Beef Management Tips

Livestock Update, September 1998

A. L. Eller, Jr., Extension Animal Scientist Emeritus, Animal and Poultry Sciences, Virginia Tech

September is here and fall is again upon us. 1998 has been an unusual growing season. We had an over abundance of rain in the spring and have experienced some real dry weather during the middle of the summer. The recent mid August rains may help late season pasture and hay crops. Producers have in most areas stored enough feed for the winter but conditions are variable. Fall is a busy time of year with harvesting, cattle marketing, cattle buying and preparation for winter. Here are some thoughts:

1. New across breed EPDs - Any commercial producers who use bulls of several breeds have become aware of across breed EPD's that allow for doing a reasonable job of comparing EPDs across several breeds of cattle. EPD adjustment factors come out of the research at the USDA Experiment Station at Clay Center, Nebraska, and were presented at the July Beef Improvement Federation meeting in Canada. The new adjustment factors adjusted to an Angus base are given in the following table and are based on 1996 data. To compare EPDs of bulls of different breeds simply add or subtract the appropriate adjustment factor for the breed in question from the EPDs of the individual bulls in question. Across breed EPD adjustments are not perfect but do allow for comparing bulls of different breeds on an EPD basis in a very usable manner (see table).

For bulls of different breeds the table adjustment factors can be used to make a fair comparison. For example, if a Charolais bull has an EPD for weaning weight of +25.0 and a Hereford bull also has an EPD of +25.0 would we expect their progeny out of a different breed of dam (example Angus) to weight about the same? No, not unless the adjustment factors are the same. In this case the across breed EPD for Charolais is +67.0 (the table adjustment factor of +42 added to the Charolais EPD of +25.0). Across breed EPD of the Hereford bull is 28.3 (the table adjustment of 3.3 added to the Hereford EPD of 25.0). In this example, calves of the Charolais bull would be expected to weigh 38.7 lbs more at weaning than the calves of the Hereford bull. (42+25)-(3.3+25)=38.7 lbs.

ADJUSTMENT FACTORS TO ADD TO EPDs OF TWELVE DIFFERENT BREEDS TO ESTIMATE AB-EPDs
Breed	Birth Wt		Weaning Wt		Yearling Wt		Milk
Hereford	4.0		3.3		-4.4		-9.6
Angus	0.0		0.0		0.0		0.0
Shorthorn	8.3		29.4		40.7		10.7
Brahman	14.7		35.8		-16.8		24.0
Simmental	7.3		24.4		42.4		13.6
Limousin	8.1		34.0		29.2		-5.7
Charolais	11.2		42.0		62.0		1.7
Maine Anjou	12.3		41.1		53.9		23.8
Gelbvieh	10.1		48.3		52.3		26.4
Pinzgauer	9.2		30.4		29.6		7.5
Tarentaise	5.5		32.2		20.4		19.2
Salers	6.5		29.6		34.9		12.9

2. Where to from here? Now is the time for Virginia cow-calf producers and those who produce feeder cattle to think about what is going on in the industry and plan for making maximum profit in the years ahead. Things have changed drastically in the beef industry and continue to change making it more difficult for the small producer to compete unless the right steps are chosen. In looking at the state of the industry, Topper Thorpe of Cattle-Fax, observed recently that the total number of producers and processors in the industry continue to decline. The four largest packing firms handle about 80 percent of the fed cattle marketed. 2100 feedlots with more than 1,000 head one-time capacity annually market 85 percent of the fed cattle. 800,000 cow calf producers (1992 census) are in business across the country. 92 percent of these producers have less than 100 cows. 80 percent have less than 50 cows. 25,000 producers have more than 200 head and own about one-third of the total beef cows. Changes in industry structure have increased competition within and between segments intensifying the search for ways to maximize returns and minimize costs. The situation has stimulated communication and new business arrangements and marketing approaches such as selling on a grid basis contract, formula sales, formation of coops and partnerships. 70 percent of the fed cattle sold annually are sold on a cash-negotiated basis. This gives rise to the basis for price discovery in the industry. The better cattle are sold on something other than negotiated-sale basis. This implies that the ìpoorerîcattle are available for negotiated sales. Further, if the packer already has a portion of his needed supply tied up in formula contract purchases, he need not negotiate hard for the balance and may buy them at a below average price. Negotiated prices are most often used to determine base price for formulas and average prices may be reduced overall. Formulas are grounded on negotiated price and in most cases premiums and discounts have increased over time.

There are a number of generally accepted major concerns in the beef industry which are of even greater concern to the mid-size and smaller feeder calf and yearling producers. These concerns are:

1. Loss of market share. There is no question but what beef has lost market share since 1979 the magnitude of about 30 percent. Market share has been lost to other competing meats of which chicken is the leader. This is indeed a major concern of the industry that keeps a cap on cattle prices.

