Rock on

You were the rock stars at last week’s Certified Angus Beef annual conference.

Yes, you, the American cattleman. Among the business suits and loafers, cocktail dresses and stilettos, that are commonplace at The Greenbrier Resort, the ranchers and feeders stood out…and not just because of the cowboy hats they sported.

“They were the only award winners to receive a standing ovation,” Mark says. “There was a real appreciation by our end-users for the job they do every day.”

The couple dozen producers who traveled to West Virginia for the event were ambassadors of sorts for those of you who spent last week just like any other: caring for the herd, perhaps harvesting some crops or weaning calves.

Our award winners and a handful of producer board members were just a small subset of the 600-some people attending our conference, but they represented that iconic, hard-working, steward of the land and livestock.

Producers aren’t segregated into their own track, but rather immersed in the same sessions that the restaurant and retail trade takes in. They learn about the educational tools and marketing ideas we share with our partners, but it also gives them a chance to interact with all the people who use what they create: Certified Angus Beef.

These brave souls fielded questions about a typical day on the ranch, how they care for sick animals, and what effect the drought is having on them personally.

From my home office, I watched the twitter feed light up when four of the producers took the stage for a panel.

AC standing o — The producer panel also earned a standing ovation.

“Frank Scheilfelbein is my hero,” one tweet said. (Hey, I couldn’t agree more!) But the Cliff’s Notes on the real-time coverage: the cattlemen stole the show. Mark was there and he concurred.

“The producer panel was far more about getting to know the people than it was full of controversial questions,” he says. “When they know there are real people with a shared value system taking care of these animals, things like implants become almost a non-issue to them.”

Gary Darnall talked about how his son Lane was home hauling water to cattle. Frank talked about how big their farm is and why it has to be to support him, his eight sons and their families. Dale Moore shared how he and his wife packed up, moved states and jumped headfirst into the feedyard business.

The overall reaction? From those who cook, sell and present beef every day: a resounding THANK YOU!!

And since a remote, solo, standing ovation carries a little less weight, I’ll just say, “Ditto!”

May your bottom line be filled with black ink,

Miranda

PS—To read about any of our award-winning producers, check out their individual stories available here.

Light at the end

Survive nine months of bad news, better days follow for feeders

by Miranda Reiman

Don’t expect corn values to get dramatically lower….this year.

Feeding Quality Forum attendees were probably not surprised to hear Dan Basse, Ag Resource Company, say that pricing inputs would be their top challenge in the last quarter of 2012. But the fact that those costs could normalize in the latter part of next year surely piqued their interest.

The market analyst addressed feeders, allied industry and educators at the seventh annual meetings held in Grand Island, Neb., and Amarillo, Texas, last month.

“There aren’t too many years in my career that I’ve talked about surety of supply,” Basse said. “I want all of you to not only think of the cost of feed, but making sure you that you have it.”

He expects the U.S. corn crop to drop substantially from USDA’s estimates, which have not reflected any reduction in harvested acres. Ag Resource puts the average corn yield at the lower range of industry estimates, but their numbers are based on actual field research. If the average falls to 113 bushels per acre, it would move corn prices to above $11 per bushel.

That average is around 28% to 30% below trend, Basse said, also noting that ending stocks will be tight.

“I can’t show deficit stocks,” he said. “Someone has to go without. What is that last residual bushel of corn worth? I don’t know. I don’t know how high is high.”

Corn stocks will likely settle around 650 million to 700 million bushels. They’ve only been that low about 3% of the time since 1973. “Historically, this is unprecedented,” Basse said.

That doesn’t necessarily mean the beef business will have to deal with back-to-back record corn-price years.

Regardless of the status of the renewable fuels mandate, Basse says the “ethanol monster” is not the factor it has been the past five years.

“He’s not dead, but he is at least in hibernation. Ethanol has reached its zenith,” Basse said. More efficient cars and driving fewer miles, along with the lower ethanol exports, make that a reality.

“This will be the first year since 2005 in which the world per-capita grain use will decline,” he said. “That’s why this year was looking promising until Mother Nature dealt us this big blow in terms of heat and dryness.”

