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Western Livestock Journal

Commercial Cattle Issue August 20, 2012 • Sec tion Two

Inside • • • • • •

SUSTA I NABI LITY CONSERVATION EASEMENTS PROFITABI LITY POTENTIA L MA RKET OUTLO OK AKAUSH I FI NA NCIA L PREPA RATION

Western Livestock Journal - The National Livestock Weekly • Since 1922 • A Crow Publication • 7355 E. Orchard Rd., #300, Greenwood Village, CO 80111 • www.wlj.net • 303/722-7600 • FAX 303/722-0155


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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

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Western Livestock Journal

Commercial Cattle Issue August 20, 2012 • Sec tion Two

CONTENTS 6

SUSTA I NABI LITY A ND PRODUCTION ENHA NCI NG TECH NOLOGIES —Traci Eatherton, WLJ Managing Editor

The number one buzz word—sustainability—continues to plague the industry, despite years of growth and production.

21

CONSERVATION EASEMENTS

—Andy Reiber, WLJ Correspondent

Conservation easements tend to make for heated conversation amongst cattlemen, but despite the controversies, the numbers are growing.

37

PROFITABI LITY POTENTIA L

—Dr. Bob Hough, WLJ Correspondent

Producers using proper breed complementarity and heterosis see production uniformity and increased profitability.

55

MA RKET OUTLO OK

—James Robb and Katelyn McCullock, Livestock Marketing Informantion Center

Calf prices in the fall of 2013 are expected to be well above 2012’s and if Mother Nature cooperates, could eclipse 2011’s record high.

71

AKAUSH I

—Kerry Halladay, WLJ Editor

This relatively new breed has some U.S. producers thinking outside of the box on production improvement.

87

FI NA NCIA L PREPA RATION

—Kerry Halladay, WLJ Editor

There are a variety of ways to protect a business financially; the key is having a plan.

INDEX ACROSS- BREED EPDS ............................ 84 SA LE CA LENDER ..................................... 88 A DVERTISER I NDEX ............................... 94

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COMMENTS CHA LLENGI NG TIMES The beef industry is facing some challenging times after enjoying tall grass and high cattle prices. Mother Nature has abruptly turned it around to no grass and lower cattle prices. This drought has lots of folks worried about feed availability and cost, and it looks like it will be an expensive proposition feeding a cow herd this winter for much of cattle country. The corn crop has turned out to be a big disappointment. USDA’s early forecasts were very optimistic but turned sour by mid-July. History was made when corn futures jumped up over $8 a bushel. Corn prices have the ethanol industry in a dither and many plants have shut down operations until feed stocks improve. With several plants shutting down, the dried distillers grain market has shot up to the $300-a-ton level. Right now, it seems like a cattle feeder just can’t get a break. With high cattle costs and now very expensive feed stuffs, it will be hard for them to earn a profit for a while. However, the futures markets are showing some hedging opportunities later this year. We’ve been through droughts before and nobody likes them. It forces ranchers to make hard decisions. Securing enough feed for this winter is a task you need to do now, if you haven’t already, before feed prices get really high. It’s is also time to get creative on feed stuffs. This historical drought has producers double-checking bottom lines and looking for creative ways to stay in the black. This Commercial Cattle Issue looks at some creative ways to weather the storm, or in this case, the lack of storms, and also shares some insight into planning for the future to maintain sustainability. This drought will pass and the cattle markets will be good for a while, several years, in my opinion. We’ll be forced to sell some more cows this fall, but when we’re on the other side of this situation, our herds will have the best genetics and they will produce an even better product. — PETE CROW

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


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5


s e u l a v , s e iv t c e p s r e P a n d s u s t a in a b il it y , WLJ By Traci Eatherton

R

Managing Editor

umor has it, there was once a time when running a ranch or farm was a relatively paperless endeavor. But long gone are the days of no pencils, spreadsheets, written regulations, and on and on. And there are no signs on the horizon of any let up on the pencil pushing for producers. Today it’s impossible to open an ag paper or go to a conference without getting the lecture on the “how to’s” of Ranching 101. With the constant growth in the industry, education and record keeping are a must to compete in the business, although I’m sure there are many producers out their pining over the long lost days of a penciless business. Along with the pencil pushing lessons, the industry buzz words run rampant throughout agriculture. Biosecurity, efficiency, retained ownership…and then there are the infamous buzzwords imposed on the industry that we will continue to mull over for years to come: pink slime and mad cow. But by far, the buzzword of the

6

year would have to be—sustainability. It’s relatively impossible to go to any conference without the word coming up in meetings and speeches. As with any buzzword, set definitions are somewhat hard to come by, and this industry buzzword is no exception, bringing with it some external complications or some perception gaps that will be difficult to breach without a strong communication plan. So what is sustainability? And how can the industry show it is sustainable? Colorado Livestock Association President Mark Frasier said it well: “We were sustainable before sustainable was cool.” But somewhere along the timeline, beef sustainability has come under fire. Similar to personal values, be it religion, family, financial, education, etc., each industry player in the sustainability game has their own priority list—their top value that they believe has to be the priority to maintain sustainability. One food website claims that “sustainable farms produce foods with-

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

out excessive use of pesticides and other hazardous chemical inputs.” Is that what makes our industry sustainable? What is excessive? Who defines excessive? The industry typically focuses on sustainability as three key areas: environmental, economical and social. Despite this, there seems to be an external consensus on some basics that are necessary to convince consumers of beef production sustainability: animal welfare, conservation of resources, financial stability, biodiversity, etc. But what happens when one player gives one necessity a higher priority? Along with priorities, the ever changing perceptions of consumers, often led by misinformation, also have the potential to put a damper on sustainability for the ag industry. Without a bottom line that includes some money left over for a business to survive, sustainability doesn’t exist. While the industry as a whole is continually improving its communication skills, producers need to


continue to play a key role as the primary educator on production’s 5-Ws and 1-H, and researchers such as animal scientist Jude Capper, Ph.D., have some key points to counter the anti-ag agendas.

Who? If producers don’t tell their own story, who’s going to? No doubt, someone will, along with some added fiction. U.S. beef producers have continually improved production practices with productivity-enhancing technologies, providing consumers with beef products that are environmentally sound, socially responsible and economically viable.

What? What would happen if U.S. beef farmers and ranchers no longer used productivity-enhancing technologies to raise beef cattle? According to research done by Capper and the Sustainable Beef Resource Center, to produce the same total amount of U.S. beef without using these technologies, U.S. farmers and ranchers would need 10 million more beef cattle, 81 million more tons of feed, 17 million more acres of land and

138 billion more gallons of water— and 18 million extra metric tons of carbon dioxide equivalent (CO2eq) would be released in the U.S. alone. These effects are equivalent to imposing an 8.2 percent tax on U.S. beef farmers and ranchers, leading to a 17 percent reduction in U.S. beef production by 2023.

When? In addition to reducing domestic beef production by 17 percent, if demand continued as is, within 15 years, Canada, Brazil, Argentina and Australia would increase beef exports by 36 percent, 24 percent, 11 percent and 5 percent, respectively. These four countries also would release 3.1 billion more metric tons of CO2eq. “As the global and national population increases, consumer demand for beef is going to continue to increase,” Capper says. “The vital role of improved productivity and efficiency in reducing environmental impact must be conveyed to government, food retailers and consumers.”

Where? Critics often use the argument

Additional inputs, resources and waste output required to produce an equivalent amount of beef without the use of productivity-enhancing technologies. Animals

Per-year impact

Cattle herd maintained (no. of head)

+10,006,000

Cattle harvested (no. of head)

+2,859,000

Resources Land (acres)

+17,000,000

Feedstuffs (tons)

+81,000,000

Water (gallons)

+138,276,000,000

Fertilizer (tons of nitrogen, phosphorus & potassium) Energy (megajoules)

+289,000 +8,135,000,000

Waste output Manure (tons)

+51,541,000

Nitrogen excretion (tons)

+659,000

Phosphorus excretion (tons)

+55,800

Greenhouse-gas emissions (C02eq, metric tons) SBRC: Sustainable Beef Resource Center

+ 18,571,000

that we could grow more crops to help feed the world on the land that producers are using to graze cattle. But Capper points out that approximately 85 percent of U.S. grazing lands are unsuitable for producing crops due to climatic, topographic or soil limitations. “The supposition that cattle compete with humans for nutrient resources is unfounded. Grazing cattle on this land more than doubles the area that can be used to raise food and helps us feed a growing population in the United States and abroad,” Capper says.

Why? New research presented at the 2012 American Society of Animal Science meeting provided insight into the consequences if U.S. farmers and ranchers no longer used productivity-enhancing technologies to raise beef cattle. “Global demand for safe, affordable beef has increased during the last 50 years, and U.S. producers have responded by adopting innovative products and management practices that help them produce more lean beef,” says Capper. “If use of these scientifically proven, U.S. Food and Drug Administration (FDA)-approved technologies were discontinued, our research shows the end result would be sobering: more cattle, more land and more water needed to produce the same amount of beef, and more CO2eq released into the atmosphere.” “The biggest single impact would come from the destruction of 16.9 million acres of Amazon Rainforest and forests in the West Central Cerrado regions of Brazil,” says Capper. “Losing the ability to use safe, approved technologies will create significant environmental and economic challenges that are undesirable and unnecessary.”

How? Sharing the improvements the industry has made over the last 30 years is an easy start for explaining how beef production is a sustainable industry. Anti-ag groups claim beef is bad for the environment and bad for people’s health, and they have been very successful getting this message out over the past 30 years while Continued on page 8

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

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Continued from page 7

producers were busy improving their business. But the science counters their claims. According to the research, thanks to production improvement, beef is environmentally and nutritionally efficient. Each serving of beef requires less land, water and energy than it did 30 years ago, and provides 10 essential nutrients to a diet. Advances in productivity over the past 30-plus years have reduced the carbon footprint and overall environmental impact of U.S. beef production, according to Capper. “It’s important to note that all food production has an environmental impact, but significant improvements in efficiency have clearly reduced the greenhouse gas emissions and overall environmental impact of beef production,” said Capper. “Contrary to the negative image often associated with modern farming, fulfilling the U.S. population’s requirement for high-quality, nutrient-rich protein while improving environmental stewardship can only be achieved by using contemporary agricultural technologies and practices.”

8

Effect of withdrawing productivity-enhancing technologies from U.S. beef production on production and trade over a 15-year period. U.S. Market

2023 vs. 2009

U.S. beef production

-17.1%

U.S. net beef imports

+352%

International markets Canada’s net beef exports

+36.3%

Brazil’s net beef exports

+24.8%

Argentina’s net beef exports

+10.9%

Australia’s net beef exports

+5.4%

SBRC: Sustainable Beef Resource Center

When compared to beef production in 1977, each pound of beef produced in modern systems used: • 10 percent less feed energy • 20 percent less feedstuffs • 30 percent less land • 14 percent less water • 9 percent less fossil fuel energy • 18 percent decrease in total carbon emissions (methane, nitrous oxide and carbon dioxide)

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

The science behind the research Capper’s research looked at two U.S. beef-production systems that were identical in all ways but one: whether or not productivity-enhancing technologies were used. The Conventional System analyzed included FDA-approved ionophores, steroid Continued on page 13


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August 20, 2012 â&#x20AC;¢ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;¢ Section Two

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Ranchers Only High Altitude Sale Offering 170 High Altitude, Range Ready, 18 mo old Stabilizer bulls. New date: 1 pm, Saturday, December, 1st, 2012 Western Slope Livestock Auction, Loma, Colorado PAP tested at 7900 feet, measured for feed efficiency and designed to provide more hybrid vigor. You will not find a set of coming 2’s this stout, sound, and gentle. Best of all, every Leachman bull has been bred to sire calves that have an unfair Beef Industry advantage in producing true, bottom line $Profit™ (Leachman’s proprietary weighted index with real world $ values for all traits including feed efficiency).

Lee Leachman, Manager Ryan Peterson, Herdsman & Sales 5100 ECR 70, Wellington, CO 80549

(970) 568-3983 • www.leachman.com 10

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


Improve Your Profit Potential Selling 170 Range Ready Bulls 1 pm, Saturday, September 15th At 101 Livestock Market, Aromas, CA

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

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W

hen BRD breaks, get a rapid response and 10-day treatment with a single dose of ZACTRAN (gamithromycin).1 In recent field trials, first-pull cattle given ZACTRAN showed a significant improvement in BRD clinical signs within

24 hours.1 Better still, ZACTRAN kept busting BRD for the 10-day study,1 making it a great choice for treatment or BRD control in high-risk cattle.2 If you’re sick and tired of worrying, it’s time to talk to your veterinarian about prescription ZACTRAN.

Approved for treatment of Mycoplasma bovis.2 IMPORTANT SAFETY INFORMATION: For use in cattle only. Do not treat cattle within 35 days of slaughter. Because a discard time in milk has not been established, do not use in female dairy cattle 20 months of age or older, or in calves to be processed for veal. The effects of ZACTRAN on bovine reproductive performance, pregnancy and lactation have not been determined. 1

2

Sifferman RL, Wolff WA, Holste JE, et al. Field efficacy evaluation of gamithromycin for treatment of bovine respiratory disease in cattle at feedlots. Intern J Appl Res Vet Med. 2011:9(2):171-180. ZACTRAN product label.

For more information about Merial, go to www.merial.com or call 1-888-637-4251. ®ZACTRAN is a registered trademark, and ™”Because it’s critical, it’s ZACTRAN®” is a trademark, of Merial Limited. ©2012 Merial Limited, Duluth, GA. All rights reserved. RUMIOTD1223-C (03/12)

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

Give subcutaneously at 2 mL/110 lbs.


Continued from page 8

implants, melengestrol acetate and beta-adrenergic agonists used at current adoption rates. The No-Technology System did not use any of these products. Capper and her colleagues used a new whole-system environmental and natural resource model to determine the effects of using each system to

produce the same amount of beef. This model included all inputs and outputs throughout beef production, from the manufacture of cropping inputs (fertilizers and pesticides) to the arrival of animals at the processor. Dermot Hayes, Ph.D., economist at Iowa State University and partner in the research, then fed the results into the Center for Agricultural and Rural Development model—which includes

15-year cumulative change in carbon emissions resulting from discontinuing use of productivity-enhancing technology in U.S. beef production. Country

Cumulative CO2eq due to land-use change (metric tons)

Brazil

+2,157,000,000

Canada

+283,000,000

Argentina

+ 143,000,000

Australia

+ 139,000,000

Rest of world

+413,000,000

Total

+3,135,000,000

SBRC: Sustainable Beef Resource Center

Continued on page 15

®

(gamithromycin) 150 mg/mL ANTIMICROBIAL

NADA 141-328, Approved by FDA

For subcutaneous injection in beef and non-lactating dairy cattle only. Not for use in female dairy cattle 20 months of age or older or in calves to be processed for veal. Caution: Federal (USA) law restricts this drug to use by or on the order of a licensed veterinarian. READ ENTIRE BROCHURE CAREFULLY BEFORE USING THIS PRODUCT. INDICATIONS ZACTRAN is indicated for the treatment of bovine respiratory disease (BRD) associated with Mannheimia haemolytica, Pasteurella multocida, Histophilus somni and Mycoplasma bovis in beef and non-lactating dairy cattle. ZACTRAN is also indicated for the control of respiratory disease in beef and non-lactating dairy cattle at high risk of developing BRD associated with Mannheimia haemolytica and Pasteurella multocida. CONTRAINDICATIONS As with all drugs, the use of ZACTRAN is contraindicated in animals previously found to be hypersensitive to this drug. WARNING: FOR USE IN CATTLE ONLY. NOT FOR USE IN HUMANS. KEEP THIS AND ALL DRUGS OUT OF REACH OF CHILDREN. NOT FOR USE IN CHICKENS OR TURKEYS. The material safety data sheet (MSDS) contains more detailed occupational safety information. To report adverse effects, obtain an MSDS or for assistance, contact Merial at 1-888-637-4251. RESIDUE WARNINGS: Do not treat cattle within 35 days of slaughter. Because a discard time in milk has not been established, do not use in female dairy cattle 20 months of age or older. A withdrawal period has not been established for this product in pre-ruminating calves. Do not use in calves to be processed for veal. PRECAUTIONS The effects of ZACTRAN on bovine reproductive performance, pregnancy, and lactation have not been determined. Subcutaneous injection of ZACTRAN may cause a transient local tissue reaction in some cattle that may result in trim loss of edible tissues at slaughter. ADVERSE REACTIONS Transient animal discomfort and mild to moderate injection site swelling may be seen in cattle treated with ZACTRAN. EFFECTIVENESS The effectiveness of ZACTRAN for the treatment of BRD associated with Mannheimia haemolytica, Pasteurella multocida and Histophilus somni was demonstrated in a field study conducted at four geographic locations in the United States. A total of 497 cattle exhibiting clinical signs of BRD were enrolled in the study. Cattle were administered ZACTRAN (6 mg/kg BW) or an equivalent volume of sterile saline as a subcutaneous injection once on Day 0. Cattle were observed daily for clinical signs of BRD and were evaluated for clinical success on Day 10. The percentage of successes in cattle treated with ZACTRAN (58%) was statistically significantly higher (p<0.05) than the percentage of successes in the cattle treated with saline (19%). The effectiveness of ZACTRAN for the treatment of BRD associated with M. bovis was demonstrated independently at two U.S. study sites. A total of 502 cattle exhibiting clinical signs of BRD were enrolled in the studies. Cattle were administered ZACTRAN (6 mg/ kg BW) or an equivalent volume of sterile saline as a subcutaneous injection once on Day 0. At each site, the percentage of successes in cattle treated with ZACTRAN on Day 10 was statistically significantly higher than the percentage of successes in the cattle treated with saline (74.4% vs. 24% [p <0.001], and 67.4% vs. 46.2% [p = 0.002]). In addition, in the group of calves treated with gamithromycin that were confirmed positive for M. bovis (pre-treatment nasopharyngeal swabs), there were more calves at each site (45 of 57 calves, and 5 of 6 calves) classified as successes than as failures. The effectiveness of ZACTRAN for the control of respiratory disease in cattle at high risk of developing BRD associated with Mannheimia haemolytica and Pasteurella multocida was demonstrated in two independent studies conducted in the United States. A total of 467 crossbred beef cattle at high risk of developing BRD were enrolled in the study. ZACTRAN (6 mg/kg BW) or an equivalent volume of sterile saline was administered as a single subcutaneous injection within one day after arrival. Cattle were observed daily for clinical signs of BRD and were evaluated for clinical success on Day 10 post-treatment. In each of the two studies, the percentage of successes in the cattle treated with ZACTRAN (86% and 78%) was statistically significantly higher (p = 0.0019 and p = 0.0016) than the percentage of successes in the cattle treated with saline (36% and 58%).

Work smarter, not harder.

Marketed by Merial Limited 3239 Satellite Blvd., Duluth, GA 30096-4640 U.S.A. Made in Austria

fencepostdriver.com 800.980.7599

®ZACTRAN is a registered trademark of Merial Limited. ©2012 Merial Limited. All rights reserved. Rev. 03/2012

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section TwoLIVESTOCK JRNL_FA.indd ZACTRAN-PI-thirdpage-MBovis_WESTERN 7/11/12 4:2713 PM 1


Matt Macfarlane ©

You Can’ t Manage What You Don’t Measure • We have expanded our Growsafe® system to 32 nodes, giving us the capability of testing over 1,000 head annually. • In drought conditions, such as we are experiencing right now in the West, efficient cattle will thrive while inefficient cattle will lose weight and body condition.

“It is an old management adage that is accurate today. Unless you measure something. you don't know if it is getting better or worse. You can't manage for improvement if you don't measure to see what is getting better and what isn't." • If farmers and ranchers are going to feed the world by the year 2050, we must double food production. Less than 20% of that increase may come from developing more farm land. The balance must come from improvements in technology, such as measuring for efficient cattle.

maRk YOuR CaLeNdaR ... “BuLLs FOR the 21ST CeNtuRY” saLe

sunday, march 10, 2013

Snyder LIVe LIVeSTOCK CO. TO FIND OUT MORE ABOUT OUR OPERATION, VISIT www.slcnv.com

P.O. Box 550 • Yerington, Nevada 89447 Office 775-463-2677 • Fax 775-463-4319 Lucy Rechel 775-790-0801 • lrechel@slcnv.com Funded in part by grants from the City of Yerington and Lyon County Room Tax Boards.

14

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


Continued from page 13

a greenhouse-gas assessment—to understand the global agriculturalproduction and trade consequences. “Our goal was to make this research as accurate and as real as possible,” says Capper. “That’s why we turned to the best available resources, from the models used to prepare briefings for U.S. trade representatives and congressional leaders, to the newly developed whole-system environmental model.” The whole-system model incorporated all relevant agricultural inputs, including pasture land, cropland, fertilizers, pesticides, drinking water for cattle, irrigation water, electricity and fuel, starting from the manufacture of cropping inputs to the arrival of the finished cattle at the processing plant.

Growth-promoting hormones A key component to industry growth, but also a controversial one, has been growth promotants. “Growth-promoting hormones are a key component of North American beef production. Their use over the past 50-plus years has proven beneficial Continued on page 17

At Wild West, Quality Counts. Quality is the name of the game at Wild West Angus. We don’t run a large cow herd, so every cow has to be productive and earn her keep. Our AI program ensures that the most current Angus genetics are crossed on these cows, resulting in bulls that are meeting the demands of today’s commercial cattleman.

The Snyder Livestock Bull Test Overall 2012 Champion. He was also the Calving-ease Champion & Top RFI Bull. Special thanks to Faith Ranch, Modesto, CA for the purchase of this bull.

Thanks to all of our bull buyers this past year.

We appreciate the confidence you have placed in our program. Look for Wild West Angus bulls this coming year at Red Bluff, Klamath Falls, Snyder Livestock Bull Test and Winnemucca Ranch Rodeo Bull Sale.

Wild West Angus

Mitch Cain

24551 Hwy 140 East • Dairy, OR 97625 541-545-6075 • cell 541-892-5900 www.wildwestangus.com

MAKE PLANS TO ATTEND THE

2013 NATIONAL SHOWS & SALES Angus, Charolais, Gelbvieh, Braunvieh, Hereford, highland, Limousin, Lowline, Maine-Anjou, Miniature Herefords (World Show), Piedmontese, Red Angus, Salers, Shorthorn, Simmental and South Devon. Need to Book a Hotel? Discounted Rates Available! Visit nationalwesternhotels.com or call (855)623-2115

Also Commercial Female: Chianina, Galloway, Texas Longhorn, Bison, Wagyu and Yak shows and sales. NWSS Livestock Exhibitors

For schedules and information visitAugust nationalwestern.com/livestock or call (303) 299-5559 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

15


Same Proven Program For Over 40 Years!

22nd Annual Bull Sale March 2013

May, Idaho

• Silver Bit Bulls sire calves that consistently gain, convert, & grade at the top end of thousands of calves in feedlots they’ve gone to! • National demand for replacement females out of Silver Bit Bulls! • Silver Bit Ranch known for consistently stout, wide based cattle! • Excellent performance & carcass genetics without sacrificing maternal traits! • Moderate birth weights for consistent, easy calving! • Silver Bit Ranch AI’s to only the Best Proven Sires! • Embryo Program based on the best proven Angus genetics!

