in the west, fires in Kansas and tornadoes in Kentucky – the decision making has been unsettling. These circumstances, confounded with the conditions already in place from COVID, have skyrocketed input costs and exponentiated inflation. In a year’s time, the cost of gain has increased by about $30 per hundredweight. Due to these greater input expenses, cattle are being backgrounded a shorter time and short fed at the feedyard, making the transition to harvest faster as a mechanism to manage inputs. Producers are seeking additional revenue potential, and some are pivoting their production enterprises by maintaining ownership in the feedyard and managing carcass sales. This gives cattlemen the leverage to connect closer to the consumer and capitalize on the higher retail margin. Many cattlemen are finding this integration as another value-adding opportunity to their business. I’ve been enlightened and inspired by these producers discovering additional systems to better benefit their operations. With these discoveries, more farmers and ranchers are wanting to become involved in the beef processing segment and even band cattle herds to vertically integrate into a shortened beef supply chain to benefit local economies. Many producers in Idaho, Iowa, Nebraska and Wisconsin are working together to raise funds and build or re-start harvest and packing facilities. However, I still believe a likely challenge for these new and upcoming initiatives is the workforce shortage. Many large plants like Tyson, provide competitive wages and benefits, and still struggle to hire enough workers to fill their plants. Though, it is well understood that cattlemen are risk takers, and they appear to be ready to take on these associated risks. In some risk-mitigation strategy, I anticipate that many of these new plants will be built to be able to withstand collapses in the labor workforce and streamline the supply chain. Plants of the Future I believe the recent market drivers that occurred during the pandemic will continue to drive plant advancements and will include artificial intelligence from gate to plate. Plants of the future will be more focused on transparency of the supply chain and consumer claims, which better link the consumers to the producer. More plant advancements will be important to economical sustainability, including providing their own sources of power in additional to water recycling, solar power integration and geothermal heating. Future producer or cooperatively owned plants will aim to be more vertically integrated and produce their own value-added products, including pet food and treats as well as ready-to-eat processing facilities.While being more diverse and vertically integrated, these plants will likely be smaller and have advanced technological innovations to remove human labor and enhance worker safety. These innovations will help beef processing become more streamlined like poultry and pork processing. For example, more automation will be used for carcass splitting, evisceration, and limb and head removal. These investments will likely open more jobs in the industry for persons with backgrounds in systems management, IT, mechanics and engineering. In addition to the workforce shortage, food safety will continue to be a constant market driver. Evaluating easier ways for hide removal could be investigated to reduce trimming labor, contamination and ultimately improve food safety. Collectively, the beef industry is making many market-driven decisions to be more prepared for the future. Ongoing vertical integration will permit cattlemen and women to better control their destinies and, ultimately, local supplies of beef. E-mail comments to mjwbeef@gmail.com Photo from NPR.com
11 CALF News • February | March 2022 • www.calfnews.net Continued on page 13 February’s Beijing Winter Olympics couldn’t speed skate past icy tension between China and the United States over questions about human rights, the origin of COVID-19 and Taiwan’s sovereignty. The United States even had a “diplomatic boycott” in mind. Thankfully, there’s plenty of tasty, tender, U.S. grain-fed beef available to help slice through the frigid relations. Members of the Chinese Communist Party, thousands of other Olympic visitors and dignitaries, not to mention the many athletes living their dreams and representing some 90 countries can forget about politics over a plate of short ribs or even a ribeye or other American beef that’s in high demand across China. Yep, beef exports to China continue to sizzle. U.S. beef and other meat companies continue to capitalize on the huge market access gains achieved in the Phase One Economic andTrade Agreement, says Dan Halstrom, president and CEO of the U.S. Meat Export Federation (USMEF). China Demands U.S. Beef Despite