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OSU Extension BEEF Team

BEEF Cattle questions may be directed to the OSU Extension BEEF Team through Stephen Boyles or Stan Smith, Editor

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Previous issues of the BEEF Cattle letter

Issue # 510

November 1, 2006

What's a bred beef heifer "cost"? - Stan Smith and John Grimes, OSU Extension

Most commercial cattlemen replace 15 to 20% of their mature cow herd annually with heifers which are retained from their own herd. For the "average" Ohio beef herd of 16 cows, this means that each retains and develops four to six replacement heifers from each calf crop in hopes that three or four of them will become pregnant and calve along with, or a couple weeks prior to the mature herd. Obviously, larger or smaller Ohio beef herd managers work with numbers that go up or down proportionately.

It all seems logical enough. After all, we've done it this way successfully for years. The question is, "Can we each afford it?" While the "cost" items will vary for each operation, and may include cash, time, labor, facilities, and even the loss of heterosis in most small herd genetic "plans", these are issues that must each be considered on an individual basis.

The challenges that cattleman face when developing and breeding heifers are similar regardless of how many heifers there are to manage. Heifers need enough of the right kind of nutrition to grow themselves, conceive a calf, birth a calf, feed it, and then breed back to do it all again within one year while just reaching the point of full maturity themselves. For this reason, developing heifers along with the mature herd is seldom an efficient or profitable alternative.

Also falling under the heading of "challenges" are the equipment, facilities and manpower required to feed, breed and manage a few heifers separately from the mature herd. In many cases, it takes a similar investment in the equipment and facilities regardless if you're managing only a few, or a truckload of heifers.

But, as we review the presentations offered during last spring's Ohio Heifer Development Short Course, we realize the greatest "cost" a cattleman might realize when developing his/her own replacement heifers from within his/her own herd is the economic loss realized from a mating system that doesn't maximize heterosis. Of course, a well managed artificial insemination program will reduce or minimize these losses, but once again, only if adequate facilities and labor are an available resource.

Many Ohio cattlemen maintain only one bull due to the size of their herd, and because the added expense in maintaining an extra bull simply for heifers is not cost effective. Since the bull in a single bull program is expected to breed both the mature herd and the virgin heifers, he might typically be a calving ease sire of the same breed as the herd. At the same time, research indicates to us that in this scenario we are missing out on an 8.5% gain in pounds weaned from the heterosis of simply mating two purebred animals of different breeds, commonly known as an F1. Further, if we mated those F1 females to a terminal sire of a third breed, we'd have the opportunity to realize maximum heterosis in the herd of 23.3% additional pounds weaned. Admittedly, an efficient artificial insemination program eliminates most of these issues, but the fact is that at this time more than 90% of the U.S. beef herd is still bred naturally.

While looking at economics issues during the Heifer Short Course, we realized total on-farm costs to a typical example Ohio herd for developing heifers ranged from $1500 to more than $1600 per heifer entering the herd as a bred. These costs included the value of the heifer at weaning, interest on money, a 1% death loss, feed, and breeding costs (either AI or from a calving ease natural sire). In addition, the "cost" of losing maximum heterosis in the herd due to the challenges of maintaining and managing multiple bulls within a small herd amounted to a "cost" of nearly $500 of the $1500-1600 cost per heifer retained.

All this being said, the advantages of having heifers developed commercially off the farm, or simply purchasing them already bred to a calving ease bull become rather obvious. Not only might it free up space, facilities and feed to house additional mature cows during the winter and early spring, but it could allow Ohio's commercial cattlemen to more easily optimize the advantages of heterosis in their herds.

In recent weeks you've been hearing about the Ohio Beef Heifer Development Program which has been created as a demonstration in hopes of determining exactly what all the costs and potential pitfalls and/or advantages of custom heifer development might be. It's also expected that through this demonstration the opportunities for "value added" income to those cattlemen with the expertise to effectively manage heifers will be identified. At this point, several potential cooperators have expressed interest in providing such a service.

The Ohio Heifer Development Committee hopes to identify at least two cooperators for this demonstration by early December. At the same time, the Committee is seeking out individuals who might have an interest in enrolling 2006 spring born heifers into the program for development and breeding. These heifers could then be returned to the originating farm or merchandised.

The Committee is not only seeking heifers for enrollment into this program, but also would like to hear what kind of heifer development program would best accommodate the concerns of Ohio's cattlemen. If you have interest in enrolling heifers into this demonstration for the coming winter and spring, or would simply like to discuss the alternatives that might best fit your farm situation, contact John Grimes (grimes.1@osu.edu or 937.393.1918) or Bill Doig (doig.7@osu.edu or 614.873.6736).