Digging into historical data, there have never been two consecutive years of widespread drought in the central U.S.

“Even in the 1930s, we had drought in 1934 and 1936, but in 1935 we had average rainfall,” Basse said. “So if I’m in the cattle feeding business, I’m very hopeful that next year’s weather will be normal.”

If farmers ratchet up corn acres to 98.5 million and get an average yield of 160 bushels per acre next year, that puts corn in the $4.50 to $5.00 per-bushel range.

“Won’t that be nice?” he asked. “But that’s three or four quarters away.”

To add to the immediate stress, hay production is forecast at 120 million metric tons, or the lowest level since 1976.

The poor corn crop may provide one saving grace: “The only good news for you is that this is really bad quality corn. There might be some nice discounts offered relative to poor quality.”

Low test weights and aflatoxin issues are some of the widespread concerns.

Herd liquidation is another factor as feeders look to source calves, but Basse says crop insurance might help. Some Midwestern farmers are looking to chop poor-quality corn and invest their payout in cows.

“What does that mean for the cowherd in the United States? I’m not quite certain, but I do believe it will allow it be more withstanding than I’ve seen in other drought years,” he said.

As the domestic population ages, beef demand is down slightly, but the worldwide trend contradicts that.

“When I look at consumption, it is still moving up, so the story of being a livestock producer is still relatively bullish longer term,” Basse said. “We’re also finding from our overseas customers that importing beef is less costly than importing the grain itself.”

That bodes well for trade.

Individual balance sheets are based not only on costs and inputs, but on getting the highest possible revenue. Supporting a branded program is one option: “That’s good for the farmer, and everybody up and down the chain gets the most value,” Basse said. “It helps everyone, including the consumer because he knows he’s getting a high-quality product, so I’m big on branding, going forward.”

Another thing he’s big on? Foresight.

“I want every cattleman to think forward, at least for three quarters, and then we can plan for the good times which will probably happen nine months from now.”

The forum was co-sponsored by Purina Land O’ Lakes, Certified Angus Beef^® brand, Feedlot Magazine and Pfizer Animal Health. Watch for more information in the weeks ahead at www.cabcattle.com.

Gimme the good news!

Our Feeding Quality Forum the week before last, was full of some kind of gloomy news for cattle feeders, like this:

2012_08_28_mr_Nebraska FQF 12-3 — Dan Basse, Ag Resource Company, talked about many challenges, but he also forecast an end date for some of those.

“I’d like to tell you here today that the corn market is acting tired and not doing well, but the problem is, every time it drops there are buyers.”

Or this:

“We do see over the next few years, something on the order of a 3-million-head drop in the size of the cowherd and a 4-million-head drop over the last four years. In three years we’re gonna see some empty pens; we’ve got excess capacity. We’re gonna have to deal with it.”

But I inherited optimism from a lady who does a crummy job with a smile on her face, because my mom is thinking, “Well, this is better than driving the rendering truck.”

So rather than go on and on with all the challenges facing y’all, I thought I’d capture one good news comment from each speaker:

“We are not in the camp that this corn crop is getting better. The only good news that we have for all of you is that this is really bad quality corn. Test weights yesterday at several fields were as low as 37 pounds per bushel, for corn. A lot of them are coming in between 49 and 52. Now if you are feeding corn, there might be some nice discounts that you are offered relative to that poor quality.”—Dan Basse, Ag Resource Company
“Those are record-high retail beef prices. We’ve set a record almost every month the better part of the last two years. And if you extend my comments over the next two or three years that’s going higher.”—Mike Sands, Informa Economics
“Looking at the foodservice and retail side, there are positives there as well <related to the trend toward increasing carcass weights> because that retailer, distributor, they’re in the business of selling pounds of
CAB meat scientist Phil Bass says you can have the best of both worlds.

beef. They’re as concerned about a shrinking cowherd and less beef to sell as we are because their markets are very driven by beef sales. The increased carcass weight will help to keep the overall beef production up.” –Shawn Walter, Professional Cattle Consultants
“Can we have a high-quality animal and still have a lot of meat coming off that carcass? Absolutely. We’re seeing it today. In the past, the old paradigm in our brain was, ‘No, not really.’”-Phil Bass, Certified Angus Beef
“About 9% of our disposable income is what we spend on food in this country to feed our families. In some of the similar developed countries, Europe for instance, anywhere from 13% to 28% of their income is being spent on food. What am I getting at with this? One, we take it for granted. Two, it’s cheap.” –Brad Morgan, Pfizer Animaal Health

If you want the whole scoop, taking the good with the bad, feel free to check out the wrap up article . We’ll have more in-depth stories on each of the presentations in the coming weeks.