Tension Over Taiwan, Human Rights and Even a Diplomatic Olympic Boycott COVER STORY Market Drivers By Larry Stalcup Contributing Editor USMEF’s Jan. 6, 2022, report shows that through October 2021, exports to China increased by more than 500 percent in volume, 154,857 metric tons (mt), and more than 600 percent in value, about $1.26 billion. As China’s largest supplier of grain-fed beef, the United States accounted for 10 percent of China’s imports on a value basis and 6 percent of import volume. Exports to the combined China/ Hong Kong market have already far exceeded previous annual records. But with all of the tit-for-tat tension between the United States and China, how do American beef exports continue to make their way into the massive market? Halstrom tells CALF News that “USMEF certainly follows the U.S.- China trade relationship carefully and we are aware of potential pitfalls. But it is important to keep in mind that U.S. beef exports to China are driven by company-to-company transactions. “Buyers in China want the product that best meets their clients' needs,” Halstrom says. “So the key factor for U.S. beef exports is simply to have meaningful and reliable access to the Chinese market, which was achieved in the Phase One Economic and Trade Agreement.” Halstrom emphasizes that China “complements an outstanding range of well-established markets such as Japan, South Korea and Taiwan, as well as Mexico, Canada and Latin America.” Record Overall Beef Exports in 2021 Overall U.S. beef exports reached 115,709 mt in October, up 7.5 percent from a year ago, while export value climbed 48 percent to $956.9 million – the second-highest total on record, behind August 2021, according to data released by the U.S. Department of Agriculture and compiled by USMEF. Through the first 10 months of 2021, beef exports totaled 1.19 million mt, up 17 percent from a year ago. Export value increased 38 percent to $8.53 billion, surpassing the 2018 record of $8.33 billion with two months to spare. USMEF says broad-based growth puts beef exports on a $10 billion pace. They will top $2 billion in each of three key Asian markets – South Korea, Japan and China/Hong Kong. Japan remains the leading volume destination for U.S. beef. Through October, exports to Japan were 5 percent ahead of the previous year’s pace in volume (269,815 mt) and 19 percent higher in value ($1.92 billion). Growth to Japan included a 15 percent increase in chilled beef, up to 130,551 mt, valued at $1.13 USMEF’s Dan Halstrom says U.S.exporters are able to maneuver through politics to get product into Chinese consumer markets.
12 CALF News • February | March 2022 • www.calfnews.net POP QUIZ: If there’s one thing a dairy cow is good at, it’s __________. Producing milk, of course. But as the beef business has learned over the past few years, there’s another answer that’s becoming more and more important. A dairy cow is good at producing beef-sired calves that, in turn, produce high-quality beef. Getting to that point, however, has been anything but easy. “We worked for years on developing it. But we weren’t getting along very good,” says Tom Jones, manager at HyPlains Feedyard, Montezuma, Kan. “We were getting really inconsistent quality grade results, and the red meat yields and shape of the cattle and conformation wasn’t happening the way we wanted it.” That’s because, Jones says, not just any beef bull has the genetics to fix the issues a dairy calf brings to market; the kind of things that keep packers frustrated and reduce the value of a straightbred dairy steer. “We started off trying several different bulls,” he says, “but we’re feedyard people, not geneticists. So we weren’t getting our genetics lined up the way we needed to really make a big difference.” Indeed, they quickly learned that you can’t put just any black bull on a dairy cow and get the feedyard performance and characteristics you’re looking for. At roughly the same time that HyPlains was experimenting with the beefon-dairy cross, bull studs such as ABS were looking to tap into the trend – and learning the same lessons. They were pulling Angus semen out of the tank almost randomly and using it in dairy cows. “But we found out real quick that wasn’t working. It didn’t fix the problems,” says Dan Dorn with ABS. Trouble in Dairyland Dairy breeds, Holstein primarily, have a different body type and carcass characteristics than beef-type cattle. The ribeye is shaped differently; it’s longer and more angular than the round shape consumers are used to. “We talk about spring of the rib. There’s a lot more rib length on that Holstein,” Jones says. Then the round is less pronounced in Holstein cattle. Beyond the shape, dairy beef tends to be softer, without the firmness typical of a steak from beef-type steers. And the