2022 Fall Directions

NATIONAL CATTLEMEN

The trusted leader and definitive voice of U.S. cattle and beef industry

2022 DIRECTIONS THE OFFICIAL PUBLICATION OF NCBA NCBA.org 1

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T A B L E O F CONTENTS 4............................LETTER FROM THE PRESIDENT 6.................................................LETTER FROM THE CEO 8......................................................................STATE OF NCBA 11......................................................WALL STREET REGULATOR 14.................................STATE OF THE FEDERATION 20.............................................THE EFFECTS OF WILDFIRES 24...........................................ECONOMIC SUSTAINABILITY 28.............................................................CARBON MARKETS 30...................................................NON-FUNGIBLE TOKENS 32...........................................................CONSUMER REPORT 34..................................................................MARKET UPDATE 36...........................................................WEATHER OUTLOOK 38...................................................DIRECTIONS STATISTICS

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CATTLEMEN THE OFFICIAL PUBLICATION OF NCBA 2022 NCBA Leadership President Don Schiefelbein President-Elect Todd Wilkinson Vice President Mark Eisele Treasurer Joe Guild Federation Division Chair Brad Hastings Federation Division Vice-Chair Clark Price Policy Division Chair Buck Wehrbein Policy Division Vice-Chair Gene Copenhaver Immediate Past President Jerry Bohn Chief Executive Officer Colin Woodall Senior Editors John Robinson

Editor Contributing Writers

Creative Director Graphic Designer

Jill Johnson Sarah Drown Wendy White Hunter Ihrman Haden Comstock Mike Simone Don Waite Dancinee Jennings

For ad sales contact Summer Johnson 303-850-3346, Shannon Wilson 303-850-3345, Lindsay Clark 303-850-3339, Kate Ramsey 303-850-3321 or Jason Jerome 303-850-3313.

Contact NCBA: 9110 E. Nichols Ave., Suite 300, Centennial, CO 80112 (303-694-0305); Washington D.C.: 1275 Pennsylvania Ave. N.W., Suite 801, Washington, D.C. 20004 (202-347-0228).

National Cattlemen’s Beef Association reserves the right to refuse advertising in any of its publications. National Cattlemen’s Beef Association does not accept political advertising in any of its publications. National Cattlemen’s Beef Association does not

accept any advertising promoting third-party lawsuits that have not been endorsed by the board of directors. ©2022 National Cattlemen’s Beef Association. All rights reserved.

The contents of this magazine may not be reproduced by any means, in whole or part, without the prior written consent of the National Cattlemen’s Beef Association.

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Don Schiefelbein President Minnesota

Buck Wehrbein Policy Chair Nebraska

Mark Eisele Vice President Wyoming

Todd Wilkinson President-Elect South Dakota

Gene Copenhaver Policy Vice-Chair Virginia

Brad Hastings Federation Chair Texas

Clark Price Federation Vice-Chair North Dakota

DENVER OFFICE

9110 E. Nichols Ave. Suite 300 Centennial, CO 80112 303-694-0305 membership@beef.org

WASHINGTON D.C. OFFICE Joe Guild Treasurer Nevada 4

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Jerry Bohn Immediate Past President Kansas

Colin Woodall CEO Colorado

1275 Pennsylvania Ave. N.W. Suite 801 Washington, D.C. 20004-1701 202-347-0228

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CORPORATE MEMBERSHIP DIRECTORY Animal Health International

Micro Technologies

www.animalhealthinternational.com

www.microtechnologies.com

Boehringer Ingelheim Animal Health Inc.

Moly Manufacturing

Caterpillar

New Holland Agriculture

Central Life Sciences

Purina Animal Nutrition LLC

Corteva Agriscience™

Ritchie Industries Inc.

www.bi-vetmedica.com/species/cattle.html www.cat.com

www.molymfg.com

www.newholland.com

www.centrallifesciences.com

www.purinamills.com/cattle

www.corteva.com

www.ritchiefount.com

Elanco Animal Health

Roto-Mix

www.elanco.com

www.rotomix.com

John Deere

(Minimum $100,000 Investment)

Zoetis Animal Health

www.deere.com

www.zoetis.com

Merck Animal Health

www.merck-animal-health-usa.com

Bayer Environmental Sciences CHR HANSEN Farm Credit Council Huvepharma, Inc. Lallemand Animal Nutrition Neogen