May your bottom line be filled with black ink,

Miranda

Asheville perfect setting for N.C. field day

NC Angus 1 - Tent — This tent was strategically placed in one of the most beautiful places in the country, Mark says.

Our crew gets to go to some pretty cool places, see lots of high-quality cattle and meet some great people. Even so, Mark felt like he hit the jackpot with his weekend trip to the Biltmore Estate in Asheville, N.C., for the 2012 North Carolina Angus Association Field Day.

“In my opinion,” Mark says, “Asheville is one of the prettiest spots on the planet! For anyone who has never visited, you need to go.”

(Make a note to yourself: Add Asheville, N.C., to must-see list. Mark says.)

But back to the event.

Ted Katsigianis, vice president of agricultural and environmental sciences for the Biltmore Estate, organized the affair, which brought together more than 125 Angus enthusiasts from the Southeast, a roster of speakers — including Mark — to cover current industry topics and great cattle from the Biltmore program.

NC Angus 3 - Cattle — A quick glance at the Biltmore cattle.

The herd, which consists of several hundred registered Angus cattle bred to thrive in their environment and on a Southeast forage base, is quality- and efficiency-driven.

“Interestingly, Ted has recently used the GeneMax™ test on his steer calves to determine those with the highest marbling and gain potential,” Mark says.

The Biltmore farm finishes out those highest potential steers at their feedlot and that meat will be used by the foodservice team of the Biltmore properties.

The program kicked off with a joint presentation by Mark and Tonya Amen of Angus Genetics Inc. The duo gave an overview on the use of genomics and then introduced GeneMax™.

NC Angus 2 - Joe Hampton — Mark was in good company. Here former AAA Board President, Joe Hampton, addresses the crowd.

American Angus Association (AAA) Past President Joe Hampton was also on the program, sharing insight from his time on the board. AAA Regional Manager David Gazda provided association updates, too.

“All in all, a great turnout, wonderful hospitality, really good Angus cattle and a very educational field day,” Mark says.

Congratulations to Ted and his crew for pulling together such a successful event!

From Bluegrass to Switchgrass to not enough grass

Diversity Abounds

Yesterday I had the chance to return to my old college stomping ground of Lexington, KY to visit with the folks of the Kentucky Cattlemen’s Association. If you don’t have a personal tie to the bluegrass state, cattle probably aren’t the first four-legged critters that come to mind.

Horse racing fans know that tomorrow’s Belmont Stakes is the last leg of the Triple Crown. It’s been over 30 years since a horse has claimed the title, a streak that won’t be broken tomorrow due to the recent scratch of I’ll Have Another. It’s a sporting series that rivals the prestige of the Super Bowl and the World Series. Though the last chapter of the trifecta is written in New York, the Kentucky Derby is where it all starts.

The better part of my travels this year have taken me through the middle belt of the United States, from Montana to Texas. In most cases, horses are for stock and many of the towns have far more cattle than people. While Lexington is without question more of a concrete jungle than many of places I’ve been lately, a couple hours of talking about cattle management in the bluegrass quickly reminded me of one of my favorite characteristics of the beef community – diversity.

One of my choice topics to discuss with cattlemen and women is, “How do you manage cattle in your part of the world?” A simple question with so many different answers. In Kentucky, you might get responses alluding to modest herd sizes and cooperatives that allow multiple small breeders to combine cattle for more effective marketing. On a good year in the Ohio River Valley, pasture management is referenced in cows per acre, not acres per cow.

