News and views on stocker segment issues from BEEF magazine.
March 28, 2006 A Prism Business Media Publication
ISSUE CONTENTS
Cattlemen Establish Fire Disaster Relief Fund

National Stocker Award Applications Due April 30

Wildfires Can Harm Cattle in Surrounding Areas, Too

U.S. Trade Team to Meet With Japanese Today

Return On Investment

Animal ID Education

Gerrish Grazing Seminar Is April 4-7 In North Carolina

Market Treads Water But Looks Lower

Questions & Comments


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News
Cattlemen Establish Fire Disaster Relief Fund
The Texas Cattle Feeders Association (TCFA), Texas and Southwestern Stock Growers Association, and Livestock Marketing Association of Texas have established The Cattlemen's Disaster Relief Fund to assist cattlemen affected by wildfires in Texas, Oklahoma and New Mexico.

Tax-deductible contributions can be made to: Cattlemen's Disaster Relief Fund, 5501 I-40 West, Amarillo, TX 79106. Hay and feed donations are also being accepted. For more information about donating hay and feed, contact Burt Rutherford at TCFA, 806/358-3681.


National Stocker Award Applications Due April 30
If you haven't already nominated your own stocker program -- or a peer's -- for BEEF's National Stocker Award (NSA), look for the details at www.beef-mag.com and consider doing so.

Three finalists will be chosen from the following categories:
  • Summer stocker operation (forage-based),
  • Fall/winter stocker operation (forage-based), and
  • Backgrounding/dry lot stocker (feed-based).
Of these, one will be selected to receive the National Stocker Award and a $10,000 cash prize. The winner also receives a trip to the 2007 Cattle Industry Annual Convention for special recognition. BEEF will announce the winner and publish stories about the three finalists in the October issue.

Selection will be based on information provided in the NSA nomination form (available at www.beef-mag.com) and follow-up phone interviews by the selection committee. The main eligibility requirement is that the nominee derives the majority of cattle income from the stocker/backgrounding business.

The deadline for nominations is April 30, 2006. The selection committee includes representatives from private industry, university Extension and BEEF magazine.

Besides recognizing the best of the best stockers and backgrounders, the program will give peers a chance to find out how the winners excel. This is in keeping with BEEF's philosophy of helping producers learn from one another.


Wildfires Can Harm Cattle in Surrounding Areas, Too
The wildfires that have ravaged parts of Texas, Oklahoma and New Mexico create a cascade of long-lasting misery.

In the March 12 fires that swept across the Texas Panhandle, loads of cattle were trapped in the raging fires -- 10,000 by one estimate -- and more than 700,000 acres burned. This means that grass -- already at a minimum due to drought -- is years away at best. As many as 25,000 head of cattle were estimated to be in the affected area, according to Steve Amosson, a Texas Cooperative Extension economist.

"We probably had a lot of calves that were lying out susceptible to the fire, as fast as it was moving across there," says Ted McCollum, Extension livestock specialist for Texas A&M University (TAMU). "They had no place to go. Also, there will be a lot of mothers with potentially scorched udders. The calves that survived won't be able to suckle the mothers who have sore udders."

Health disorders, such as burned eyes, feet, udders, sheaths and testicles, as well as smoke inhalation with lung inflammation and edema, are the most common problems in these situations, says Floron "Buddy" Faries, the Extension program leader for veterinary medicine at Texas A&M University.

"One of the problems we've run into in the past is with the feet," explains Ron Gill, Extension livestock specialist in Stephenville. "It may take 10 days to two weeks for the damage to start showing. The cattle will start sloughing the hoof wall and become crippled." Extension service personnel and veterinarians are working on determining major symptoms to look for and what actions to take if lameness begins to appear, he says.

"To assure the welfare of the affected animals, veterinarians need to be consulted," Faries says. "If, in the event the animal is not going to be able to be treated, decisions concerning sending them to market need to be made immediately, before secondary complications develop."

Faries also advises designing an animal evacuation and rescue plan to prepare for wildfires. He says plans should include ways of moving livestock out of the fire danger zone. This may include hauling the livestock out in trailers, opening gates or cutting fences and releasing the livestock; allowing them to move to a safer place, including plowed ground or wheat pasture, he says.

