There are certainly times when you are racing from one urgent task to another. While it feels like the rest of the working world has three to five business days to respond to a request, that tactic doesn’t apply when cattle escape onto a busy road, the stock water dries up or a sick animal needs attention.

The fall run is a good reminder of the contrast between the long wait and the mad dash intrinsic to cow-calf production. It’s a time of gathering, sorting, shipping, evaluating and selecting. There is a familiar rhythm of activities like weaning and preg-checking that yield easy-to-count metrics producers use to inform decisions or (more honestly) take pride in. Are the weaning weights up or down? Did the cows breed early? Are we happy with how the calves looked out of that new herd bull?

For insightful observers, the season can also underline subtleties that pull at the heartstrings of the gruffest, toughest cattle producer. Maybe it’s a set of twins that thrived despite the odds, or a favourite, reliable cow that raised one last calf before it’s time for her to go down the road.

There are things about raising a live animal commodity that are inherently different from other agricultural sectors. Planting, harvesting and marketing a cash crop within six months requires a different approach than the mindset necessary for operating within the messy, complex continuum of breeding, grazing, weaning and calving.

The fall is often an incredibly important time for beef businesses. For many commercial cattle producers, this period is where a big portion of annual income is generated. Managing cash flow and budgeting on a single big paycheck for the year is challenging, even when prices are good. Producers who have retained calves to feed or breed have a minimum of 12 to 24 months of expenses tied up in a live critter that has yet to leave the farm. There are a lot of moving parts between conception to market that impact profit.

While most producers are strategic about paying their bills, there isn’t a Magic 8 Ball with answers on how to parse out those funds so they last until the following year or beyond. Will the winter be tough or the summer dry? Should we invest in water? Land? Buy more cattle? Pay down debt? Should more calves be sold when prices are good? Or should females be kept to increase the breeding herd? It’s impossible to anticipate all the chances, choices, and outcomes.

Yes, raising cattle can be fast-paced and full of life-or-death moments, and that’s likely part of what makes this business appealing for some. But an equally important aspect of raising cattle is about pacing oneself to make it to the finish line, or more practically, the next payday.

For cattle producers, the fall is the end of a chapter, a new beginning, and a continuing saga, all at once. Be patient yet quick, sprint but also walk, and acknowledge the risks you take on for a business that somehow costs and pays you more than you can define.

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Breakeven pen closeouts are in the range of $250-$255/cwt, so margins are in negative territory for the time being. The margin structure doesn’t look much better moving forward with breakeven pen closeouts in the range of $255-$261 for December through March.

Negative margins will weigh on the feeder market moving forward. In late October, late-blooming yearlings straight off grass averaging 900 lbs. were trading for $330-$335/cwt.

This is about $10/cwt higher compared to a month earlier. Calf prices continue to trade near historical highs with quality-genetic 500-lb. steers readily moving through the ring at $465-475/cwt at most sale barns in Western Canada.

In central Alberta, 350-lb. steers reached $600/cwt, which is the highest price I’ve ever heard besides 10-day old dairy cross calves being picked up for $1,000.

Cattle on feed in Alberta and Saskatchewan as of Oct. 1 were at 843,012 head, down nine per cent or 78,378 head from Oct. 1, 2023. Feedlot placements in the two Prairie provinces during September were 238,221 head, down 11 per cent or 29,088 head from 12 months earlier.

There are lower numbers on feed and placements were down from year-ago levels. This sounds positive but it may be misleading for the winter-fed cattle market. It’s important to note that placements over 900 lbs. during September were up nearly 40,000 head from September 2023.

Table: U.S. quarterly beef production, in millions of pounds.

*= estimates. Source: U.S. Department of Agriculture.

Market-ready fed cattle supplies during December and January will be up about 15,000 head from December 2023 and January 2024. This will cause fed cattle basis depreciation in the Alberta market over the winter, similar to last year. This reinforces the need for feedlots to forward-contract their fed cattle marketings for December through March.

South of the border, a similar situation is developing. As of Oct. 1, U.S. cattle on feed numbers were 11.6 million head, down only 4,000 head from last year. U.S. feedlot placements during September were 2.198 million head, down two per cent or 42,000 head from September 2023. Placements in the top two weight categories were up 20,000 head from year-ago levels. Market-ready fed cattle supplies in the U.S. will actually be up from year-ago levels during the winter months. Fed cattle supplies are not tight. The second factor to consider is that marketing weights are up from 30 lbs. from year-ago levels. Larger supplies and heavier carcasses will result in a year-over-year increase in beef production.

The U.S. feeder market is transitioning from contraction to expansion, which causes prices to reach historical highs and feedlot margins to remain in negative territory for an extended period of time.