color of a steak from a dairy steer is more pink than red. “You can’t put Holstein beef and native beef in the same counter for the consumer,” Dorn says. “They’ll pick the native beef all day long because it has a darker red color.” Those traits present problems for retailers. “We seem to fix that with the right genetics,” Dorn says. How they did that, beginning in 2014 with a program called New Era Genetics, was to focus on hand selecting 30 to 50 Angus and SimAngus “super cows” to create hybrid bulls. All the bulls were performance tested and the top 10 percent were selected. Then the bulls were tested for fertility, calving ease, gestation length and other factors important to a dairy producer. That eliminated about half of the bulls. “So now you’re down to the top 5 percent, and that’s the bulls that go into stud,” according to Dorn. Continuing this process year after year has refined the genetics to the point that the beef-on-dairy cross is a viable and potentially profitable part of the beef business, Dorn says. Given the parallel paths that ABS and Hy-Plains Feedyard were on, it was only a matter of time before the two hooked up. The partnership has been a win all the way around. “We’re focused on feed efficiency first, which is the No. 1 profit driver in the feedyard. And then carcass after that,” Dorn says. “It’s really focused on terminal genetics. You don’t want to keep these [heifers] as cows.” Numbers Tell the Tale With the ongoing effort to refine the genetics that make the beef-on-dairy F1 cross a winner, Dorn says that now, packers are asking for the cattle rather than spurning the straight Holstein steer. “Retailers are starting to look at it because it’s beef with a story.” According to Jones, the feedyard shipped more than 4,000 beef-on-dairy crosses in 2021. Here’s how they performed: Choice or better – 91.5 percent Dressing percentage – 62.6 percent Yield Grade 3 or better – 76.4 percent Average hot carcass weight – 866 pounds Fat at the 12th rib – 0.58 inch Ribeye area – 13.84 square inches Average marbling score – 552.5 Even better, ribeyes from the F1 cross are now averaging 13.84 square inches on the crossbred cattle coming out of Hy-Plains. “That is absolutely center-ofthe-plate preferred,” Jones says. “It’s just exactly what they want. It’s a big deal, actually.” COVER STORY Market Drivers Beef With a Side of Dairy By Burt Rutherford Contributing Editor Continued on page 16
13 CALF News • February | March 2022 • www.calfnews.net billion – up 24 percent on continued strong retail demand. Through October, Korean exports were also up 13 percent to 235,260 mt and increased 32 percent in value to $1.93 billion. This growth included a 50 percent increase in chilled beef export value ($831 million), with chilled volume, up 23 percent to 71,860 mt, despite ongoing social distancing restrictions impacting the foodservice sector. Other January-October highlights for U.S. beef exports include: Mexico: Export value increased 39 percent to $861.1 million. Mexico is the largest volume destination for U.S. beef variety meat, with exports increasing in value by 20 percent to $211.2 million. Taiwan: Export value on pace for 16 percent to $532 million. Chilled exports were up 37 percent to $351 million. USMEF says the United States continues to dominate Taiwan’s imports of higher value chilled beef, capturing more than 80 percent of the market share. The value of beef exports to U.S. producers is staggering. Beef export value per head of fed slaughter equated to $439.46 in October, up 55 percent from a year ago, USMEF says. The January-October average was $394.14, up 34 percent. U.S. beef, pork, grain, cotton and other commodity sales to China, Russia and other countries that may not agree with us politically are gold to U.S. producers. Old-timers remember when the United States set a grain embargo on the then Soviet Union in 1980. U.S. wheat markets tumbled. It took several years to rebuild that and other markets. Foreign consumers of beef and other U.S. ag commodities want the quality U.S. producers can provide. Chinese beef buyers won’t let a U.S. ship or two skating in the South China Sea butcher a deal for short ribs headed to Shanghai, population 26 million. “When given the chance to compete, demand for U.S. beef will remain strong in China, even when tensions rise between the two governments,”Halstrom says. The USMEF, National Cattlemen’s Beef Association and other promoters of U.S. beef plan on helping introduce beef to more Chinese and other foreign consumers. And Olympic athletes like snowboard king and gold medalist Shaun White shouldn’t have any trouble obtaining the beef cut they prefer. When preparing for the Sochi Olympics in 2014, White said, “I usually eat a pretty big steak the night before I