For More Information, Contact Scott or Gwen Whitworth • May, ID 83253 (208) 940-0433-cell • (208) 876-4226-home silverbit_ranch@yahoo.com

PIEPER RED ANGUS Fall Run Production Sale • October 27, 2012 12:30 P.M. MST at the Ranch

★ 75 18-Month-Old Registered Red Angus Bulls Youngest 40% of 2011 Crop – Herd and Range Bull Prospects This Group Has Not Been Topped

★ 150 Registered Red Angus Females Show Heifer Prospects – Donor Cows – Bred Cows and Heifers

★ 300 Commercial Red Angus Bred Heifers Ultra-sounded for sex and date – 3 week calving interval

★ 35 Pieper Ranch Quarter Horses Including Broke Ranch Geldings Outstanding Weanling Colts by Playguns Little Lena and Shiner Smart Cat

For Catalogs, Call or Visit Us Online at www.pieperredangus.com Mark, Deb, or Tate Pieper

3779 550th Rd • Hay Springs, NE 69347 • H: 308-638-4557 C: 308-430-0989 Tate’s Cell: 308-430-1777 • pieperra@haysprings.net Private Treaty Cattle Available Year-Round!

16

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


Continued from page 15

not only to beef producers, but to consumers and to the environment— all of which benefit from lower costs and more efficient use of scarce natural resources. In short, growth-promoting hormones allow us to achieve the old Yankee maxim of producing more with less,” said Alex Avery. Alex and Dennis Avery, directors of research at the Hudson Institute’s Center for Global Food Issues, conducted an in-depth assessment of the safety and environmental benefits of growth-promoting hormones. They found that growth promotants in grain-fed beef production, along with being deemed safe by scientists throughout the world, reduce the land required to produce a pound of beef by 67 percent. In addition, they help to reduce greenhouse emission by as much as 40 percent. Consumer concern comes into play with misguided media messages claiming that hormone-treated cattle produce hormone-laced beef. The science shows a different story. Scientists from all over the world agree there is no measurable difference in natural hormone levels in beef from implanted animals compared to non-implanted animals. The hormone level in implanted beef is much lower than the amount of hormones produced every day by every man, woman and child, according to Avery.

Values John Robbins, author of “The Food Revolution: How Your Diet Can Help Save Your Life and Our World,” says, “Feeding grain to cattle has got to be one of the dumbest ideas in the history of western civilization.” While he has a right to his beliefs, although pretty far-fetched, producers have a right to theirs, and with the available science, those beliefs become facts. It’s time for producers to use their pencil-pushing techniques they’ve learned over the past 30-plus years and get the word out that they are here to stay. For beef production to continue to be sustainable, it must be recognized as a priority on the value list; a priority for not only consumers and producers, but also by state and local leaders who influence policy decisions regarding taxation, regulations and financial incentives. And for that to happen, producers are going to have to step up the communications.

BULL SALE MONDAY, OCTOBER 8, 2012 • M McARTHUR, ARTHUR, CA THESE STOUT BULLS, AND MORE LIKE THEM, SELL AT THE INTERMOUNTAIN FAIRGROUNDS AT 1 P.M.

MLC STYLE 3063

DOB: 3/4/11 • Sire: Silverias Style 9303 Dam’s Sire: BR Midland BW +1.5•WW +43•YW +82•MILK +20• CW +14 MARB +.51•REA+.24•FAT +.024 •$W +25.17 $F +24.87•$G +29.45•$B +52.05

AEC DARKHORSE 3066

DOB: 3/5/11 • Sire: Limestone Darkhorse U322 Dam’s Sire: Exar Lutton 1831 Projected EPDs: BW +3.0•WW +49•YW +94•MILK +26 EPDS: CW+43•MARB +.43•REA +.54•FAT +.003

TPR ROCKET 6Z

DOB: 2/1/11 • Sire: Churchill Rocket 938W Dam’s Sire: MHW Iceman 505 BW +2.5•WW +58•YW +86•MILK +24 SC +1.1•MARB +.31•RE +.51•CHB +$33

TPR 9245 ADVANCE 5Z

DOB: 1/27/11 • Sire: H5 7170 Advance 9245 Dam’s Sire: JAK L1 Domino P121 BW +1.2•WW +47•YW +75•MILK +26 SC +1.1•MARB +.23•RE +.19•CHB +$23

75 BULLS ANGUS HEREFORDS AND

TWO-YEAR-OLDS AND LONG-YEARLINGS

PLUS

BULLS BACKED BY: Ultrasound, Semen, and Trich Testing and Complete Herd Health Program. Efficient bulls that will work for you!

DELIVERY AVAILABLE Affordable Wintering Options

BRED HEIFERS AND FIRST-CALF HEIFER PAIRS

LUNCH SPONSOR: Central Oregon Ranch Supply

BULLS FOR CATTLEMEN BY CATTLEMEN Contact either breeder to receive a sale book, or download one from either breeder.

Registered Horned Herefords Since 1928 Alan Parks: (541) 576-2651 • Dan Parks: (541) 576-2377 59234 Fort Rock Rd., Silver Lake, OR 97638 email: dan@poplarsranch.com www.poplarsranch.com

Home of the 2010 Red Bluff Bull Sale Grand Champion Haltered Angus! BRAD AND BUCKLEY COX 1881 Brophy Road • Eagle Point, OR 97524 (541) 826-3650 • (541) 826-3249 Fax email: info@traynhamranch.com www.traynhamranch.com

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

17


ns o s r r ou the

fo k o o L

at

1:00 p.m. • September 11, 2012 • Oakdale, California www.cabullfest.com

SS DAKOTA CLETUS 6S11

MH SILVERADO 891 ET

CED

BW

WW

YW

MILK M&G

-1.0

+3.8

+49

+74

+19

+43

SC

FAT

UPS DOMINO 5271

Reg# 42924278 • DOB: 03/24/2008 • Sire: GH Rambo 279R

Reg# 42737175 • DOB: 03/06/2006 • Sire: MH Dakota 0230 REA

MRB

CED

BW

+0.8 +.037 -.06

+.16

-6.7

+6.4

WW

YW

MILK M&G

+66 +108 +23

+57

SC

FAT

Reg# 42644369 • DOB: 09/16/2005 • Sire: SR Domino 700

REA

MRB

CED

+0.3 -.019 +.99

-.12

+1.5 +1.9

BW

WW

YW

MILK M&G

+51

+73

+20

+46

SC

FAT

REA

MRB

+0.6 +.028 +.61 +.11

For the very best in Horned Hereford Genetics, Look to Schohr. Call today to get on our mailing list. Carl, Susan & Tracy (530) 846-4354 Steven & Joseph (530) 864-2855 P.O. Box 391, Gridley, California, 95948 Date New New n io Locat

1:00 p.m.

September 11, 2012 Oakdale, California

Auctioneer: Rick Machado • Lunch 12 Noon

Genoa Livestock Selling 15 Spring-Calving Horned & Polled Registered Hereford Heifers by Top Sires. Schohr Herefords selling a group of 10 Fall Bred and Fall Yearling Registered Hereford Females.

• Semen Tested Trich Tested • Anaplas Vaccinated • Calving Ease, Growth, Carcass • Free Delivery in California and adjoining states “0197” DOB: 09-03-2010 BW: 84 • 205: 538 • 365: 1025

“1011” DOB: 04-26-2011 BW: 74 • 205: 810 • 365: 1258

“0S75” DOB: 09-27-2010 BW: 50 • 205: 765 • 365: 1100

Sire: R Legend 2218

Sire: Duff Special Edition 811 Dam by: B/R New Frontier 095 Maternal Grand dam by: Bon View New Design 878

Sire: HH Advance 767G 1ET

BW+2.0 WW+53 YW+87 MK+12 RE+.41 MRB+.22

BW+3.2 WW+42 YW+70 MK+22 RE+.29 MRB+.50

BW-.4 WW+41 YW+63 MK+27 RE+.12 MRB+.14

• $50 off per bull if hauled yourself • Fully guaranteed • Ultrasounded or DNA Tested • Sight unseen purchase guarantee • Horned Bulls from Schohr & Genoa • Polled Bulls from Genoa

“0198” DOB: 09-04-2010 BW: 84 • 205: 578 • 365: 1085

“0S85” DOB: 11-06-2010 BW: 74 • 205: 715 • 365: 1040

“0S90” DOB: 11-20-2010 BW: 62 • 205: 665 • 365: 1010

Sire: R Legend 2218

Sire: SS Cody Max 8S45

Sire: UPS Domino 7222

BW+2.8 WW+54 YW+89 MK+14 RE+.36 MRB+.21

The Danekas Family • 10660 Gay Road, Wilton, CA 95693 916-849-2725 • 916-837-1432 Joe Claeys, Herdsman • 765-414-5966 Email: pheasanttrek@aol.com • Web: www.pheasanttrek.com

18

Performance Angus and Horned & Polled Hereford Bulls Sell!

BW+6.0 WW+53 YW+81 MK+24 RE+. 21 MRB+.06

BW+4.2 WW+49 YW+82 MK+22 RE+.02 MRB+.02

PO Box 391, Gridley, CA 95948 Carl, Susan & Tracy (530) 846-4354 • Steven & Joseph (530) 864-2855 www.schohrherefords.com • ricencows@schohr.com

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

www.cabullfest.com

640 Genoa Lane, Minden, NV 89423 Dwight Joos (775) 240-6030 • Bob Coker (916) 539-1987 Michelle Coker (916) 207-1142 • Office (775) 782-3336 www.genoalivestock.com • info@genoalivestock.com


GENOA LIVESTOCK Performance Hereford Genetics

POWERFUL HEREFORD GENETICS FOR 2012 Genoa Livestock’s 2011 Bull calf crop – sired by the outstanding bulls pictured here – will give you the powerful Hereford genetics you are looking for. This exceptional offering, including both Horned and Polled, is above breed average in 14 of the 15 indexes in AHA 2012 EPDs for 2011 Spring Bulls. Individually, many are in the top 10% of the breed.

THM DURANGO 4037

UPS DOMINO 3027

R PUCKSTER 4108

CJH HARLAND 408

SCHU-LAR ON TARGET 22S

CHURCHILL YANKEE

Registration #: P42460503

Registration #: 42426386

Registration #: 42536808

Registration #: P42914072

Registration #: P42669011

Registration #: 42731411

Genoa Livestock spring 2012 Bull EPDs are above breed average in 14 of 15 traits and indexes. 80 HD BULL CALVES

Calving Date

CE

BW

WW

YW

MILK

M&G

MCE

SC

FAT

REA

MARB

BMI

CEZ

BII

CHB

3/31/11

3.1

2.1

51

86

22

48

2.7

1.0

.014

0.38

0.23

22

18

18

28

0.4

3.6

44

73

17

39

0.9

0.7

.001

0.25

0.04

17

15

15

20

AHA BREED AVERAGE

VISIT OUR WEBSITE FOR INFORMATION ON THE BULLS WE WILL OFFER AT THESE UPCOMING SALES: BULLFEST – SEPT 11, 2012 OAKDALE, CA

CAL POLY – OCT 7, 2012 SAN LUIS OBISPO, CA

SHASTA BULL SALE – NOV 6, 2012 COTTONWOOD, CA

RED BLUFF BULL SALE – JAN, 2013 RED BLUFF, CA

FALLON BULL SALE – FEB, 2013 FALLON, NV

BULLS AVAILABLE FOR VIEWING AT THE RANCH ANYTIME - GIVE US A CALL! Genoa Livestock, LLC 640 Genoa Lane, Minden, NV 89423 Ofce: 775-782-3336 • Fax: 775-782-8333 info@genoalivestock.com

Bob Coker • 916-539-1987 Dwight Joos, General Manager • 775-240-6030 Michelle Coker • 916-207-1142

www.GenoaLivestock.com

19


PAYWEIGHT will highlight our 52nd ANNIVERSARY SALE March 14, 2013

at the Okanogan Livestock Market

Okanogan, Washington

WHY SUNNY OKANOGAN BULLS? After 52 years and three generations, you’ll simply get more for your buck. Our cow herd is tried and true and ran in the mountains, the same as yours. Sunny Okanogan bulls are gain and semen tested. They have the ability to increase your efficiency, growth and carcass traits. Yes, predictable Sunny Okanogan genetics to ensure a profitable future.

Reg#: 15332022 [AMF-NHF] Sire: Vermilion Payweight J847 • Dam: Basin Lucy 3829 Owned jointly with Basin Angus Ranch EPDs as of 6/12/12 BW WW +2.3 +85 RE FAT +1.16 +.021

YW +133 $W +43.16

MK +25 $F +64.43

CW +57 $G +24.30

MB +.26 $B +77.21

• Sire of the Top RFI sire group at the 2010 Midland Test Sale. • Sire of the top averaging sire group at Sunny Okanogan’s 2010 & 2011 Sales. • Adds performance in extra length in a moderate package. • Proven performance backed by the powerful Basin Lucy Cow Family.

THE BULL FOR TOMORROW IS HERE TODAY!

• SEMEN $25

• CERTIFICATE $30

CRAIG, TODD & SCOTT VEJRASKA

Box 3160 • Omak, WA 98841 Phone: (509) 826 3604 or (509) 826 2516 Craig (509) 322 2780 • Todd (509) 429 2276 • Scott (509) 429 2176 Email: sunnyok@communitynet.org

20

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

J U LY / A U G U S T 2 0 1 2 • W E S T E R N C O W M A N

63


Straight talkin ’ about : s t n e m e s a e n io t a v r e s con A useful to ol, but not everyone ’s cup of tea

LJ By Andy Rieber, W

Correspondent

Photo from Texas Parks and Wildlife Department

L

ike religion and politics, conservation easements tend to make for heated dinner conversation, particularly if you’re sitting at a table full of cattlemen. Why? Ranchers are protective of their rights and property, and no wonder. Owning land and grazing cattle in this industry aren’t just ways to make a living, and running a ranch isn’t just a job. A ranch is home. More than that, it’s a life, one intimately tied to land, family history, and a unique set of values and traditions. And perhaps most importantly, it’s an opportunity for kids and grandkids to carry those traditions and values of the past into the future.

Short of loss of life and limb, losing control of the family ranch represents the ultimate heartbreak for most producers. And because conservation easements involve the sale or donation of some of the rights on a piece of private property, just bringing up the idea for some people can be like hitting a raw nerve with a dentist’s drill. Multiply that effect several times over when government agencies or environmental groups are brought into the picture. Easements can conjure nightmare images of meddling government busy bodies and hemp-clad tree-huggers tromping across a beloved family ranch and dictating its management to the owners, reduced to tenants on

The Anderson Family—Photo from Texas Parks and Wildlife Department

their own land. For producers who see easements in this way, there’s a straightforward response to the issue: Over my dead body. But that’s not the whole story, or even half of it. Far from being a road to ruin, increasingly, many ranchers now view easements as a legitimate option to help keep ranches in the family and in agricultural production. In reflection of this trend, easements are also growing in popularity; the California Rangeland Trust, for example, has a waitlist of 120 families seeking to have easements put on their land, a difficult number to fathom if easements are putting people out of business. As of 2010, local, state and national land trusts held conservation easements on some 47 million acres of private land, an increase of 10 million acres since 2005, and 23 million since 2000, according to a census by the Land Trust Alliance. Just get talking down at the sale barn or coffee shop, and satisfied ranchers with easements are pretty easy to come by; some even claim that without the arrangement, they would have had to sell out entirely. But positive stories notwithstanding, there are persisting concerns that an easement is little more than a clever ploy to get well-intentioned Continued on page 22

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

21


Continued from page 21

ranchers separated from their rights, and ultimately, their property. Given the conflicting accounts, it’s often difficult to sift fact from rumor. But it’s worth the effort. With more and more ranchers using conservation easements as important planning and financial tools, it’s smart to have a clear view of the potential benefits that easements offer, while maintaining a realistic outlook on their limitations, and even potential dangers. So let’s get the straight talk: What is an easement? How does it benefit you? What do you give up? And most importantly, whom can you trust?

What exactly is a conservation easement?

It’s no news to ranchers that the land market has changed radically over the past 30 years. Even in the present economic downturn, developers are hungrily gobbling up scenic ranchland for conversion into subdivisions, ranchettes, hunting properties and other non-ag uses. According to a study by the American Farmland Trust, between 1982

and 2007, over 41 million acres of farm, pasture, range and forestland were converted to development uses. That’s more farms and ranches out of production than the entire landmass of Illinois and New Jersey combined. Lots of people–and not just ranchers–are increasingly worried over this permanent conversion of agricultural land, open spaces and habitat into tracts of McMansions (or “It’s worth understanding what they are and what they’re not, even if you never choose to do one.” — Chris West, executive director, Colorado Cattlemen’s Agricultural Land Trust. double-wides) sporting RVs, manicured lawns and backyard play sets. In the past several decades, conservation easements have emerged as one tool to help stem the tide of development and tap into the natural desire of ranchers to care for the land. A conservation easement is a legal agreement between a landowner and

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another party–like a land trust, conservation organization, or government agency–which puts limitations on future uses of the owner’s property. As a landowner, you have the right to use your property in many ways: to develop it, sell off parcels or resources, build structures, and generally manage it as you like. If you enter into a conservation easement, you voluntarily agree to relinquish some of those rights. For example, a landowner may enter into an easement giving up the right to subdivide his land, in order to preserve open space and maintain the ranch as a working landscape. A different easement may limit building structures like wind turbines, to preserve a view. Or an easement may call for management practices to help conserve a wetland, or other habitat. Each easement is unique. Some are quite simple in their requirements, while others combine a number of limitations together. Some easements apply to an entire ranch property, others only to specific areas. An easement also grants the trust, organization or agency that holds the easement the right to monitor the property, usually once a year, to ensure that the terms of the agreement are being met. The landowner, or “grantor,” and the holder of the easement, or “grantee,” negotiate what restrictions will be placed in the easement based on their individual needs and goals. But limitations on land use stop with the contract. When a landowner signs an easement, he only limits or restricts uses that are specified in the contract; all other rights are retained by him. An easement contract has no power to take away rights that the landowner did not explicitly sign over. Lynne Sherrod, Colorado rancher and western policy manager for the Land Trust Alliance, an umbrella organization representing land trusts in Washington, D.C., argues that property owners should view the development rights on their land the same as any other right that can be sold or transferred: that is, as an asset. “Every landowner has a bundle of rights that they can do whatever they want with that property as long as it doesn’t cause harm to another person, and one of those is the ability to sell or donate …their development rights,” explains Sherrod. “It’s the same as Continued on page 24

22

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


47th

Famoso All Breed Bull Sale October 20 M WS

Thursday, October 18th

8 a.m.

PHYSICAL PHYSIC CAL SIFTING OF B BULLS ULLS

Friday, October 19th 8 a.m. GRADING ELIGIBLE GRA ADIING OF ELIGIB BLE BULLS S 12 noon Grader Grrade er Lunch 1 p.m. SELECTION IDEAL RANGE SEL LECTION OF ID DEAL RANG GE BULL

Saturday, October 20th 10 a.m. FEMALE F EMALE SALE 12 noon LUNCH 1 p.m. 47th ANNUAL FAMOSO BULL SALE Expecting: 300 Bulls from the most reputable breeders in the nation! 800 Fancy Bred Cows and Pairs!

The bull demand is the best ever in California this year. Cow herds are increasing and the calf markets are at record highs.

Western Stockman’s Market Market Website: www.westernstockmansmarket.com Dwight Mebane (661) 399-2981

Frank Machado (805) 839-8166

Justin Mebane (661) 979-9894

Review EPDs as bulls are entered on our website.

E

at Famoso, 661-399-2981

ER N

STOCKM AN ’

LE

TH

d es, yearlings an If you need information, Including calv ! males fe t en m ce please call Debbie or Helen la p re

T ES

W

O

SA

Your Consignments Welcome!

S

ES SPECIAL SALAY EACH MOND

W

31911 Hwy 46 • McFarland, CA 93250-9709 Always in the Lead

RL

D’

SF

IRST

... T R U LY ... A L L B R

E ED

SB

UL

L

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

23


Continued from page 22

Old Legacies Meet New Frontiers at cal poly, SAN LUIS OBISPO

if somebody wanted to sell hunting rights or fishing rights on their property, or sell their water rights. It’s the general philosophy that landowners are able to do what they want with their land.”

What are the benefits of an easement? A conservation easement may be a nice way to benefit local communities, the general public, and the environment by conserving land. That’s great. But there’s obviously a cost involved for the rancher. Giving up some of the uses on your land limits your options for the future. An easement also reduces the value of your land, particularly if the easement is

56th Annual

Cal Poly Bull Test Sale Sunday, October 7 Cal Poly Beef Center

Where Only the Best Pass the Test 200+ YEARLING BULLS ON TEST $QJXV‡5HG$QJXV‡3ROOHG+HUHIRUG +RUQHG+HUHIRUG‡6LP$QJXV‡/LPRXVLQ‡/LP)OH[

THE TOP 60% OF THE BULLS ON TEST SELL AT 1 P.M. COME EARLY AND ENJOY THE TRADE SHOW ON SUNDAY! All Angus bulls have Genomic Enhanced EPDs. Offering free transporation to central locations in California and surrounding states.

Track bull test consignments online http://bulltest.calpoly.edu

ANIMAL SCIENCE DEPARTMENT SAN LUIS OBISPO, CA 93407 MICHAEL H. HALL Beef Cattle Specialist (805) 756-2685 mhall@calpoly.edu AARON LAZANOFF Beef Cattle Operations Manager (805) 801-7058 alazanof@calpoly.edu

Join us for the Cal Poly Animal Science Reunion and Open House of the new Animal Science facilities

. Social 4 to 6 p.m. . Dinner 6 p.m.

SATurday, OCTOBER 6

Tour of Facilities 1 to 4 p.m.

ENTS details or to purchase tickets: http://animalscience.calpoly.edu

“Really, an easement is the only permanent planning tool. All the rest is subject to change.” —Jaques Etchegoyhen, conservation easement consultant and principal, Legacy Land and Water. granted in perpetuity (as most are) because it limits the options of all future owners of the property. This is serious business. So why on earth would anyone choose to permanently tie up their property with an easement, even in a good cause?

Cash payment The most straightforward benefit an easement can bring to a rancher is a cash payment. Many easements are funded by groups who wish to see the land protected in one way or another. By funding an easement, they compensate a rancher for the value he loses when he gives up some uses on the property. Counties, states, the federal government and conservation organizations are some of the most common funders of easements. For many ranchers, selling an easement on their property has been key to hanging on to the ranch and passing it down through the family. For some, it has meant the difference between paying off debt and going out of business, while it has allowed others to expand and bring family members into the operation. Expansion was exactly what led Continued on page 26

24

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


Straight talk honeSt anSwerS You know the unique challenges faced by the cattle industry. So do we. After all, we’ve specialized in agricultural financing, services and programs since 1916. Strong, stable, secure — three more reasons ranchers like you have been trusting American AgCredit for more than 95 years.

A part of the Farm Credit System. Equal Opportunity Lender.

Call 800.800.4865 today or visit AgLoan.com

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

25


Continued from page 24

Lakeview, OR, producer Larry Maxwell to set up an easement on his ranch through the Oregon Rangeland Trust (ORT) using funding from Ducks Unlimited. Though the ranch had numerous house lots on it, Maxwell was reluctant to carve up the property. But with kids to partner in, he needed to generate income and expand the ranch. Selling the easement kept the ranch intact, but helped to realize the development value, too. “We’d be way ahead financially to

sell those house lots, but we’d just as soon keep it as a working ranch,” said Maxwell. “This is one of the ways to do it, and still generate income... It helped me in the purchase of another ranch, is what it did.” Maxwell’s easement prevents him from subdividing or developing his land, something he had no intention of doing anyway. He is also expected to manage some wetlands on the property so they maintain “an upward trend,” a requirement Maxwell says has been easy to meet, since irrigating and grazing are the best tools for keeping the wetlands

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healthy. “We’re all kind of on the same page,” say Maxwell of his partners at ORT and Ducks Unlimited. “Once a year, they come around to make sure you haven’t sold off any house lots” and to monitor the wetlands. “That’s basically it,” says Maxwell. “We like our partners.”