Norbrook, Inc. Rabo AgriFinance RAM Trucks

American Foods Group Cargill Meat Solutions Certified Angus Beef Culver’s Darden Restaurants empirical Fareway Stores, Inc. Five Guys McDonald’s Corporation National Beef Packing Omaha Steaks Performance Food Group Preferred Beef Group Tyson Fresh Meats

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44 Farms ADM Animal Nutrition, Inc. Advanced Ag Products Agri-Pro Enterprises of Iowa, Inc. AgriWebb Alltech, Inc. American National Insurance Arrowquip A.T. Ferrell Company Inc. Bank of America Barenbrug USA Bass Pro Shops/Cabela’s Behlen Manufacturing Bimeda BioZyme Bush Hog Inc. Cargill Animal Nutrition Case IH CEAT Specialty Tires CME Group DATAMARS Livestock Dell Technologies Diamond V

ENDOVAC Animal Health Farmers Business Network Feed-Lot Magazine Fera Diagnostics & Biologicals Corp Food Safety Net Services Furst-McNess Company Gallagher Gravely, an Ariens Company Greeley Hat Works Grov Technologies Groviv Hayden Outdoors Real Estate Hyundai Construction Equipment IMI Global International Stock Food International Genetic Solutions Jorgensen Land and Cattle Kent Nutrition Group Krone Kubota Tractor Corporation Kunafin “The Insectary” Laird Manufacturing Meat & Livestock Australia, Ltd. Micronutrients National Corn Growers Association

Nationwide

New Generation Supplements Newport Laboratories, A Vaxxinova Company Noble Research Institute Novus International

Parker McCrory PBS Animal Health Phibro Animal Health Pneu-Dart Priefert Ranch Equipment QualiTech, Inc Quality Liquid Feeds R&R Machine Works RFD-TV Roper/Stetson/Tin Haul Apparel and Footwear South Dakota State University Stone Manufacturing Superior Livestock Supreme International Syngenta Tarter Farm and Ranch Equipment The Hartford Livestock Insurance The Vit-E-Men Co. Inc./Life Products Trans Ova Genetics Twin Mountain U.S. Premium Beef Vermeer Vitalix Vytelle Westway Feeds Wild River Y-Tex Zinpro Performance Minerals

These are companies that have teamed with NCBA as corporate members, demonstrating their commitment to the beef industry. Their involvement strengthens our future. NCBA members are urged to support these partners in turn by purchasing their products and services. Those who would like to become corporate members with NCBA (securing premium booth placement at the annual convention and trade show as well as other membership benefits), please call the Corporate Relations team at 303-694-0305.

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LETTER FROM THE

PRESIDENT

Don Schiefelbein, NCBA President Standing Together for a Better Future Growing up in a large family and now running the farm with more than 80 family members involved, I have learned a tremendous amount about what the word “family” truly means. To me, it means a group of people who — despite differing opinions, experiences and values — find common ground, support each other and ultimately work together for the betterment of each other and their goals.

When I think about our industry, I think of it as a family. As the nation’s oldest and largest cattle organization, it’s no surprise that we as individual members have our differences from time to time.

From the type of businesses we operate to the past experiences we’ve had — each of us provides a perspective that ultimately drives our sector to learn from the past and be more prepared for the challenges we will face in the future.

Our grassroots, member-driven engagement is what keeps our industry strong year after year. July proved that when we gathered in Reno for our Summer Business Meeting. It was during this meeting that cattlemen and women helped guide NCBA policy for the next big issue for our industry — the 2023 Farm Bill.

Authorized every five years, the Farm Bill is the largest piece of legislation impacting all of agriculture. For NCBA, the 2023 Farm Bill presents an opportunity to build on our successes in the 2018 Farm Bill by improving our investments in animal health, livestock risk protection and voluntary conservation programs. NCBA will continue advocating for all these programs that protect cattle producers and their livestock.

Another issue the organization is focused on is continuing 6

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to keep beef at the center of the plate. Beef demand is at an all-time high, but that doesn’t mean we can afford to be complacent in addressing consumer concerns and ignore the rising challenges from the alternative protein sector. The work of NCBA as a contractor to the Beef Checkoff is focused on increasing consumer confidence in beef’s nutritional profile and beef production practices. NCBA’s work in Washington, D.C., is focused on advocating for proper labeling of our product, fighting against false claims of fake meat companies, and making sure regulators don’t fall victim to misinformation when making decisions about beef’s role in a healthy diet.

