North Central Research Extension Center


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Change in Cow/Calf Business


Industries, businesses, and individuals are not static but react, change, and evolve over time in response to markets, regulations, and a host of other factors. Forward thinkers anticipate changing conditions and adapt their business plans to be positioned to capitalize on emerging opportunities. There is lots of discussion currently on how an expanding ethanol industry might impact corn availability, and cattle producers. Some anticipate some shift of feeding to areas of ethanol production back to the western corn belt and into some non-traditional feeding areas.

Year to year it is difficult to identify incremental change but reflection over a longer time period identifies trends of structural change, technological advances, efficiencies, and market demands. While every-cow calf operation exists within its own set of influencing factors some generalizations can be made on trends that seem to be shaping the industry and leading change.

Concentration is visible in the industry from the mega feedlots, to the local level of fewer but larger operations. Even in farm county characterized by many small secondary cow-calf enterprises in the past, we see emerging some much larger herds which are a primary focus of the operation. Increased herd size is driven to meet increasing living needs while margins per cow have trended down. Greater specialization and further expansion of operations is probably also related to the high cost of equipment and technologies only cost effective with scale of operation.

Trends with labor, equipment, and facilities become intervened with issues of scale. The lack of dependable, available farm help in most communities and the cost of hired employees impacts equipment needs, herd scheduling, and use of contact services. More cows per man can be accomplished with later season calving, streamlining some management, and a greater us of hired trucking, forage harvest, AI breeding and backgrounding- preconditioning, and heifer development. Remaining challenges with cattle processing are often addressed with upgraded handling facilities and equipment, and traditional networking and cooping with neighbors. There is an expanding array of more effective and often times portable equipment for handling and working cattle to accomplish necessary management for herd health, production testing, identification and marketing associated with spring and fall calf processing and the annual working of cows.

Summer grazing and winter feeding represent the greatest cost and resource need of cow-calf operators. Competition for pasture has driven up land and rental values. Cows are routinely moved farther to summer grazing, and there are an increasing number of custom contract grazing services being utilized. Grazing capacity and length of grazing season are of high interest resulting in adoption of more strategic grazing and participation in assistance programs for fencing and water development for adoption of rest-rotation management and early and late season grazing on complementary pastures, annual forages, and cropping resides. Electric fencing is commonly utilized for seasonal grazing, pasture subdivisions, temporary grazing and increasingly for permanent and perimeter fencing.

Harvesting feed for wintering is a basic need of cow-calf operations in the region. Cost, resources, and time limitations associated with traditional haying have driven trends to alternative feeds and try to minimize feeding days. Greater use of relatively in expensive, fairly easy to harvest low quality forage as managed or, disaster released CRP haying and baling or grazing of corn and other crop resides has increased. The annual cropping of forage to accomplish a high quality, high yielding quality to balance rations is evident by conversion of marginal farmland to alfalfa, rising corn acres, and increased corn silage. Similarly hay-residue based rations are commonly extended and supplemental with a growing base of cropping co-products as screenings, middlings, distiller grains, and oil seed meals. With the trend to alternative feeds has come changes and investments in feeding equipment ranging from bunks, mixer wagons, hay processors, supplement feeders, and commodity storage. Where low cost opportunity feeds exist and grazing costs are high, it has become competitive for greater supplemental feeding and less pasturing.

Environmental concern of livestock operations has substantially increased with new animal feeding operation regulations. The siting of corrals or confinement facilities, the potential to pollute ground and surface waters, and management of manure and waste move the industry in several directions. With specific issues and availability of cost sharing, there has been an increase in feeding facility expansion and renovation to develop a waste system to handle runoff, containment and manure use compliant with the regulations and permitting procedures. Other with an assessed low risk of pollution due to location and operation my not realize a need for any major change but there may likely be a focus to minimize confinement periods by greater out wintering and pasture calving.

There has always been value to high quality feeder calves but the techniques and tools to produce and document value have grown. Consequently the spread in prices for feeders is quite large and associated with the confidence feeder cattle will be healthy, gain efficiently, hit high value carcass targets, and comply with marketing claims for the feeder and processor. The cost associated with sick calves in terms for treatment, death loss, performance, and carcass value have been well documented and moved the industry standard for pre-vaccinated calves. In marketing channels dealing with direct movement of load lots, a significant price differential mandates sellers to sell calves with documented vaccinations, which is now also prevalent in sale barns. There is evidence of further value being placed on calves weaned and started on feed for 45 to 60 days along with vaccinations. The trend is for value for calves that stay healthy, which is not simply a vaccination but also proper nutrition and minimized stress. Opportunities are likely to exist for producer who can low stress wean and start calves prior to marketing either on the ranch or by local feeders and become replicable suppliers of healthy feeders. Drought affected, feed short producers have started a trend to earlier weaning and pre-conditioning.

Beyond health there is great variation in the value of calves based on their feedlot performance and carcass value. Producers have available more genetic tools then ever for selecting breeding stock. A significant premium for highly marbled high grading cattle enhances the value of calves by proven carcass/feedlot improving sires or who have demonstrated superiority by previous herd mates. The trend has been back to British breeds and for black cattle but the real trend for added value is driven by genetically documented and predictable cattle that gain, finish, and cut with added value. Today’s cow-calf producers are challenged to us the available tools of AI, crossbreeding and genetic evaluation technologies for implementing breeding systems that exploit breed differences and balance selection for efficient cow herds and high value calves on a practical economic basis.

Video, internet, and direct marketing have become substantial marketing methods. The ability to pre-price calves prior to shipment and minimize shrink and handling stress has advantages to sellers. Other price protection alternatives, now more widely understood by producers remain limited in use. Marketing larger numbers in more uniform lots as required by some sale methods has brought some producers together to group market. Considering the consolidation in the industry post weaning this will likely be growing opportunity.

Animal identification, tracking, and documentation extend beyond herd health and genetics to additional factors evolving in the marketplace. Verification of age, source, care, feeds, etc becomes necessary for specialized markets. All of which is a part of our current information age and the need for adoption of farm level record keeping for marketing documentation, production evaluation, and financial tracking and analysis.

Current trends and recent developments might help guide cow-calf producers to opportunistically adapt change to be best positioned for an evolving industry. Look to grow the operation or co-op with others to have enough scale to market in load lots and justify handling and feeding equipment to efficiently process cattle and use cost effective alternative and by product feeds. Mange high land costs, drought risk, and animal performance with grazing management that rests grass in the growing season and extends grazing with stock piling and residues. Be a precise feeder, supplementing for cow needs to manage condition and achieve high reproduction. Take pride in your calves and enhances their value and quality through herd genetics, health programs, weaning, preconditioning, identification, and documentation. Align yourself with suppliers and marketers that help provide feedback and capture added value. And finally spend some time analyzing your business, planning for the future, and anticipating the next change and opportunity.

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