Tax incentives/estate planning Easements also provide significant tax benefits. In particular, by devaluing a ranch property, an easement can substantially reduce the estate tax that must be paid when the ranch is inherited. This can make the difference between heirs having to sell the ranch to pay the government or being able to keep it in the family. Jim Bill Anderson, a cow/calf operator from Canadian, TX, made the decision to donate an easement on his property to the Texas Agricultural Land Trust after witnessing the dissolution of a friend’s ranch upon his death. “After that was said and done, after a lifetime of work… it all went to the IRS,” Anderson recalls. “That made an impression on me. …I sure didn’t think much of that.” Donated easements like Anderson’s also come with additional tax benefits because they are considered a charitable donation by the IRS. The benefit is typically a one-time federal income tax deduction, but depending on the state you are in and other factors, there may be additional income and property tax deductions, as well.

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Obviously, cash payments and tax breaks are important incentives for doing an easement. But according to many ranchers who have gone through the process of putting one together, an easement can’t just be seen as a cash cow if it’s expected to work. You’ve got to look beyond the monetary side of things to make one successful. Anderson calls this the “philosophical” side of easements; it’s got to have value to you not just in terms of dollars and cents, but because the easement fits with your ideas about how the land should be managed on a permanent basis. Preserving that, in itself, must have value. Continued on page 28

26

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


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“I have an affection for the land, always have,” explains Anderson. “I didn’t want to see it chopped up and sold off two generations from now.” Clearly, not every rancher will have the same future vision for their land. For some ranchers, it will always be more important to keep financial options open than to guarantee that the land stays undeveloped. That, says Anderson, is fine. But he strongly cautions

anyone against doing an easement if they are only in it for monetary gain. “If all you want is money out of your ranch, then you don’t want an easement,” says Anderson. “If you want to maintain a lifestyle, an easement may be the way to go.” Sherrod of the Land Trust Alliance concurs. “After the money goes away, the easement stays, and you and your family still need to believe that this was the right thing to do,” Sherrod

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

points out. “If you don’t feel it in your heart, then you shouldn’t even be contemplating doing a conservation easement.”

Who are you doing business with? By granting an easement, you sign a contract with another party that can permanently affect how you and your heirs use your property. It’s a binding business agreement, so before you ever consider signing on the dotted line, due diligence is essential. You need to ask yourself: Who will be holding the easement? Each easement holder–whether it’s a land trust, conservation organization, or government agency–has a mission it is trying to accomplish. Are their goals for the land the same as yours? Don’t assume that they are, regardless of what is said informally. What really matters, in the end, are the restrictions stated in the easement itself. If you and your attorney determine that these requirements don’t work for your ranch over the long term, don’t sign. Several types of entities can “hold” easements, which means that they sign easements with landowners, and then monitor and administer them. For example, land trusts are non-profit organizations dedicated to land conservation through holding and sometimes funding easements. Some land trusts are national, while others are community-based. And each one has its own mission and goals which will be reflected in the easements it offers. “With money comes strings. …[I]f somebody is allowing you to have a big chunk of money to purchase an easement, then probably they have certain requirements they would like to see happen.” — Lynne Sherrod, western policy manager for the Land Trust Alliance A unique category of land trust that has emerged over the past 10 to 15 years is the agricultural or rangeland trust. These trusts were created by state cattlemen’s associations specifically to preserve ranching and agricultural land uses, and to meet the needs and goals of ranchers who want Continued on page 30


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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

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Continued from page 28

to utilize easements on their land. Unlike other land trusts, these trusts are run by ranchers to serve ranchers’ interests exclusively. Though they don’t have money to fund easements, they do provide an invaluable service by helping to source funding and by holding and administering easements for ranchers. “When people come to the Rangeland Trust, they want [us] to assist them with the process, help obtain the funding, and ultimately hold the easement and do the monitoring of that easement,” explains Scott Stone, rancher and chairman of the California Rangeland Trust Board of Directors. “I can say with 100 percent clarity that the [California] Rangeland Trust has the best interests of cattlemen in mind,” continues Stone. “You’re not going to find somebody from Defenders of Wildlife on our board. They have to be working ranchers.” Currently, California, Oregon/ Washington, Montana, Colorado, Texas, Kansas and Wyoming have rangeland trusts.

Fall replacement heifers—Photo from Texas Parks and Wildlife Department

Other entities like conservation groups (The Nature Conservancy is a prime example) and government agencies (like the Bureau of Land Management, or state fish and wildlife departments) also hold and fund easements. While some ranchers have had positive experiences granting easements to these entities directly, it’s essential to realize that their mission may be to preserve habitat, or certain species or open space, as opposed to preserv-

ing ranching as an ongoing land use. By contrast, explains Stone, “[i] f you have an easement with the Rangeland Trust, it is a grazing easement. There are additional benefits for habitat and watershed protection and open space and all those things, but it is first and foremost a grazing easement. It is meant to utilize the ranch for that purpose, and to keep these working families on the land.” Most of the easement horror stories Continued on page 32

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


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31


Continued from page 30

out there, and there are a few, are the result of landowners rushing into an agreement without the necessary caution and legal expertise, particularly when dealing with an entity having non ag-related goals. ORT Executive Director Frank O’Leary steered one rancher away from signing a habitat easement with a government agency that would have prioritized wildlife over cattle. “There was a provision in the ease-

ment that stated if …the cattle were infringing on the forage for the deer, he would have to remove the cattle from the range,” said O’Leary. “The landowner hadn’t reviewed the document closely, and had no idea that provision was [there].” The moral of this story, according to Sherrod, is obvious. “Landowners should never, ever consider contemplating a conservation easement unless they have legal representation that understands the power of this tool and the long-term ramifications,” Sherrod warns. “I cannot

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

stress that strongly enough.” Fifteen years in the conservation easement business has given Chris West, executive director of the Colorado Cattlemen’s Agricultural Land Trust, a healthy respect for sizing up the mission of potential easement funders. “The people who get into the most trouble are people who rush into it and don’t take the time to think things through,” West emphasizes. “A wildlife organization or wildlife agency is going to have a much different set of goals, and that set of goals is going to come up in their conservation easement.” Sometimes, according to West, those requirements are simply not feasible for ranchers. “There’s a lot of potential funding out there that comes from wildlife-oriented sources, and there’s some that we as a rangeland trust just won’t touch.” The point here is not that ranchers should never grant easements to government agencies and conservation groups directly. Many have, and successfully. But when entering into an easement without the help a cattlemen’s rangeland trust, the organization you are working with is going to be looking out for their own interests, not yours. They will also probably not understand what kind of restrictions work well for ranchers, and which are not feasible. “The problem with going direct to the funders,” explains Stone, “and I’m not slapping the funders because they’re there to work with us, but, who’s looking out for the rancher if you’re just dealing direct?” Regardless of what organization you are working with, you (and your attorney) have got to make sure any contract you sign gives you the flexibility and options you need to keep ranching profitably on your land. When working without the help of a cattlemen’s rangeland trust, there’s even more reason to be vigilant.

Where to start

What’s your first move if you want to determine if an easement is right for your family? First, take the time to find a land trust that is philosophically aligned with what you want to do with your property. A cattlemen’s rangeland trust is the obvious place to start, if you have one in your state. If you don’t, the Land Trust Alliance represents over 1,700 land trusts nationally, and can give Continued on page 34


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BEEFMASTER The Commercial Cattlemen’s Choice August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

33


Continued from page 32

you suggestions. Talk to a number of them, look at their basic easement template, and visit with ranchers who have done easements with them. “When I decided I wanted to do this, I [shopped around] a lot. You don’t want to do this casually,” explains Jim Bill Anderson. “I really researched it.” “This is not a silver bullet. It’s not a perfect thing. It’s not for everybody…” — Lynne Sherrod, western policy manager for Land Trust Alliance. Next, make sure you have the time and resources to put together an easement properly. Like many longterm legal arrangements, easements involve consulting expenses and can take a year or more to put together. Specifically, talk with different land trusts to find out what costs are involved and whether funders will be able to cover some of them for you. A landowner should also “run the numbers” with an accountant famil-

Jim Bill Anderson—Photo from Texas Parks and Wildlife Department

iar with all current tax laws applying to easements to determine whether the economic benefits of doing an easement outweigh the costs. Don’t automatically assume that they do. “No matter what easement it is, it always costs more and takes longer than you originally expected,” remarks Stone. Last, examine your motives. If you are selling the easement, as opposed

to donating it, the income may be very important. But it shouldn’t be your only motivation. Behind any monetary benefits, there should be a permanent vision for the use of your property. In other words, you need to have a “philosophical” understanding, as Anderson puts it, that by conserving the land, you’re not just getting a payment or tax benefits, you’re doing something right.

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

J U LY / A U G U S T 2 0 1 2 • W E S T PHOTO BY JONATHON ZANDER E R N C OW M A N 2 1


Profitability potential with crossbre eding

LJ Correspondent W , gh u o H b o B r. D By

F

irst let me say that there is that crossbred cows producing comroom in the industry for all posite-sired calves provide a 23.3 types of commercial breed- percent improvement in pounds of ing systems, from straightbreed- weaned calf per cow exposed over ing to the most complicated cross- straightbred cows and calves! With breeding programs. However, with the skyrocketing cost of land, feed Angus having over half the mar- inputs, and inheritance taxes—it’s ket share for seedstock bulls in not going unnoticed. Heterosis is the commercial industry, straight- about the only input left in beef breeding of Angus has become ever production that’s still free.” more prevalent. This trend comes Thirty years of science and real with good reason; Angus combines world experience has shown that growth with calving ease, high crossbreeding increases weaning marbling and high milk. But with weights due to heterosis. Heteroall it has going for it, Angus, like sis refers to the superiority of the any breed, has areas which can be crossbred animal relative to the improved upon. With one cross of average of its straightbred parents. another breed, those weaknesses The big effects of heterosis are on can instantly go away. A question lowly-heritable traits like fertility raised in recent years is what cross- and longevity, which are some of the breeding’s value is and whether it most economically relevant traits is worth the effort. Crossbreeding’s possible. value comes down to three things: USDA research has indicated that heterosis, breed complea breed like Red Angus, mentarity, and the value which released a reproof the seedstock inputs. ductive sire summary in For Dave Nichols, of 2002, has very good reproNichols Farms, Bridgeduction, but breeds which port, IA, the answer to the chased more terminal types of indexes are slidquestion of crossbreeding in reproduction. Thereing’s value is clear. “The U.S. Meat Animal Re- Dave Nichols, of Nichols fore, sensible crossbreeding and heterosis would search Center has proven Farms, Bridgeport, IA

greatly benefit these latter breeds. Dr. Bob Weaber, Extension beef cattle specialist at Kansas State, echoes the differences between straightbreeding and crossbreeding . “The crux of straightbreeding is evaluating if Dr. Bob Weaber, Extension beef cattle specialist the benefits (val- at Kansas State ue created) by increasing the percentage of a breed offset the decrease in production efficiency associated with decreasing heterosis, especially the maternal heterosis of the cow herd.” Breed complementarity is when breeds off-set each other’s strengths and weaknesses. This is a powerful tool and 100 percent heritable. Examples would be feedlot and carcass traits where Continental and British breeds complement each other in terms of marbling and Yield Grade. Dan Dorn of Decatur County Feed Yard put this into perspective. “When asked about crossbreds versus straightbreds, you need to look first at the profit drivers! The profit Continued on page 38

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

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Continued from page 37

drivers are feed conversion, carcass or grid merit, and carcass weight. You can capture one or the other of the profit drivers using straightbred genetics. But to capture all of the profit drivers at one time, cow/ calf producers need to be using crossbred genetics or a crossbreeding system that allows for maximum breed complementarity and heterosis.” Another typiDan Dorn of Decatur County Feed Yard cal example of breed complementarity is environmental adaptability in a hot, humid climate where a Bos Indicus-influenced breed is bred to a Bos Taurus breed. Something that has risen recently is the rapid increase in Hereford bull market share. Many attribute this to breed complementarity and Hereford’s adaptability to harsh envi-

38

Simmental/Angus or Red Angus

ronments seen with this multi-year drought. Although many people think breeds no longer have the ability to contribute the way they once did in terms of breed complementarity because they now are much more similar in terms of frame, horned/ polled status and color, from the

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

across-breed expected progeny differences (EPDs) tables, USDA research, and recent observation, it is obvious that all these breeds can significantly contribute to the commercial beef industry in their unique ways. Nichols has the same Continued on page 41


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1-800-646-6636


Continued from page 38

sentiment: “To believe what anyone (including me) says or publishes will change which breeds or combinations thereof thrive in the commercial cattle market place is folly. Astute businessmen/women will increase utilization of heterosis to get maximum profit on their cattle, on their farms, on their ranches, and in their feedlots.” With all this in mind, why are more and more people straightbreeding? The consensus seems to be breeders striving for ease of seedstock input, ease of breeding system, uniformity and concentration on outputs rather than inputs. Buying from one trusted producer is certainly a reason some straightbreed. However, more and more seedstock producers are seeing the need to raise more than one breed in order to be a full service seedstock supplier. Some operations have tried to make their breeding program and purebred breed try to be all things to all people. Others have stayed true to what the utility of their breed is while making sure any breed weakness is not so severe as to knock a crossbreeding system off the track. Still more have been worried about quantity and quality of the crossbreeding seedstock input. Heterosis and breed complementarity all go out the window if you introduce low quality seedstock into a breeding program. However, high quality seedstock exist in every breed, and it is said that there is as much variation within a breed as there is between breeds. The Simmental and Gelbvieh associations now register between 40 to 50 percent of their herd book as hybrids, so they are certainly available in quantity. Their strength was also shown in the last Western Livestock Journal bull survey where hybrid market share with commercial producers had jumped to third place above perennial power houses like Red Angus and Charolais. Quality hybrid seedstock are also available in quantity at individual farms and ranches, according to Nichols. “We sold over 400 hybrid and composite bulls in our private treaty sales this spring. They were the first to sell and averaged a bit higher than our 400 purebred bulls. Our hybrid Continued on page 42

CHERRY GLEN

Beefmasters

Breeding for Quality and Performance Since 1989 John & Sue Pierson

P.O. Box 6897, Vacaville, CA 95696 • Phone/Fax 707-448-9208 • piersons@castles.com

Your best choice for cross-breeding! Consigning to: WSBBA Bull & Female Sale Tulare County Stockyard Dinuba, CA – 9/29/12 Collier Farms Performance Bull Sale Brenham, TX – 11/17/12 Live Oak BBA Bull Sale Three Rivers, TX - 1/5/13 Texoma Beefmaster Bull Sale Overbrook, OK – 3/23/13

8-month-old Beefmaster sired Angus x calf

Second Annual

Beefmaster

Bull & Female Fall Sale A BBU APPROVED SALE SponSored by

OFFICIAL

BBU Approved Sale

Western states Beefmaster Breeders association

Saturday, September 29 Tulare County Stockyard, Dinuba, CA

Commercial Female Sale at 11 a.m. Featuring Beefmaster and Beefmaster-Influence Females Lunch follows the Commercial Sale and Immediately following Lunch Beefmaster Purebred Bull & Female Sale (females sell before bulls) – Immediately following Beefmaster Sale –

Annual Dinuba Bull and Horse Sale saLe information:

www.wsbba.org • www.tularecountystockyard.com

Les Chappel: 559 336-2485 John Evangelo: 559 924-2904 John Pierson: 707 718-4199

Jon & Summer Dolieslager: 559 591-0884

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

41


Continued from page 41

bulls were F-1s out of registered sires and dams. Our three-breed composites had registered purebred grand-sires. All Nichols bulls have complete performance records, EPDs, ultrasound data, and DNA profiles.” Another way to get top quality bulls and implement a complex crossbreeding system without the fencing and management that usually keeps it in the domain of large producers is to use A.I. The bull studs carry the

best bulls in the country for a wide variety of breeds, and with today’s heat synchronization technology, even a producer with limited time resources can do timed A.I. with amazingly good results. Generally, these operations keep a minimum, usually one clean-up bull, which is often a hybrid Angus or Red Angus, that can be bred to heifers or cows. Ben Lohmann, ABS sire acquisitions manager, sums up the opportunity. “Many producers have long overlooked the advantages of crossbreeding with the assumption that it was

WHILE YOU’VE BEEN AT WORK ON THE RANCH CCA has been working to keep it that way...

This year, California legislators introduced over 3,000 pieces of legislation. Including bills that would have:

Prohibited livestock sales at county fairs. Restricted ranchers’ ability to AI and vaccinate without a veterinarian present. Reinstated the California Estate tax.

CCA defeated these proposals and over a dozen others that would have affected YOUR bottomline! Since 1917, CCA has been Property Rights Protection Trade YOUR voice in Animal Health Transportation Estate Tax Reform Marketing Sacramento on these issues and many more: Environmental Policies Tax Relief Plan a weekend getaway to attend our 2012 Convention! Nov. 16-18 in Santa Clara!

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Join Today! (916) 444-0845 www.calcattlemen.org 42

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

only for ranches with great land and management resources. AI, now more than ever, allows everyone the opportunity to capitalize on the Ben Lohmann, ABS sire use of heterosis. acquisitions manager With the continued high cost of bulls, producers can now AI to the absolute best sires of a complementary breed at a fraction of the cost. By crossbreeding a set of synchronized cows, a producer can dramatically increase both pay weight and bottom line, with little affect on pasture management.” Complexity of crossbreeding systems has been a valid reason for straightbreeding for years. Although some heterosis is lost when using hybrid bulls compared to the full-blown crossbreeding systems that maximize heterosis, the ease of management is tremendous as they can be run like a straightbreeding program. Weaber agrees. “Don’t let current talk about the perceived complexity of crossbreeding systems discourage you. Several crossbreeding systems, like a terminal sire on F1 cows, is a very simple and effective system. Using hybrid bulls is another system that offers the simplicity of straightbreeding but with heterosis and breed complementarity added. Both of these systems can be easily implemented without multiple breeding pastures or other management required in rotational crossbreeding systems, making them attractive to producers of any size.” All major breed associations that register hybrid cattle calculate acrossbreed EPDs on them just like the purebreds so they can compare apple to apples. This means they remove any extra performance a hybrid has due to heterosis when it goes into a breed associations’ genetic evaluation to get EPDs. Sure, a hybrid bull will outperform a straight purebred bull in the pasture, but their EPDs are calculated and expressed on a purebred basis because there is no way of knowing what kind of cows the bull will be breeding, from hybrid cows of the same breed make-up (half the heterosis) to hybrid cows with unrelated breed make-up (all the heterosis). Continued on page 44


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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

43


Continued from page 42

The Difference is Black and White. RITCHEY’s dual-colored, engravable tags allow you to create permanent numbers that will last a lifetime.

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SEND US YOUR BULLS, STEERS AND HEIFERS... WE ARE A GROW YARD AND FULL SERVICE FEEDLOT DEDICATED TO MEETING YOUR NEEDS! Our team looks forward to working with seedstock and commercial producers from around the West bringing cattle to our facility near Gustine, Calif. We offer you and your cattle the best of both worlds - great care and customer service.

Some wonder if the EPD analysis is as good, though. Well, big names like Angus Genetic, Inc. and others are running the genetic analysis. The American Simmental Association (ASA) was one of the first to run acrossbreed EPDs. “The ASA evaluation includes over 9 million head in its data base,” said Weaber. “While not as ‘large’ as AAA [American Angus Association] evaluation, it certainly provides highly accurate and useful genetic predictors for many traits of economic importance, including calving ease, heifer pregnancy and stayability in addition to measures for growth and carcass merit.” ASA is also incorporating genomics into its genetic evaluation. Surprisingly, Dr. Wade Schafer of ASA reports, “Though quite effective on purebred Simmental, ASA’s 50K DNA test has even more predictive value on SimAngus hybrids.” Other breeds producing hybrids are soon to follow as early as this fall with genomically enhanced EPDs. It appears that hybrid EPDs can be taken to the bank every bit as much as purebred EPDs. Uniformity used to be a very valid reason for not crossbreeding. In the past, breeds varied widely in frame, color and growth pattern, so crossbreeding could result in wild swings in type and kind. This has changed greatly. Basically, all of Continued on page 46

GUSTINE CALIFORNIA

Serving ing Commercial Cattlemen and Seedstock Producers Produ

LLEO LE E O & MICH M MICHEL MICHELLE I C H EL E LLLE L E CCOZZITORTO LE O Z Z I T O RTO OZZIT RTO

Office (209) 620-9205 Cell (209) 620-9204 Fax x (209) (209 (2 09) 09 9) 8 856-3113 85 566-31 3113 31 13 Email Email Emai iill lo lone loneoakf loneoakfeeders@yahoo.com on neoa eo oakfee o oa kfee k feeder eeed ders ders@yahoo d errs@ s@ @y @ya yahoo hoo o.co c co F1 Simmental/Angus cow with maternal heterosis

44

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


TAKE ADVANTAGE OF HETEROSIS WITH A PROVEN BULL PROGRAM

THREE WAYS TO INCREASE YOUR PROFITS For over 41 years you've known is for our outstanding Hereford cattle. We have also been producing top quality Angus and Charolais cattle for over 16 years. All our breeding programs are built on the top genetics in their respective breeds. We provide proven crossbreeding components that will add pounds to your calves and work in your environment. For maternal traits, beef quality, muscle and durability, we have the options. We use these cattle in our own commercial program and finish them in the feedlot. We know what they will do for you.

SAV BISMARK 5682

Selling: 100 Angus Bulls Othre sires include UpWard, Thunder, GridIron, TC Rito 696, & X Factor.

KING CHAROLAIS

Proven Crossbreeding Components New Mexico’s Largest 1 Iron Seedstock Producer LT EASY BLEND 5125

Selling: 100 Charolais Bulls Other sires include Oakdale Duke, LT Easy Pro 3151, LT Mighty Blend 6297, LT Bravo Star 5151, & Western Edge.

KING HEREFORD

Bill & Peggy King 505-832-4448 505-832-4330 • 505-220-9909

P.O. Box 564 • Stanley, NM 87056 Located 40 miles east of Albuquerque.

C HARLAND TOO ET

Selling: 150 Hereford Bulls Other sires include Harland Too, C Maui Jim, C Pure Gold 4215, C New Era ET, & CL 1 Domino 6136S.

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

45


Top Angus sires are used in A.I. and natural service in crossbreeding

Gelbvieh/Angus or Red Angus

Continued from page 44

www.gatewaysimmental.com The standard in the Lucky Cross Program... Whichever direction you are going, they cross.