As I write this column, the White House is making its final preparations for the upcoming Conference on Hunger, Nutrition, and Health, and agriculture is finding itself fighting for a seat at the table. Farmers and ranchers form the literal base of the food chain, and beef producers supply the highest quality protein, packed with essential vitamins necessary to provide Americans of all backgrounds with a healthy diet; we need to be part of this conversation.

Congress directed the organizers and attendees of the conference to examine why hunger and nutrition insecurity persists, as well as explore approaches to improve health by improving access to and consumption of nutritious foods.

There is no better example of a nutritious food than beef, and farmers and ranchers are essential to food security and meeting Americans’ nutrition needs. You show up every day making sure beef makes its way through the supply chain to consumers’ plates. We will continue to make the case for beef with the Administration and use science-based, data-driven research to guide the conversation.

For the sake of the future of our business, we must work together as an industry. We need, as leaders, to find common ground that will likely determine our long-term fate and avoid the ruin of our industry that some desire. I am committed to working diligently to ensure the success of our industry now and in the future. Our industry is strongest when we band together and fight collectively. This year, I continue to be honored to lead that charge!

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LETTER FROM THE

CEO

Colin Woodall, NCBA CEO

Our Right to Vote!

The fall edition of National Cattlemen Directions has become a must-read among our membership. The industry data, facts and figures give you a sense of trends we are seeing in the cattle and beef business. This publication is one that can serve as a reference throughout the year. From drought to inflation, we are facing many challenges, so being informed of the latest industry information is critical to our success as cattle producers.

The United States government also has tremendous influence on our success. As this edition is hitting your mailboxes, we are about a month away from election day, Tuesday, November 8. I know that you are sick and tired of seeing and hearing campaign commercials. That whole aspect of our election process just seems to get worse and more ridiculous each cycle. Regardless, it is a part of trying to get elected in America. However, do not let your disdain for the process keep you from participating. I need you to get out and vote!

Control of both the U.S Senate and House of Representatives is up for grabs, and I believe both parties still have a fighting chance. Democrats and Republicans have had primary and special election success they believe will bolster their positions going into the general election. All it takes to change that, though, is a three-second soundbite that reflects poorly on the party or the candidate.

Late October and early November surprises have changed the course of some elections in our nation’s history. It is not over until election day, and as we have seen over the past several elections cycles, there is no guarantee we will have all the races called on election night.

Congressional control becomes even more important during a mid-term election.

President Biden wants to maintain Democrat control of Capitol Hill so he can keep moving forward with his political agenda. The Democrat leadership in Congress believes they have delivered on many of the President’s priorities and deserve another two years of control. They are also looking at the 2024 presidential election cycle and the need to show more wins to get four more years of a Democrat in the White House.

The Republicans see an opportunity to capitalize on last year’s withdrawal from Afghanistan, gas prices, food prices, overall inflation, the border crisis and even California’s decision to stop selling gas-powered vehicles. They want to offer an alternative and hope they can get enough supporters to come along and vote for them. Republicans believe that their views of governing are more attractive right now and look at last November’s success in Virginia’s gubernatorial race as proof.

Now, I realize that many of you just read that and wondered why I did not make some sort of prognostication about who will win. While we can have our strong beliefs, to win in Washington you must have friends in both parties. From Republican Frank Lucas in Oklahoma to Democrat Jim Costa in California, we have friends on both sides of the aisle willing to step up and fight for us. That is why, regardless of the outcome, NCBA will continue to work with all Members of Congress to advance our policy positions. As the head of our D.C. office, Ethan Lane, likes to say, “we are in the friend making business.” While that statement may seem simplistic, the ability to work both sides of the aisle is based on relationships. That is why we have a full-time presence in our nation’s capital.

Relationships take time and effort to build, and in Washington, face-to-face interaction is still the preferred method to make this happen.

We start building our relationships when these Members of Congress are just candidates looking for the chance to serve. We bring them to our office on Pennsylvania Avenue and talk about our industry and find out what they know, or do not know, about cattle and beef production. These relationships prove critical when it is time to vote on a piece of legislation and we ask them to support us. If you wait and reach out to a Senator or Representative for the first time just to ask for their vote, you will be sorely disappointed in the outcome.