The first sign of expansion is the drop in the beef cow slaughter. For 2024, the U.S. beef cow slaughter is expected to finish near 3.02 million head, down 562,000 head from the 2023 total and down one million head from 2022. We’re expecting the Jan. 1, 2025 U.S. and Canadian cattle inventory reports to show a year-over-year increase in heifer retention.

In January and February, we’re expecting feeder cattle prices to trend lower. Fed cattle prices will come under pressure due to the year-over-year increase in market-ready supplies. Seasonally, beef demand drops by about 10 per cent from December to January. The first two months of the calendar year are a period of seasonal low beef demand.

We can also make a case for stronger feed grain prices over the winter. Canadian barley production was estimated at 7.6 million tonnes, down 1.3 million tonnes from last year. The deterioration in feedlot margins will weigh on the feeder market.

U.S. job and wage growth has been a major contributor to economic expansion. Earlier in September, the U.S. Federal Reserve lowered its benchmark interest rate by 50 basis points due to fears of rising unemployment and slower economic growth. We continue to project softer consumer spending over the winter and into next spring. (Editor’s note: this column was written before the Fed’s Nov. 7 announcement of a further 0.25 per cent rate cut.)

There will be lower beef production in the first and second quarters of 2025 but the fed and feeder cattle markets will have difficulty trading higher if consumer spending slows as expected. The economy won’t fall apart but U.S. restaurant and grocery store spending was only up about one per cent from year-ago levels in September. In the spring of 2024, the spending was up six to eight per cent from the same period of 2023. Spending is easing as disposable income evaporates.

Light-weight calves are at extreme highs because of the lower beef production forecast in the final quarter of 2025. The light-weight feeder market is incorporating a risk premium due to the uncertainty in production. The market needs to ration demand.

In conclusion, the fed market is expected to trend lower through the winter due to larger supplies and seasonal low beef demand in January and February. This will weigh on the feeder market. Longer-term, we believe the U.S. economy is vulnerable to weaker consumer spending, which will limit the upside in the fed and feeder market during the spring and summer of 2025.

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Live prices were quoted at $255/cwt (US$186), f.o.b. feedlot, in southern Alberta. The fed market has come off the summer highs as demand eases moving into the fall period. Monthly restaurant spending on both sides of the border has decreased after making seasonal highs in June. Economic growth in Canada and the U.S. is expected to stall later in fall.

The jobless rate is expected to increase and consumer spending is expected to decrease in both Canada and the U.S. I follow many analysts and they all focus on cattle and beef supplies. When I started writing cattle market analysis 25 years ago, an old-timer told me that if one wanted to be successful as a cattle analyst, you have to focus on the economy and consumer spending for the average American.

This was the best advice I ever received. Focusing on the discretionary spending of the average American consumer defines long-term trends in the cattle market.

The cattle market is vulnerable to softer economic growth. During July, Canadian employers shed 2,100 positions. This follows the elimination of 41,000 full-time jobs in the second quarter. In the U.S., job growth totalled 114,000 jobs in July but this is down from the 12-month average of 225,000 positions. The unemployment rate in Canada and the U.S. is expected to increase over the next six to 12 months.

The U.S. Federal Reserve held its benchmark rate at 5.5 per cent at its meeting on July 31. The Fed rate had been at this level since July 2023. Expectations are that the U.S. central bank will lower its interest rate by 25 basis points on Sept. 18. This will likely be followed by another cut in November or December.

The Bank of Canada cut its policy rate by 25 basis points on June 5 and then again on July 24. The financial industry is expecting two additional rate cuts from the Bank of Canada in 2024. [Editor’s note: this column was written before both the Bank of Canada’s Sept. 4 rate cut to 4.25 per cent and the U.S. Fed’s Sept. 18 rate cut to 4.75-5.00 per cent.]

If we look at past history, the unemployment rate will continue to increase as the central banks lower interest rates. It takes 12 to 18 months for interest rate adjustments to work through the economy. U.S. and Canadian consumers have cut back on spending due to elevated inflation and higher interest rates, which have been in place for a couple of years. In the U.S. McDonald’s same-store sales decreased 0.7 per cent in the second quarter. Last year, same-store sales were up 10 per cent. This is a leading indicator for consumer financial health and the overall economy.

I want to discuss two examples from past history. The Federal Reserve’s (Fed) policy rate peaked in June 1981 at 19.1 per cent and the unemployment rate was at 7.6 per cent. During the major recession of 1982, gross domestic product (GDP) was negative each quarter. Unemployment actually peaked in December 1982 at 10.8 per cent, at which time the Fed funds rate was at nine per cent. The unemployment rate increased and the Fed decreased its policy rate.

In July 2007, the Federal Reserve’s rate was at 5.26 per cent, which was the high prior to the recession. At the same time, unemployment was at 4.7 per cent. The main recession occurred from the fourth quarter of 2008 to the first quarter of 2009. In October 2008, the Fed lowered its policy rate to zero to 0.25 per cent. Unemployment peaked at 10 per cent in November 2009.