They have been PROVEN to do it all! s02/$5#%'//$#/73s'//$0%2&/2-!.#% s'//$#!2#!33%3s'//$$%-!.$ Homozygous black, homozygous polled s'REATFORUSEONHEIFERS s!DDSLENGTH MARBLINGANDMUSCLEIMPROVESSTRUCTURE

#% "7 77 97 -#% -- -77 $/# 21 -2.0 54 98 16 28 55 27.8 !3! 3-!. 1 5 25 1 13 30 1 Sire: GAR US 9' -ARB "& 2%! !0) 4) Premium Beef Carcass -.25 .63 -.03 .80 175 79 Dam: GW Miss Lucky 2ANK 23 5 5 1 4 Charm 410P (GW Lucky Charm 665K) %0$S 2ANK

GW Premium Beef 021TS

Homozygous black, homozygous polled s3IRESCALVESTHATARETHICK WIDEBASEDSTYLISHH #% "7 77 97 -#% -- -77 $/# !3! !3! !3!  16 -3.0 63 101 16 24 56 18.5 3-!. 5 1 30 10 1 35 25 13 Sire: GAR Predestined 9' -ARB "& 2%! !0) 4) Dam: GW Miss Lucky Carcass -.25 .88 -.01 .93 180 94 Strike 363 (GW Lucky 2ANK 23 1 1 1 1 Strike 147G) %0$S 2ANK

GW Predestined 701T

GW Lucky Charm 665K

Homozygous black, heterozygous polled s/URFIRSTFOUNDATION,UCKY#ROSSSIRE s(ISPROGENYDOITALLnFROMCONCEPTIONTHROUGH CONSUMPTION #% "7 77 97 -#% -- -77 $/# !3! 3-$3 %0$S 20 -0.6 62 101 13 27 58 30.4 2ANK 4! 1 17 33 20 4 13 15 1 Sire: Lchmn Lucky 9' -ARB "& 2%! !0) 4) Buck 7048C Carcass -.30 .40 -.07 .65 147 77 Dam: GW Miss 600U 2ANK 10 25 4 18 8 7 508C (600U)

Join us for our 33rd Annual Breeding Value Bull Sale on February 4, 2013! Sale Managed by Eberspacher Enterprises Inc. 507-532-6694 or 612-805-7405 Sale information online soon at www.ebersale.com Marketing Partner: AGR Marty Ropp 406-581-7835

46

Jim & Tom Butcher 2109 Joyland Rd, Lower Spring Creek Lewistown, MT 59457 Jim 406-538-9695 or 406-350-0467 4OM  s&AX   E-mail: butcher@3riversdbs.net www.gatewaysimmental.com

August 20, 2012 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two

todayâ&#x20AC;&#x2122;s cattle are red or black with the exception of Charolais. Frame has also been much more equalized across the breeds, and you can even find among many of the major herds the British breeds being bigger than the Continental cattle. Acrossbreed conversions are now available from USDA, so anyone can check breeds or a particular animal across the breeds. With there being as much variation within as between breeds, uniformity is no longer necessarily a between-breed problem in crossbreeding. People are especially wary of the uniformity of hybrid progeny. Not to worry, according to Weaber. â&#x20AC;&#x153;While a mismanaged or poorly constructed crossbreeding system can induce variation in the appearance of different groups of calves, a well-defined and managed system produces similar levels of variation as observed in a straightbred system. In fact, U.S.Meat Animal Research Center data demonstrates that a crossbreeding system that mates F1 bulls to F1 cows produces the same variation as a straightbred system but gets the benefit of heterosis and breed complementarity. This system is as simple to implement as straightbreeding.â&#x20AC;? The final concept is producersâ&#x20AC;&#x2122; fixation on pounds and end product instead of a balanced approach that also weighs expenses. Weaber thinks people should consider this from the onset. â&#x20AC;&#x153;When considering breeding systems, commercial producers should take time to consider the trade-offs between straightbreeding and crossbreeding systems. Often, producers focus on the trait improveContinued on page 52


HERITAGE ANGUS BULLS Right for the Times, Generation after Generation BW +.9

WW +68

YW

+104

MILK +24

CW

I+18

REA

I+.62

MARB I+.21

$B

+62.11

‘1002’ 1/18/2011 Five Star Pacific 6008 x Mytty In Focus BW

+I.2

WW +53

YW

+103

MILK +25

CW

+39

REA +58

MARB +.58

$B

+77.35

‘1014’ 1/1/2011 Sitz Upward 307R x BR Midland

Join BW WW Us On YW Our MILK New CW Sale REA Date: MARB 9/9/12 $B 1PM ‘1028’ 4/6/2011 Connealy Right Answer x TC Total 410 +1.5 +64

+116 +28

I+34

I+.59 I+.45

+75.91

Contact either breeder regarding results of Pfizer HD 50K testing on these sale bulls and more!

SELLING 75 HEAD OF REGISTERED ANGUS

AT THE RANCH, WILTON, CA (916) 803-3113 • www.m3cattlemarketing.com mmacfarlane@wlidblue.net

WW +56

YW

+95

MILK +26

CW

+29

REA +63

MARB +.16

$B

+56.5

‘1010’ 1/5/2011 SAV Brilliance 8077 x BCC Bushwacker 41-93

We utilize the most proven and productive genetics in the Angus industry to produce bulls that excel in calving ease, performance, maternal, carcass and balance.

SPRING AND FALL YEARLINGS AUCTIONEER: JOHN RODGERS Matt Macfarlane

BW

+1.1

In addition, our bulls have the functional traits that impact your bottom line—sound feet and legs, udder quality and mothering ability of daughters, as well as fleshing ability, disposition and longevity.

THESE CATTLE ARE DEFINITELY RIGHT FOR THE TIMES!

Come Help Celebrate Our 101 st Year in the Angus Business!

R

BAR R CRAIG AND J.J. REINHARDT

916-712-3696 • BAR6925@SBCGLOBAL.NET 6925 BISBEE DR. • SLOUGHHOUSE, CA 95683

5

HILARIO GOMEZ, RANCH OPERATIONS (916) 804-8136 SE HABLA ESPANOL

FIVE STAR LAND & LIVESTOCK MARK & ABBIE NELSON

RYAN, HAILEY & JHETT NELSON

12211 Pear Lane, (916) 804-6861 Cell Wilton, California 95693 (916) 687-7108 Home, (916) 804-4990 Cell Abigail5Star@aol.com www.fivestarlandandlivestock.com

47


Vintage Angus Ranch NEW DATE THURSDAY, SEPTEMBER 6th • NOON •

$W +30.74 $F +48.71

AT THE RANCH IN LA GRANGE, CA All Bulls are 100% DNA Tested with Pfizer HD50K

$G +42.79

V A R Complete 1226 • Calved 3/14/11

$B

Reg. No. 16917010

EPD Acc. DNA %

BW +2.9 .29 BW 65

WW 4

WW +62 .27 YW 4

YW +111 .31 DMI 99

+88.76

Milk +33 .20 RFI 95

Milk 10

MARB +.68 .30 CW 4

RE Fat +1.12 .27 -.003 .28

FAT 7

REA 1

The Angus breed is on the road to more accurate progress through the use of HD50K marker assisted EPDs. Vintage Angus Ranch is providing you, the customer, with EPDs that are the result of years of performance testing and when verified with HD50K DNA marker information, you receive the most valuable data you have ever had to make your most profitable genetic decision.

Marb 16

$W +41.95 $F +50.14 $G +43.15

V A R New Day 1111 Calved 1/31/11

$B

Reg. No. 16916944

Ultimate Angus Genetics Jim Coleman, Owner Doug Worthington, Manager Brad Worthington, Operations Manager Jason Judge, Marketing: 209-988-3722 2702 Scenic Bend—Modesto, CA 95355 Office 209-521-0537 CALL,WRITE, EMAIL OR VISIT US ONLINE TODAY TO RECEIVE YOUR VAR SALE BOOK WWW.VINTAGEANGUSRANCH.COM vintageangus@earthlink.net

48

EPD Acc. DNA %

BW +1.3 .28 BW 18

WW 7

WW +64 .27 YW 8

YW +113 .31 DMI 94

Milk +30 .17

RFI 98

Milk 7

+86.32

MARB +.69 .30 CW 13

RE Fat +1.06 .27 -.002 .27

FAT 19

REA 3

Marb 38

FIRST BREEDING SEASON GUARANTEE 5% VOLUME DISCOUNT OF 6 OR MORE BULLS 5% REPEAT BUYERS DISCOUNT TESTED PI-NEGATIVE FOR BVD FREE DELIVERY OR $50 OFF EACH BULL PICKED UP SALE DAY

Don’t Settle For Less Genetic Information

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


19th Annual Carcass Maker Bull Sale

$W $W +36.77 +36.89 $F +51.24 $F $G +51.24 +34.83 $B $G Reg. No. 16893910 +80.27 +35.02 BW WW YW Milk MARB RE Fat +.9 .32V A +59 +112 .33 1006 +40 Calved .24 +.501/1/11 .32 +.84 .29 -.001 R.30Upward $B .30 BW WW YWReg. DMINo.RFI Milk CW FAT REA Marb +80.46 16893910 5 9 5 95 92 1 17 34 9 32 EPD BW WW YW Milk MARB RE Fat Acc +.9 .32 +59 .30 +112 .33 +40 .24 +.51 .32 +.83 .29 -.001 .30

V A R Upward 1006 • Calved 1/1/11

EPD Acc DNA %

DNA BW WW YW DMI RFI Milk % 5 9 5 95 92 1

CW 17

FAT 34

REA Marb 9 32

SELLING 170 ANGUS BULLS SEPTEMBER 6TH 170 SELLING ANGUS BULLS —————— SEPTEMBER 6TH

MORE THAN —————— 50% OF THE OFFERING HAS MORE A BW THAN EPD 50% OF THE UNDER 2 OFFERING HAS POUNDS A BW EPD UNDER 2

—————— POUNDS

$W $W +32.79 +33.20 $F +49.43 $F $G +48.26 +40.49 $G $B Reg. No. 16917005 +88.53 +40.66 EPD BW WW YW Milk MARB RE Fat Acc +2.5 .29 +63 .27 +112 .31 +33 .20 +.62 .30 +1.11 .27 V A R Complete 1209 Calved 3/8/11 $B -.003 .28 DNA BW WW YW DMI RFI Milk CW FAT REA Marb +88.47 Reg. No. 16917005 % 48 4 3 100 97 10 2 7 1 21 EPD BW WW YW Milk MARB RE Fat Acc +2.4 .29 +63 .27 +111 .31 +32 .20 +.63 .30 +1.10 .27 -.003 .28

V A R Complete 1209 • Calved 3/8/11

DNA BW WW YW DMI RFI Milk % 48 4 3 100 97 10

CW 2

FAT 7

REA Marb 1 21

140 BULLS —————— HAVE A $B IN 140TOP BULLS THE 10% HAVE $B IN OF THEABREED $W $W +39.41 +39.28 $F $F +50.14 +50.14 $G +32.98 $G $B +32.88 Reg. No. 16893997 +77.32 BW V A WW YW 1119 MilkCalved MARB Fat R Upward 2/2/11 RE $B +1.4 .41 +64 .33 +113 .33 +40 .24 +.53 .32 +.72 .29 +.014 .30 +77.22 Reg. No.RFI 16893997 BW WW YW DMI Milk CW FAT REA Marb EPD BW WW 99 YW 84 Milk MARB 5 13 16 1 22 60 RE 34 Fat 29 Acc +1.4 .41 +64 .33 +113 .33 +40 .24 +.53 .32 +.71 .29 +.014 .30

V A R Upward 1119 • Calved 2/2/11

EPD Acc DNA %

DNA BW WW YW DMI RFI Milk % 5 13 16 99 84 1

CW 22

FAT 60

REA Marb 34 29

$W $W +35.35 +35.40 $F $F +50.53 +49.36 $G $G +34.14 +34.80 $B Reg. No. 16916903 +78.31 $B R War YW Party 1147 EPD BW V AWW Milk Calved MARB 2/16/11 RE Fat Acc +2.3 .29 +58 .28 Reg. +110No. .31 16916903 +31 .15 +.64 .28 +.76 .26 +79.22 +.036 .26 DNA EPD BW BW WW YW DMI RFI Milk CW FAT REA Marb WW YW Milk MARB RE Fat % 63 +2.210.29 +58 4 .28 100 8 +.665 .28 +.77 85 21 Acc +111 .3198 +32 .15 .267 +.036 .26

V A R War Party 1147 • Calved 2/16/11

DNA BW WW YW DMI RFI Milk %

63

10

4

100

98

8

CW

FAT

5

85

REA Marb 7

21

THE TOP 10% OF THE BREED —————— ——————

105 BULLS HAVE A $W IN 105 BULLS THE TOP 10% HAVE A $W IN THE TOP 10% OF THE BREED OF THE BREED

—————— ——————

FOR PFIZER FOR PFIZER HD50K HD50K PERCENTILE PERCENTILE RANKINGS, A RANKINGS, A LOWER VALUE LOWER VALUE INDICATES A INDICATES A MORE MORE FAVORABLE FAVORABLE RANKING. RANKING. PERCENTILE PERCENTILE RANKINGS ARE RANKINGS ARE FROM TOP FROM TOP 1% TO 100% 1% TO 100%

$W $W +32.58 +32.70 $F $F +42.46 +42.46 $G +41.79 $G $B +41.85 Reg. No. 16893923 +79.48 EPD V BW WW Answer YW 1023 Milk MARB A R Right Calved 1/4/11 RE $B Fat Acc +2.2 .38 +58 .31 +104 .31 +28 .19 +.90 .27 +.43 .24 -.002 .25 +79.55 Reg. No. 16893923 DNA BW WW YW DMI RFI Milk CW FAT REA Marb YW Milk RE % EPD 45 BW 4 WW28 33 3 46MARB 13 57 13Fat 11 Acc +2.2 .38 +58 .31 +104 .31 +28 .19 +.90 .27 +.43 .24 -.003 .25

V A R Right Answer 1023 • Calved 1/4/11

DNA BW WW YW DMI RFI Milk % 45 4 28 33 3 46

CW 13

FAT 57

REA Marb 13 11

$W $W +35.04 +35.41 $F $F +43.34 +43.34 $G $G +37.01 +38.15 $B Reg. No. 16893991 +80.30 V A R New Day 1110 Calved 1/30/11 $B EPD BW WW YW Milk MARB RE Fat No. 16893991 Acc +2.8 .38 +56Reg. .32 +104 .31 +34 .18 +.67 .30 +.88 .27+79.27 +.033 .28 DNA BW WW YW DMI RFI Milk CW FAT REA Marb EPD BW WW YW Milk MARB RE Fat % Acc 72 37 +10454.31 +34 48 .17 +.70 7 11 +.8387.27 +.029 16 .27 13 +2.9 .3831+56 .32 .29

V A R New Day 1110 • Calved 1/30/11

DNA BW WW YW DMI RFI Milk %

72

31

37

54

48

7

CW

FAT

11

87

REA Marb 16

13

Better Ribeye! Better Marbling! Better $B! Better DNA! BETTER BULLS! August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

49


M ID V ALLEY S ALE MONDAY, SEPTEMBER 10, 2012

A RELLANO B RAVO P RODUCTION S ALE SATURDAY, SEPTEMBER 15, 11:00 A.M.

D ISMUKES R ANCH B ULL S ALE FRIDAY, SEPTEMBER 21, 1:00 P.M. Angus & Charolais Bulls

44 TH A NNUAL C ENTRAL C ALIFORNIA W ORLD OF B ULLS S ALE SATURDAY, OCTOBER 6

At Cattlemen’s Livestock Market our goal is to market your cattle for a premium. Today, more than ever, genetics have taken an important role and the bulls you choose can make a difference. CLM will have a representative at every California bull sale this fall to help with your bull selection and purchasing needs.

Saturday 10:00 A.M. - 300 Females • Saturday 1:00 P.M. - 150 Bulls

 S PECIAL F EEDER C ATTLE WEDNESDAYS THIS FALL

S ALE

Cattlemen’s

AUCTION YARD

LIVESTOCK MARKET

Call now to consign

12495 Stockton Blvd. Galt, CA 95632 209-745-1515 OFFICE • 209-745-1582 FAX 209-745-2701 MKT RPT • www.clmgalt.com

MARK FISCHER ... 209-768-6522 REX WHITTLE ...... 209-996-6994

JAKE PARNELL .... 209-495-1714 • 916-662-1298 GEORGE GOOKIN ..... 209-482-1648

JOE GATES ........... 707-694-3063 JUSTIN TRICK ...... 916-240-4601 ABEL JIMENEZ ..... 209-495-0995

2009 Grand Champion Pen of 5

44

TTH H ANNUAL

Angus • Braangus • Gelbviiehh • Limousin Red Anguus • Beefmaster • Charolais Herefordd • Polled Herefordd • Salers Shoor th t orn • Simm mental

OCTOBER 5TH AND 6TH, 2012

CATTLEMEN’S LIVESTOCK MARKET, GALT, CA

150 QUALITY BULLS SELL FRIDAY, OCTOBER 5TH

SATURDAY, OCTOBER 6TH

9:00 A.M. Bull Grading 10:00 A.M. Female Sale 1:00 P.M. Private Treaty Trading 1:00 P.M. Bull Sale 5:00 P.M. Social Hour (Bulls and Females Available to Preview All Day Friday)

BULL SALE COMMITTEE: • Jake Parnell 916-662-1298 • Luke Parnell • Sally Semas • Randy Parnell • Jack Parnell For further information or catalogs, contact: Sally Semas, Sale Secretary • 1785 Palermo Rd. • Palermo, CA 95968 530-534-1061

50

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


As Good as the Best and Better than the Rest! 1986 CBCIA Seedstock Producer of the Year

2009 BIF Pioneer Award

Bull & Female Sale September 22, 2012 Females sell at 10:30 am • Lunch at Noon • Bulls sell at 1:00 pm BULLS • HEIFERS • SPRING BRED COWS

Selling progeny from these industry leading sires!

MCPHEE TOP COMMITTMENT 352 • #1307962 7 -1.3 53 95 12

39

0

16 5

15

MCPHEE PACIFIC PRIDE 4127 • #1112140

1.06 0.05 55 0.09 0.00

-6 6.0 78 130 3

42

6

9

0

7

0.45 -0.01 86 0.77 0.01

Top 10% of the breed

A herd built on performance that's pays! McPhee bred cattle excel where it counts… from calving ease to growth…all the way through to harvest! Buy with confidence from a herd built on performance bred in, not fed in.Bulls sell with complete performance data, fertility, ultrasound carcass evaluation, and tested PI negative for BVD. Call or email to get a catalog • Phone bids welcome Nellie, Mike, Mary, Rita & Families • 14298 N. Atkins Rd. • Lodi, CA 95240 Nellie: 209-727-3335 • Rita: 209-607-9719 • info@mcpheeredangus.com

www.mcpheeredangus.com

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

51


Continued from page 46

ments made through additive genetics for heritable traits like growth and carcass merit associated with increasing the representation of a breed at the expense of the beneficial heterosis effects on lowly heritable traits like reproduction and longevity. The truth is, you can have both with a well-planned crossbreeding system.” Crossbreeding is said to be a free lunch, but if you increase milk through heterosis, it takes extra nutrients to support that milk production; hardly a free lunch. Don’t get me wrong, we get paid by the pound and everyone in the beef complex is responsible for our end product whether you are selling feeder calves or on the grid. But we need to keep in mind where cow/ calf expenses and revenues are. Reproduction is the number one trait for profitability, and heterosis can help in this area more than any other. If a breeder is only focused on end product, research suggests that it might be at the detriment to reproduction and cow maintenance requirements. Cow herd expenses

A Special Thank You We would like to extend a special thank you to all of the buyers and bidders in our recent Internetbased Private Treaty Bull Sale, as well as the other ranches and individuals who have supported our program over the past year.

Fresno State 2011-2012 Student Assistants Kyle Bower Martin Castro Joe Machado Vanessa Power Kyla Ruble

must be balanced with revenue for optimum profitability. No doubt, many producers are decreasing inputs due to drought or increased cost of supplemental feeds stuffs. To put it in perspective, Weaber says, “If you are going to ask your cows to do more with less, make sure they have the heterosis tools to succeed.” Is crossbreeding dying in favor of straightbreeding? Not according to Nichols. “The buyers of Nichols Farms hybrid and composite bulls tended to be younger and with much larger agricultural operations. They’re very profit oriented, keen marketers and practice risk management. We’re very pleased that our hybrids and composites make crossbreeding easier and much simpler for them to manage their herds while increasing uniformity in their calf crops.” Even with the dominance of Angus, many feel, especially with the advent of hybrids bulls, that crossbreeding is about to make a renaissance. With modern crossbreeding, gone will be the days of rainbow herds of different colors and sizes in a weave of electric fence. Crossbreeding is so much simpler with

Trait

Individual Heterosis Units % Heterosis

Calving Rate, % Survival to Weaning, % Birth Weight, lb. Weaning Weight, lb. Yearling Weight, lb. Average Daily Gain, lb./d

Trait

3.2 1.4 1.7 16.3 29.1 0.08

Maternal Heterosis Units % Heterosis

Calving Rate, % Survival to Weaning, % Birth Weight, lb. Weaning Weight, lb. Longevity, years

3.5 0.8 1.6 18.0 1.36

3.7 1.5 1.8 3.9 16.2

Lifetime Productivity Number of Calves .97 Cumulative Weaning Wt., lb. 600

17.0 25.3

breeds of mainly black or red, and similar frame size. Hybrid bulls allow for the ease of management of straightbreeding for even the smallest operation, and now there are easy-to-use acrossbreed EPDs for selection. With proper breed complementarity and heterosis, using either traditional or hybrid bulls and crossbred females in a crossbreeding system, uniformity and profitability will increase!

Beef Cattle and the Federal Government Most of us in the livestock industry have a problem with the federal governments uncontrolled spending and large deficits. We realize that there must be a balance between taxes and spending and eventually somebody is going to “pay the bill” for our current poor fiscal management. Beef cattle are no different. If we continue on our current path of selecting for higher yearling weights, increased levels of milk production, and higher $ Value Beef Indexes – we are creating a genetic base that has extremely high maintenance requirements. If you are a producer that has access to irrigated pasture in the summer – you can probably support that production level. However, if you’re a commercial cow-calf producer that runs in the foothills year-round and your cows graze dry feed in the summer and fall – in our opinion, you should proceed with caution. With the high feed costs of today, we are trying to breed cattle that have a balance between performance levels and feed requirements – just like the government should be trying to find a balance between income and spending. The “413” bull pictured above represents the type of cattle that we strive to produce from a phenotypic standpoint. His progeny have been adequate in terms of performance yet moderate in terms of frame size and level of milk production. He is a bull that we raised and sold and are now using in our AI program.

Randy Perry: (559) 278-4793 • Web Site: http://jcast.csufresno.edu/beef Purebred Herds/Bull & Heifer Development: Ryan Thompson (785) 477-3008 Commercial Cattle: Anthony Suniga (209) 840-9541

52

4.4 1.9 2.4 3.9 3.8 2.6

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

53


CB Means See Bernie! That’s Right, See Bernie for the best in Red Angus and Angus Bulls.

Lorenzen Santiam Real Grid 8426 ANGUS AI SIRES Upward 307R • Total 410 • Big Eye • Pioneer

This top performing son of PIE Gridmaster 589 is doing a great job in our herd and his sons will do a great job in your herd. His EPDs rank him in the top 10% for Weaning, Yearling, Total Maternal, Milk and Ribeye.

See Bernie At The Following Sales: Shasta Bull Sale, Cottonwood, CA Central California World of Bulls Sale, Galt, CA Red Bluff Bull Sale, Red Bluff, CA Bulls Always Available At The Ranch

CB RANCH

Developed for the Commercial Cattleman

Bernie Hartman • 23080 Thomes Avenue Gerber, CA 96035 • (530) 385-1427

J Bar Stenberg Ranch The Breed’s Most Powerful Heifer Bull!

al Commerci Semen $12/Straw ORIg OR Igen en

Stenberg Coalition 509 Reg. No. 15452104

CED +11

BW -4.9

February 13, 2013

At the ranch near Echo, Oregon. It’s your kind of sale! We offer the best genetics in the Angus breed as a result of our AI program. By using some of the breed’s best bulls on our proven and productive cow herd, we can offer you bulls that are bred for your protability. Each year, the sale barn is lled with cattlemen, many of whom are repeat customers, and we thank them for their condence in our program. Their success is our goal and we work at it every day of the year. AI Sires Represented Include:

SAV Final Answer • GAR Retail Product • Missing Link • SAV Pioneer Rito 6I6of 4B20 6807 • Coneally Lead On

WW +76

[AMF-CAF-MIF-NHF]

YW +120

RADG $W $F +.21 +54.17 +52.91

There are a lot of bulls that try to prove themselves in the shampooed showring with their head in a feed bucket, whereas 509 has proven himself by consistently siring fancy quality replacement females and scale-tipping sons. Proven Calving-Ease • Excellent Calf Vigor • Adds Depth and Length Explosive Growth and Muscle • Makes “Keeper” Heifers ✔ One of the most extreme spreads from birth to weaning.. ✔ One of the absolute top weaning values of the breed.