2. Production efficiency. With production costs continuing to escalate in most incidences to produce beef at the lowest possible cost is a major concern.

3. Use of check-off funds. There is an increasing major concern among beef producers across the country in terms of the value of the national beef check off program and how the funds are being utilized. Producers in many instances feel under represented in the use of their check-off funds. Most small producers may feel that check-off funds are used to help large producers and other industry entities to a greater degree than uses made to help small producers.

4. Captive supplies of cattle by big packers. Estimates indicate that perhaps some 30 to 40 percent of the total supply of fed cattle are considered captive by the large meat packing concerns. Thus the price for these cattle is not negotiated and is not part of the price discovery system that trickles down to those who produce feeder cattle. Price discovery is based on negotiated cash sales of slaughter cattle and most grid marketing contracts are based on prices thus received. Prices for some of the best cattle produced are not reflected in this price discovery system.

5. Giving the consumer what they want and are willing to pay for. There is a large share of consumers who want well marbled beef in the choice or prime grades. Since 1979 the percentage of choice has dropped from 76 percent to 49 percent. Also there are not enough convenience items in the beef supermarket counter as compared to other meats available.

6. Less equity in the feeding industry. The cattle feeding industry has lost a tremendous amount of equity during the last 12 months and no doubt many cattle feeders will be unable to continue operating.

   Food safety.
   Where does this leave Virginia feeder cattle producers as they look to the future? There are several thoughts for consideration as follows:

   1. Genetics. Cattle produced in cow herds in Virginia are definitely the best they've been and continue to get better. At the same time a lot of work needs to be done from a genetic standpoint. The 1998 National Animal Health monitoring system beef survey indicated that 65 percent of producers in the last five years have placed no genetic emphasis on carcass traits though we see enhanced value of calves and fed cattle when superior genetics exist and can be documented particularly for carcass end points. Producers must get a handle on genetics from a breed and breed mix standpoint and add superiority for both production and carcass traits. Uniformity of cattle and end product is a large need.

   2. Production efficiency. The SPA economic data base shows that there is between $100 and $200 difference in the average annual cow costs between the most profitable producers and the least profitable ones. A 1998 Colorado State University study shows that feeder cattle buyers paid $1.61 to $3.39 more per hundredweight for preconditioned cattle vs. non preconditioned calves. Some programs and marketing data show even wider premiums than this. The 1998 NAHMS survey shows 64.3 percent of calves marketed did not receive vaccinations prior to sale and 42.4 percent of calves were sold directly off the cow at weaning.

   3. Carcass quality. Less than 50 percent of the fed cattle marketed produced carcasses which will grade choice or prime. There is a high demand for choice and prime beef. Genetics play a part and with many sires identified in several breeds with carcass EPDs indicating superior marbling apparently these bulls have not been fully utilized. The same goes for carcass cutability and percent retail product.

   4. Marketing. Small producers must produce a quality product but must market feeder cattle collectively in order to receive what the cattle are worth and prevent discounts. Graded feeder cattle sales and telo-auction field sales are a step in the right direction for lots of small producers.

3. Grass tetany alert. Grass tetany is caused by the lack of magnesium in the diet or an imbalance of electrolytes including magnesium in the animal's system. There are two major seasons of concern for grass tetany. One of them is in the spring and the other in the fall, generally in September and October. When fall rains come and there is an abundant supply of fresh tender grass tetany can strike and in most fall seasons it does. This means that cows should be switched to a free choice mineral supplement containing magnesium during the fall season. Either use a commercial mix containing at least 12 percent magnesium or use a homemade mix which may contain equal parts of trace mineralized salt, dicalcium phosphate and magnesium oxide or a mix containing equal parts of trace mineralized salt, dicalcium phosphate, magnesium oxide and finely ground shelled corn or soybean meal for palatability. Remember cattle most apt to be affected by grass tetany will be mature cows that have recently calved.

4. Chute cows this fall. After calves have been weaned cows should get a trip down the chute. This is the time to have a veterinarian or qualified technician pregnancy check each cow. Open cows in most incidences should be sold for beef. Wintering open cows can be a very expensive item. While cows are in the chute they should be checked thoroughly for condition of teeth, eyes, udders, feet and legs. Unsound and old cows need to be put on the cull list. In the months of September and October most cows should be treated for external parasites including grubs. There are several good grubicides in the form of pour-ons or spot-ons on the market. For fall calving cows their trip down the chute should be after they calve to be inoculated against various respiratory and other diseases before being bred again. They should be vaccinated against IBR, PI3, BVD, Leptospirosis and Vibriosis. In most instances a combination vaccine with modified live respiratory disease products will be best. Consult your veterinarian if there is any doubt.

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