Again, the unemployment rate increased and the Fed decreased its policy rate. In both of these cases, the fed cattle market dropped by 20 per cent and a similar decrease was noted in feeder cattle prices. Again, there is a time lag of three to four months for the feeder market, but keep this in the back of your mind.

There is another factor to consider: the U.S. beef cow slaughter during June was 227,000 head, the lowest since July 2017. During 2017, the U.S. cattle herd was expanding. This may be the first signal that the U.S. cattle herd is moving into an expansionary phase. This is also very timely.

Throughout history, the U.S. cattle producer expands the herd when U.S. interest rates are at the roof. Back to my first example, the U.S. cattle producer started to expand the herd in 1981 at which time the U.S. economy was transitioning into a recession. The cow-calf producer is a perfect indicator to time when the cattle market turns from an upward trend to a downward trend.

During August, Alberta yearling steers averaging 1,000 lbs. off pasture were trading for $330/cwt. These steers have a break-even price in December around $275/cwt. This is $20/cwt above current levels. Feedlot margins will move into negative territory during October 2024. The fed and feeder markets are expected to trend lower from October 2024 through December 2025.

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Market-ready supplies of fed cattle were sharply above year-ago levels earlier in winter, but the backlog has slowly been alleviated through the spring period.

The Alberta fed cattle market has been functioning to ration demand by trading at a sharp premium to prices in Kansas and Nebraska.

Despite the higher prices in Alberta, fed cattle exports to the U.S. continue to exceed year-ago levels, thereby further tightening the available supply in Western Canada.

Wholesale beef prices have been percolating higher. Restaurant spending in the U.S. has been running five to six per cent above last year. In Canada, data shows restaurant spending up only 0.5 per cent from year-ago levels.

Feedlot margins in Alberta have been hovering in positive territory during June after significant equity erosion over the winter and spring. Western Canadian feeder cattle prices continue to trade near historical highs.

It appears the U.S. will experience a year-over-year decline in the calf crop for 2024 and 2025. Heifer retention is not sizeable enough to warrant expansion.

On April 1, market-ready fed cattle supplies were at burdensome levels on both sides of the border. U.S. cattle on feed 150 days or longer were up 21 per cent from year-ago levels. In Western Canada, market-ready fed cattle supplies on April 1 were up about 40,000 head from last year. In addition to the larger available numbers, carcass weights were up 20-30 lbs. from last year. U.S. second-quarter beef production is expected to finish at 6.82 billion lbs., up 100 million from the second quarter of 2023. The U.S. April slaughter was up nearly 190,000 head from April 2023 which drained a large portion of the excess supply. In Canada, second-quarter beef output will be similar to last year’s Q2, but keep in mind fed cattle exports have been running 2,000 head per week above last year.

Surprise

As of July 1, the U.S. fed cattle supply and demand balance will be in equilibrium. During August, we’re expecting U.S. market-ready supplies of fed cattle numbers to be in a deficit position relative to the demand projection.

In Canada, fed cattle supplies tightened up in April so that the Alberta market traded at a sharp premium to the U.S. in an effort to curb exports. However, many feedlot operators forward-contracted cattle during the fall of 2023 and this was a surprise to the trade.

Fed cattle supplies in Alberta didn’t seem that tight but analysts and merchants underestimated the amount of cattle that were contracted to U.S. plants. On Aug. 1, market-ready supplies in Alberta are expected to be in a deficit of nearly 30,000 head relative to the demand forecast.

Feedlot placements under 800 lbs. have been sharply below year-ago levels throughout the spring. This trend is expected to continue. Notice U.S. third-quarter beef production will be similar to last year, but fourth-quarter production is expected to be down 227 million lbs. compared to 2023.

Wholesale beef prices have been percolating higher throughout May and June. Prices are expected to peak in July and then start trending lower in August. Similar to last year, packing margins are expected to come under pressure from September through December.

U.S. packers will likely curtail the slaughter pace to keep wholesale prices from dropping significantly.

Restaurant spending trends lower from September through mid-November before picking up for the holiday period. After grilling season wraps up, retail beef demand also softens in the fall period.

Cattle producers in Canada and the U.S. are not rebuilding the herd despite the higher prices. Given the cow slaughter pace and the number of heifers in the slaughter mix, we’re expecting a year-over-year decline in the U.S. and Canadian calf crops in 2024 and 2025. We’re only expecting significant heifer retention in 2025 which would result in a year-over-year increase in the calf crop for 2026.

There have been stronger prices for cow-calf pairs and bred heifers; this largely is a reflection of the current calf market, rather than a sign of herd rebuilding.