Direct Sales: 406-644-3636 • Stenberg@blackfoot.nett

Meadow Acres Angus Ranch

Annual Production Sale

J S

Sons Available!

Beef is Back!

The outlook for the beef industry is fantastic, but now isn’t the time to take risks with Genetics. Select from a herd that has proven that they work in the “real world.” CED +5 WW +57 MILK +15 CW +29 RE +.55 $W +24.66 $G +36.64

BW +1.4 YW +110 $EN -3.86 MARB +.67 FAT +.013 $F +49.81 $B +75.30

Gonsalves Ambush 28 104B

t our heck ou e Come c bulls! Incre as us g n r, A o / Sim br id vig your hy , a nd profits. e c n a m per for

Birth: 2/12/11 Sire: B/R Ambush 28 Dam: Gonsalves Lady 546C

See you September 19th, Oakdale, CA

Call For Information:

Richard Correa (541) 449-3558 Devon Correa (541) 379-0632 32581 Correa Lane • Echo, OR 97826 meadowacresangus@msn.com • www.meadowacresangus.com

54

GONSALVES RANCH

Angus & Sim/Angus Cattle

The Gonsalves Family

7243 Maze Blvd., Modesto, CA 95358 Joey, Kristy, Riley, & Reese: (209) 526-3006 • Mike: (209) 531-4893

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


Market Outlook: Drought hits cattle industry hard, again in 2012 By James Robb and Katelyn McCullock, Livestock Marketing Information Center

D

rought continues to reduce the U.S. beef cowherd, which had already shrunk during recent years. The 2011 drought caused national beef cow numbers to decline dramatically, led by herd liquidations in Texas and Oklahoma. This year’s drought decimated pasture/range conditions in most of the U.S. and has damaged Midwest feed crops, dropping yields to the lowest in decades. Cattle feeding losses were record large this summer. The result was a summer crash in calf prices. Still, in

calendar year 2012, prices of all beeftype cattle are projected to set new record highs. Fed cattle prices over the calendar year will average about 7 percent above a year ago while calf prices still increase about 10 percent despite the large summer declines. For fourth quarter of this year, calf and yearling prices are expected to continue to be under pressure and drop below 2011’s. Looking ahead to calendar year 2013, additional gains are expected in fed cattle prices. Calf and yearling price patterns in 2013 may unfold

quite differently than this year’s. If Mother Nature provides a more normal 2013, prices of calves and yearlings are expected to be highest in the second half of the year. For the first two quarters of 2013, calf and yearling prices are forecast to be below 2012’s, but throughout the year, fed cattle prices should be higher. From both an economic and a pasture/range resource perspective, recovery from the 2012 drought will be a multi-year endeavor. With increasingly tight cattle supplies, cow/ calf returns will rebound once the drought subsides.

Cattle inventory keeps declining

Slide 1. Livestock Marketing Information Center. Data Source: USDA-NASS

CALF CROP July 1 Estimates, U.S., Annual

Slide 2. Livestock Marketing Information Center. Data Source: USDA-NASS

Midyear cattle numbers provided by USDA’s National Agricultural Statistics Service (NASS) showed that drought and feedstuff costs are reshaping the U.S. cattle sector. On July 20, USDA released the midyear cattle inventory count. That report, which gives a timely count on a range of categories from breeding cows to the size of this year’s calf crop, had been scheduled for elimination by USDA, but Congress stepped in last fall, maintaining it for this year. However, the future of this long-standing report remains uncertain. Overall, the cattle report showed more drought-induced whittling away of U.S. cattle numbers than expected between the beginning of this year and July 1. At 97.8 million head, the total of all cattle and calves was down 2.2 percent from a year ago. Nationally, both the beef and dairy cowherds were a little smaller than anticipated with a year-onyear decline in beef cows of 900,000 head and an unchanged dairy herd. Importantly, producers had reported an annual increase in the number of heifers held for beef cow replacements as of Jan. 1, but by July 1, there was no change compared to a year ago, indicating drought had already adjusted producer plans. USDA’s first indication for the 2012 Continued on page 57

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

55


PERFORMANCE PLUS

O’NEAL RANCH

ANGUS BULL SALE

September 3, 2012

MISSION ANGUS RANCH

Lunch: 11 a.m. • Sale: 12 Noon At the Ranch 16 miles East of Madera, California

Selling 100 Angus Bulls

O’Neals Net Worth 0111 BW +3.0

WW +59

DOB: 12-22-2010

YW +113

MILK +21

MARB +.34

RE $B +.46 +70.32

O’Neals Upward 0132 BW +1.6

WW +63

DOB: 12-24-2010

YW +116

MILK +31

MARB +.48

RE $B +.73 +79.44

O’Neals Upward 0156 BW +2.5

WW +64

DOB: 12-27-2010

YW +113

MILK +30

MARB +.28

RE $B +.26 +66.17

Sire: S A V Net Worth 4200 MGS: Vermilion Dateline 7078

Sire: Sitz Upward 307R MGS: Vermilion Dateline 7078

Sire: Sitz Upward 307R MGS: V A R 216 LTD 0085

Mission Final Answer 1521

Mission Dash 1554

Mission Iron Mountain 1570

BW +1.0

WW +57

DOB: 01-10-2011

YW +108

MILK +23

MARB +.68

RE $B +.45 +70.14

BW +1.2

DOB: 01-23-2011

WW +51

Sire: S A V Final Answer 0035 MGS: TC Rito 416

YW +94

MILK +25

MARB +.42

RE $B +.38 +64.88

Sire: Sitz Dash 10277 MGS: BT Right Time 24J

BW +3.4

WW +51

DOB: 01-30-2011

YW +93

MILK +22

MARB +.58

RE $B +.31 +61.47

Sire: S A V Iron Mountain 8066 MGS: H S A F Bando 1961

: Lifetime Anaplas Vaccinated

ell S s l l u ll B

Ultrasounded • Semen Tested Tested PI Negative for BVD • Breeding Guaranteed Free delivery in California or $50 rebate for pickup on sale day!

A

Call to be added to our mailing list: (559) 822-2386

Gary & Betsy Cardoza • (559) 822-2386 P.O. Box 40, O’Neals, CA 93645

Since 1878 56

The Perez Family

P.O. Box 97, Crows Landing, CA 95313 Justin Schmidt, Cowherd Mgr: (209) 585-6533

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


Continued from page 55

calf crop was 2.3 percent, or over 800,000 head below 2011’s. An often calculated statistic is the supply of feeder steers and heifers outside feedlots. That statistic has been declining since July 1, 2008, but the rate of change has accelerated the last two years. As of July 1, 2012, the one-year decline in the supply of steers and heifers outside feedlots was 3.2 percent (down 1,184,000 head). Last year, the midyear drop was 2.5 percent (961,000 head). All signs point to a smaller cowherd, again, as of Jan. 1, 2013. Even though beef cow slaughter is below a year ago this year, levels have been large enough to indicate a herd decline. The number of heifers held for breeding herd replacement purposes remains below herd expansion norms. Even if normal pasture and range conditions return, it may take two more years to stem the cowherd decline and longer to post any significant growth.

Specializing in Balanced Genetics Angus - Bl Ack simmentAl - simAngus

Bulls and Heifers Available at Private Treaty and watch for our bulls at the sales this fall. Call for more information! Bob Mullion • 760-861-8366 Michael Mullion 760-464-3906 Blythe, CA, & Medford, OR RPmullion@gmail.com

POUNDS OF PROFIT

Amador bulls are bred to be curve-bending sires for the commercial cattleman! Our bulls are truly the cowman’s kind with soundness, thickness, performance and solid EPDs. Amador Upward 1129 24 Sired by Sitz Upward 307R

Drought crashes calf prices In early 2012, the drought of 2011 was mostly subsiding in the Southern Plains and cattle numbers were tight. Additionally, U.S. consumer demand for beef was improving, exports of beef were moderating from a record 2011 but remained strong, and feedstuff costs were set to decline dramatically, especially for corn. On a quarterly average basis, prices of all cattle classes surged to all-time highs in the first quarter of 2012. The 5-area fed cattle price averaged over $125 per cwt., nearly 14 percent above 2011’s first quarter. In the Southern Plains, calf prices (500- to 600-pound) were over $180 per cwt. (up 22 percent from a Continued on page 58

Bulls Available Sired by These B Breed dL Leaders: d Sitz Upward 307R • SAV Net Worth 4200 SAV Final Answer 0035 • B/R New Day 454 Mytty In Focus • GDAR Game Day • Sydgen Mandate 6079

Watch for Amador Angus bulls this fall selling at ...

❯❯❯ Monday, September 10th - CLM in Galt, CA ❯❯❯ ✦

❯❯❯

MID VALLEY BULL SALE ✦

✦ CAL POLY BULL TEST SALE ✦ Sunday, October 7th - San Luis Obispo, CA

❯❯❯

AMADOR ANGUS

Ed, Carlene, Joshua and Tiffany Amador

Ed (209) 595-3056 • Josh (209) 499-9182 5136 Laird Rd., Modesto, CA 95358 • AmadorFarms@msn.com August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

57


Continued from page 57

A1 Mist Sprayers Resources, Inc. User Friendly...Farmer Tough 877-924-2474

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• Control mosquitoes (West Nile), flies, grasshoppers, bean leaf beetles & aphids • Great for beef feedlots, poultry farms, cow/calf, dairy & swine operations (fly control) • Great for spraying: • mesquite, prickly pear, brush & weed in pastures • cities & municipalities for mosquitoes (West Nile) • road ditches, fence rows & irrigation ditches, levees • vegetables, vineyards, orchards & tree farms • golf courses, campgrounds, hunting & fishing lodges (flies, ticks & mosquitoes) SUPER DUTY •Sweet corn, berries, melons, pumpkins & tomatoes

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Tombstone Hay Saver

Bunk Feeder 16 ga., 11 1/2' long x 30" wide x 9" deep

year earlier) and yearlings (700- to 800-pound) were over $154 per cwt. (up 19 percent from 2011’s). Then drought hit the nation. As of mid-July, USDA-NASS rated 55 percent of the U.S. pasture and range as poor or very poor (the two worst categories and essentially requiring significant supplemental feed or worse). At the same time last year, the massive Southern Plains-centered drought resulted in a national poor and very poor rating of about 33 percent. Widespread deterioration in crop and pasture conditions made 2012 the worst U.S. drought since 1988. With the 2012 drought, national average corn yield estimates have been reduced almost weekly. By midsummer, most estimates had corn yielding 20 percent below a year ago. So, as the second quarter of the year progressed, drought turned from eroding to hammering calf prices. On a monthly average basis, the 500- to 600-pound steer calf price in the Southern Plains crumbled from about $182 per cwt. in May to about $145.50 in July. Feedlot closeouts flowed red ink and losses in that sector continued to build up. In June and July, Livestock Marketing Information Center (LMIC) estimated losses for cattle feeders were record large and feedstuff costs were still increasing. By the end of July, year-on-year gains Continued on page 62

Hydraulic Squeeze Chute 102" overall length 66" inside height clearance 92" inside length clearance Weight: 3400#

Side Release and Palp Door

Stockyard, Feedlot, Equine and Pasture Gates Palpation Cage Bull Gate, 2" 14 ga. 5 rail

Heavy Duty 2" 16 ga. 6 rail

16 ga. 1 1/2" tube 2" x 4" welded mesh

www.hutchison-inc.com 1-800-525-0121 58

Rectangular Bale Feeder “One Ton”

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


Sunday, September 16, 2012 Selling 75 Angus Bulls at the Ranch near Calistoga, California.

OAK RIDGE NEW FRONTIER 1470

OAK RIDGE PREDESTINE 1360

Sire: B/R New Frontier 095 • Dam by: OCC Bonanza 880B

Sire: GAR Predestined • Dam by: SS Traveler 6807 T510

BW +2.2 YW +82 CW +34 RE +.45 $W +24.28 $G +31.00

BW 74

205 774

WW +43 MILK +23 MARB +.52 FAT +.004 $F +24.87 $B +70.91

BW +1.8 YW +89 CW +22 RE +.58 $W +31.79 $G +44.50

365 1339

BW 77

DAMS RATIO 10 CALVES, 109 WEANING, 107 YEARLING

OAK RIDGE OBJECTIVE 151

DAMS RATIO 5 CALVES, 106 WEANING, 107 YEARLING

Sire: GAR Objective 7125 • Dam by: Five Star 8045 Rt Time 5070

BW +3.2 YW +104 CW +25 RE +.58 $W +28.68 $G +35.08

BW WW +2.2 +59 YW MILK +102 +28 CW MARB +23 +.48 RE FAT +.58 -.001 $W $F +30.92 +39.77 $G $B +33.89 +66.64

BW 67

205 797

365 1253

DAMS RATIO 1 CALF, 106 WEANING, 106 YEARLING

SELLING SONS OF: BW +.4 +1.6 +.7 -1.0 +4.6

WW +66 +58 +57 +61 +58

YW +126 +109 +104 +105 +110

For sale books please contact:

365 1217

OAK RIDGE OBJECTIVE 091

Sire: BR 0T26 Objective U005 • Dam by: TC Total 410

SYDGEN MANDATE 6079 SYDGEN DIAMOND 8499 TC ABERDEEN 759 SAV FINAL ANSWER 0035 SAV NET WORTH 4200

205 823

WW +53 MILK +27 MARB +1.05 FAT +.024 $F +28.15 $B +75.16

MK +36 +26 +43 +25 +29

MRB +.84 +.58 +.64 +.47 +.54

RE +.46 +.73 +.87 +.47 +.38

FAT +.014 +.010 +.004 +.051 +.058

BW 70

205 782

WW +60 MILK +29 MARB +.54 FAT +.002 $F +41.58 $B +69.88

365 1224

DAMS RATIO 105 WEANING, 105 YEARLING

$B +68.59 +80.92 +76.91 +60.03 +68.76

CHERYL & FRANK Box 13520, Hwy 128 LAFRANCHI-MONGINI Calistoga, CA 94515

707-942-1475

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

59


nol reform needed inSilas see,” he says. Skinner. “Aof lot ofdrought supply at the national level. “Type cording officials at the Bureau rancher w.wlj.net •toemail: editorial@wlj.net •wake advertising@wlj.net • circulation@wlj.net finally being brought to heel, ac-

n-

lion and $40 billion in losses. Crop s, historicofdrought Land Management (BLM). Howat

insurance made this lister nearly ever, 65 restoring thepayments damaged rangnation—decimat- year to drought-afflicted farmers may take the years. are expected to exceed $10.8 es of U.S.es, cornsay and officials, nbillion paid in 2011. Corn8, recently vestock and dairy by Ignited lightning on July the - urging surpassed a record $8 a bushel. are ConLong Draw and Miller Homestead Meanwhile, USDA projected sharply curtail or d fires spread rapidly, killing unate o a federal Re- July 25 that food prices in 2013 could climb up toand 4 percent (RFS) numbers known of by cattle wild-as nStandard ercent oflife, the threatening nahomes, and burna supply come from

around us for as far as we could

large fire are currently in short

a result already of this year’shad drought, drought eradicatto Vale District BLM folks to with bringruptcy. cowsWith theAccording beef expected to vaultnothing by up to 5 to ingeat; tremendous volumes of Mark corn, Wilkening, the spokesman home. There’s percent. That’s atop food price in- livestock producers say it’s urgent rapidrequired spreadtoofbe the fire was at least they’re completely burned Lots creases estimated at 3.5 percentout. that the amount thisthose year. ranches, they savedused for ethanol be sharply re- conditions before partially due to of their Corn feed alsothat is soaring cost, the remaining andof during the burn. “Fine fuels houses, and wasinit.” Theduced Longso more making it more difficult for cattle corn can be used for food instead were severely dry, the winds were Draw which begantobetween ranchersfire, and dairy operators of fuel. blowing hard, remain solvent and avert bankJordan Valley and the state’s borSee Ethanol on page 7 and we had a high der with Nevada, eventually con- temperature,” explains Wilkening. sumed nearly 560,000 acres of “So we had the perfect conditions rangeland between highway 95 for a fire to really rip through.” Wilkening, w with and the Ow Owyhee River, m making it Additionally, says W much of the w western U U.S. althe largest single fire in an already so m fire-scourged w west, and O Oregon’s ready burning, a shortage of perm m made the biggest blaze in over a century. The sonnel and equipment While footprint of such a burn, says Skin- fire hard to address quickly. W

1 crews are a tough commodity to get,” says Wilkening. “There’s always a shortage, and they’re in high demand. As the fire grew, we started calling for resources, but there’s always a time delay. You have to start calling for more engines, dozers, crews, etc. It takes time to mobilize all that.” According to Skinner, the fire was three days old, and had spread w to roughly 400,000 acres, before BLM M crews w w were able to reach the scene. D During that time, m he says, See O Oregon fires on page 8

ty tough,” says Jordan Valley

A Crow Publication

ned drought disaster process created ing a combined 1,100 square miles

i-

WLJ Online!

ross and with s of elief

#IRCLE$#ORPORATION

According to Vilsack, the pack- gency loans that effectively lowers tion, we’re creating a more efficient age of program improvements will the current rate from 3.75 percent and &effective B D 4 process. And by deliv, O 4 ,OW 0 Ol interest % PM rates N 4 on emer& B D &O 0 P   4ON 4 deliver faster and more flexible to 2.25 percent; and a payment ering lower assistance to farmers and ranchers reduction on Conservation Re- gency loans and providing greater Ca o a dea e nea you devastated by natural disasters. serve Program (CRP) lands qualiReport credits cred ts $385 billion b onflexibility for haying and grazing Vilsack announced three sig- economy fied for emergency haying andoron CRP lands, we’re keeping more boost to Interior Inter Vil- nificant improvements to the de- grazing in 2012, from 25 to 10of Inte-farmers in business and supportm impacts m From m facilitating energy devel- on the economic rior lands and programs, m accordinging our rural American communim m to m managing America’s last cades-old USDA programs and opment percent. m the department. m m and out- to a release from public lands for tourism irvatively estimateprocesses related to Secretarial A report recently released by theties through difficult times. With door recreation to assisting Indian new “Agriculture remains a bright ht, the worst in 50 Outdoor Industry Association tribes w with education and eco- O the U.S. at least ould spot our nation’s economy and king it the mostdisaster designations: a final rule w that 140 m million Amerim these improvements, we’re also m growth, win the nomic activities of the showed ght since 1988 and D m Department of the Interior (Inte- cans spent $646 billion on hunting, that it contributed is increasingly 3e cost of 2011’sthat simplifies the process for fishing, hiking, and that other outdoortelling American producers that rior) $385 billion to the important oughts in 1980 and 1ly, totaled $20 bilU m and supported m U.S. economy more recreation on public and private ions Secretarial disaster designations than USDA has theaccordtoolslands, toincluding act quickly on the 500 m millionUSDA stands with you and your 2m million jobs in 2011, 2 public lands m managed bycommunities when severe weather to aab report earlier in acres of to 4 ge om “Meatless “Mea ess Monday” plug p ug no notreretractable e ing ac ereleased assistance iredfrom and will result in a 40 percent and deliver farmers Interior agencies. month. 4 fire last week press secretary Courtney Rowe. less Monday” initiative for the Health.” the m nder m when “This reportneed underscores thatand natural disasters threaten to The report, The D Department of “Today, we have in received a number environment. ers and politiciansduction Crediting theand United Nations for the processing time for most ranchers they it after encouraging of inquiries regarding a rumor that “One simple way to reduce your the information, newsletm on m Contribu- there are real, lasting impacts the USDA’s Interior’s Economic o vegetarian one USDA is encouraging “Meatless environmental impact while din- ter said that tions, meatless is good the impacts mm amending and small m businessesdisrupt your livelihood.” highlights of the communities new counties affected by disasters; a going most,” saidmVilsack. “By mprove both their Mondays,” she wrote, adding that ing at our cafeterias is to partici- for your health and also for the where Interior broad m mission, in- across the country w climate. While the “USDA does not endorse Meatless pate in the ‘Meatless Monday’ environmentdepartment’s becausem “animal aginterest rate for emerSecretarial disaster See CRP on page 8 Monday. The statement found on initiative racted the state-reduced http://www.meatless riculture iscluding athe major land source of w is helping todesignastrengthen economies m and water m manageit was unauthor- the USDA website was posted monday.com/,” USDA’s July 23, greenhouse gases and climate

uction now ofabsorbs rangeland. percent of the an- both fires are currently While W used i-arvest. Corn m listed contain300 percent fromat near complete hcreasingm M the devastation in from 1.6 ment by BLM, os5 billionthe bushels. w wake of the m massive blaze has recast for the averkm left many of the region’s ranchers -acre yield for this at vest has been rey. 6 bushels to 133 withers en masse hout the Midwest —t of nine states are xtreme heat wave. c. wered its estimate n rn will be used to n650 million bushe It also reduced nt. U.S. s exports by 300

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On the 300-square-mile Jornada Experimental Range near Las Cruces, New Mexico, technicians Rob Dunlap (left) and John Smith round up cattle the time-honored way. Photo by Scott Bauer

Now get the entire Western Livestock Journal online! What you get in the tle on feed mailbox, up, Marketis may have delivered seen now seasonal lows pass rketings down through the Internet. EPA calls on Iowa to Front page stories and fix CAFO oversight photos, sale reports, classified ads. Futures rally on

ve the damage was h a little help from

ur after a National f Association (NCse statement came pulled the newsleta statement from

without proper clearance and it has been removed.” On Wednesday, Kansas Republican Sen. Jerry Moran asked USDA’s Tom Vilsack to explain why the agency’s employee newsletter encouraged them to not eat meat and participate in the “Meat-