Keep in mind the fire danger zone isn't just where the fire is, Faries says. It's where the livestock risk inhaling smoke. Smoke can move for miles, and cattle that aren't near the flames or heat can suffer damage, too.

Contact with burning grass, weeds and brush causes immediate burns, Faries says. However, he explains inhalation of smoke causes immediate irritation to the lining of the respiratory system, including nasal passages, trachea and lungs. This can lead to inflammation, edema and emphysema, with the severity determined by the duration of inhaled smoke.

"The time it takes to cause damage might only have to be a few minutes with high quantities of smoke, and may be hours in low quantities of smoke," Faries says. He adds the lining of the eyelids and eyeballs can be irritated and lead to secondary infections, which can be fatal.

Once the fire has passed, Faries advises immediately consulting a veterinarian for any animals with severe burns or direct smoke exposure. They will evaluate if the animal can be salvaged, or for humane reasons, should be slaughtered or euthanized. Other livestock should also be evaluated for possible health disorders.

Monitoring should continue for weeks after the event, Faries says. "Before these secondary complications of infection occur (such as cough or cloudy eye), immediate slaughter for human consumption may be the most appropriate humane procedure," Faries explains. "Prior to slaughter, an antemortem inspection will be conducted by veterinary meat inspectors to determine safety and wholesomeness for human food."



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Market News
U.S. Trade Team to Meet With Japanese Today
If thing go according to schedule, representatives from the U.S. will be meeting with officials in Japan today in an attempt to restore beef trade.

"The United States is eager to provide any additional clarification Japan may request so we can resume beef exports to Japan as quickly as possible," explained Agriculture Secretary Mike Johanns last Wednesday. "I believe our report is thorough and actions address the unique circumstances surrounding this ineligible shipment. Now my hope is that we can take the next steps toward resumption of normal trade."

Johanns directed that a USDA technical team go to Japan after the Japanese government signaled a willingness to receive USDA experts.

In the meantime, USDA continues to investigate the latest native BSE case discovered earlier this month -- an aged cow in Alabama that never entered the market.


Stocker Economics
Return On Investment
There are plenty of ways to lose money in the stocker business, but the returns can be more lucrative than some realize, too.

At the Mid-South Stocker Conference, Mike Murphy, an analyst for Cattle-Fax, pointed out just a few dollars return, relative to the equity requirement per head and the length of ownership can produce astounding return on investment (Table 1).

Rather than think in terms of dollars per head, Murphy explains, "Return on equity is how we should be measuring our business."

Annualized Percentage Return on Equity
(Assumes $150/head collateral)
Dollars/Head Profit
Days on Grass $10 $20 $30 $40 $50
100 24% 49% 73% 97% 122%
120 20% 41% 61% 81% 101%
140 17% 35% 52% 70% 87%
160 15% 30% 46% 61% 76%
180 14% 27% 41% 54% 68%
200 12% 24% 37% 49% 61%

Source: Cattle-Fax



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Events
Animal ID Education
If you're wondering how and when to get your arms wrapped around animal ID of the electronic kind, Kansas State University (KSU) may have the solution for you. The university will host two Electronic Beef ID Crash Courses this summer.

The programs will be held at the KSU Stocker Unit outside of Manhattan, KS, and will include live-animal demonstrations, hands-on use of animal ID equipment, a review of available technologies, and how to budget a system.

KSU Extension beef specialist Dale Blasi says this summer's programs, each aimed at different audiences, are a follow-up to the KSU Beef ID Academy programs during summer 2004.

The June 21-22 program is aimed at operators of feedyards, sale barns and stocker-grower operations. The July 19-20 program is aimed specifically at cow-calf producers and veterinarians. Space is limited to 100 attendees in each session.

For more info, contact Lois Schreiner at 785/532-1267 or lschrein@ksu.edu.


Gerrish Grazing Seminar Is April 4-7 In North Carolina
Southeast graziers can learn to become efficient low-cost cattle producers via a Jim Gerrish Hands-On Management-Intensive Grazing School planned for April 4-7 at Braeburn Farms in Snow Camp, NC. The program includes discussion and how-to on year-round grazing, contact grazing, fertility management, grazing cell design and pasture-finished beef. In addition, the topics of balancing animal demand and forage supply, how to manage for a variable stocking rate, pasture improvement, and fence and water development will also be covered. To learn more, contact 208/876-4067 or dawn@americangrazinglands.com.
-- Joe Roybal



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Markets
Market Treads Water But Looks Lower
First, the good news. Feeder steers and heifer sold steady to $3 higher last week, according to the Agricultural Marketing Service (AMS), and the fed market was steady to $1 higher at $86-$87.