compete.” He’s hungry for another gold and shouldn’t have to worry about finding beef on the Beijing menu. Service • SaleS • partS Dodge City, Kan. 1501 South Second 800-280-7150 Scott City, Kan. 40 East Road 160 800-280-7251 Service on all mixers and electronic sales – all makes and models. Highest Standards in Product, Service and Customer Satisfaction! www.midwestmixer.com located in the Heartland for all Your cattle Feeding Needs. product liNeS Harsh • Kuhn Knight Laird Mfg. • Kirby Mfg. Scott City Parts 1006 West 5th 620-872-7007 Strategically located in the heart of the cattle-feeding industry, we provide over 100 years of combined experience and knowledge. JOHNSON CONCRETE LIVESTOCK WATERERS THE BEST NAME IN CATTLE WATERERS www.JohnsonConcreteProducts.com Trusted by Livestock Owners Everywhere! JOHNSON CONCRETE LIVESTOCK WATERERS 109 East B Street Hastings, Neb. 68901 phone: (402) 463-1359 toll free: (800) 752-1670 Built with features to last, Johnson Waterers withstand punishing weather and prove to be dependable year after year. TOUGH, DEPENDABLE CONSTRUCTION See us for all your water trough needs. We are #1 in water trough parts and services. Designed for the most punishing environments, our livestock waterers stand the test of time and deliver performance unequaled in the ndustry. CHINA DEMANDS U.S. BEEF Continued from page 11
14 CALF News • February | March 2022 • www.calfnews.net I received an email from a reader who said he enjoyed my column (“What Should You Focus on in 2022?,” Dec. 2021/Jan. 2022 CALF News) “This is just what we need to hear,” he wrote. “The new workforce we have is a challenge.” I called him and we spent some time on the phone discussing the challenges of today’s workforce. We agreed that it doesn’t do any good to complain about it. It’s the hand you’ve been dealt and, if you’re going to stay in business, you’ve got to figure out how to play it. People my age and older grew up in an authoritarian work culture dominated by managers who had a “my way or the highway” attitude. Since we wanted to keep our jobs, we did as we were told, kept our mouths shut and didn’t rock the boat. Whitt & Wisdom By JimWhitt Contributing Editor How to Deal With the Workforce Challenge honor stability, control through systems and procedures, and see passion and involvement as words not fit to pass adult lips. Leaders thrive on change; exercise ‘control’ by means of a worthy and inspiring vision of what might be, arrived at jointly with their people; and understand that empowering people by expanding their authority rather than standardizing them by shrinking their authority, is the only course to sustained relevance and vitality.” “There are two ways of exerting one’s strength,” Booker T. Washington said.“One is pushing down, the other is pulling up.” Managers push down, leaders pull up. Reward and punishment are the traditional methods of motivation managers use. But reward and punishment have limitations. Employees know that they will only be rewarded to a certain degree and they can only be punished until they decide to choose the highway. As Kouzes and Posner observed, “Leaders get others to buy into their dreams by showing all will be served by a common purpose.”Without a purpose, an employee’s only motivation is reward and punishment. Leaders recognize employees for a job well done and create a sense of belonging through a culture that values teamwork. They help them find their own niche within the organization and allow them to contribute what they do best. The organization fulfills its potential by inspiring and enabling employees to contribute to the common purpose. Unfortunately, organizations don’t hire leaders, they hire managers. But the most effective managers are effective leaders. To identify what leaders do, Kouzes and Posner asked people to describe their personal best leadership experiences. Their research revealed five leadership practices common to successful leaders. These leaders: Challenged the process Inspired a shared vision Leaders recognize employees for a job well done and create a sense of belonging through a culture that values teamwork. They help them find their own niche within the organization and allow them to contribute what they do best. Today’s workforce has been conditioned in a totally different culture. Raised in the most affluent and secure era in history, they have a much different outlook. When presented with “my way or the highway” they’ll choose the highway. And there are plenty of other jobs to be found on down the road. This makes today’s generation a challenge for old-school managers. To effectively deal with today’s workforce you have to be more than a manager — you have to be a leader. The difference between managers and leaders may best be described by James M. Kouzes and Barry Z. Posner in their book, The Leadership Challenge. “The difference between managers and leaders is the difference between night and day. The former