For the fall period, yearling heifers around 1,000 lbs. are valued at $300/cwt while yearling steers are quoted in the range of $320-$325/cwt. This will put 500-lb. steer calves at $500-$525/cwt, which is about $40-$60/cwt above current levels.

Conclusions

The fed cattle market will likely peak in late July or early August before trending lower into the fall and early winter. The feeder market will likely make fresh historical highs in August and early September. The feeder market will soften during October and November as the fed market comes under pressure.

For cow-calf producers and backgrounders, make sure you have your price insurance in place. When the market is at historical highs, assess your risk/reward. There is very little upside and significant downside potential.

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Most cow-calf producers “are too dependent on outside inputs, which are also at record-high costs,” says Pharo, who operates Pharo Cattle Company in Colorado and was the keynote speaker at the recent Holistic Herd Management Conference at Valleyview, Alta.

Pharo says there’s a wide range of profitability among ranchers in Canada.

Due to continual selection for bigger weaning weights, average cow size has increased 40 percent. Stocking rates have decreased; the same land can’t support as many cows because they consume more forage than the smaller cows of 50 years ago. Cost of production has increased, and profits have decreased.

READ MORE: Rethinking ranch priorities

“If everyone was making money like they were in 2014-2015, I wouldn’t worry, but they are not making that much money now, even with higher cattle prices, because expenses have risen. People need to make major changes regarding how they operate.”

Pharo promotes profit per acre, not overall production of meat, as the route to profitability.

For that, he uses a “two trucks” illustration. Take two ranches of equal size. One produces 50,000 pounds of 400-pound calves (more total calves). The other ranch produces 50,000 pounds of 600-pound calves (fewer animals).

“Fifty thousand pounds of calves is a truckload,” he says.

Using recent market prices for calves, the 400-pound calves on the blue truck are worth $42,000 more than the 600-pound calves on the red truck. It follows that the lighter calves are worth more per pound.

“For over 50 years, the average cow-calf producers have been breeding and selecting for the wrong thing,” says Pharo, “Their ‘bragging rights’ (weaning bigger calves than the neighbours) may have increased, but at the expense of their profits.”

With proper grass management — using rotational grazing and regenerative practices to improve soil health and grass production — and the right kind of low-maintenance genetics, many cow-calf producers today have more than doubled the amount of beef they produce per acre.

“This is happening in many environments, on four different continents,” Pharo said.

Consider the two ranches represented by the two trucks. One ranch continues to focus on increasing pounds per cow (weaning weights). The other ranch is focused on doubling pounds per acre through a combination of low-maintenance genetics and proper grass management. The income difference is significant.

“The ranch represented by the two blue trucks (with double the original stocking rate) is grossing $215,500 more than the ranch represented by the red truck. This is why some cow-calf producers are extremely profitable, while most cow-calf producers are struggling to make a decent living. Many ranches that were put together and paid for with 350-pound calves are now struggling and going broke with 600-pound calves.”

The beef industry, he says, has been based on what fundamentals were like 50 years ago, when land, feed, fuel, labour and equipment were cheap.

“We need to learn how to operate differently than we did 50 years ago. What worked so well back then will never work again,” he says.

Expenses a challenge

Pharo mentions the need for increasing production, but also the fact that ranchers need to eliminate some expenses.

Otherwise, he says, they might as well sell their cattle and land at the top of the market and do something different because it’s only going to get worse; expenses will keep going up.

There are ways to eliminate and reduce some expenses, such as calving in sync with nature — that is, when cows can be on grass rather than fed hay, with less labour and facilities required for cold-weather calving.

“For Canadians, that will save more than $100 per cow, which equates to $100 more profit per cow.”

Producers should learn how to graze more and feed less, Pharo says.

Those big cows require a lot more feed and aren’t producing as many pounds of calf compared to their own body weight as smaller, more efficient cows.

“For 50 years we’ve been trying to get bigger weaning weights, and succeeded, but cows are 40 per cent bigger, too.”

Increasing production per cow did not work, so we need to increase production per acre. Many folks at the holistic conference are already producing twice as much beef per acre as their neighbours and doing it long enough that they know it works, Pharo said.

“Ranchers in many regions have doubled or even tripled production simply by having the right kind of cows and knowing how to manage grass. If you can go from 50,000 pounds of calves to 100,000 pounds of calves on the same ranch, that’s huge.”

Change can be difficult for ranchers who have been doing things a certain way for a long time. “The older we get, the less we want to change; we don’t like risk. When we were 30 years old, risk was not such a big deal, but when you are 60 or 70 years old risk becomes a big deal.”

In a multigenerational ranch, trying to convince Dad or Grandpa there should be some changes can be hard.

But cow numbers across the U.S. and Canada are lower than they’ve been for 72 years, so the industry can’t afford more ranches going out of business.

Anyone interested in the Pharo Cattle Company program can receive weekly e-mail newsletters to learn more.