Now, for the other boot.

Year-to-date slaughter of cattle is down 1.1% from a year ago, but total beef production is up 4.3%. "Heavyweights and increased numbers are the culprits in the beef supply picture," say AMS analysts. "Average dressed carcass weights at 782 lbs. are 31 lbs. heavier than at this time last year."

Cheap cattle feed and ideal feeding weather has a way of doing that. "This entices putting on another 100 lbs. to lower overall unit production cost and help the red ink a little bit. However, this is temporary relief and counterproductive to long term objectives," AMS says.

Slaughter cattle prices have dropped around $10 since the first of the year, and the CME feeder cattle index is down a similar amount.

Last week's Cattle on Feed report was bearish, too. Numbers in feedlots are up 8% from a year ago; February placements are up 5% and February marketing's are down 1%.

The summary below reflects the week ended March 24 for Medium and Large 1 -- 500- to 550-lb., 600- to 650-lb., and 700- to 750-lb. feeder heifers and steers (unless otherwise noted). The list is arranged in descending order by auction volume and represents sales reported in the weekly USDA National Feeder and Stocker Cattle Summary:

Summary Table
State Volume Steers Heifers
Calf Weight 500-550 lbs. 600-650 lbs. 700-750 lbs. 500-550 lbs. 600-650 lbs. 700-750 lbs.
OK 20,400 $135.96 $124.19 $109.01 $119.43 $111.26 $97.75
MO 19,300 $135.63 $122.22 $108.07 $118.77 $107.43 $95.26
TX 18,600 $128.28 $113.91 $103.61 $124.13 $105.78 $94.97
Dakotas 16,800
North
South
$136.16
$139.77
$121.55
$125.11
$104.686
$111.28
$118.102
$128.08
$111.52
$114.71
$104.50
$103.10
KY* 16,200 $114-124 $102-112 $89-995 $99-109 $92-1023 $82-925
IA 7,300 $143.42 $129.36 $111.76 $128.83 $113.05 $98.60
GA*(***) 7,200 $109-134 $100-117 $91-101 $101-125 $91-105 $82.50-90
Carolinas* 6,400 $107-136 $90-1173 $83-1025 $95-119 $85-1063 $82-97.505
NE 6,200 $141.95 $124.34 $109.06 $129.22 $113.96 $103.28
TN* 6,100 $123.68 $109.02 $98.82 $112.70 $100.25 $89.64
AL 5,600 $125-134 $104-1143 $94-1004 $115-122 $103-109 **
KS 5,300 $130.90 $122.974 $108.17 $114.692 $103.804 $95.91
AR 4,700 $129.84 $115.55 $103.26 $116.82 $105.59 $98.61
FL 4,300 $109-124 $94-113 $91-97 $101-115 $92-93 **
VA 4,200 $128.37 $116.42 $102.94 $112.75 $98.93 $93.51
MS* 2,400 $115-1251 $105-115 $88-945 $105-1151 $95-105 $90-954
CO 2,100 $137.42Z2 ** $102.806 $130.01 ** **
WA* 1,900 ** $117.08 $103.94 ** $108.26 $101.65
LA* 1,700 $120-127 $111-1212 ** $109-119 $105-1152 **
WY 1,600 $139.87 $115.332 $105.446 ** $122.182 $107.944
NM 1,500 $126.642 ** $106.09 $113.92 $110.682 **

* Plus 2
** None reported at this weight or near weight
(***) Steers and bulls
NDNo Description 1500-600 lbs.
2550-600 lbs.
3600-700 lbs.
4650-700 lbs.
5700-800 lbs.
6750-800 lbs.
7800-850 lbs.


Contact
Questions & Comments
Please send questions to:

Wes Ishmael, Contributing Editor, BEEF Stocker Trends, at beef@primediabusiness.com

Joe Roybal, Editor, BEEF magazine, at jroybal@primediabusiness.com



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