Steve Paisley: Tying it all to the future | TSLN.com

Steve Paisley: Tying it all to the future

Steve Paisley

June is historically a very busy travel month, with several state, regional and national meetings to attend. Over the last three weeks I have had the pleasure of driving across most of Wyoming, Nebraska and northern Colorado. Between all of these research, committee and coordinator meetings has been several hours of windshield time to try and organize and apply all of the information discussed. I’ve come up with a buffet of various topics that will probably require full attention and a full column in the near future. For now, this is a “cooks choice” list of items that have made my Top 10 list for June 2011.

• Wyoming cattle inventory. The latest Wyoming Livestock Board report suggests that beef cow numbers have continued to decline in the state, with recent estimates showing another 2-3 percent drop in overall beef cow numbers. Recent reports, as well as my own visual observations, would indicate that stocker/yearling numbers are replacing many of the mature beef cows in the state. It has been really interesting to watch Wyoming shift from a very high percentage of cow-calf pairs back to a combination of yearling and cow-calf within the last few years. While it may seem like the beef industry adapts slowly to change, there are certainly signs that beef production practices are changing, and based on feed and grain reports, these changes are going to have to accelerate in order to stay in the game.

• Current and future beef demand. CattleFax reports suggest that although beef prices have been sluggish in late spring and early summer, there is some industry optimism that prices will rebound this fall. High beef retail prices have affected retail sales to some extent, but the demand index for beef has held relatively steady. On the other hand, global demand for beef is increasing, and beef exports continue to rise. We have all heard reports that world population and economic indicators suggest that demand for animal protein will continue to increase. Increased export demand for beef combined with record high grain prices and shrinking national beef herd indicates to me that the beef industry will have to undergo additional rapid changes.

• Reduced role of corn in beef production. Continued concern about the nation’s corn crop, along with continued ethanol subsidies and higher fuel prices, all indicate that corn grain will have to become more of a component ingredient in finishing diets rather than the predominant energy source. We currently have a feedlot industry that developed and matured on larger cattle numbers, cheap transportation costs and low corn prices. High grain prices will dictate that we feed cattle for fewer days, utilize alternative energy sources and by-product feeds, and attempt to reduce fuel and transportation costs. The feedlot sector will have to adapt to these changes, while the overall industry is challenged to meet domestic and export demands for beef when our beef production time line has lengthened due to the economic incentives for extended grazing, and beef production efficiency is negatively impacted by reduced reliance on traditional feed grains.

• Consumer demand and perceptions of beef production. An additional factor affecting domestic beef demand has been changes in consumer perceptions of beef and beef production. Recent survey work suggests that 95 percent of polled consumers say that it is important to them that animals are cared for properly, and 31 percent of respondents say that they are willing to pay up to 5 percent more for animal products labeled as “humanely raised.” I have always felt that cow-calf producers have a built-in respect for life and an innate ability to care for domestic livestock. The producer level as well as industry challenge is more related to documenting that we understand and use appropriate animal stewardship practices. There is certainly an educational component that will demand our industry to be proactive in addressing these concerns. One of the potential “players” in this area is Beef Quality Assurance programs. We have documented previous successes for reducing injection site lesions and reducing residue problems. The next topic for BQA to tackle may very well be cattle handling and husbandry practices. Similar to the injection site challenges in the ’80s, if the industry can develop and offer an acceptable voluntary set of guidelines and verification procedures for cattle handling and management, it may help sustain beef demand and reduce the chance of future regulations.

• Improved feed efficiency is part of the next step. During the last three years, breed associations, seedstock producers and commercial cattlemen have begun the transition into measuring and selecting for individual efficiency. Data from efficiency evaluations over the last three years suggests that in the past, we have done a very good job selecting for increased production and improved weight gain, but we have not had the tools to select for feed efficiency, with wide ranges in RFI and feed efficiency within each breed. Progeny collected on RFI-tested sires suggests that feed efficiency is a moderately heritable trait, and that improvements in feed efficiency can be achieved without impacting performance, cow size or birth weights. Feed efficiency isn’t the only answer for continued competitiveness for the beef industry, but it is an important trait that we need to address.

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• Positioning for the future. I’m convinced that part of the reason why national cow numbers continue to decline is that producers and potential investors recognize the transition that is occurring in the beef industry, and it is difficult to invest in the industry without a clearer picture of where we are headed. One of the keys I believe will be to “commit” to the office work part of the business. Successful marketing of cattle will continue to require paperwork and verification. Short and intermediate term planning for the operation will depend on doing homework – using unconventional feed resources and alternative management to remain efficient and competitive.

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