The post A key to cattle business survival appeared first on Grainews.

Profitivity is a combination of profitability, productivity and positivity. For an operation to thrive, these three things are important to get right. Profit and production may be somewhat self-explanatory, but planning for a positive attitude is also essential. There is very little point in planning in a negative direction or ranching just for ranching’s sake.

Being accountable for the Profitivity triad is a challenge. Most of us in production agriculture like the production piece. Seeing new calves up and running, smelling fresh-cut hay, or seeing a pen of steers blossom is very gratifying, but production is not enough. In order of profitivity importance, I would probably place positivity first, profit second and productivity in third place.

I sincerely think it is important and OK to ask some basic questions about our farms and ranches. “Is this place fun?” or, put another way, “If I saw a job posting for our operation, would I want to work there?”

Building a positive end goal or vision for the ranch and the ranch team (even if it is a team of one) and for life is a key first step in the planning process, and it is probably the hardest. There are a few really good resources for this, but one of my favourite places to start is with Simon Sinek and his book Start With Why. If you are not a reader, just search him up on Google, YouTube or your favourite podcast supplier.

On a more personal level, if the positivity challenge is an internal struggle, resources such as Do More Ag are extremely valuable. It is nearly impossible to build a positive business if you are going through personal struggles and feel you don’t have a place to turn to for help.

Profit planning is lodged firmly in spot No. 2. Understanding how much money you want to net at the end of the year and what you want to do with that money is a good framework for creating effectiveness.

Planning for profit will also help to focus the production equations. Rather than going through the motions of production and hoping to make money, profit planning clearly defines what we should be doing, rather than what we want to be doing.

Is this investment or input going to move us toward our goal? Is the profit goal realistic given our operational size? What obvious things am I missing? There are a lot of good profit planning tools out there, but a basic understanding of your costs is a great first step. How much are my direct costs (things that physically go into the cow) to run a cow? What are your total overhead costs?

Once we make a profit decision, the next step is to look at the production side. Is the profit I want achievable with our operation? What production levels will support my profit goal? What production costs should I invest in? Do I have the right production system or am I producing the right things?

Diminishing returns

A simple tangible example could be creep feeding. Creep feeding obviously helps to increase weaning weight and potential revenues from weaned calf sales. Creep feeding is also obviously not free, as there are feed and labour costs involved. Whether creep feeding is a good or bad production decision should be balanced against the net benefit and your profit goals.

The other key part of the productivity piece is to make sure we are measuring the right production measures. Are we concerned with production per acre? Or per cow? Are there other things we are concerned about in terms of production, like disease risk, or ecological function? Or measuring if we are effective or not? How much time do I invest and for what return? Am I completely played out and still falling behind? Do we measure things like our time in our operation?

Over the years I’ve learned it is essential to place positivity first and the best investment on a farm or ranch is nearly always investing in the people, but I would firmly place profit ahead of production. It’s interesting to me that while giving presentations on our own operation I often run into the dichotomy of production versus profit.

We tend to be a lower-cost type of producer, but I get a lot of questions about our productivity. While this likely means I have done a poor job of explaining what we do, I think it’s fair to say traditional ideas of production do not always equate to profit and profit may not equate to production, but the two are intertwined. There is often a stereotype that operations that are not extremely productive — for example, weaning heavy calves — are not profitable. The reality is that this may or may not be true.

A basic economic theory driving the production/profit paradigm is that of diminishing returns. This means that for each level of input we will see rising output to a certain point, but past that point each unit of input will progressively yield a lower return on investment. Stated another way, there is a reason we don’t feed 90 pounds of hay per day to a cow. The first 40 pounds is effective and the last 50 pounds are a waste.

Planning for profitivity means understanding your profit goals and your production system and perhaps more importantly measuring the right production, profit and attitude. We may not wean 800-pound calves, but our pastures are highly productive. What drives your profit equation, and does it fit your production?

Having a positive goal and outlook and a profit orientation also makes it easier to be accountable for doing some of those should versus want to jobs, as with planning you can better see how those less fun jobs move you toward your positive goals. It also allows you the mental freedom to quit doing ineffective tasks.

While I have described profitivity in a somewhat linear fashion, it is actually a circular process of planning and replanning. If production cannot meet my profit goal, or my profit goals don’t support my life goals, we need to recirculate through the problem and find a frame of reference and a plan that does work.

Deliberate profitivity planning can create businesses that have effective production, produce profits and create happiness amongst families and employees. Identifying weak points and addressing them through the process can strengthen businesses and lives. Every operation is unique, and every operation will have a different profitivity plan, but working on and in a business that is fun, productive and profitable generally reinforces the positive feedback loop.

The post Rethinking ranch priorities appeared first on Grainews.

There are alternative products, but their use may mean tweaking management. Another option might involve not vaccinating certain groups of cattle — such as older cows — saving a limited supply for where it’s most needed.