15 CALF News • February | March 2022 • www.calfnews.net Enabled others to act Modeled the way Encouraged the heart Kouzes and Posner describe effective leaders as pioneers. And dealing with the challenges of today’s workforce means you’re going to have to do something different than you have in the past. I suggest you use this pioneering strategy. To transform managers into leaders, these five questions should be incorporated into their job descriptions and measured as part of their performance reviews. Do you challenge the process, inspire a shared vision, enable others to act, model the way and encourage the heart? If you do, you’re a leader. You’ve met the leadership challenge. And you’ll be able to meet the challenge of dealing with today’s workforce. If you aren’t exhibiting these five leadership practices, you’re just a manager. And if you’re just a manager, you’re in trouble. E-mail comments to jim@purposeunlimited.com 254.527.3342 www.cllnet.com 7th Capitol Land & Livestock 1946 • Schwertner, Texas • 2021 5 ANNIVERSARY Celebrating 75 Years of Service to the Cattle Industry
16 CALF News • February | March 2022 • www.calfnews.net Beyond those numbers, Jones says feed conversion, while not quite as good as quality beef steers, was much better than straight Holstein steers, and the F1s had about 6 percent more days on feed. But the hybrids had better yield grades than straight beef steers. “So our yield grades were going lower and our quality grades were going higher. We were getting more Choice and Prime with less fat,” he says. “And we’ve made significant progress in the last five years, moving up into where we’re much better than the commodity cattle here in the yard,” Jones says. Those type of cattle generally grade around 70 percent Choice, maybe a little better. What’s more, according to research conducted by Texas Tech University with beef-on-dairy steers at Hy-Plains Feedyard’s Research Center, the crossbreds performed well in consumer sensory tests.“In the consumer sensory panel, the most tender was a straight dairy steer,” according to the research report. But the beef-on-dairy cross produced more tender steaks than beef steers. “On juiciness, we were slightly more juicy,” Jones says. The beef-on-dairy cattle at Hy-Plains are marketed to packers on a grid “and we’re getting a bit of a premium for them,” Jones says. Connecting the Dots At the moment, agreements to produce and buy beef-on-dairy calves happen between individual feedyards and individual dairies. However, Dorn says ABS is developing a program to help feedyards and dairies connect the dots on a bigger scale. “We’re just on the cusp of creating that actual program,” he says. “We’ll work on lots of different agreements with different feeders, different packers.” Dairy producers are numbers nuts just as much as feedyard folks. So they can identify the top cows in their barn and breed those to sexed semen to produce replacement heifers. The rest of the cows could be bred to beef bulls and produce a calf with much higher value than a straight Holstein. “Anywhere from $60 to $100 [per head] is what a dairy calf is worth,” Dorn says. “These [F1] calves are worth $200 and I’m hearing as high as $285 for a day-old calf.” And some dairies are retaining ownership in the crossbred calves to realize the full value of the beef-on-dairy cross. Unlike a straight Holstein calf that will be on feed for a year or more, the beef-ondairy crosses can be handled more like a beef steer. After a stay at a calf ranch, “We’re growing a lot of these composites in a typical grow yard program,” Jones says, and the cattle are going on feed around 800 pounds. What’s more, the beef-on-dairy crosses are available 52 weeks a year, Dorn points out. That takes away the seasonality with spring and fall weaning. As the beef-on-dairy trend has grown, some have wondered if the F1 crosses are putting more tonnage into the beef market. According to Jones, however, the opposite may happen. Those dairy steers are part of the fed beef marketing mix already. “We’re able to market these cattle [F1 crosses] at a lighter weight.” Rather than pressure the entire beef market, Jones thinks the price pressure will be put on commodity cattle. The carcass quality is much better than that from a high-risk commodity steer. “When we can make these cattle grade 91 percent Choice, we’ll grow that chain,” Jones says. “We’ll get more as we go forward out of these cattle. We’ve done it in straight beef cattle and we’ll do it in these as well.” According to Dorn, “What we’re doing to the average beef producer is raising the quality bar they have to compete with. We think there’s opportunity to influence more than 5 million calves going into the beef supply chain.” Jones agrees.