2012, “Greening Headquarters Update” read. “This international effort, as the name implies, encourages people not to eat meat on Mondays. Meatless Monday is an initiative of The Monday Campaign Inc. in association with the John Hopkins School of Public

m ment; energy and m mineral develop-

change. It also wastes resources. m ment on public lands; encouraging It takes 7,000 kg of grain to make 1,000 kg of beef. In addition, beef m and outdoor tourism recreation at production requires a lotparks, of water, m m national monuments and fertilizer, fossil fuels, and pestiw refuges; wildlife conservation, cides.” NCBA President J.D. Alexander hunting and fishing; support for See Meatless 15 m on page mm American Indian tribal communi-

and support families,” m Secretary of the Interior K Ken Salazar said in a news w release. W m While the report has lots of merits, it still m may be m missing some m key pieces, according to D Dustin Van Liew, w executive director of the Public Lands Council. W w are not convinced that “While we DOI has fully captured the ecoDO nomic m importance m of grazing on BLM M lands w with this report, w we are appreciative of their response to our concerns regarding their previous, deeply flawed w report released in 2011. That reported cited grazing as having contributed just 0.2 percent of all the jobs generated by Interior activities in 2010—only — 2,507 direct jobs in total—and — See Economy m on page 14

ties and Insular Areas; and scientific research and innovation. m m The department manages 500 m million U U.S. acres, m mostly in the w m west, and encompasses everything Cattle feeders and packers by Thursdayfrom afternoon a low of Land M m theafter Bureau Managean unusual cosmic alignment in the world of USDA played chicken with each other on of $122.44 earlier that morning. m M and the Bureau of ment (BLM) uly Cattle on Feed (COF) report, the Mid-Year Cattle prices most of last week. Packer Troy Vetterkind of Vetterkind ort, and the monthly Cold Storage report all came out Indian Affairs bids trailed behind offers by $3-6 Cattle Brokerage predicted near(BIA) to the unay. The first two are addressed in this article, while live in the Southern Plains and term live cattle futures will find of O w Bureau known Ocean Energy age report coverage can be found elsewhere in today’s $5-10 dressed. some support soon as thoughts of M m Management, Regulation and Entock Journal. Feeders, knowing show lists the season's lows being set the forcement. were small last week and on ru- week prior at $113m circulate. Feed mor that at least one of the major “The AugustPrepared futures are going by Interior’s O Office of OF report showed that cattle on feed as of July 1, 2012, packers was short bought, held to encounterPolicy some near term re- the report underAnalysis, marketingsThe for June 2012 were to 2011. Integrity Project. The Environmental mdown relative Protection staunchly to asking prices of $116-petition sistance at $119.50 and the Octoo showedAgency placements down, but analysts explain that, scores findings w w its N sought to South withdraw National m (EPA) released a prelimi118 live in the and $187-188 ber at $124.50 but the I think any of other studies less business day for June 2012 is considered, placedressed in theD Corn Belt. Regionm near term breaks back into $116 Discharge Elimination nary report on Thursday, July 12, Pollution odestly up. The numbers were very close to pre-report al packers in the North reportedly basis August and $121-120 in the m (NPDES) N D m permitting auoutlining several deficiencies in System were bidding up to $183 dressed, October are going to find good m IDNR w D m from the Iowa Department of N Natural thorization but all expectations were ofDN trade on buyer support.” U.S.the CATTLE ON FEED being forcedthe Friday. Fed cattle futures weren’t the DN dealings w group w was not fulfillResources’ with grounds 1,000+ Capacity (IDNR) Feedlots Near term fed cattle futures did only thing imitating amusement m m feeding opera- ing the requirements of the Clean confined animal a bit of intra-week rollercoaster- rides last week. Outside markets, 2012 W W O At2011 w Water Actfed (CWA). tions (CAFOs). issue are Iowa’s ing. August futures opened fueled largely on schizophrenic Mondayform, at $117.80. news regarding Eurozone issues m the petition O their alleged discharge of lastInweek its on original CAFOs, August futures then saw a high of and domestic economic concerns, w alleged 31 different violations, pollutants into nearby w waterways, $118.93 midday Tuesday, a low of fluctuated wildly. The Dow in m early Thursday DN complaints, and/ormorning, deficiencies in lost andCash their regulation, and w what IDNR $117.47 particular gained in the live cattle trade surfaced unusually early last w week, w with and at $118.20w as of Thursdigits from day toactivity day, shed-on Tuesday and some DNstood dealing O triple IDNR’s with CAFOs. EPA, is (or isn’t) doing about it. most m m cleanup trade on W Wednesday. day afternoon. ding over 100 points on Monday DN w and the petitioning parties Following a five-year investiga- IDNR Early trade on Tuesday w went for $111-113 live in the south and October fed cattle futures also and Thursday, then gaining slightm met periodically since the tion, the EPA report concluded have saw some movement, but had not ly on Wednesday, then gaining $112-113 live, $178-180 dressed in the north. Later-day Tuesday recaptured early week by 210 pointsand by Thursday w m over In DN has m m initial petition washighs submitted. that w while IDNR made admicleanupaftrades generally w went for $1 lower w than earlier numm Thursday afternoon. October fed ternoon. m m m that time, most of the original alstrides in fixing many Mar. Apr.rable May Jun. Jul. Aug. Sept. Oct. Nov.probDec. bers. Extremes m of $181 dressed (in K Kansas for 72 head) and $110 futures opened Monday of last Andrew Gottschalk of Hedger’s m it still has several “areas of legations have been taken care lems, week at $123, peaked at $123.70 Edgeof,gave an liveentertaining (Iowa) w w were noted but not the trend. See Cattle on feed on page 8 later that day, and stood at $123.10 See Markets on page m m O improvement.” Of particular con- leaving only five issues still needThe live11cattle futures got an injection of excitement m from ma cern w were unclear definitions of ing attention. number m of sources, seeing almost m limit m up jumps m on W Wednesday. The report’s findings requiring procedure and jurisdiction related After starting the w week at $117.20 for August and $121.45 for w m to permitting, a lack of rigor re- action are as follows: October, the futures trended downwards O w w through Tuesday, closing DN is not issuing N D NPDES garding inspections, and inaction • IDNR at $115.47 and $119.97, respectively. m to CAFOs O w permits when approprion discharge violations. Word that Japan is seriously considering easing their age restricW DN IDNR’s initial response to the ate tions on beef animals, m coupled w with an exuberant jump m in outside DN has not conducted comm report reiterated a dedication to • IDNR markets and the idea that summer mar m mm lows w m may have been realized, m m prehensive inspections to deterimproving its procedural system, sent W Wednesday’s futures up to the limits. m August and O October m w natural resourc- m mine w whether unpermitted CAprotecting Iowa’s futures closed W Wednesday w with over $2.50 gains in each, at $118.07 O need N D m NPDES permits es, and w working w with “producers FOs and $122.82, respectively. m w environmental m m • EPA finds that in a number of on how impacts Much of these gains w M were retained into Thursday w when, by m midw (49 percent), IDNR DN m livestock operations can be cases reviewed from day, August live cattle futures w were trading for $119.08 and $124.28 w its failed to act, or did not follow avoided.” for O October. D Deferred futures w were also gaining through Thursday’s m response policy w when The EPA’s self-described “infor- enforcement early trade. W N D m m permit mal investigation” w was conducted addressing CWA/NPDES Corn continued to hog the m market spotlight throughout the w week m violations in response to a petition submitted as ongoing projections of diminishing m yield and overall production DN is not assessing adequate w Citizens for • IDNR in 2007 by the Iowa play center stage in m many m minds. Corn futures have been jumping m O mm m m Community Improvement, the penalties against CAFOs See M Markets on page 11 m Circulation” w CA O on page 9 Sierra“The Club and Environmental See Iowa CAFO Industry’s Largest Weekly The latest drought monitor map shows that the western 75 percent of Nebraska is suffering from a severe drought, and extreme drought is affecting some counties in the center of the state and its southwest corner as well. The 2012 drought conditions are forcing many producers to wean early. Photo courtesy of Cyndi Van Newkirk, Van Newkirk Herefords, Oshkosh, NE.

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Posted each Fr day No wa t ng for the post office Posted n e ght d fferent anguages You can search for Market nformat on onwide onw d could ou d au automatically omapast a y stor qualify qua yes for o d disaster a assistance a an if they h y experienced xp n dd drought ough for o eight gh w weeks or more under USDA’s he state’s h a 64 counties oun were d w a dd disaster a areas a a on Ju y3 3. Th The abov photo o wa was taken ak n Ju July y6 6, near Limon, Colorado. asdeclared fresh as you canJuly get t above pho Purebred sa e reports

otic paper Beef production up, WLJ.net has it all, Streamlined drought disaster process created sought corn including daily news briefs. estimates cut The National Livestock Weekly

website: www.wlj.net • email: editorial@wlj.net • advertising@wlj.net • circulation@wlj.net

July 16, 2012 • Vol. 91, No. 41

A Crow Publication

INSIDE WLJ

CANADA TPP INCLUSION — The National Pork Producers Council is calling for greater harmonization of rules governing the U.S. and Canadian pork industries in several areas, including labeling, following the recent inclusion of Canada in the Trans-Pacific Partnership (TPP). Page 4

With drought conditions across the U.S. clearing out pastures and D has stepped in w crops, U USDA with an emergency m plan in hopes of m m providing some much needed relief m to ranchers and farmers. m VilAgriculture Secretary Tom w conference last sack held a news W w Wednesday laying out the new provisions and w what areas it w would affect. Vilsack pointed out that m previous emergency provisions m the 2008 Farm m Bill expired from m in September 2011, and w with the m conditions of 2012, a new w extreme plan w was necessary.

According to Vilsack, the package of program improvements will deliver faster and m more flexible assistance to farmers m and ranchers devastated by natural disasters. Vilsack announced three sigm m nificant improvements to the deD programs m and cades-old U USDA processes related to Secretarial disaster designations: a final rule m that simplifies the process for Secretarial disaster designations and w will result in a 40 percent rem for m duction in processing time most counties affected by disasters; a m reduced interest rate for emer-

in- of Information Act (FOIA): one and seeking documentation of FDA’s ) to issuing “categorical exclusions” to RACTOPAMINE STANDARDS — After five years of inaction, the biotexempt some antibiotics from enUnited Nation’s standard-setting group for foodvironmental safety has voted in liveanalysis, and another favor of science. It was a close call, however, and not everyone is happy sued requesting information supporting about it. Page 5 r COMPOSITE re- FDA’s to reduce levels of TRADE OFF decision — A program takes egood ofcrossbreeding antibiotics being fed to livestock some background in genetics, a big enough herd and land base, good olicy bytimeencouraging the voluntary cobull suppliers and to figure all that out. Producers looking for a simpler route to heterosis often opt of pharmaceutical comoperation to use a composite bull. Page 15 EER panies and producers, as opposed JUNE HEAT BREAKS RECORDS — The June temperatures contrib- mandatory regulations. ronto issuing uted to a record-warm first half of the year and the warmest 12-month nonInexperienced a press release, New England period the nation has since recordkeeping began in tion PEER Director Kyla Bennett, a 1895. The Lower 48, as a whole, experienced its 10th driest June on wing record, with abiologist nationally-averaged and attorney formerly precipitation total of 2.27 inches, 0.62 inch below average. the Page 16U.S. Environmental Proment with yees. tection Agency, complained that INDEX P-3 turned a blind eye on dBeeftoBits ................................ FDA has Markets ................................ P-11 ests potential fallout from the Classifieds ........................... P-12 Coming Events .................... P-14 dom See FDA on page 7 Sale Calendar ...................... P-14

gency loans that effectively lowers the current rate from 3.75 percent to 2.25 percent; and a payment m reduction on Conservation Reserve Program m (CRP) lands qualified for emergency m haying and grazing in 2012, from m 25 to 10 percent. “Agriculture remains m a bright spot in our nation’s economy m and it is increasingly important m that USDA U D has the tools to act quickly and deliver assistance to farmers m and ranchers w when they need it most,” said Vilsack. “By amending m m the Secretarial disaster designa-

tion, we’re creating a more efficient and effective process. And by delivering lower interest rates on emergency loans and providing greater flexibility for haying and grazing on CRP lands, we’re keeping more farmers in business and supporting our rural American communities through difficult times. With these improvements, we’re also telling American producers that USDA stands with you and your communities when severe weather and natural disasters threaten to disrupt your livelihood.” See CRP on page 8

The July World Agricultural Supply and Demand Estimate (WASDE) report, released Wednesday, July 11, bespoke the weather woes faced in much of the growing areas of the U.S. Drought and back-to-back days of record heat have cut yield estimates for corn and soybeans significantly, with expectations of further reductions in the months to come. While considerable attention rests on the happening of corn, beef was the bright spot in meat estimates, rising beyond earlier predictions and leaving other proteins behind.

If you are a current subscriber, log on with your customer number as Beef use and other meats your user name and Annual beef production estimates rose in the July WASDE report from 25.18 billion pounds in the June report to 25.27 billion pounds. wlj123 as your password. Analysts expect this increased projection is due to weather and

Reg AAA #17016769

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Wes w nd and ND 5050 DJH 122 Wes w nd ND 5050 DJH 126 pasture conditions around the country. As drought high heat #17029366 R AAA #17022945 damage pastures, and hay is scarce, more cattle Rare AAA expected to be sent to slaughter than previously anticipated. W WW W M M W W WW W M M W + + + +between + + + + + + + + + + Though the overall production estimate increased the + June and July reports, even the raised number is still below 2011’s Wes w nd Roundup DJH 108 Wes w nd P oneer DJH 124 26.29 billion-pound production. Expectations for R beef AAAproduction #16910971 R AAA #17027956 in 2012’s third and fourth quarters are similarly below last year’s W W WW W M M W WW W M M W levels. +USDA’s+ + + + + + + + + + + + + + More than 1,000 counties nationwide could automatically M m qualify for disaster assistance if they experienced drought for eight w weeks or + more under new plan. In Colorado, 62 of the state’s 64 counties were declared disaster areas on July 3. The above photo was taken July 6, near Limon, Colorado. Estimates of overall beef supply for 2012 rose in the July reWes w nd Ob ec ve DJH 127 port—from 28.22 to 28.35 billion pounds—due to expected increases in imports decreases in exports the R AAA #17027569 Antibiotic paper Beefand production up,coupled with W WW W M M W aforementioned increased production projections. In the June re+ + + + + + + + trail sought cut port, USDA corn estimatedestimates 2.44 billion pounds of imports and 2.62 The July W World Agricultural Supply and D Demand m Estimate m m O In the latest of a series of in- of Information Act (FOIA): one Near-term live futures pounds These numbers weretherevised in the July (WASDE) WofDexports. report, released Wednesday, W July 11, bespoke mbillion D m cattle creasing demands on the Food and seeking documentation of FDA’s woes faced in m w much of the growing w areas of the U U.S. D m decline Dalltolast Drug Administration (FDA) issuing “categorical exclusions” to had a progressive reportfrom to 2.48wweather andand 2.59 billion pounds, respectively. Drought D back-to-back days of record heat have cut yield estim some m antibiotics m enm its approval of antibiot- exempt reexamine mates for corn and soybeans significantly, w m with expectations of m ics for subtherapeutic use in live- the vironmental analysis, and another week. August futures opened Both beginning and ending projections further reductions in the m monthsstocks to come. m W While considerable at- remained steady m stock, a non-profit group has sued requesting information supporting tention rests on thepounds, happening of corn, beef w was the bright spot in D decisionat the agency, at saying that their re-and FDA’s to reduce of 575 week on Monday $119.15 600levels and million respectively. Total use projections meat estimates, m m rising beyond earlier predictions and leaving quests for public disclosure of antibiotics being fed to livestock other proteins behind. slid down todocuments $117.23 by midday m about antibiotic policy by encouragingwent the voluntary coup by 165 million pounds from last month’s expectations David Jto Holden 530-736-0727 m m w were ignored. operation of pharmaceutical comBeef and o Bee other he mea meats Thursday without much interrupThe plaintiff in the case is PEER panies and producers, as opposed 25.19 billion pounds. Per capita retail availability of beef was also Annual beef production estimates m rose in the July W WASDE D report m (Public Employees for Environ- to issuing m mandatory regulations. from m 25.18 billion pounds in the June report to 25.27 billion pounds. tion. October live futures simi %BHVFSSB 1P OU %S WF t .BSZTW F $B  raised to 56.1Analysts pounds per person, up 0.4 pounds from June. N w England m mental Responsibility), a nonIn a press release, New expect this increased projection is due to w weather and m profit environmental organization PEER D Director K Kyla Bennett, a larly shed about $2 throughout the pasture conditions around country. in As drought and high heat of the estimated Theformerly July report sawand a hay $2isthescarce, drop the top end m w that supports w whistle-blowing biologist and attorney damage m pastures, more m cattle are expected to be XTUXJOE!IPUNBJM w U Environmental m m from m claims leveled against government with Proweek, going $123.43 to the U.S. annual prices paid for live steers to stand at $123-126 per DPN t XXX XFTUXJOEBOHVT DPN sent to slaughter than previously anticipated. m m agencies by disaffected employees. tection Agency,average complained that Though the overall production estimate m increased between w the D has turned D failed to FDA PEER alleges Thursday. that FDA a blind eye on $121.58 by midday cwt. Despite this decline, the estimates for annual prices paid for June and July reports, even the raised number m is still below w 2011’s m the w separate requests potential fallout from respond to two 26.29 billion-pound production. Expectations for beef production m m in See FDA DAsteers for documents under Freedom on page 7in 2012 Analysts credited thethedecline is well 2011’s average ofyear’s $114.73. Quarterly in 2012’s third andover fourth quarters are similarly m below w last levels. futures to a number of factors. average price estimates are similarly up compared to 2011; $7-11 Estimates m of overall beef supply for 2012 rose in the July report—from — m 28.22 to 28.35 billion to expected inCorn markets, declining beef deCutout values in the third quarter and $1-4 in pounds—due the —fourth quarter. creases in imports and decreases in exports coupled with the mand and productcontinue values, uncer-to fall aforementioned productionto projections. In the June reOther meats are notincreased projected perform as well as beef. Expecport, USDA estimated 2.44 billion pounds of imports and 2.62 tainty in the Cash domestic and globalNear-term live fed cattle buying was spotcattle futures billion pounds of exports. These turkey numbers werewere revised inadjusted the July tations for pork, broilers and down in July ty throughout the week with pack- had a progressive decline all last report to 2.48 and 2.59 billion pounds, respectively. markets, and lower than expected ers and feeders mostly at a stale- week. August futures opened the to June. compared Despite the gains inremained beef,steady the expected perforBoth beginning and ending stocks projections mate. Few sales too small to estab- week on Monday at $119.15 and at 600 and 575 million pounds, respectively. Total use projections second quarter profit reports all mance of pork and poultry combined to drag down meat lish market trends took place slid down to $117.23 by midday went up by 165 million pounds from last month’s expectations to Augus 20 much 2012 • WLJ s Comme c a Ca e ssue •overall Sec on Two early in the week—a few hundred Thursday without interrup25.19 billion pounds. Per capita retail availability of beef was also played a role. Additionally, the use head sold in Iowa at weighted tion. October production, live futures simiraisedand to 56.1 availability. pounds per person, up 0.4 pounds from June. averageof of $186 dressed on Tues- via larly shed about $2 throughout the The July report saw a $2 drop in the top end of the estimated spectacular loss $200 million Pork import expectations remained steady at 812 million pounds, day and a few more at $184 week, going from $123.43 to average annual prices paid for live steers to stand at $123-126 per

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Curled corn leaves; a defense mechanism of the plant to conserve moisture. Photo courtesy of Marybeth Feutz, DVM, rancher and operator of AgriCultured, a blog seeking to educate consumers about their food and the efforts to produce it.

in calf and yearling prices had disappeared. Without the drought of 2012, strong returns would have set the course toward the multi-year process of breeding herd expansion, but the economic picture is not so clear now. Since the early 1970’s the (LMIC) has estimated cow-calf returns over cash costs plus pasture rent based on typical production and marketing practices in the Southern Plains. Those estimates incorporate data and information provided by several USDA agencies. The LMIC’s estimates are developed for market analysis purposes, actual cow/calf returns will vary considerably, even between neighbors. Over the last three months (May through July), massive drought has resulted in both crashing calf prices and surging costs of production for U.S. cow/calf operations resulting in estimated 2012 returns plummeting by about $100 per cow.

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Fed cattle prices will rebound from the lows set this summer. Commercial cattle slaughter in the last quarter of 2012 is forecast 1 percent to 3 percent below a year ago, with both fed cattle and cow slaughter dropping. Slaughter steer prices are expected to remain well above a year ago for the balance of 2012. Look for fed cattle prices to Continued on page 65

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

Corn plants dying from drought in an Indiana field mid-July. Photo courtesy of Marybeth Feutz.


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generally strengthen as the fourth quarter progresses, and as was the case last year, to set their annual high in that quarter. Slaughter cow prices may not erode as much as normal in late 2012 as cow slaughter was pulled ahead by drought. The dominant influence on yearling markets this fall quarter will be corn and fed cattle prices. Even with rather high fed cattle prices, cattle feeding margins will likely remain well in the red, keeping feeders cautious buyers of cattle. Southern Plains 700- to 800-pound steer prices this fall quarter may average slightly below recent levels, mostly in the upper $130’s per cwt. For the full calendar year, 700- to 800-pound steer prices will be about 9 percent above a year ago. In terms of calf prices, three areas to watch over the near-term are: 1) the amount of drought-damaged corn harvested for forage (green chop, silage, baled); 2) development of Southern Plains wheat and small grains pastures (moisture availability, planting progress and temperatures); and 3) prospects for fall/winter forages in states like California. Regionally and even nationally it is possible for calf prices to bottom quickly depending on forage conditions this fall. High cost-of-gain will make cattle feeders more interested in yearlings than

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

65


Maternal Performance with Carcass Quality

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In addit of water, al It from bothol Hill after arian one Mondays,â&#x20AC;? not endor found on monday.com ning Headquart kg res a lot ation 1,000 ent does veget August d requi A Capit their and pestiintern , â&#x20AC;&#x153;Gree â&#x20AC;˘â&#x20AC;&#x153;This on to go poste20,2012 2012 â&#x20AC;&#x153;USD es, en- productionfossil fuels, ve both Sec The statem tion employees to impro te. While the Monday. A website was on and it Updateâ&#x20AC;? read. name implimeatTwo fertilizer, Alexander clima the state- the USD clearance , as the e not to eat day a week â&#x20AC;? is an ent J.D.page 15 and the proper cted b- effort ges peopl less Monday Cam- cides. Presid health t retra unauthor- without removed.â&#x20AC;? as Repu coura NCBA ay less on departmen ing it wasdamage was has been esday, Kans n asked Mondays. Meat The Mond with the See Meat claim the in tive of iation Public ment, On Wedn Jerry Mora believe a little help from of - initia Inc. in assoc l ck to expla Sen. ized, some with news Vilsa lican yee paign done ins Schoo Tom already . National USDAâ&#x20AC;&#x2122;s agencyâ&#x20AC;&#x2122;s emplo to not eat John Hopk after a tthem social media an hourAssociation (NC- why the the â&#x20AC;&#x153;Mea encouraged Within ipate in Beef ent came statem newslet- letter and partic Cattlemenâ&#x20AC;&#x2122;s meat release the low BA) press had pulled after a ent from a statem afternoon morning. out, USDA sent out r that Thursday rkind ter and 44 earlie of Vette near ers by and pack on of $122. Vetterkind predicted find Troy feede rs each other r Brokeragefutures willhts of with Cattl e Packe Cattle cattle chicken week. thoug the played most of last offers by $3-6 term live rt soon as set of USDA s and some suppo lows being ate. prices behind the worldear Cattle n's trailed Southern Plain ent in bids $113 circul going the seaso out the c alignm t, the Mid-Y lists week prior atst futures are t all came live in ed. ) repor al cosmi show term reunusu Feed (COF Storage repor article, whileâ&#x20AC;&#x2122;s $5-10 dress â&#x20AC;&#x153;The Augu some near the Octoknowing and on rusaw an e on and hly Cold ssed in thishere in today Feeders, last week the major to encounter 50 July 20 July Cattl any mont addre the think the elsew one of ce at $119. but I t, held $116 were small reports; report, and first two arecan be found at least bough $116- sistan $124.50 s back intoin the The age mor that was short of Inventory ber at t cover break 120 prices same day. packers to asking and $187-188 near term st and $121- find good on the Storage repor al. 1, 2012, CME FEEDER nto of July to 2011. staunchly $136.00 the Cold Livestock Journ going basis Augu DRESSED STEERS in the South Belt. Regio feed as ve $179.98 7-26-12 er are LIVE STEERS 118 live in the Corn â&#x20AC;&#x2122;t the Western reportedly Octob cattle on down relati in that, rt.â&#x20AC;? $113.99WEEK ENDING: ed that on Feed dressed rs in the North dressed, buyer suppo futures werenement sts expla place2012 were $183 amus ets, Cattle COF report show ered, , but analy for June al packe Fed cattleimitating g up to s were of trade etings ments down 2012 is considto pre-report de mark The July were biddin . Outsi ophrenic only thing close while mark ed place expectation y. for June schiz issues es did rides last week were up t also show but all were very Frida ess day ly on futur ers one forced busin erlarge repor numb d Euroz concerns, The being term fed cattle one less up. The rollercoast d fuele regarding mic Near when the modestly news Dow in es opene intra-week stic econo were FEED ments a bit of st fed futurat $117.80. and dome wildly. The d in the TLE ON ay Feedlots estimates. ing. Augu on Mond saw a high of fluctuated lost and gaine shedU.S. CAT Capacity then ay, a low of particular from day to day, ay last week 1,000+ futures on Mond 2011 August midday Tuesd morning, triple digits100 points g slight sday Thurs93 gainin over ng Thur $118. 2012 ding as of early day, then then gaini Million $117.47 at $118.20 and Thurs esday, Thursday afHead Wedn s by also and stood oon. futures not ly on point erâ&#x20AC;&#x2122;s day aftern fed cattle but had by over 210 of Hedg ing on. October movement, highs rtain Gottschalk 12.0 fed terno saw some early week 11 Andrew an ente October recapturedafternoon. ay of last Edge gave ets on page 70 11.0 Thursdayopened Mond See Mark d at $123. â&#x20AC;˘ SUSTA I NABI LITY futures $123, peake at $123.10 Nov. Dec. week at day, and stood Oct. 10.0 â&#x20AC;˘ CONSERVATIO N EASEMENTS Jul. Aug. Sept. later that Jun. â&#x20AC;˘ PROFITABI LITY 8 9.0 Apr. May L rn Mar. POTENTIA on page Westeock Feb. feed â&#x20AC;˘ MA RKET Jan. 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ANNUAL AVERAGE CATTLE PRICES Southern Plains

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Continued from page 65

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

Longer-term: Tighter supplies support higher prices Lots of big-picture factors will provide the foundation for beef and, hence, cattle prices in 2013 and beyond. Will European financial problems drag the U.S. into recession? How high will oil and corn prices be? Preliminary forecasts for 2013 assume continued very modest economic growth domestically and a slow-down worldwide. Importantly, normal U.S. feed grain production is assumed for 2013. One aspect to highlight is international trade. In 2011, surging U.S. beef exports and declining imports were the drivers of record high cattle prices. In 2012, those factors were still very important to cattle prices but beef export tonnage declined and imports increased. Still, U.S. export tonnage in 2012 looks to be the second highest ever and the dollar value of beef industry exports (beef, variety meats, etc.) should be a new high. In 2013, the trends of this year will likely continue, so any beef demand improvement will need to come from the U.S. consumers, not those overseas. Beef cowherd liquidation has set the stage for beef production to tighten again in 2013. So, supplies will remain very supportive of beef and cattle prices. The decline in U.S. production will be combined with rather stable beef exports and modest, if any, growth in poultry and pork output means U.S. per capita availability of red meat and poultry in 2013 is forecast to decline further. In fact, calculated per person availability of red meat and poultry in 2013 is forecast to be the smallest since 1987. Corn stocks will be tight at least until 2013 crops are harvested.