We all know that scours booster shots are given annually at a certain time before calving starts, but this varies with each product, so make sure if you switch vaccines that you pay close attention to the time interval. In my view, proper timing is one of the critical pieces of information.

Some pharmaceutical manufacturers will say if you switch companies, you need to start over, but that is simply not true. It is no different than if we switched to different COVID vaccinations.

The leading vaccine that is not available is Elanco’s Scour Bos 9. It provides comprehensive protection against up to nine antigens for broad-spectrum coverage against the leading causes of scours. It also has a flexible administration schedule. However, there are two pretty equivalent competitors such as Guardian from Merck Animal Health and Scour Guard 3kv from Zoetis .

With all productsm the proper timing to administer the vaccine and booster will vary. They always say so many weeks before calving starts. So when is that? Calving actually starts when the rush from the first cycle of conception starts. In my mind, the twins that come a week early or the premature calves or those cows with really short gestations are not technically the start of calving season, so keep that in mind. Then there is the variance in when you can actually vaccinate depending on weather, available help, the timing of external and internal parasite treatments and other management factors.

Proper management practices

I believe that with such things as better colostrum management, biosecurity measures such as boot dips in the calving barns, lots of bedding and making sure calves suck quickly after they are born are all preventative measures that help reduce the risk of scours.

My worry is it just takes that one colostrum-deprived calf to start a bad clinical case and the rest of the herd is highly exposed to infectious scour causing organism and a wreck develops.

On the management side, often in smaller beef herds, cows with calves aren’t separated from those about to calve can have consequences for spreading disease. Another ideal situation for disease development and spread is when a producer keeps adding cows with calves together in the same pen or paddock and they end up with increasing numbers of younger calves with older calves.

Those cows that calve on grass where lots of separation between animals may not require a scours vaccination.

In all the herds we still see outbreaks of cryptosporidiosis scours, which tells me biosecurity is not ideal. This is the type of scours that is not covered by any of the vaccines. It is very prevalent in dairy calves. It is a protozoa where millions of oocysts (eggs) are spewed out.

Also of concern is zoonosis (disease transmission between animals and humans). This is a type of scours that can cause severe intestinal infections in people as well. So when treating sick animals, one must use gloves and clean up very well after handling.

It is also important to isolate these calves in an area far away from any calving area or barn. The producer needs to change coveralls before entering a calving area, or have someone that doesn’t deal with the calving cows do the scour treatments to keep these one-off cases from spreading.

Clinics can test scours manure in several different ways to see if cyrptosporidiosis is the problem, and that is well worth knowing.

Treatment options

Getting back to the vaccine shortage, Elanco does have a supply of Scour Bos 4 for the prevention of disease in calves caused by bovine rotavirus and bovine coronavirus.

The vaccine does not cover the main bacterial cause of scours but that protection can be added in with use of a bolus product such as First Defense. First Defense is a pill given at birth or can be started when an outbreak occurs.

There are a few options if cows aren’t vaccinated and a scours outbreak occurs. First is to have the type of scours specifically diagnosed. Knowing the age of calves that are getting scours gives the clue to your veterinarian as to whether viruses, bacteria or protozoa (cryptosporidiosis or coccidiosis) are involved.

At the start of an outbreak, use a product such as First Defense that can give protection against the e-coli or the bacterial form of scours. There are also oral vaccines such as Calf-Guard by Zoetis or intranasal vaccines (bovilis corona) that will look after the main viral causes of scours. And then there is mass treatment with a specific treatment for cryptosporidiosis. This treatment for crypto is a specific treatment containing halofuginone. This is pretty labour-intensive but can stop an outbreak if acted on quickly.

Scours can be a scourge during calving season but if diagnosed and acted on quickly with the right treatment it can be stopped, and of course prevention is always the number one option.

If there is an outbreak, additional steps can be taken to prevent it from reoccurring next year. We have come along way over the years to properly prevent, manage and then treat if necessary, but outbreaks still happen each year. Your veterinarian is still your best source to put all the pieces of the puzzle together and get you headed in the right direction.

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A vision of the future

A vision statement can be one of the most powerful tools available to a company. It sets the big-picture goal for a business and provides a framework for communication. A well-crafted vision can provide the fuel to empower those in the business to assess its own performance and apply creativity towards a common goal. On a personal note, coming up with the right vision statement for our ranching operation has probably been the biggest transformational change we have made in the last 20 years and maybe the last 112.

I think this can also be true of visioning for an entire industry. We need to step back and figure out where we want to be in 20 years or we can get buried tilting with the windmills of today. The most important aspect of a vision is that it is aspirational. Once the vision is clear, solving the problems and charting the path forward become the challenge.