Merged pasture pics — From the Waggoner Ranch just south of Vernon, Texas where cattle, crops and horses span over a half-million acres, to my family’s farm in southern Indiana where just over 800 acres sustains our cow herd, cattlemen everywhere have diverse ways of growing and marketing cattle to meet their needs.

From where you are today, you may need 20,000 acres or 200 acres to maintain your herd. Your family may be fully supported by cattle production or you may diversify in farming or other business.

No matter how you do things in your part of the world, always remember that you are never too large or small to get better, aim for quality, and do what you can to add more black ink to your bottom line.

~Kara

From order takers to salesmen

“I want to be the beef expert when I walk in the room….no matter who is in the room.”

That’s the guy you want selling your final product. The expert. Not just the one who knows enough to be dangerous; not the guy who is selling beef because it pays the bills; not even the one who thinks he knows all about beef. Nope, you want the bona fide expert.

The MBA event kicked off at Rishel Angus.

CAB is helping to create a few more of those. Our third Master of Brand Advocacy (MBA) course kicked off at Rishel Angus near North Platte, Neb., earlier this week. And by central Nebraska standards, we’re practically neighbors (albeit 50+ miles apart) so I got to tag along.

That opening quote came from one of the attendees when they were asked to go around the room and tell why they’d applied to be part of this three-week, intensive education program. (There is a waiting list to get in, by the way.)

Another gentleman leads a team of foodservice salesmen (as many of them did) and said, “I want to become a resource for them, so they can learn how to sell beef, not just take orders for it.”

You know how a good auctioneer can really make an auction. Think about the power the protein sales force has. They can have a frontline impact on the price of beef, how your product is perceived by consumers and ultimately the demand for it.

We know that. So we invite these people to step into your world for a week. They learned about a seedstock producer’s role by visiting with Bill Rishel. They saw his cattle first hand and then even tried their hand at buying a few bulls.

Then they split it up and went to commercial Angus ranches for an even more personal “day in the life” experience. At the Pioneer Ranch, near Tryon, the smaller group got to know Rusty and Rachel Kemp. They tagged along while they turned on windmills and checked on the last of the herd yet to calve. They even got to pet a fresh calf. That may seem like a simple thing to those of you in the trenches, but it was a highlight for many who had never seen a cow in person, er, bovine before.

Pioneer Ranch, Rusty & Rachel Kemp, near Tryon, Neb.

Rachel told how she tags every single calf and talked about vaccinations and judicious use of antibiotics, saying, “They’re like my babies. You don’t ever want to see them sick.”

Rusty shared the ways they take care of the land and how that’s improved over the decades, often saying, “When I was a kid…” And all the while their two little cowboys tagged along, winning over everybody, myself included.

This might just seem like a “warm and fuzzy” day out on the range, but I heard many quote-worthy statements that were enough to prove it was worth it and it worked. I’ll share some of those next week, but in the meantime, you can hear from a few in their own words via a clip from the local TV station:

Pasture-to-Plate from KNOP

The week rounded out with a packing plant tour and a feedyard visit, but their education will continue with a weeklong meats lab and a sales session.

It all comes back to that one goal that CAB’s David MacVane summed up so nicely on day one: “You’re not here to be brainwashed Certified Angus Beef. You’re here to learn the beef industry.”

That should make YOU very happy.

May your bottom line be filled with black ink,

Miranda

When it rains, it pours…

…and that’s OK in OK.

Gary and I were in Chickasha, Oklahoma to put on our second annual “Backgrounding for Quality” seminar with our friends from Pfizer Animal Health last week. The weather was not pretty… it’s safe to say that I’d classify the precipitation as pouring more than once during that day. But after we spent so much time talking about the drought (over and over and over again…) in the southern US this past year, I could hardly complain about the moisture we encountered.

Now, I may have said an unkind word or two about the timing of that moisture last week, but what can you do but shrug and go on with the show when you’ve planned an outdoor field day that forecasts “100% chance of rain?”

So when the wind, rain and cold settled in at Chickasha, we settled in the White Brother’s Cattle Company’s shop with some heaters instead of our original outdoor plan. There was plenty of hot coffee, a brave and hardy crowd and a line up of top-notch speakers.