We stand ready to work with Congress, regardless of who is in charge. It will be easier, though, if you get out and vote for cattle-friendly candidates who are willing to step up and help us fight for your right to stay on your land and produce cattle and beef without the government making it even harder than it is. The process of voting varies from state to state, so be sure to take the time to review your polling location and the time it is open, check your mail-in ballot deadlines, vote early, or request your absentee ballots early enough to get them in. Every vote counts, and you need to make sure you are exercising your right to have your voice heard. Vote!

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A Look into Issues on Capitol Hill Farm Bill Authorized every five years, the Farm Bill is the largest piece of legislation impacting all of agriculture. While the Farm Bill does not require reauthorization until Sept. 30, 2023, NCBA is already having conversations with policymakers about our priorities for the next bill.

NCBA grassroots members set Farm Bill priorities at the 2022 Summer Business Meeting in Reno, Nevada. These priorities include: •

Strengthening risk management programs that provide producers with added protection against weather events and price decline.

•

Supporting disaster recovery programs that help producers return to normal operations following adverse weather, attacks by predators, or extreme conditions like drought and wildfire.

•

Promoting voluntary conservation programs that recognize the value of producers’ nationwide conservation activities, and support implementation of these practices free from government mandates.

•

Protecting animal health through programs that guard against the spread of foreign animal diseases. This includes support for programs like the National Animal Disease Preparedness and Response Program (NADPRP) and the National Animal Vaccine and Veterinary Countermeasures Bank (NAVVCB). NADPRP allows for government entities to collaborate with animal health partners to implement projects that enhance prevention, preparedness, detection and response to the most damaging, emerging foreign animal diseases that threaten U.S. agriculture. The NAVVCB, which currently houses the Foot-and-Mouth Disease (FMD) vaccine for U.S. producers, provides vaccine protection for livestock producers but also recognizes the danger that a foreign animal disease poses to the U.S. livestock industry.

•

Blocking a stand-alone livestock title. A stand-alone livestock title within the Farm Bill would open the door to unnecessary overregulation and harmful mandates.

Animal Health A healthy cattle herd is a top priority for producers to ensure economic success as well as safe and wholesome beef for consumers. NCBA's Chief Veterinarian is based in the NCBA Center for Public Policy office in Washington, D.C., and serves as a leading voice for animal health and disease prevention.

NCBA holds a seat on the USDA National Animal Disease Preparedness and Response Program’s (NADPRP) Consultation Board and, recently, NCBA partnered with the sheep industry to receive a NADPRP grant to develop guidance for safeguarding livestock grazing on public lands in the event of a foreign animal disease outbreak.

NCBA holds a seat on the USDA National Animal Disease Preparedness and Response Program’s (NADPRP) Consultation Board, and recently NCBA partnered with the sheep industry to receive a NADPRP grant to develop guidance for safeguarding livestock grazing on public lands in the event of a foreign animal disease outbreak.

NCBA is also focusing on the threat posed by ticks in the U.S., specifically the Asian Longhorned Tick (ALT). This small pest, which is about the size of a sesame seed, has more than 25 hosts in the U.S., including birds, making this tick highly mobile.

The ALT can transmit a protozoan pathogen called Theileria orientalis Ikeda. Theileriosis may cause anemia, failure to grow (ill-thrift), reproductive problems, and in some cases, death.

Recovered animals may be persistently infected and serve as a reservoir for the disease. There is currently no approved treatment against Theileria orientalis, leaving the U.S. cattle herd at risk. To increase education and awareness for the threat posed by this tick, NCBA and the U.S. Department of Agriculture (USDA) hosted a two-day virtual tick symposium that included veterinarians, state animal health officials, industry experts, cattle producers and an expert from Australia, where the ALT and theileriosis is endemic. NCBA is continuing to advocate for resources and research to control the ALT and mitigate any associated pathogens.

While NCBA is advocating for policies that support healthy herds, each individual cattle producer also has an important role to play. Every cattle operation should formulate a basic biosecurity plan that addresses common disease threats. Basic biosecurity plans can be enhanced, using information from the USDA-funded Secure Beef Supply plan to guard against

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foreign animal diseases, like FMD. Recent foreign animal diseases in other countries have highlighted the importance of implementing a biosecurity plan for your farm or ranch. This key step protects your cattle herd and the entire beef cattle industry. The Checkoff-funded Beef Quality Assurance program has biosecurity resources to assist in getting you started. Please visit BQA.org for more information.