I am far from capable of visioning the entire beef industry, but I have put together a few thoughts that I would like to leave open for discussion. Rather obviously, each topic could be a long discussion in its’ own right, so consider this a brief summary as food for thought.

Contribution to the economy

Canadian Beef Fast Facts shows the contribution of the beef industry to the Canadian economy at roughly $16 billion per year. If we take that number and divide by the number of beef cows (3.83 million) it works out to a contribution to the economy of $4,177 per cow. If we further extrapolate this to encompass the vision of seven million beef cows and added value through trade, I think that a reasonable target would be to shoot for at least $4,500 per cow. That equates to a $31.5 billion contribution, basically double what we do today. I think that would put beef into the big leagues with government and the public. To give some context, dairy’s contribution to GDP is estimated at almost $20 billion and canola’s is at $26.7 billion.

Farmer demographics

I debated this one a long time and think that it belongs at the end. The only way I see to progress towards the “people” goals is to build a vibrant, profitable and challenging industry. That said, it also takes people to accomplish the tasks to create that industry.

The average age of agricultural producers according to the last census is 55. For the purpose of visioning, I think this needs to be roughly 45. That means there is still room for older producers, but we need a real drive to increase youth in the industry. This creates energy, but also drives innovation, as young businesses often operate with different debt loads, cash requirements and ideas than equity-rich established entities. As well, a demographic shift means that more young families are involved with more potential future farmers in the works. Youth in agriculture also provide an important direct link to our educational system and bring farming/ranching back into the collective discussion. On the marketing side as well, moms are a much more powerful force than cowboys when it comes to connecting with the public.

If we are to become a global powerhouse in the beef space, then I think we need to make serious investments in ourselves as producers. This does not necessarily mean a university degree, although certainly I think that the number of industry participants with a degree will increase. It does mean investing in business training, production training and understanding of the industry and our specific market for our cattle.

The vision (or something like it)

The actual hardest part of the vision for our ranch was distilling it down to its essence. A good rule of thumb is that a vision statement should be fewer than 20 words, and preferably under 10. It should also be clear and understandable and should transcend time. So roughly, what I see as a vision for the Canadian industry:

“A world-leading industry that provides real value to customers and Canadians.”

I appreciate there are a lot of roadblocks to this vision and it is easy to dismiss the possibility of any of this occurring. I also appreciate that there are a tremendous number of visionaries in the industry. The rough vision I have outlined here may not fit with everyone’s ideas of the future (see the first paragraph). I do however think that we need to get serious about aspirational goals and vision so that we can chart a path forward and tackle issues proactively. Hopefully this article can invoke some discussion and visioning in your own operation as well.

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We often forget about this ratio in our everyday operations, but it is an especially important one to remember during bull-buying season.

The math seems pretty simple. Reproduction is five times more important than growth and 10 times more important than carcass in terms of profitability, if we are marketing our calves out of the cow herd. In reality it is a lot more nuanced than that and may even be shifting for your cow herd.

How it works

I thought working through some basic examples would help to illuminate how this relative emphasis works. Let’s use a 100-head cow herd. The herd breeds 100 cows, and has a 15 per cent culling rate. If you think that’s high, I would suggest it is actually rather low for most of us. To put that in perspective if you keep all your own replacements you would have to keep only 30 per cent of your heifer calf crop to maintain herd size. With a 15 per cent culling rate from our 100 cows we are instantly at 85 calves. If we assume another five per cent loss to weaning, we would produce 80 calves for every 100 cows that are bred to a bull the year before. Let’s use a 500-pound average weaning weight in our example.

Based on these numbers a one per cent improvement in weaning weight will result in five pounds more per calf, or 400 pounds of calf (80 weaned calves x five pounds per calf). This also has the effect of slightly lowering the price per pound for the group if we consider a normal price slide, where heavier calves are worth slightly less per pound.

If we make a one per cent improvement in fertility across our 100-cow herd, this means that we produce one more calf. The result is 500 pounds. This is not quite as simple as adding 500 pounds though. Remember that 15 per cent culling rate. That means we need to keep 15 to 20 replacement heifers to keep our cow numbers up, assuming we cull open cows and have that same 15 per cent open rate on our replacement heifers. Improving fertility by one per cent equates to one less open cow, which means we only need to replace 14 cows, and thus we have freed up another entire calf for sale. Additionally, when you do the math, it means we wind up with more bred heifers that we can either market or retain into the cow herd.

Another important aspect of this ratio is the consideration that more performance may come at a cost concerning cow size and the resulting cow maintenance cost. Finally, since calves are sold as pounds of calf, the driver of growth, trumps that of carcass characteristics.

Use the ratio

Once you start figuring out the angles, the 10:2:1 ratio makes quite a bit of sense. It also is something that deserves marked consideration as the industry evolves. Because genetic change takes a long time in the beef industry, thinking about where we are today is not good enough.