One of those speakers was Dale Moore, the owner and manager of Cattleman’s Choice Feedyard. Dale’s topic of discussion was “What a feeder wants,” and he knows that question from both sides of the equation. Dale and wife Mary also run a commercial cow-calf operation in Oklahoma. Here’s an excerpt from the beginning of his talk.

“What do you think feeders really want? I could give you the same song and dance about feedyards wanting high quality, weaned cattle that won’t give them any problem and will make them a whole lot of money. That’d be my whole talk.

“But I wanted to come up with something new to say to you, about what feedyards are looking for and what feedyards can do for you. When I thought about that, I kept coming back to the same thing: In all honesty, feedyards want customers. At least my yard does. I take pride in being able to feed high quality cattle and make guys lots of premiums, to improve their cowherds. We want to give our feedyard and customers lots of recognition and give them coffee shop talk. That’s what all feedyards under the CAB banner are looking for.

“We don’t get a lot of our upper Choice, CAB-type cattle at the sale barns because a lot of those cattle have to be put together with other cattle or you just don’t win the bid. So we rely on our customers for those good ones. We need customers, and we want to help them be profitable in the long term and improve their cow herd.

“So to do that, the consumer is where we all need to go back to, in my option. Consumers are demanding higher quality cattle; a better eating experience. Consumers are willing to pay for what they get, and in return they want a tremendous eating experience. That goes all the way down the line from consumers to retailer to packers to feedlots and ultimately to you guys as cow-calf and stocker operators.

“So that’s what a feeder wants: something that through all these chains, is going to provide the end result of a good eating experience, because that’s what’s paying for all of it. We get that good eating experience from high quality customers.”

“You measure profit by performance, quality, dollars… but the bottom line is about satisfied consumers.”

When it rains, it pours. And when our industry focuses on meeting the demands of our final customers like Dale focuses on his feedyard customers, it pours success back down the entire system.

To get more clips and quotes from the event, check out our Twitter and Facebook feeds from last week. Enjoy!

-Laura

No business in the DNA business?

If you were at the National Cattle Industry Convention and Trade Show last week, you probably noticed a buzz around GeneMax.

From comments at Pfizer’s Cattlemen’s College…

to Cattlemen’s College lunch..

to our trade show display…

and our media event…

GeneMax was all over the place!

And if you were home—like me and Steve (we both happened to be caring for babies, some bovine) following along on Twitter—you probably still noticed that GeneMax was a news item.

And if you missed all that, you can get up-to-speed by catching the post-convention coverage by the likes of Agriclture.com (New DNA technology for your beef herd) and Brownfield Ag Network (CAB unveils GeneMax).

But all of this DNA talk has led a few to buy into this notion:

Myth–CAB has no business being in the DNA business.

Fact–Our core mission is to grow the demand for registered Angus cattle. We do this by providing a time-tested, super yummy product to consumers across the globe. The only way we can continue to do that is by having more of that product to sell.

You’ve heard us say it before, but I’ll say it again: Marbling is the number one reason cattle fail to meet the brand specifications. (For us, that means less product. For you, that means fewer premiums.) It’s a losing deal for all of us.

The company doesn’t own any cattle. The only way we can increase that supply is by giving cattlemen tools to help them improve the marbling in their herds. We’ve got the breakeven calculators, the Best Practices Manual, research, research and more research. This is just one more tool.

We hope you’re as pumped about this new venture as we are.

So now that it’s officially here, launched and ready for use, do you have any questions? Any DNA-related myths we can bust?

May your bottom line be filled with black ink,

~Miranda

Do high prices equal high profits?

August 29, 2011

If I had to sum up the Feeding Quality Forums we co-hosted last week in a short phrase, it would be, “So much good information.”

I enjoyed all the presentations, and as I’m listening to them I’m always trying to pick out the most useful take home messages for producers. As I discussed the content with my family, market analyst Dan Basse’s came up a lot.

He and his cohorts at AgResource Co. are predicting fed-cattle prices to reach $130 to $135 early next year.

To outsiders that might sound like everything is roses in this business, but insiders know better. Still, it’s easy to get starry-eyed when talking record highs and dollar signs in the same breath.

So today’s post is somewhat cautionary.