Grain prices are expected to remain quite volatile, causing potentially large price swings in calf and yearling prices. But price swings could provide opportunities for producers with sound business and risk management plans to purchase calves and sell yearlings. In the next few years, opportunities to make money putting pasture-based weight gains on calves should continue. Preliminary forecasts for 2013 put the slaughter steer price 2 percent to 6 percent above 2012’s. The strongest fed cattle prices of the year are forecast to be in the second and fourth quarters, similar to the normal seasonal pattern. For the first time ever, quarterly fed cattle prices are forecast to be over $120 throughout the year. In the Southern Plains, forecasts call for yearling and calf prices in 2013 to post a small annual increase. High feedstuff prices make it nearly impossible to match levels posted in the first half of 2012. Over the calendar year, the weakest yearling prices could be in the first quarter of 2013, again assuming a normal growing season next summer. For the year, 700- to 800-pound steers

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


The offerings of

AKAUSH I

, WLJ Editor By Kerry Halladay

Half-blood Brangus/Akaushi heifers. Photo from the American Akaushi Association.

I

n the world of commercial beef production, everyone is looking for something to give their herd that edge to improve the end-product and, ultimately, their bottom line. A lot of strategies revolve around the cattle themselves by way of introducing better genetics for carcass traits, feed efficiency, the ever elusive improved fertility, and more into the herd. When it comes to getting that edge, the old adage of “think outside the box” could be the commercial cattleman’s best strategy. In this case, consider going way outside the box.

Rather than choosing a different sire or venturing out into one of the more common breeds, why not look at a breed you may never have heard of before? Akaushi is a relative newcomer to the world of commercial beef production but well worth consideration. This Japanese breed is known for their exquisite marbling, their higher ratio of heart-healthy fats over saturated fat, and for their well-rounded traits born of decades of meticulous data collection and strictly controlled breeding. Your bottom line rests on a

Full-blood Akaushi Bull. Photo from the American Akaushi Association.

lot of factors—production efficiency, markets for your calves, and producing a product consumers want, to name a few—so a breed that might deliver on all of those can’t be ignored.

Why Akaushi The question, of course, is why this breed over others? Supporters of Akaushi cite a number of benefits of the breed. Akaushi’s history has produced well-rounded cattle with traits that directly pay off in commercial production. The structure of the existing supply and marketing system for Akaushi makes for a ready buyer paying premiums for Akaushi-influenced calves. And at the end of the production system, the breed’s genetic heritage produces beef consumers want to buy and are willing to pay for. The Akaushi breed has a long history of a strictly enforced, closed-herd, meticulously recorded, multi-trait breeding program in its native Japan. This tradition has been continued with the fullblooded cattle in the U.S. As a result, the breed today boasts uniformity and consistent excellence in the traits cattlemen look for; fertility, structural, maternal, calving ease, weaning weight, feed efficiency, carcass quality and more. Continued on page 72

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

71


Continued from page 71

When it comes to knowing beef, Bill Fielding—current CEO of the Akaushi-specific HeartBrand Beef—is among the most well known authorities. He has held numerous positions of note in the packing and refrigeration side of the industry, including holding the presidencies of Excel, ConAgra, Farmland Refrigerated Foods, and Creekstone Farms packing. Fielding’s history with the industry includes 27 years with Cargill where he was head of the meat operation, involvement with Meyer Natural Angus, and several other specialty meat groups. With all this experience, Fielding laid out why Akaushi should be in the minds of ranchers looking to gain that productive edge. “The cattle are more efficient for the rancher, the backgrounder, and the feeder. They marble faster so they use less corn. The breed is centered around producing better quality meat more efficiently that can be priced competitively.” Austin Brown III, of Brown Ranches in Beeville, TX, is a fourth-generation rancher who runs a commercial cow/ calf operation as well as a backgrounding operation in the sometimes unforgiving land of southern Texas. For Brown, the efficiency of the breed was a key feature. “We were Hereford breeders for many, many years. But as business got tougher, we looked for more efficient ways to make a profit and make

Akaushi x Red Angus cow. Photo from the American Akaushi Association.

more out of the limited resources we have down here. We can’t grow our operation down here; we’re landlocked with little option to expand. So we’re constantly trying to figure out how to do more with less. Because we can’t grow our operation, this Akaushi breed allows us to command an excellent premium over the industry.” Brown also spoke highly of the breed’s ability for hardiness, self-sufficiency and ease of keeping. “The beauty of it is that it doesn’t cost any more to use the Akaushi bull than using another bull. We don’t need to bottle raise these cattle. There is no expense or special attention needed. They are a very hardy animal and acclimate very well to a variety of climates.” Brown wasn’t alone in his praise

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

of Akaushi’s robust genetics. J.G. Schwarz recently began using Akaushi bulls on his cowherd. His Big Willow Ranch, in Payette County, ID, can see some harsh winters and he was somewhat concerned. “But the calves get up. I’ve never had any calves not get right up and suck.” In answer to the question of why Akaushi, Bubba Bain, executive director of the American Akaushi Association (AAA), summed the advantages of the breed up nicely. “Simply put, by using an Akaushi bull, in one generation we can advance the commercial cattleman’s product to a level they’ve never been to before. All crosses we’ve put an Akaushi bull on, we’ve seen improvement. If cattlemen are truly wanting to improve their product and their bottom line, Akaushi is the way to do it.” As a relatively new breed to the U.S. with a small market share at the moment, Akaushi cattle come with a unique production and marketing chain situation. The founding source of fullblooded Akaushi genetics in the country is HeartBrand Beef, which operates a ranch in Harwood, TX, with the descendants of the 11 animals originally imported from Japan. Stemming from the original herd, six other fullblood breeders have since developed in the U.S. Thanks in part to AAA’s rigorous whole herd reporting system and quality standards, HeartBrand has developed a source-verified, verticallyintegrated production system for cattlemen wanting to work with Akaushi genetics. The system has a rich dataset for producers to work with and offers premiums for Akaushi-influenced calves. Continued on page 74


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Continued from page 72

This ready-made buyer of calves can be very attractive to commercial cattlemen, particularly when calves are purchased at a premium. Despite this, cattlemen who choose to use Akaushi genetics are not required to sell their calves to HeartBrand. Calves and feeder/fed animals can be sold elsewhere by conventional means, as long as they are all terminal. Fielding is confident cattlemen will appreciate the HeartBrand offer. “We feel the premium we pay for the calves will be better than what the

Photo from the American Akaushi Association.

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

producer will get on the grid.” These premiums go up with the percentage of Akaushi blood in the calves, all of which are DNA-verified. This detail may encourage cattlemen to not only use Akaushi bulls on their existing cowherd, but retain F1 Akaushi heifers for breeding and pursue AAA’s A4 Advantage Program. By the fourth generation of breeding back retained Akaushi-influenced heifers to fullblooded Akaushi bulls, ranchers can achieve 15/16 Akaushi animals, considered purebred. While not immediately or directly tied to the bottom line, having a purebred herd opens up the possibility of breeding purebred seedstock. Bain commented that the upgrading program has been working well for both AAA and ranchers who have participated since the program began in 2009. Charlie Cobb of 7J Ranch in Hereford, TX, is participating in the A4 program. “We’re very impressed with our yearling [half-blood Akaushi] heifers. We’ve bred them back to Akaushi bulls to get some three-quarters. They are just excellent and we’re very pleased. Their disposition is excellent, their fertility is very good, and their structure and conformation is better. We had a conception rate of about 95 percent and that’s even during this horrible drought.” Cobb praised both AAA and HeartBrand Beef for how well they both have helped commercial cattlemen and have been true to their word on what the breed can deliver. Recent studies conducted by the National Cattlemen’s Beef Association on what consumers want show consumers are becoming more selective with the meat they buy and are generally eating less of it. Economic uncertainty is also making consumers more discriminating about what they buy. When they choose to buy beef, however, they look for and expect a tender, flavorful beefeating experience. Marbling is directly tied to both flavor and tenderness, and Akaushi is way ahead of the pack on marbling. Akaushi cattle are genetically predisposed to marble more and faster than other breeds. This was a trait selected for over a century in their native land. “The Japanese successfully developed a breed with intense marbling,” said Jordan Beeman, president of HeartBrand. “The difference is they Continued on page 76


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Continued from page 74

looked at the cattle from the inside. The quality of the offsprings’ carcass would determine the quality of the sire. But even in incorporating the meat quality into their judging, no traits have been sacrificed for that improved product.” Marbling plays a large part in the grading results of individual carcasses. The more marbling, the more likely grades of Prime or Choice can be achieved. Fielding commented on this facet of the breed’s influence.

“If a rancher uses an Akaushi bull on any cow—purebred or cross—the carcass [of the resulting animal] will be twice the Prime and upper Choice they might have gotten with another breed. They are going to get a better premium with an Akaushi bull.” This was certainly the case for Brown. He reported his early experiences breeding his registered Hereford cows to Akaushi bulls were exceptional. “We got upwards of 15 percent Prime [on the F1 crosses], and the balance would be high Choice. So the Akaushi

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

genetics are very, very powerful.” When his ranch started replacing Hereford cows with registered Red Angus cows, Brown said the quality of product jumped even higher. “With our Red Angus crossed with Akaushi bulls we can get 20 to 25 percent Prime, with no additional cost. We now use Akaushi bulls exclusively.” When asked about the overall grade make up of his calf crops, Brown said in the three crops halfblood Akaushi cattle of his which have been processed, he remembers only three yield grade 4s. In addition to the aforementioned benefits of marketing structure set up by HeartBrand, the company has several branded meat programs based on DNA-verified quality specifications set by AAA. The premium brand, running under the name HeartBrand, is the prime-plus quality product. Originally, this brand saw only meat from fullblooded animals, but has begun seeing beef from some crossbred animals as quality improves. Prime and Choice product coming from Akaushiinfluenced animals is marketed as Beeman Family Ranch Gold and Silver respectively. Even the Choice-level brand program only labels the upperlevel USDA Choice cuts from Akaushiinfluenced cattle. “All of the programs are Akaushi beef,” said Beeman regarding the branded programs. “They are all natural and we don’t give them any hormones.” This detail also positions Akaushi beef sold via HeartBrand well for the growing niche market of consumers who seek specially-raised meats. Demand for the branded products is reportedly doing extremely well to the point of being sold out, even at premium prices during this down economy. “Because of the consistency afforded by the DNA testing to ensure 50 percent or more Akaushi, we know beef sold under the HeartBrand and Beeman brands is the highest quality,” said Fielding. While a producer of Akaushi beef, Cobb has also enjoyed the fruits of his and others’ labor. “We’ve bought some of the HeartBrand beef and served it to guests. It is just excellent. Now everyone wants to come back.” He laughed at his own expense, saying, “I don’t think they want to come see us, they just want to keep eating that beef.” While not as familiar with food production as in the past, consumers


are growing more concerned about the health impacts of the food they choose. So selecting breeds with known genetic predispositions to produce end-product with traits consumers want, such as healthier fats, is a way to get that economic edge. By giving consumers what they want, you will always have a market for your product. In addition to Akaushi’s marbling abilities, the makeup of that fat is vastly different, having higher ratios of monounsaturated fat to saturated fat. According to outside analysis, by groups including Washington State University and Texas A&M, of HeartBrand data compared to information in USDA’s Agricultural Research Service and Nutrient Database, Akaushi beef (HeartBrand 80 percent lean ground) has a monounsaturated fat to saturated fat ratio of 1.45 while the next highest protein (unbranded 95 percent lean ground beef) had a ratio of 0.96.

Other health benefits of Akaushi-influenced beef include the presence of oleic acid, the most abundant fatty acid in monounsaturated fats. According to numerous outside sources—including the aforementioned universities, the Journal of the American Heart Association, and the Journal of Clinical Nutrition—oleic acid can help reduce undesirable LDL blood cholesterol without decreasing HDL cholesterol levels (good cholesterol). Schwarz sees the breed as a way for the beef industry to keep serving the demands of health-conscious consumers. In addition to praising the benefits of the heart-healthy monosaturated fat and oleic acid in Akaushi-influenced beef, Schwarz had to laugh. “Philosophically, I like the element that it tastes better and it’s also better Continued on page 80

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for you. You know, usually it’s the other way around.” In the end, all the cattlemen who’ve begun using the breed say it has a bright spot in the future of American beef. Brown spoke in no uncertain terms of the value he sees in Akaushi. “This is a breed that can change the industry.”

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wary of investing in new or unfamiliar breeds like Akaushi. The added element of a limited number of players in the fullblood genetics game and AAA requirements could turn the suspicious away. Past bad experiences with unknown “fad breeds” may also weigh on the minds of some. Beeman understands these concerns, but says the strengths of the breed, coupled with the programs of HeartBrand and AAA, speak for themselves. “It’s understandable that people are doubtful. They’ve been burned before. But the real key is that when they see the original cattle today, they can see the longevity and the performance. They can then go to the feedlot and see how the cattle perform there and see the carcasses. “The difference with our program versus others people may have tried in the past is we have enough data to be very transparent. We are willing to show all our results, good or bad. We’re very confident people will get on board because they see our cattle perform the way we say they do.” The point about data and transparency is a big one for HeartBrand and AAA. On its own, AAA requires members participate in its whole herd reporting system which returns more comprehensive data than other systems. If ranchers choose to sell calves back to HeartBrand, data is recorded at each point of individual animals’ lives. Because of HeartBrand’s vertically-integrated system, this information is collected and communicated back to cattlemen. Data for all points of life gives cattlemen the ability to make decisions about their breeding program informed by all points of view: production, feeding, and end-product quality. Bain, a cattleman himself with 35 years of varied hands-on experience, spoke at length of the problem of cattlemen having little if any information on how their cattle perform at feedlots or on the rail. Decisions about breeding and production practices are made basically in the dark. “That’s one of the weaknesses of the current system. With [the HeartBrand] system, the producer will get the feeding data from the feed yard and carcass data back from the packer. I think that’s important that we offer this back to the producer. And this is all done in one generation.” HeartBrand also prides itself on its transparency. Fielding spoke of Continued on page 82

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August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


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Continued from page 80

an ongoing side-by-side study to assess comparative fertility, conception rates, weaning weights and so on of Akaushi bulls/F1 crosses in real world range conditions. The commercial cowherds owned by Paul Davis at the Alvord Ranch, and Mike Davis at the Kueny Ranch, both near Princetown, OR, were turned out with an equal number of Akaushi and non-Akaushi

bulls to see which bulls sired the most calves. The calves—both indigenous commercial and halfblood Akaushi, born spring 2012—will be raised together under the same conditions. Once weaned, they will be moving to a backgrounding operation in Cascade, ID, operated by Phil Davis, then onto the feed yard, Bovina Feeders in Bovina, TX. Data has been gathered on these cattle throughout their lives and

that will continue to when they are slaughtered. Once the study cattle are processed, their carcass data and all preceding data will be assessed to give a greater picture of how the breed performs against others in real, hands-on situations commercial cattlemen care about. “We’re going to have an outside person doing the stats on this,” Fielding said. “And I mention this up front because we welcome anyone to challenge us or check out what we’re doing.”

Additional Akaushi information

½ Akaushi x ½ Red Ang steers. Photo from the American Akaushi Association.

Akaushi is a Bos taurus type breed originating in Kumamoto, Japan. The breed’s name translates to “red cow” and it is one of Japan’s four indigenous breeds. Akaushi is sometimes incorrectly called “waygu,” which is a catchall term for Japanese beef cattle often mistaken in the U.S. as a breed itself. Other Japanese beef breeds are Kyroshi (Japanese black), the Japanese polled, and the Japanese shorthorn. The Akaushi cattle of today are the result of over a century of intense genetic selection in Japan and over 80 years of meticulous record keeping through the Japanese Akaushi Asso-

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ciation (JAA) and the Japanese government. Pedigrees, economic data, and carcass assessment records have been kept for every animal in the entire breed since the JAA was formed. The breed has been closed since 1923. As in their native home, the HeartBrand herd is a closed herd to preserve the limited genetic treasure of these cattle in the U.S. Of the original 11 animals brought over in 1994 (eight females and three males) due to a unique trade opportunity in the Trade Act of 1992, six are still living (four females and two males).

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EPDs

The table of adjustment factors to be used to estimate across-breed expected progeny differences (AB-EPDs) for eighteen breeds was released at the Beef Improvement Federation Annual Meeting in Houston, TX, on April 20 (see Table 1). Across-breed adjustment factors have been calculated for growth traits and maternal milk since 1993. Adjustment factors for carcass traits have been calculated since 2009; to be included, breeds must have carcass data in the U.S. Meat Animal Research Center (USMARC) database and report their carcass EPDs on an actual carcass basis using an age-adjusted endpoint. Bulls of different breeds can be compared on the same EPD scale by adding the appropriate adjustment factor to the EPDs produced in the most recent genetic evaluations for each of the sixteen breeds. The AB-EPDs are most useful to commercial producers purchasing bulls of more than one breed to use in cross-breeding programs. For example, in terminal cross-breed systems, AB-EPDs can be used to identify bulls in different breeds with high growth potential or favorable carcass characteristics. As an example, suppose a Simmental bull has a yearling weight EPD of + 52.1 lb and a Gelbvieh bull has a yearling weight EPD of + 84.0 lb. The across-breed adjustment factors for yearling weight (see Table 1) are 22.4 lb for Simmental and -13.5 lb for Gelbvieh. The AB-EPD is 52.1 lb + 22.4 lb TABLE 1:

ADJUSTMENT FACTORS TO ADD TO EPDs OF EIGHTEEN DIFFERENT BREEDS TO ESTIMATE ACROSS BREED EPDs Breed Angus Hereford Red Angus Shorthorn South Devon Beefmaster Brahman Brangus Santa Gertrudis Braunvieh Charolais Chiangus Gelbvieh Limousin Maine-Anjou Salers Simmental Tarentaise

BW 0.0 2.7 2.4 6.0 4.2 6.7 11.1 3.7 7.4 1.2 8.6 3.3 4.0 3.8 4.1 1.8 5.2 1.7

WW 0.0 -2.8 -0.6 15.7 3.2 35.3 42.5 13.0 37.7 -19.2 40.1 -14.9 5.7 -0.9 -13.0 -3.1 24.9 33.1

YW 0.0 20.1 -12.0 39.4 -6.3 32.5 4.8 13.5 33.9 -38.5 46.8 -31.3 -13.5 -34.7 -34.5 -14.3 22.4 21.2

Milk 0.0 -16.7 -3.1 17.9 -2.3 7.8 22.4 6.8 -0.4 5.7 13.6 -9.2 -4.7 2.4 19.8 23.4

MB 0.00 -0.34 0.03 -0.14 0.05

Rib 0.00 -0.11 -0.10 0.17 0.15

Fat 0.000 -0.053 -0.034 -0.148 -0.111

-0.67 -0.67 -0.46 -0.42

-0.19 0.23 0.92 0.40

-0.115 -0.095 -0.222 -0.157

-0.70 -0.79 -0.11 -0.55

1.07 0.88 0.75 0.92

-0.210 -0.210 -0.215

= 74.5 lb for the Simmmental bull and 84.0 - 13.5 = 70.5 lb for the Gelbvieh bull. The expected yearling weight difference when both are mated to cows of another breed (e.g., Angus) would be 74.5 lb – 70.5 lb = 4.0 lb. Most breed associations publish EPDs at least on an annual basis. These EPDs predict differences expected in performance of future progeny of two or more bulls within the same breed for traits including birth weight, weaning weight, yearling weight, and maternal milking ability (as reflected in progeny weaning weights). Normally, the EPDs of bulls from different breeds cannot be compared because most breed associations compute their EPDs in separate analyses and each breed has a different base point. The across-breed adjustment factors allow producers to compare the EPDs for animals from different breeds for these traits; these factors reflect both the current breed difference (for animals born in 2010) and differences in the breed base point. They should only be used with EPDs current as of April 2012 because of potential changes in EPD calculations from year-to-year. It is important to note that the table factors (Table 1) do not represent a direct comparison among the different breeds because of base differences between the breeds. They should only be used to compare the EPDs (ABEPDs) of animals in different breeds. To reduce confusion, breed of sire means (i.e., when sires from two different breeds are mated to cows of a third, unrelated breed) between 2010 born animals under conditions at USMARC are presented in Table 2. The adjustment factors in Table 1 were updated using EPDs from the most recent national cattle evaluations conducted by each of the eighteen breed associations (current as of March 2012). The breed differences used to calculate the factors are based on comparisons of progeny of sires from each of these breeds in the Germplasm Evaluation Program at USMARC in Clay Center, Nebraska. These analyses were conducted by USMARC geneticists Larry Kuehn (email: Larry.Kuehn@ars.usda.gov; ph: 402-762-4352) and Mark Thallman (email: Mark.Thallman@ars.usda.gov; ph: 402-762-4261).