The Future of Beef - Midsized Challenges - Kris Ringwall, Beef Specialist, NDSU Extension Service

There is considerable difficulty in being in the middle because the middle seldom stays the middle. The middle (average) is where no one wants to stay. For most, our upbringing has been to move away from the middle and strive to excel, dominate and extend whatever it is that we do to further heights.

The consequence of this business approach has affected rural areas in many ways. One major effect has been the lack of neighbors. In cattle country, the lack of neighbors translates into the lack of help. This is not a new concept, but it is a concept that has been with us since people have been engaged in business.

This gradual elimination of the players or partners in the beef business is part of a cycle that (hopefully) will perhaps someday recycle and redistribute resources. For the time being, the future of the cattle business seems to be pointed to larger and more expansive operations.

So what is the albatross or difficulty in surviving with reduced scale? Actually, most of those involved in small to midsized operations already feel the pinch. The pinch is increased costs and the inability to effectively proportion those costs across limited production units (the cow and calf). Along with the immediate and obvious struggles, the future brings with it some other unknowns that impact beef operations.

According to an article, "Economics of Animal Agriculture Production, Processing and Marketing," authored by Michael Boehlje and published by the American Agricultural Economics Association's online Choices magazine (www.choicesmagazine.org, Volume 21, No. 3, 2006), there are several very real impacts for small and midsized operations that loom in the future. It is a lot like running a race, at least a race in which various hurdles are placed before you and you must overcome them to continue successfully.

For those involved in animal agriculture, there is always the risk of additional regulatory functions, changing consumer wants and varying marketing structures. Regarding additional regulatory issues, Boehlje lists "added restrictions on business models, such as contract production or vertical integration, more restrictive immigration policies or worker safety rules, increased environmental regulation and restrictions on the use of feed ingredients/additives." These all add up to an uncertain future.

In addition to potential regulation guided by people who are relatively disconnected from the production of agricultural products, these same people have a very broad expectation of available products. Boehlje says changing consumer wants include many familiar terms, such as animal welfare, organic, social responsibility, environmental responsibility, free-range production, locally grown and no use of antibiotics, synthetic growth hormones or genetically modified organisms.

These are all on the list of product attributes that may be difficult to meet and, even if production is geared up to meet them, nonfactual trends are very apt to change faster than production can. The last category of hurdles, as defined by Boehlje, "are concerns that marketing agreements, contracts and similar business arrangements are more conducive to larger operations; reduce spot market liquidity; reduce the availability of market information needed for efficient price discovery; and adversely affect smaller operations."

"If there is a way, it can be done" is often quoted by those working hard to reach their end dream, but the doses of reality are hard. Like hurdles in a race, the winner will get to the end. Unfortunately, the hurdles usually are cleared faster by someone bigger than you. Another sad note, but life goes on.

Forage Focus: Utilizing Corn Stalks - Rory Lewandowski, Extension Educator, Athens County

Even though we do not have the acres of corn production in Athens County that other counties have, there may still be some opportunities for beef cattle owners to rent or utilize corn stalks following corn harvest. For cows at the mid-gestation stage of production, grazing a field of corn stalks can be an economical way to meet the cow's nutrient requirements. Following corn harvest, the remaining residual in the field typically consists of corn stalks, corn leaves and some corn grain. The amount of grain left in a field after harvest depends upon a number of factors such as harvest date, the amount or percentage of corn plants that lodged and the harvest efficiency of the machinery. An average figure used is that 4.2% of the corn yield is left behind in the field as corn grain.

The nutrient content of cornstalks is greatest immediately after harvest and will decline through the fall period as plant material deteriorates due to weathering. Unless a large enough number of cattle can be put into the field to consume the residual within a few days, utilization will be increased by strip grazing the field. Given free reign over an entire field, cattle will select and eat the grain first, then the husk and leaves, and finally the cobs and stalks. In a large field with few cattle grazing, this results in a diet above the 7% CP and 48.8% TDN recommended by NRC tables. In fact, early on in this type of grazing, a cow may ingest a diet with a TDN content as high as 70%. Strip grazing will limit this selectivity somewhat, forcing cows to eat the stalks in an area before moving to a fresh strip where the corn grain is again eaten first. However, the producer must balance the strip grazing with the knowledge that leaf and husk quality will be deteriorating over time, so the goal should be to graze the entire field within 60 days following harvest. As with any change in forage/feed type, the producer should be monitoring the body condition of the cows to make sure they enter the late gestation period in good body condition.

Information for this article provided by OSU Extension Bulletin 872, Maximizing Fall and Winter Grazing of Beef Cows and Stocker Cattle.