Myth—High beef prices=guaranteed profit for cattlemen and women.

Fact—High beef prices=hopefully enough money to cover all the rising input prices.

No matter what segment of the business you’re in, there are a number of factors that will Continue reading “Do high prices equal high profits?”

Deets honored by Feeding Quality Forum

by Miranda Reiman

Some people set out to make a lasting change on their industry, but Max Deets, Beloit, Kan., says he never thought of himself in that light.

Instead the cattle feeder’s natural leadership ability, quest for improvement and genuine respect for others led him to some of the most influential roles in the beef business.

Deets, who managed Solomon Valley Feeders until 2007, is just the second recipient of the Feeding Quality Forum Industry Achievement Award.

He will accept the recognition at the meetings in Nebraska and Kansas later this month.

“I have always respected Max because he is a true gentleman,” says fellow Kansas cattleman Jerry Bohn. “He wasn’t an ‘in your face’ leader, but could be forceful in his own way. He is just somebody you look up to.”

The Pratt Feeders manager says he got to know Deets by way of career path.

“I wasn’t directly involved with him a great deal, but in a way he was an industry mentor to a lot of us, just by our watching him,” Bohn says.

Deets’s story doesn’t start much differently than others. He grew up on a diversified crop and livestock farm in south central Kansas. He was drafted into World War II and then used the GI Bill to attend Kansas State University.

“At that point I still planned to go back to the family farm,” says Deets. He and wife Marcelyn did just that for five years, before managing a cow-calf operation, starting a small feedlot and eventually moving to Arkansas City to manage a yard.

There his story deviates. Deets began doing bull testing and pioneered that concept within the state.

“I didn’t have any real vision of being an instigator of bull tests in Kansas,” he reflects. “I’d always been interested in putting figures together and the competition in breeds was always fascinating to me.”

He thought the Arkansas City location was a permanent one, until investors in Beloit, Kan., wooed him with their enthusiasm and plans. So the couple made their final move to manage the newly built 20,000-head Solomon Valley yard.

There he got more involved in industry associations, particularly the Kansas Livestock Association (KLA) board and then presidency in 1988.

“He is a natural leader and always gravitates toward leadership positions in whatever organization he’s in,” says Larry Corah, Certified Angus Beef LLC (CAB) vice president.

The KLA president worked closely with the National Cattlemen’s Association (NCA, now NCBA), so it’s no surprise that Deets eventually served as its president in 1997.

“I enjoyed meeting other people with interests similar to mine, but I could see the value in influencing government decisions,” he says. “There wouldn’t be any way I could have a say in that by myself. This way we were able to have a voice.”

One cause he championed was a focus on the ultimate customers.

“In my year as president, consumer acceptance of beef was at its lowest percentage in some time, so we had a real interest in trying to turn that around,” Deets says. “That’s what generates profits for the whole industry. I liken it to a pie. For every segment to get a bigger piece, you have to have a bigger pie.”

Bohn says the beef industry has historically been “a bit predatory.”

“Here over the past few years we’ve all been able to make a little, and rising water floats all boats,” he says. “Max was certainly somebody who had the interests of the industry at heart, much more than his own.”

Change happens in all segments, Deets says, but it takes information and producer involvement.

“They have to train themselves by getting records on their cattle and learning what they’re producing,” he says. “If they’re not producing the best, they need to do something better.”

Deets jokes that the market volatility and soaring input costs make him glad to be retired, but in the next breath he remains optimistic: “The industry has always had to live with these kinds of occurrences; they come out of it and are stronger.”

His real joy in retirement is rooted in family time, spent with his six children and 16 grandchildren that are “spread out all over the country.

“It was important to have the support of family, and they understood what I was about,” he says.

Deets will give remarks during the lunch program at Omaha, Neb., on Aug. 23 and Garden City, Kan., on Aug. 25.

The seminars are sponsored by Pfizer Animal Health, Land O’ Lakes Purina Mills, Feedlot magazine and CAB.

To register, visit www.feedingqualityforum.com, or contact Marilyn Conley by phone 800-225-2333, ext. 298, or email mconley@certifiedangusbeef.com.

Rock on

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