Transportation and Supply Chain Producers and consumers alike have experienced shortages, delays and disruptions caused by supply chain challenges. A shortage of truck drivers and unreliable rail service has harmed agriculture.

Hauling cattle is not like hauling toilet paper, drivers cannot stop for 10 consecutive hours of rest with a load of live animals on their truck. That is why NCBA has continued advocating for flexibility within hours-of-service (HOS) and with electronic logging devices (ELD). Each month, NCBA has worked with the Federal Motor Carrier Safety Administration (FMCSA) to request an emergency declaration within HOS that gives livestock and livestock feed haulers a complete exemption from HOS when fully loaded. Thus, giving these haulers additional flexibility for their critical deliveries.

At the 2022 Summer Business Meeting, cattle producers also passed new policy on railway concerns as it relates to overall supply chain issues. This led NCBA to support the Freight Rail Shipping Fair Market Act, which would reauthorize the Surface Transportation Board and allow for further oversight and much needed transparency within the rail industry.

While trucks and trains are the primary ways to haul livestock and livestock feed in the U.S., ocean shipping is essential to exporting beef to foreign consumers. Foreign trade provides an important financial benefit to U.S. cattle producers, and NCBA was pleased to see the Ocean Shipping Reform Act — which granted new authority to the Federal Maritime Commission — signed into law, thus beginning to help alleviate congestion at U.S. ports.

Cattle Markets Regardless of how producers choose to sell cattle, data availability and market transparency are crucial to make informed business decisions. In March 2022, Congress authorized a Cattle Contract Library pilot proposal — a tool which allows producers to learn more about the types of

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contracts offered by meatpackers for the procurement of fed cattle. The pilot program will provide producers with additional market information, and NCBA is continuing to work with the USDA on developing this tool in a manner that benefits producers.

NCBA has also advocated to expand beef processing capacity by supporting small- to mid-size regional processors. In addition to $1 billion in pledged funds from USDA, NCBA has advocated for workforce development programs and technical assistance to help new processing facilities open their doors and hire skilled workers.

NCBA’s policy opposes arbitrary mandates on cattle marketing. In response, NCBA has opposed attempts to enact heavy-handed government intrusion into the markets.

Trade American cattle producers raise some of the highest quality beef in the world, and foreign consumers have developed a taste for it. Exports add value to cuts that are less popular among domestic consumers. Beef tongue, liver or short plate may not be in high demand in your local grocery store, but these cuts fetch a premium in other countries where they are a delicacy.

Strong foreign demand for U.S. beef is driving record U.S. beef exports in 2022. For the first half of 2022, beef exports soared to 743,904 metric tons valued at $6.19 billion, a 33% increase from 2021. Most of our export growth is due to strong demand in Asia and Latin America, where marbled beef is gaining a bigger following. For cattle producers, exports alone account for an average of $476.98 of value per head.1 Likewise, the U.S. is also a major importer of lean beef trimmings that are combined with our fattier trimmings to make hamburger. Even though imports have risen in 2022, the U.S. remains a net exporter, exporting more beef than we import.

Historically, customers abroad have had little access to U.S. beef due to high tariffs and non-scientific trade barriers. Realizing the benefits for foreign markets and U.S. cattle producers, NCBA continues to advocate for greater market access to existing markets and the opening of new markets through marketbased and science-based trade policies. In fact, some of the markets where we see the greatest gains are markets where trade agreements have removed barriers to trade. Moving forward, we must continue to identify and remove barriers and

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diversify our export markets. Earlier this year, NCBA President Don Schiefelbein traveled to the United Kingdom (U.K.) to meet with British government officials and explain U.S cattle production.

U.S. and U.K. cattle producers share many similar production practices and values that will support complementary beef trade between our countries. NCBA will continue to press the Biden Administration and Congress to expand trading relationships and solidify trade deals that support U.S. cattle producers.