Sorting Cows In the Fall For Efficient Winter Feeding - Glenn Selk, Extension Cattle Specialist, Oklahoma State University

Sound sorting concepts of the spring-calving beef cow herd in the fall should improve the efficiency of the feeding program throughout the winter. Any strategy that improves feed efficiency this year should be utilized so that short forage and feed supplies are used most effectively. Before we divide up the herd, it makes some sense to inventory the cows to be divided. How many cows of each age group do we have? Every herd will be a little bit different, but a Research Station Herd in North Dakota can give us data to use as a guideline. Dr. Kris Ringwall of the North Dakota State University Dickinson Research Extension Center reported recently on the average percentage of cows in their herd (by age group) over the last 20 years.

This data points out that 17% of this herd over the years was in the "first-calf heifer" category. The also noted that 11% of the herd was 10 years of age and older. Fifteen (15%) percent of the cows were 2nd calf 3 year-olds. From this data they formulated three logical groups of cows to be pastured together for feeding efficiency:

Group 1: The two-year old first calf heifers. They have higher nutrient needs than other cows that are not growing. They are too small to compete with larger, older, boss cows for the supplement.

Group 2: The old cows (10 years and older) and the 2nd calf heifers. In addition, this group should include any of the middle aged cows that were thin and needed extra supplement. Cows that were Body Condition Score 4 or less would be considered.

Group 3: The remaining cow herd. This is the group that is mature in size and in adequate condition to enter the winter feeding period as at least Body Condition Score 5.

Even after deep culling, because of drought, many herds will still have some cows in all categories. The number of available pastures with some forage and adequate water may limit our sorting options. If only two groups are possible, putting groups 1 and 2 together would be the logical other combination. Ranchers, then want to be certain that the feeding program is adequate to have cows in each group calve as BCS 5 or 6 next spring. Visit with the local County or Area Extension Office for more detailed information about winter feeding recommendations.

Weekly Roberts Agricultural Commodity Market Report - Mike Roberts, Commodity Marketing Agent, Virginia Tech

LIVE CATTLE in Chicago (CME) closed mostly lower on Monday with the OCT'06LC at $90.050/cwt, up $0.225/cwt but most other deferreds were down. The DEC'06LC closed off $0.600/cwt at $88.675/cwt. Large feedlot supplies and weak chart signals pressured prices as funds liquidated bear spreading dragging the December lower. The market bounced back from Friday's losses behind a stronger-than-expected cash cattle market late on Friday. However, gains failed to hold. Firm cash cattle last week supported the October contract which will expire on Tuesday. Cash cattle traded $2/cwt higher at $90/-$90.50/cwt, up from $88-$88.50/cwt last week. Declining boxed beef prices and expectations that the cash market may continue to weaken were other bearish factors. Some support was seen as the first shipment of U.S. beef to South Korea arrived on Monday. Imports have been allowed since September but this is the first delivery due to very strict rules U.S. exporters have to work with. USDA on Monday put the choice beef cutout at $146.95/cwt, up $0.48/cwt. According to HedgersEdge.com, the average beef plant margin for Monday was estimated at a negative $1.85/head. This is down from a negative $1.26/head on Friday and a negative $1.60/head last week. Cash sellers are encouraged to sell cattle on these market bounces if possible. Hedgers should watch for opportunities to protect a portion of 4th quarter '06 and 1st quarter '07 marketings. Corn users should consider pricing some near-term inputs at this time.

FEEDER CATTLE at the CME, like live cattle, closed mixed with NOV'06FC futures at $103.625/cwt, up $0.050/cwt. The JAN'07FC contract finished at $100.950/cwt, off $0.40/cwt. Chart-based selling and high corn prices still drove this market even though corn lost ground. Feeders looked like they might go higher early on Monday in short covering due to sluggish corn. The CME Feeder Cattle Index for October 26 was placed at $107.18/cwt, up $0.61/cwt. Cash sellers are still encouraged to consider protecting a portion of 4th quarter '06 and 1st quarter '07 marketings at this point. Corn users should consider pricing some near-term inputs at this time.

Visit the OSU Beef Team calendar of meetings and upcoming events

BEEF Cattle is a weekly publication of Ohio State University Extension in Fairfield County and the OSU Beef Team. Contributors include members of the Beef Team and other beef cattle specialists and economists from across the U.S.

All educational programs conducted by Ohio State University Extension are available to clientele on a nondiscriminatory basis without regard to race, color, creed, religion, sexual orientation, national origin, gender, age, disability or Vietnam-era veteran status. Keith L. Smith, Associate Vice President for Ag. Admin. and Director, OSU Extension. TDD No. 800-589-8292 (Ohio only) or 614-292-1868

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