Don’t Wait to Begin Market Planning
Colorado State University Department of Animal Science
Even though we are just completing the majority of the commercial cow-calf calving season, it is not too early to begin building a marketing plan for the 2006 calf crop. Clearly the market psychology has shifted into a more bearish mode during the past three months, and as cattle feeders feel increasing price pressure on fed cattle, it is a near certainty that we will face downside price pressure on calves and yearlings headed into the fall run. As a result, planning and risk management is of critical importance to cow-calf managers.
Good planning now can translate into better marketing decisions. Producers would be advised to accomplish the following tasks as soon as possible.
- Identify the best market alternatives including, but not limited to, utilizing video sales, retaining ownership into the stocker or feedlot phase, or developing a cooperative strategy with seedstock providers or feeders as partners.
- If numbers allow, seek to spread risk by considering marketing through several mechanisms to avoid putting all of your eggs into one basket.
- Absolutely communicate the added value of your cattle. Are they age and source verified? Will they be sold under a preconditioning program such as VAC-45? Provide historical feedlot and carcass performance data if available, and use programs such as Hereford Verified if possible to add value.
- Carefully evaluate the seasonal trends in the marketplace to better match marketing with opportunities to obtain higher prices.
- Evaluate the opportunity to utilize risk management strategies, such as backgrounding or hedging, as a means to control downside price volatility.
- Explore cooperative marketing with neighbors who have comparable quality cattle to attract more buyer interest from your ability to collectively offer larger lots.
- Investigate opportunities to align with specific alliances or partnerships.
- Seek advice from several marketing professionals to build a plan based on a variety of perspectives. No single person has a corner on market forecasting – multiple opinions are of value in this stage of the cattle cycle.
The key is to be active now as opposed to being reactive as we approach the fall months. There will be profit opportunities over the remainder of the year. The key is to be poised to take advantage of these opportunities.
Clifford Announces Final Results of Alabama BSE Investigation
U.S. Department of Agriculture (USDA) Chief Veterinary Officer John Clifford has announced the conclusion of investigations regarding the Alabama cow that tested positive for bovine spongiform encephalopathy (BSE) in March.
“APHIS (Animal and Plant Health Inspection Service) and Alabama officials excavated the index animal’s carcass and through dentition, an examination of its teeth, determined the animal to be more than 10 years old,” says Clifford. “It was born prior to the implementation of FDA’s (Food and Drug Administration) 1997 feed ban that minimizes the risk that a cow might consume feed contaminated with the agent thought to cause BSE.”
The only related animals found were the two most recent calves of the BSE-positive animal. The most recent was located at the same farm and the second calf died the year before. The living calf is being observed at APHIS’ National Veterinary Services Laboratory in Ames, Iowa.
“APHIS’ investigation did not reveal the BSE-positive animal’s herd of origin,” says Clifford. “However, this was not entirely unexpected due to the age of the animal, along with its lack of identifying brands, tattoos and tags.”
The investigation revealed that all local feed mills that handle prohibited materials have been and continue to be in compliance with the FDA’s 1997 feed ban.
For Clifford’s complete statement, visit the USDA APHIS Web site.
15 Feed Cohorts of BSE-Positive Animal Entered U.S.
USDA is working closely with Canadian counterparts on animal tracebacks in regard to Canada’s most recent case of BSE.
Canada has informed USDA that 15 feed cohorts of the BSE-positive animal entered the U.S. USDA has located one of these animals, and it will be euthanized and tested. The disposition of the remaining 14 animals is still being determined.
"Experience worldwide has shown us that it is highly unusual to find BSE in more than one animal in a herd or in an affected animal's offspring,” says USDA Chief Veterinary Officer John Clifford. “However, we will continue to work with Canada to locate as many animals of interest in this case as possible.”
May Beef Tips Available Online:
KSU Plans Beef ID Courses
The May issue of Beef Tips, produced by Kansas State University (KSU), is available on the KSU Animal Science Web site. Contents include articles about winter feeding effects, supplementation with dried distillers grains and drought management strategies.
Also included is a summary of the two Electronic Beef ID Crash Courses scheduled for this summer. The programs will be held at the KSU Beef Stocker Unit outside of Manhattan and will feature live-animal demonstrations, hands-on use of animal ID equipment, a review of available technologies and information on how to budget a system.
The June 21-22 program is designed for operators of feedyards, sale barns and stocker-grower operations, whereas the July 19-20 program is designed for cow-calf producers and veterinarians.
Beef at Boston Marathon
The Northeast Beef Promotion Initiative (NEBPI) served 8,000 samples of beef stew to spectators at the Boston Marathon. The NEBPI is a collaborative group of Northeast state beef councils, sponsors and volunteers. These beef enthusiasts manned a beef checkoff-funded booth April 16-17, dishing out the stew.
“We really had great exposure because the Boston Marathon is a world-class event,” says Allison Wenther, director of NEBPI retail marketing and public relations. “Our booth was only about 100 yards from the finish line so we had lots of samplers and rave reviews.”
The beef industry event even had its own representative runner, Brian Briner, a veteran marathoner and veal producer from Wisconsin. Briner ran in a shirt sporting the “Beef. It’s What’s for Dinner/Veal. Eat Smart, Eat Well.” tag lines and remembers hearing encouraging shouts of “Go beef!” from the 200,000 spectators lining the course.
U.S. Cattle on Feed Up 9%
The April 1, 2006, Cattle on Feed inventory was up 9% compared to 2005, according to a USDA National Agricultural Statistics Service (NASS) report. Cattle and calves on feed for slaughter market in the U.S. (for feedlots with capacity of 1,000 or more head) totaled 11.8 million. This is the highest April 1 inventory since the series began in 1996.
USDA Releases BSE Prevalence Estimate
The USDA has estimated that the prevalence of BSE in the U.S. is less than one case per million adult cattle.
This estimate is based on an adult cattle population of 42 million. Data has been gathered from not only the enhanced surveillance effort that has been underway since June 2004, but also from surveillance conducted in the U.S. for the five years beforehand.
USDA says the most likely number of cases present in the U.S. is between four and seven animals.
For more information, visit the USDA Web site.