WOTUS For seven years, policymakers have tossed around the political football of WOTUS; that is, the definition of “waters of the United States” and the federal government’s jurisdiction to regulate under the Clean Water Act. At the start of this year, the Environmental Protection Agency’s (EPA) own Farm, Ranch and Rural Communities Advisory Committee made a series of policy recommendations including a clear, limited definition of WOTUS, protecting WOTUS exemptions for common agricultural features like stock ponds and ditches, and allowing stakeholders to voice their concerns with existing WOTUS rules.

In February, NCBA submitted comments on the EPA’s proposed WOTUS rule, highlighting the issue of removing bipartisan exclusions for common agricultural features. In addition to technical comments, more than 1,600 cattle producers from 44 states submitted letters to the EPA. Separately, the U.S. Supreme Court will soon hear the case Sackett v. EPA, a direct challenge to the EPA’s authority under the Clean Water Act. This case will have important ramifications for the future of WOTUS, and NCBA filed an amicus brief with the court highlighting specific WOTUS issues for cattle producers.

Arguments in the case will be heard in October with a final decision expected in early 2023.

Supreme Court In addition to hearing the Sackett v. EPA case on WOTUS, the Supreme Court is also hearing another critical agricultural case in October: National Pork Producer’s Council v. Ross. This case challenges California’s Proposition 12, which prohibits pork raised in gestation crates in other states from being sold in California.

The case will set an important precedent about whether states can regulate the production practices of producers outside their state boundaries. The Supreme Court also handed down another important decision in West Virginia v. EPA. While this case was about the Obama Administration’s Clean Power Plan, the court ruled that the EPA must have Congressional approval before making sweeping policy decisions. This will have ramifications on the EPA’s future rulemaking on WOTUS and other issues impacting the cattle industry.

Endangered Species Act A concerning series of regulatory actions from the Biden Administration and decisions from the courts threaten to expand the federal government’s reach under the Endangered Species Act (ESA). NCBA is working to rollback potential government

overreach and advance commonsense rules that put wildlife species management in the hands of state and local leaders.

Last month, NCBA submitted technical comments on the administration’s attempt to widen the 10(j) rule to allow for the introduction of nonessential experimental populations of listed species outside of their historical range. While not the only instance, this proposed rule is the best example of the administration’s attempt to regulate based on what the land might look like after 100 years, rather than basing rules on the science and ecology of the land today.

In December 2021, NCBA submitted comments to defend the 2019 rule that finalized the definition of “habitat” under the ESA. The Trump administration formulated the rule to comply with the Supreme Court’s decision in Weyerhaeuser Co. v. U.S. Fish & Wildlife Service (2018), which — in addition to being common sense — stated that to be designated as critical habitat, an area must first qualify as habitat. The Biden administration has rolled back this definition, potentially putting the administration at odds with the law without further regulatory action.

The habitat definition is not the only area where we are seeing a regulatory backslide. In July, a federal judge in the Northern District of California remanded and vacated three ESA rules that were finalized in 2019 to address 4(d) exceptions for listed species, consider economic impact in listing decisions, and streamlining of the interagency consultation process. Alongside a coalition of other national agricultural and land management groups, NCBA intervened in court to defend these three rules.

In May, NCBA submitted comments on the uplisting of the Northern Long-Eared bat from “threatened” to “endangered.”

While the impact of the bat protections seems more indirect than protections for other species, NCBA seized the opportunity to talk about the need for 4(d) exemptions for endangered species and aggressive, wildfire-mitigation treatments even in forests with wildlife species.

Taxes Throughout the year, the Biden Administration and some members of Congress pushed for broad infrastructure spending proposals known as “Build Back Better.” To fund these expensive proposals, some looked to cutting tax benefits that currently support family farmers and ranchers.

NCBA made it clear to Congress that expensive proposals cannot be funded on the backs of farmers and ranchers. NCBA and our affiliates fought to protect several important tax provisions including stepped-up basis, like kind exchanges, and maintaining relief from the estate tax.

NCBA is dedicated to advocating on behalf of U.S. cattle and beef producers on these issues and will continue our efforts on all of these fronts as we approach 2023.

1. U.S. Meat Export Federation (https://www.usmef.org/newsstatistics/press-releases/first-half-beef-exports-on-1-billionmonth-pace-pork-exports-below-last-year/)

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WA L L S T R E E T R E G U L A T O R

Wall Street Regulator Wades into Cattle Industry The U.S. Securities and Exchange Commission (SEC) was founded at the height of the Great Depression when massive swings in the New York Stock Exchange made Americans fearful of investing in the stock market. The SEC’s mission is simple: protect investors; maintain fair, orderly and efficient markets; and facilitate capital formation.