You Can Git’ R Done with Sammis Bulls lf fs Git-R-Done 730 u W

Marbling score units: 4.00 = Sl00; 5.00 = Sm00

a

TABLE 2:

BREED OF SIRE MEANS FOR 2010 BORN ANIMALS UNDER CONDITIONS SIMILAR TO USMARC Breed Angus Hereford Red Angus Shorthorn South Devon Beefmaster Brahman Brangus Santa Gertrudis Braunvieh Charolais Chiangus Gelbvieh Limousin Maine-Anjou Salers Simmental Tarentaise

BW WW YW Milk 89.8 582.0 1036.8 94.3 576.2 1004.6 90.3 566.3 999.4 96.3 565.7 1015.6 94.8 578.7 1021.3 95.0 578.3 997.3 100.8 592.2 980.0 92.4 571.0 1006.9 96.0 577.7 992.7 92.1 556.7 976.7 97.2 599.3 1041.2 93.2 556.9 989.1 93.3 580.8 1012.7 93.3 579.5 1000.0 93.8 561.4 995.3 91.6 573.2 1016.8 93.9 590.7 1030.5 91.6 584.1 1001.6

Marbling score units: 4.00 = Sl00; 5.00 = Sm00

a

84

MB Rib Fat 570.2 5.92 12.96 548.5 5.19 12.77 562.5 5.59 12.60 568.3 5.34 12.86 568.8 5.84 12.99 558.0 576.9 565.8 4.82 12.46 582.3 5.23 13.59 560.7 5.05 13.76 5.32 13.06 578.5 559.1 4.75 14.24 563.2 4.92 13.67 570.7 5.58 13.40 571.4 5.11 13.75 572.2

0.587 0.526 0.544 0.418 0.477

0.463 0.391 0.356 0.445 0.371 0.368 0.375

Sire: GAR Retail Product BW +.2 WW +47 YW +90 Milk +24 Marb +.50 REA +.46 FAT -.006

Calving-Ease C l i E and Performance Bulls Available at the Ranch Anytime y Sons of: Wullfs Git-R-Done 730 • VDAR Really Windy 7261 Five Star Front Page 7068 • FCR Final Answer 0103

Sammis Angus Ranch

Joe and Michelle Sammis P.O. Box 625 • Dorris, CA 96023 • 530-397-3456

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


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Market your cattle with the professionals! August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

85


g: Sellin20 200 Bulls and 1150 Females

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RE +.83 $W +41.10 $F +37.97 $G +26.70 $B +60.21

Werner War Party 2417

RE +.67 $W +38.08 $F +52.76 $G +27.17 $B +76.80

RE +.79 $W +37.76 $F +66.61 $G +33.65 $B +81.51

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August 20, 2012 â&#x20AC;˘ WLJâ&#x20AC;&#x2122;s Commercial Cattle Issue â&#x20AC;˘ Section Two


The fiscally prepared cattleman By Kerry Halladay, WLJ

Editor

The paths to fiscal stability are numerous and well travelled. One of the best ways to become financially stable is to be financially prepared. And being prepared means knowing what might come your way and having the tools to handle it if or when it does. Have you considered what a worstcase scenario in corn or live cattle pricing might mean for your operation? What about a potentially devastating event like a natural disaster or an IRS audit? How long can your operation deal with the current drought before something must give? Weathering these situations and more can be made easier with good financial recordkeeping, knowing where you stand with debt, and knowing and using the risk management tools available.

Records for planning and protection According to the cliché, you can’t know where to go if you have no idea where you’ve been. Though this is usually spouted in terms of life direction and other abstract things, it applies just as well for finances and business matters. If you have no idea of where you are financially at any given point, how can you plan for the future, let alone be prepared when disaster—be it natural, social, or economic—strikes? Good recordkeeping not only improves your financial wellbeing overall, but also serves to protect you in a number of situations you may face as a rancher and business owner. From annual taxes to audits, the IRS can and often does ask for proof of income, expenses and item inventories. Some government programs can require several years of data, and, increasingly, the Environmental Protection Agency (EPA) is demanding information from agricultural producers. At the most every-day level, good recordkeeping serves as a tool in making managerial decisions about an operation. Hunter Metcalf, a commodi-

ties analyst with Wells Fargo Bank, calls good and timely recordkeeping essential. “It’s useful to stay as up-to-date as possible with the operation so that potential weak points can be identified and monitored on a real-time basis. Understanding break-evens and market risk is important to the lender, but essential to appropriate management and decision-making within the business.” Inventory—Every disaster preparedness public service announcement will tell you to have a household inventory. The same is true of finances when it comes to your business. David Smith of Texas A&M’s AgriLife Extension, speaking in terms of a natural disaster, advises the following: “A comprehensive accounting of livestock, property, or potentially hazardous substances is essential to farmstead disaster preparedness. Livestock may be killed, lost, or stolen during an emergency situation. Attach animal ID tags on all animals and note the ID number and description of the animal. “Maintain a list of machinery and equipment, including make and model number. Keep an updated list of pesticides, fertilizers, fuels, medicines and other chemicals. During a disaster, these chemicals can wash into streams or contaminate food supplies, placing people and animals at risk.” Should you find yourself in an IRS audit or in need of making an insurance claim, or some event which would have drastic financial implications— such as a natural disaster, an attack by animal rights terrorists, or an EPA ruling against you—occurs, having a detailed, complete inventory of your possessions on the ranch will save you a lot of headache. If you can, including the values of all, or as many as possible, of the items on your inventory will make the record even more useful. Proof of purchase price, appraisal values, and/or replacement costs could come in particularly handy if you find yourself in a total loss situation and are forced to make an insurance claim. Cash flow—Knowing where your money comes from and goes to at any given point is an important financial habit. Once again, the practice can act as a safeguard to you in a less than pleasant financial situation. It also gives you an invaluable tool in making informed management decisions regarding your daily life and operation.

Jason Karszes of the Department of Agricultural, Resource, and Managerial Economics at Cornell University has an exhaustive list of categories of income and expense needing individual attention when managing accounts. He calls his list of 32 main accounts and 85 subaccounts a “minimum list of accounts to have for management reasons and will meet most of the needs for analysis, IRS, and banking.” Below are some of Karszes’ recommendations grouped by income and expense. Income Accounts: Ag program payments (FSA payments, cost sharing, etc.); calf sales; capital sales (real estate, machinery, etc.); cull cow/bull sales; crop sales; refunds (workman’s compensation, gas tax refunds, etc.); non-ranch income (spouse’s income, income from hobby, etc.) Expense Accounts: Breeding costs (fees, supplies, etc.); capital purchases (vehicles, land, buildings, equipment/ machinery, etc.); cattle purchases (bulls, replacement animals, etc.); crop expenses (seed, fertilizer, chemicals, harvesting, etc.); machine/equipment/ vehicle rental; family expenses (insurances, utilities, mortgage, household needs, etc.); gas/fuel/oil; labor expenses (wages, insurance, benefits, training, etc.); lease and loan payments; rent; repairs; taxes; veterinary (services, consultation, medications, etc.) Though this level of detail can be daunting if you’re not already engaged in it, it is worth the effort. Says Mary Peabody of the University of Vermont’s Extension, “Having a clear sense of how your costs are changing relative to your sales is a key factor in making high-quality management decisions.” It is important to keep in mind that financial recordkeeping is different from production-related recordkeeping. According to Delton Gerloff and Robert Holland Jr. of the University of Tennessee Extension, “Financial records justify or prove farm income or expense transactions. Production records are items that relate to quantities of inputs and levels of production by enterprise and/or by resource type.”

Considering debt Debt has become a loathed watchword in our increasingly credit-based society, both domestic and global. News of it abounds—student debt, state debt levels, who owns American debt Continued on page 90

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

87


SA LE CA LENDAR A LL BREEDS

Sept. 4 – Madera Select, Range Bull & Replacement Female Sale, Madera,CA Oct. 6 – Central California World of Bulls Sale, Cattlemen’s Livestock Market, Galt, CA Oct. 7 – Cal Poly Bull Test Sale, San Luis Obispo, CA Oct. 20 – Western Stockman’s Market, Bull & Female Sale, Famoso, CA Dec. 16 – California Female Expo, All Breed Female Sale, Turlock, CA Jan. 12-27, 2013 – National Western Stock Show, Denver, CO Jan. 22-26, 2013 – Red Bluff Bull & Gelding Sale, Red Bluff, CA Mar.10 – Bulls for the 21 st Century, Snyder Livestock, Yerington, NV

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Sept. 3 – Performance Plus Bull Sale, O’Neals, CA Sept. 6 – Vintage Angus Ranch, Bull Sale, Modesto, CA Sep. 8 – Ray-Mar Ranches, Bull Sale, Escalon, CA Sept. 9 – The Heritage Bull Sale, Wilton, CA Sept. 11 – California Bullfest, Oakdale, CA Sept. 14 – Tehama Angus, Bull Sale, Gerber, CA Sept. 15 – Leachman – Top Line Division, Bull Sale, Aromas, CA Sept. 16 – Oak Ridge Angus Farms, Production Sale, Calistoga, CA Sept. 26 – Eagle Pass Ranch, Bull Sale, Dos Palos, CA Sept. 29 – Riverbend Ranch, Female Sale, Idaho Falls, ID Oct. 8 – Baldy Maker Bull Sale, McArthur, CA Oct. 10 – R.A. Brown Ranch, Bull, Female & Quarter Horse Sale, Throckmorton, TX Oct. 13 – California Angus & Charolais Breeders, Bull Sale, Turlock, CA Oct. 14 – Vintage Angus RanchFemale Sale, Modesto, CA Oct. 15-21 – HAVE Angus, Internet Female Sale, Wilton, CA Oct. 16 – 9 Peaks Ranch, Bull Sale, Terrebonne, OR Oct. 18 – Thomas Angus Ranch, Bull & Female Sale, Baker City, OR Nov. 17 – Riverbend Ranch, Bull Sale, Idaho Falls, ID Nov. 20 – Mytty Angus Ranch, Production Sale, Florence, MT Nov. 30 – Bentz Ranch, Bred Heifer Sale, Juntura, OR Dec. 1 – Leachman Cattle Co., Bull Sale, Loma, CO Dec. 7 – Burgess Angus Ranch, Bull Sale, Homedale, ID 2013 Feb. 13 – Meadow Acres Angus, Production Sale, Echo, OR Feb. 17 – Bar CK Cattle Co., Bull Sale, Culver, OR March 2013 – Silver Bit Angus Ranch, Bull Sale, May, Idaho Mar. 4 – Mytty Angus Ranch, Bull Sale, Florence, MT Mar. 9 – Riverbend Ranch, Bull Sale, Idaho Falls, ID Mar. 14 – Sunny Okanogan, Bull Sale, Okanogan, WA April 2013 – Bar T Bar Ranches, Bull Sale, Winslow, AZ

BA LA NCER

Sept. 8 – Ray-Mar Ranches, Bull Sale, Escalon, CA

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

Sept. 15 – Leachman – Top Line Division, Bull Sale, Aromas, CA Sept. 26 – Eagle Pass Ranch, Bull Sale, Dos Palos, CA

BEEFMASTER

Sept. 29 – Western States Beefmaster Breeders Assn, Bull & Female Sale, Dinuba, CA

CHA ROLA IS

Oct. 13 – California Angus & Charolais Breeders, Bull Sale, Turlock, CA Mar.12, 2013 – Romans Ranches, Production Sale, Vale, OR

GELBVIEH

Sept. 26 – Eagle Pass Ranch, Bull Sale, Dos Palos, CA April 2013 – Bar T Bar Ranches, Bull Sale, Winslow, AZ

HEREFORD

Sept. 11 – California Bullfest, Oakdale, CA Oct. 8 – Baldy Maker Bull Sale, McArthur, CA

HOTLA NDER

Oct. 10 – R.A. Brown Ranch, Bull, Female & Quarter Horse Sale, Throckmorton, TX

RED A NGUS

Sept. 15 – Leachman – Top Line Division, Bull Sale, Aromas, CA Sept. 22 – McPhee Red Angus, Bull & Female Sale, Lodi, CA Oct. 10 – R.A. Brown Ranch, Bull, Female & Quarter Horse Sale, Throckmorton, TX Oct. 27 – Pieper Red Angus, Production Sale, Hay Springs, NE Nov. 14 – 5L Red Angus, Fall Production Sale, Sheridan, MT Nov. 30 – Bieber Red Angus Ranch, Female Sale, Leola, SD Dec. 1 – Leachman Cattle Co., Bull Sale, Loma, CO April 2013 – Bar T Bar Ranches, Bull Sale, Winslow, AZ

SIMA NGUS

Sept. 26 – Eagle Pass Ranch, Bull Sale, Dos Palos, CA Oct. 10 – R.A. Brown Ranch, Bull, Female & Quarter Horse Sale, Throckmorton, TX

SIMMENTA L

Feb. 4, 2013 – Gateway Simmental & Lucky Crow, Bull Sale, Lewistown, MT

STABI LIZER

Sept. 15 – Leachman – Top Line Division, Bull Sale, Aromas, CA Dec. 1 – Leachman Cattle Co., Bull Sale, Loma, CO

COMMERCIA L

Sept. 10-11 – Western Video Market, Haythorn Ranch, Ogallala, NE Oct. 16 – Turlock Livestock Auction Yard, Annual Special Feeder Sale, Turlock, CA Dec. 4 – Western Video Market, Silver Legacy Hotel & Resort, Reno, NV Dec. 11 – Turlock Livestock Auction Yard, Anniversary Special Feeder Sale, Turlock, CA

HORSE

Oct. 10 – R.A. Brown Ranch, Bull, Female & Quarter Horse Sale, Throckmorton, TX


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Driven by Performance Since 1943 August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

89


Continued from page 87

and how much of it, the debt of other countries, and what all of it means for our financial world. But strategic use of loans and the taking on of debt is necessary and at times useful. “If a business is going to expand and improve, bank debt is the most classic form of financing,” said Metcalf. “Growing an operation is an inherent aspect of becoming more efficient and increasing returns.” Despite the necessity of taking on more debt (leverage), it is something to be done cautiously and according to the individual needs and strengths of the operation. “When considering taking on more leverage, consider what a maximum potential loss could be and how that will affect debt service. Moreover, what does the rancher’s remaining balance sheet look like? It can take generations for a rancher to establish a solid equity position; but too much leverage and adverse market conditions can quickly wipe that out. Long-term margin forecasting is especially tough in the volatile commodities space, so it’s prudent to look at a couple of different market scenarios,” Metcalf said.

When asked about the allure of low interest rate loans, Metcalf pointed out that the interest rate isn’t the only part of a loan to look at. Other elements such as covenants, security agreements, guarantees, capital ratios of the lender, and one’s relationship with their bank (not just their banker) are all important when considering additional loans. Despite sharing his general advice on the topic, Metcalf stressed the necessity of making financial moves based on the individual needs and capabilities of every operation. Knowing your operation, yourself, and your goals is essential. “Debt and commodity markets are in unchartered territory these days, and even the most sophisticated people have a tough time feeling out where we’ll be next year—much less in several years. The important thing is finding the appropriate level of debt given a rancher’s current financial status, future business plans, and risk management sophistication.”

Financial cushion and risk management

The similarities of financial preparedness and disaster preparedness

continue to the recommendation of having a store of money available. When asked to pick one thing, Metcalf cited a solid capital base/equity as the most important element of being fiscally prepared. “This is the most important concept in business. In general, the greater the unpredictability of pricing and profit margins, the greater the capital needed. Livestock production is the definition of unpredictable (especially backgrounding and feed-to-finish operations). A strong equity buffer is always advisable in the cattle business.” While in the case of earthquake or flood emergency kits $300 or so in cash might be suitable as an emergency stash, your buffer cash will need to be considerably larger for your operation. Exactly how much available liquid capital you keep aside for your operation in case of financial problems depends on a number of factors such as the size of your operation, what financial hardships (including natural disasters) you feel are a relevant concern for your operation or area, and how much you are able to put aside and not touch. Continued on page 92

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90

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two


91


Continued from page 90

Metcalf suggested having twice what might be lost in a worst-case price move scenario in available equity. He offered an example. “In feeding cattle to finish, insti-

tutions sometimes consider a $20/ cwt drop in fed cattle prices and a $2.50/bu rise in corn as a worst-case scenario—having twice the amount of capital to sustain such a move is a conservative strategy.” If ranchers don’t have that sort of

S For more information contact any member of the West

92

August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

available equity, Metcalf suggested locking into corn and live cattle forward purchase and sale contracts as a way to mitigate risk. Anything is better than nothing. “The important thing—even for the most risk tolerant producer—is to realize it’s advisable to have a minimum level of protection in place. As we’ve seen, large market moves can happen, and there’s no use accepting abundant amounts of risk if it means you won’t be in business to do so again next month.” There are a variety of ways to protect yourself financially. What is offered in your area or by your financial institution may differ from the offerings of other areas or institutions. Metcalf said that in his experience, cattlemen often overlook the value and variety of risk management tools and/ or don’t understand how they can help their operation. “In today’s markets, a rancher can be very capable in managing the physical operation, only to be beaten down by macroeconomic and/or market factors. Banks are in the business of serving their customers, and an operation owner should seek out his lender for information on all of the products available to manage an operation.”


August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

93


Ad Index 5L Red Angus ................................................ 96 9 Peaks Ranch .............................................. 27 A1 Mist Sprayers Resources, Inc. ................. 58 AA Acres ........................................................ 90 ABS Global .................................................... 26 Allflex USA..................................................... 63 Amador Angus ............................................... 57 American AgCredit......................................... 25 American Akaushi Association....................... 73 American Angus Association ......................... 63 American Angus Hall of Fame ....................... 94 American Hereford Association ..................... 29 American Live Stock Insurance Company..... 88 American Simmental Association .................. 40 Animal Health Express Inc. ........................... 80 Anipro ............................................................ 61 Baldy Maker Bull Sale ................................... 17 Bar CK Cattle Co. .......................................... 78 Bar R Ranch .................................................. 74 Bar T Bar Angus ............................................ 65 Beefmaster Breeders United ......................... 33 Bell Ranch ..................................................... 34 Bianchi Ranches............................................ 75 Bieber Red Angus Ranch .............................. 32 Booker, “Butch” C.D. - Auctioneer ................. 62 Booker, “Butch” C.D. - Auctioneer ................. 80 Borges Angus Ranch ..................................... 40 Burgess Angus Ranch ................................... 82 California Bull Fest Sale ................................ 18 California Cattlemen’s Association ................ 42 Cal Poly - Animal Scs. Dpt............................. 24 Cattlemen’s Livestock Market........................ 50 CB Ranch ...................................................... 54 Central California World of Bulls Sale .......... 50 Chandler Herefords ....................................... 31 Cherry Glen Beefmasters .............................. 41 Circle D Corp. ................................................ 60 DeForest Livestock ........................................ 64 Diamond W Corrals ....................................... 61 Dow Ranches ................................................ 35 Duarte, Eric - Auctioneer ............................... 70

Eagle Grip Cattle Co...................................... 40 Eagle Pass Ranch ......................................... 36 El Rancho Espanol de Cuyama..................... 92 Flying U Angus Ranch ................................... 39 Fresno State Agricultural Foundation ............ 52 Furtado Angus ............................................... 77 Gateway Simmental ...................................... 46 Genoa Livestock ............................................ 19 Gonsalves Ranch .......................................... 54 Grand National Rodeo & Stock Show ........... 69 H & M Gopher Control ................................... 22 H.A.V.E. Angus .............................................. 67 Hardesty Cattle Co. ....................................... 30 Heritage Bull Sale, The.................................. 47 Honnen Equipment Co. ................................. 40 Horton Feedlots Inc. ...................................... 65 Hutchison Western ........................................ 58 Hydro Resources ........................................... 28 International Brangus Breeders Association.. 68 J Bar Stenberg Ranch ................................... 54 Kelly Trout - Auctioneer ................................. 83 King Herefords, Angus & Charolais ............... 45 Leachman Cattle of Colorado ........................ 10 Leachman-Topline Division............................ 11 Lienemann Management Productions ........... 64 Lone Oak Feeders ......................................... 44 Madsen Angus & Herefords........................... 70 McPhee Red Angus ....................................... 51 Meadow Acres Angus Ranch......................... 54 Merial ............................................................. 12 Merial ............................................................. 13 Moly Mfg., Inc. ............................................... 43 Multimin ........................................................... 8 Mytty Angus Ranch.......................................... 5 National Western Stock Show ....................... 15 No Bull Enterprises ........................................ 83 Oak Knoll Herefords ...................................... 67 Oak Ridge Angus Farm ................................. 59 Parasal Mfg ................................................... 70 Performance Plus Angus Bull Sale - O’Neal Ranch .............................................. 56

Pieper Red Angus.......................................... 16 Powder River Livestock & Handling Equip. ... 83 Powell Scales Northwest ............................... 67 Pratt Farms Livestock .................................... 66 Producers Stockyards - Madera .................... 76 R.A. Brown Ranch ......................................... 95 Rancher’s Select Bred Heifer Sale (Bentz Ranch)................................................ 93 Ray-Mar Angus Ranch .................................... 3 Red Bluff Bull & Gelding Sale .......................... 2 Red River Farms ........................................... 57 Ritchey Mfg. Co. ............................................ 44 Riverbend Ranch ........................................... 91 Rohrer Manufacturing Inc. ............................. 13 Romans Ranches .......................................... 90 Roundup Internet Livestock Marketing .......... 75 Running Creek Ranch Co................................ 9 Salt Creek Industries ..................................... 77 Sammis Angus Ranch ................................... 84 Schohr Herefords .......................................... 18 Select Sires ................................................... 53 Silver Bit Angus Ranch - Scott Whiteworth ... 16 Snyder Livestock Co...................................... 14 Sooner Scales, Inc. ....................................... 69 Sunny Okanogan Angus Ranch .................... 20 Tehama Angus Ranch ................................... 89 The Cattle Range .......................................... 72 Thomas Angus Ranch ................................... 86 Trent Stewart - Auctioneer ............................. 64 Triner Scale ................................................... 82 Turlock Livestock Auction .............................. 81 Vintage Angus Ranch ...............................48-49 West Coast Brangus Breeders Association ... 92 Western Feed Supplements .......................... 79 Western States Beefmasters Breeders Association ..................................... 41 Western Stockman’s Market .......................... 23 Western Video Market/Shasta Livestock ....... 85 Westwind Ranch............................................ 60 Wild West Angus ........................................... 15 Z Tags of North America ................................ 38

Celebrating Our 73rd Year in Business! 1939-2012

MAKE YOUR NEXT ANGUS SALE A HALL OF FAME SALE! 8 94

August 20, 2012 August • WLJ’s 20, 2012 Commercial • WLJ’s Cattle Commercial Guide Cattle Issue •Issue Section • Section Two Two


August 20, 2012 • WLJ’s Commercial Cattle Issue • Section Two

95


“Right for the Times” FRONTLINE ~

INNOVATIVE GENETICS

Functional Low Maintenance Production P rod duct uctio uc ion Sale Salle e Productive

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SELLING S ELLING 150 150 Long Long Age Age B BULLS U LLS

”Right for the Times” Fall Production Sale

NOVEMBER 14, 2012 1:00 PM ~ AT THE RANCH Request Your Catalog Today!

5L RED ANGUS

The Larry Mehlhoff Family Sheridan, MT 59749 (406) 842-5693 5lranch@3rivers.net www.5lredangus.com Ron Bolze - Commercial Mrkting Director 402-426-2033 * 402-321-0067

Commercial Cattle Issue 2012  

August 20, 2011 by Crow Publications, Inc. Layout and design by Kaci Foultner. This is a glossy magazine, published yearly and distributed t...

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