Market signals are increasingly moving backward down the chain. Recently this has been highlighted by the announcement of the agreement between BIXS and Cargill to exchange data. As well marketing avenues have changed to include more forward selling and contracting of calves, and direct selling and sourcing.

It is entirely likely that there will be a monumental shift in a lot of operations towards the more integrated methods of production, where the farm is more closely tied to the consumer. This means an increased focus on performance and on carcass and end-product qualities.

If we retain ownership and market on a grid system the reproduction:production:product ratio actually is closer to 2:1:1. This means fertility is still the prime profit driver, but it is now only twice as important as either growth and carcass, and carcass and growth characteristics are tied in terms of driving profit.

The extreme other end of the scale is where the owner of the cow herd, also owns the retail outlet and markets specific cuts on the shelf. In this case, profit is driven squarely by end-product merit and growth and reproduction take a back seat in importance. Because each calf is worth more, and the value is driven by end-product quality on the shelf getting more calves is less important than getting the right quality of calf for the market.

If you have the scale where you can use different types of sires in the cow herd, or you are purchasing replacements you can have the best of all worlds in many ways by maintaining fertility and focusing on carcass and growth traits with your terminal sire. It is very important to maintain the focus on the right balance of traits for each type of sire used in these systems.

No matter what your system, there are definite signs that the shift towards integration is in full force, and breeding beef cattle takes a long time. Now might be an opportune time to have a look at your cowherd and your future direction and start planning your ratios moving forward.

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The study, led by research scientist Tim McAllister of Agriculture and Agri-Food Canada in Lethbridge, with staff from AAFC, Environment Canada and the University of Manitoba, logs a “significant reduction in GHG intensity” when comparing 2011 figures with those from 1981.

The first results from the five-year (2013-18) study, published Dec. 23 in the journal Animal Production Science, credit “continual improvements in production and feed efficiencies, crop yields and management strategies.”

GHG emissions have long been a contentious issue for the livestock sector. According to the Canadian Roundtable for Sustainable Beef (CRSB) in a release Monday, Canada’s beef industry today accounts for 3.6 per cent of Canada’s greenhouse gas production and 0.072 per cent of global greenhouse gas production.

At the same time, lands that grow grasses and legumes for cattle sequester carbon, thereby reducing GHGs, the group said.

GHG emissions in the study were estimated using life-cycle assessments (cradle to farm gate) based mainly on Holos, a Canadian whole-farm emissions model, the researchers wrote in their paper.

Compared with 1981, in 2011 the same amount of slaughter weight was produced, with a 14 per cent decline in methane emissions, 15 per cent decline in nitrous dioxide emissions and a 12 per cent decline in carbon dioxide emissions from fossil fuel use.

Enteric methane production — that is, from the animals’ digestive systems — accounted for 73 per cent of total GHG emissions in both years.

In all, the study found, the estimated intensity of GHG emissions per kilogram of live weight that left the farm was 14 kilograms of carbon dioxide equivalents for 1981, but 12 kg of carbon dioxide equivalents for 2011, down 14 per cent.

Past that, the study found that in 2011, beef production in Canada required only 71 per cent of the breeding herd (such as cows, bulls, calves and replacement heifers) and 76 per cent of the land needed to produce the same amount of live weight for slaughter as in 1981.

“We’re working to get a more accurate assessment of the Canadian beef industry’s environmental footprint and these results indicate that the footprint per kilogram of beef produced is getting smaller,” McAllister said in Monday’s release from the CRSB and Beef Cattle Research Council (BCRC).

The needed production and feed efficiencies, crop yields and improved management practices “wouldn’t have happened if it weren’t for investments in research and development, and the industry’s ability to adopt those technologies,” he said.

Those investments led to increased average daily gain and slaughter weight, improved reproductive efficiency, reduced time to slaughter, increased crop yields and a shift towards high-grain diets that enabled cattle to be marketed at an earlier age, the researchers said in their paper.

However, in terms of the industry’s overall sustainability, they wrote, “future studies are necessary to examine the impact of beef production on other sustainability metrics, including water use, air quality, biodiversity and provision of ecosystems services.”

“Perceived” concerns about the beef sector’s environmental impacts “often overshadow the beneficial impacts of the beef industry,” BCRC chair Tim Oleksyn, a cow-calf producer from Shellbrook in northern Saskatchewan, said in Monday’s release.

Beef producers, he said, are “inherently motivated to be more efficient, which most often has social, economic and environmental benefits. Now that we have resource use and GHG emission benchmarks, we can move forward as an industry and more strategically target our efforts to improve.”

The CRSB’s sustainability assessment is expected to benchmark the industry’s social, economic and environmental impact, using 2013 as the baseline, and to be revisited and evaluated every five years.

Results from the remaining phases of the industry environmental footprint study are expected in 2018, the CRSB said. — AGCanada.com Network

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