“We’re growing. It really has the potential to be a branded product.” BEEF WITH A SIDE OF DAIRY Continued from page 12 Each mL contains 300 mg of oxytetracycline base (equivalent to 323.5 mg of oxytetracycline dihydrate). For Use in Beef Cattle, Non-lactating Dairy Cattle, Calves, Including pre-ruminating (veal) calves BRIEF SUMMARY (For full Prescribing Information, see package insert.) INDICATIONS: NOROMYCIN 300 LA is intended for use in treatment for the following diseases when due to oxytetracycline-susceptible organisms: Beef cattle, non-lactating dairy cattle, calves, including pre-ruminating (veal) calves: NOROMYCIN 300 LA is indicated in the treatment of pneumonia and shipping fever complex associated with Pasteurella spp., and Histophilus spp. NOROMYCIN 300 LA is indicated for the treatment of infectious bovine keratoconjunctivitis (pink eye) caused by Moraxella bovis, foot-rot and diphtheria caused by Fusobacterium necrophorum; bacterial enteritis (scours) caused by Escherichia coli; wooden tongue caused by Actinobacillus lignieresii; leptospirosis caused by Leptospira pomona; and wound infections and acute metritis caused by strains of staphylococcal and streptococcal organisms sensitive to oxytetracycline. Swine: NOROMYCIN 300 LA is indicated in the treatment of bacterial enteritis (scours, colibacillosis) caused by Escherichia coli; pneumonia caused by Pasteurella multocida; and leptospirosis caused by Leptospira pomona. In sows NOROMYCIN 300 LA is indicated as an aid in control of infectious enteritis (baby pig scours, colibacillosis) in suckling pigs caused by Escherichia coli. PRECAUTIONS: Exceeding the highest recommended level of drug per pound of bodyweight per day, administering more than the recommended number of treatments, and/or exceeding 10 mL intramuscularly or subcutaneously per injection site in adult beef cattle and non-lactating dairy cattle and 5 mL intramuscularly per injection site in adult swine, may result in antibiotic residues beyond the withdrawal time. Consult with your veterinarian prior to administering this product in order to determine the proper treatment required in the event of an adverse reaction. At the first sign of any adverse reaction, discontinue use of the product and seek the advice of your veterinarian. Some of the reactions may be attributable either to anaphylaxis (an allergic reaction) or to cardiovascular collapse of unknown cause. Shortly after injection treated animals may have transient hemoglobinuria resulting in darkened urine. As with all antibiotic preparations, use of this drug may result in overgrowth of non-susceptible organisms, including fungi. The absence of a favorable response following treatment, or the development of new signs or symptoms may suggest an overgrowth of non-susceptible organisms. If superinfections occur, the use of this product should be discontinued and appropriate specific therapy should be instituted. Since bacteriostatic drugs may interfere with the bactericidal action of penicillin, it is advisable to avoid giving NOROMYCIN 300 LA in conjunction with penicillin. WARNINGS: Warnings: Discontinue treatment at least 28 days prior to slaughter of cattle and swine. Not for use in lactating dairy animals. Rapid intravenous administration may result in animal collapse. Oxytetracycline should be administered intravenously slowly over a period of at least 5 minutes. CAUTION: Intramuscular or subcutaneous injection may result in local tissue reactions which persists beyond the slaughter withdrawal period. This may result in trim loss of edible tissue at slaughter. Intramuscular injection in the rump area may cause mild temporary lameness associated with swelling at the injection site. Subcutaneous injection in the neck area may cause swelling at the injection site. ADVERSE REACTIONS: Reports of adverse reactions associated with oxytetracycline administration include injection site swelling, restlessness, ataxia, trembling, swelling of eyelids, ears, muzzle, anus and vulva (or scrotum and sheath in males), respiratory abnormalities (labored breathing), frothing at the mouth, collapse and possibly death. Some of these reactions may be attributed either to anaphylaxis (an allergic reaction) or to cardiovascular collapse of unknown cause. To report a suspected adverse reaction call 1-866-591-5777. Livestock Drug - Not for Human Use. Restricted Drug(s) California. Use Only as Directed. Manufactured by: Norbrook, Inc. Lenexa, KS 66219 MADE IN THE UK Rev: August 2021 Version: I08 (oxytetracycline injection) ANTIBIOTIC Noromycin® 300 LA Approved by FDA under NADA # 141-143
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