TOUGH ECONOMIC TIMES CALL FOR TOUGH RANCH MANAGERS

There is no question that it is a tough time to be in the cow-calf business.  Record high production costs coupled with a softening calf market creates a situation where even a person like John Wayne would be scratching his head wondering what to do.

Tough times are not a new thing in the cattle business.  We have had big swings in profits and losses over the years.   Currently the cattle industry is in a survival mode with predictions that the next couple of years will result in losses for the cow-calf producer.  However, I am an optimist and think that the industry is in for better times if we can get through this difficult stretch.   My optimism is based on the economic principle of supply and demand.  The US cowherd numbers are the smallest they have been since the early 1960’s.  It is estimated that in 2009 the number of beef cows in this country will be 32 million head.  That is down from a high in 1982 of over 39 million head.  We have lost over 7 million head of beef cows in 25 years and a large number of producers.  Total beef production has not dropped significantly due to the increase in carcass weights, but as total numbers decline, there will come a time where the supply will not meet the demand.  In turn, prices should increase for producers.  When this will occur is anyone’s guess.

The cattle industry is made up of very strong individuals who have the ability to adapt.  That adaptability will have to be put into practice as we move forward.  We will have to be willing to take a close look at our production costs and income opportunities and make the necessary management changes in order to stay in business.

If we analyze our operations for efficiency, we have to start with winter feed costs.  This is a variable cost that amounts to over 60 percent of the cost of owning a cow each year.  So how can this cost be lowered?  According to Dr. Jason Ahola, University of Idaho Extension Beef Specialist, producers need to, “Make the cows work for you”.    In order to make the cows do the work, Dr. Ahola suggests that the cows need to harvest more of their own feed.  Producers need to somehow reduce the amount of iron and fuel it takes to get cattle fed.  The grazing period needs to be extended during the late fall and early winter.

In the fall of 2008 with high fuel prices, the costs associated with harvesting, hauling and feeding hay were $66 to $99 per ton above the value of standing forage.  This cost can be reduced if cows harvest the feed themselves.  Of course in most regions of north central Idaho, it is impossible for cows to winter out on range.  However, if the grazing period can be extended by any length of time, feed costs will be lowered.

There are some options for producers to look at in regards to extending the grazing period in the fall.   Stockpiling perennial forages for grazing in the fall is an idea that will accomplish that goal.  Producers will need to have enough pasture to defer grazing on part of it for fall use, or have a well designed rotational grazing system, that allows for deferred grazing. 

Grazing crop residues or crop aftermath in the fall is another way to extend the grazing period.  These forages are usually high in fiber and low in protein, but with proper protein supplementation, crop residues provide adequate nutrition for spring calving cows.  Most wheat and barley fields in the region no longer are fenced, but there are many new electric fence options which producers can use to inexpensively fence a field to allow for grazing.   

Seeding fields with a forage crop for late fall grazing is another option that can work to extend the grazing season if there is sufficient fall moisture or irrigation.  Not many producers in this area have the luxury of irrigation, but if there is a sub-irrigated area, or if there is adequate soil moisture in August, seeding a forage crop for later grazing should not be completely ruled out.

The feeding method used can also influence winter feed costs especially in the amount of hay that is wasted.  Research conducted at the University of Missouri showed that wasted hay can range from 10 to 45 percent depending on the feeding method.  Limit feeding cows in feed bunks is most efficient with the average waste of 10 percent.  Spreading the hay on the ground causes the most waste approaching 45 percent.  Also, cows will eat 20 to 30 percent more than they need if fed free choice.  Most people in this region feed hay in big round bale feeders.  Feeding only a one day supply will lower overeating waste by 15 percent.  With hay as high as it is, anything that can be done to lower waste will lower the winter feed costs.

Another feed cost saving management practice is feeding cows based on body condition score.  If thin cows can be separated from fat cows, and these two groups fed according to their needs, money can be saved.  A fat cow doesn’t need the same nutrition as a thin cow.  She can get by on less feed.  Targeting a body condition score of 5 should be the goal.  This practice may be difficult if there is only one winter feeding area for the cows.

Additional costs can be saved by culling poor performers.  Everyone in the cow-calf business should develop a culling criteria and follow it closely.  The economically important traits that need to be selected and retained in the herd are:  reproduction; functionality and production.  Under reproduction, heifers should calve at age two and raise a calf to weaning.  Cows should rebreed and calve every 365 days and raise a calf to weaning.  Any variation from this criteria should result in a free trip to town for the cow.

In the functionality area, cows have to be sound in their mouth, eyes, feet, legs and udder.  Any unsound cows should be culled to remove potential unnecessary costs.  The production criteria should require a cow to wean off a calf that meets a weight goal set by the manager.  A good target would be 50 percent of the cow’s body weight.

According to research conducted by Bob Loucks, UI Extension Educator emeritus in 1991, high profit herds in the Salmon, Idaho area retained enough replacements to replace 18 to 22 percent of the cowherd.  Low profit herds retained just 11 percent.  High profit herds follow are strict culling program and get rid of problem cows and replace them with genetically superior replacements.

Costs saving strategies are just one part of the equation that producers need to study in their business plan.  The other side of the equation is the income side.  In my next column I will address how producers can look for additional income opportunities in their operation.

A new genetic disorder called Arthrogryposis Multiplex (AM), also known as Curly Calf Syndrome, has been identified in Angus cattle.  This disorder can cause calves to be born with twisted spines and curled up legs, which is why the generic term for the genetic defect is Curly Calf. 

Curly Calf is a lethal genetic abnormality that is caused by a recessive inheritance.  What this means is that both the sire and the dam have to be carriers of the gene in order for it to express itself.  According to the American Angus Association, it appears that the genetic abnormality comes from a bull by the name of GAR Precision 1680.  At least most of the calves that have been born with this problem have 1680 on both sides of the pedigree.  However, the exact source of where the genetic abnormality originated is unknown.

If there is any good news in this situation it is that the genetic problem is a recessive inheritance.  As was indicated earlier, both the cow and the bull have to be carriers.  If  a bull and a cow are mated and both are carriers, there is a 25% chance that the calf will have Curly Calf and be born dead.  There is a 50% chance that the offspring will be carriers of the recessive gene but not exhibit the symptoms and there is a 25% chance that the calf will be born and not be a carrier.

So what should you do if you are a commercial producer that has been using Angus genetics in your herd?  According to Dr. John Hall, University of Idaho Extension Beef Specialist at the Nancy M. Cummings Research and Extension Center in Salmon, producers need to implement a strategy for managing their genetics.  Dr. Hall recommends that producers continue a planned crossbreeding program.  He recommends that producers continue to use Angus genetics in the crossbreeding program. 

Dr. Hall also recommends that producers need to pay more attention to the pedigree of their cows and bulls.  If Precision 1680 is in the pedigree of the cows or heifers you have on the ranch, there is no need to cull them from the herd.  However, producers will need to mate them to bulls that do not have Precision in the pedigree.  Dr. Hall does not recommend that commercial producers test their herd for the AM gene when a commercial test becomes available.  He indicated that Angus breeders will soon be able to provide bulls that are tested for the AM gene.  Purchasing AM free bulls will eliminate the problem.

The American Angus Association and US Angus breeders have done a great job in the last few months of trying to inform the industry about this disorder and identifying possible carriers of the defect.  Producers do not need to panic at this time.  The best advice is to adopt the strategies outlined by Dr. Hall and stay informed on this topic.