Most Americans never interact with the SEC. While the SEC is tasked with regulating the financial markets that many Americans are invested in (through retirement, 401K, or brokerage accounts), only the top investment firms, publicly traded companies and major shareholders are regulated by the agency. That is, until SEC Chairman Gary Gensler came along.

Gary Gensler was appointed SEC Chair in 2021, just a few short months after President Biden took office. Since becoming chair, Gensler has made ESG investing a top priority. ESG refers to environmental, social and governance, and it is the idea that

investors should review a company’s climate policies, social and workforce practices, and corporate ethics and governance standards as part of determining whether the company is a good investment. ESG is controversial, with opponents arguing that the ESG metrics prioritize company politics over purely economic decisions.

While the SEC, members of Congress and investors have been debating ESG for some time, the cattle industry became involved when the SEC proposed a controversial, sweeping climate disclosure rule in March 2022.

Under the rule, all publicly traded companies would have to disclose their direct (scope 1), energy/electricity use (scope 2), and supply chain (scope 3) greenhouse gas emissions. By requiring the inclusion of scope 3 emissions, the SEC stepped far beyond its jurisdiction and placed a mandate on private companies like farms and ranches. Any cattle producer whose beef is eventually sold by a publicly traded restaurant or retailer could be liable for reporting greenhouse gas metrics from their operation.

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“The SEC is tasked with regulating large publicly traded companies and major investors, not private businesses like cattle operations,” said NCBA Chief Counsel Mary-Thomas Hart.

“Immediately after the rule was released, NCBA launched a campaign to tell the SEC to stick to regulating Wall Street, not main street.

NCBA also submitted technical comments with a large coalition of other livestock and agricultural organizations sending the same message.”

Through NCBA’s campaign, cattle producers submitted more than 7,460 comments to the SEC commissioners and members of Congress.

This sends a strong message to policymakers that their decisions will have an impact on rural America.

NCBA also emphasized that other federal agencies already provide climate metrics for the cattle industry. The Environmental Protection Agency’s greenhouse gas inventory has consistently indicated that direct emissions from cattle account for just 2% of total greenhouse gas emissions. The U.S. Department of Agriculture also maintains lifecycle assessments that provide more than enough climate data to satisfy the SEC. Now that the SEC has proposed this rule, the agency is required to review the comments they have received. This includes thousands of comments from cattle producers as well as investment industry advocates, environmental lobbyists and others. After the agency reviews the comments, the rule will be finalized and placed in effect.

“The SEC’s decision to wade into agriculture, beyond the bounds of its constitutional jurisdiction, is remarkable,” Hart said.

“Regardless, NCBA will continue being an advocate for the cattle industry and we thank you for partnering with us to stop overreaching climate rules on farms and ranches.”

TUESDAY, NOVEMBER 1 9:00 AM - 5:00 PM CENTRAL For more information visit stockmanshipandstewardship.org

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This proposed rule poses a multitude of issues for cattle producers. First, there is no way to measure greenhouse gas emissions on the farm or ranch level, and the federal government already admitted as much. Second, the SEC is a financial sector regulator with no understanding of agriculture. The SEC’s divisions include corporate finance, economic risk and analysis, enforcement, examinations, investment management, and trading and markets.

None of those divisions are equipped to handle agricultural or environmental issues, and the SEC would have to increase staff to even handle the amount of new data being requested. Third, the rule is a massive invasion of producer privacy. Court cases like American Farm Bureau Federation v. EPA have established the precedent that farmers and ranchers have the right to maintain data privacy, and this proposed rule would force the release of confidential information.

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Dear Fellow Producers, For decades, state beef councils have partnered with the national Beef Checkoff to drive demand for beef with remarkable success. By working together and sharing a unified voice, we develop creative and innovative ways to reach consumers even as their buying behaviors change.

Despite changes in how families make their grocery purchases, they still love beef. Recent research shows that 69% of consumers eat beef at least weekly.

Research like this serves as the foundation of all Checkoff programs, and the Federation continues to support product quality, nutrition, beef safety, sustainability and market research to strengthen beef’s promotional efforts.

For more than 35 years, the Beef Checkoff has been using funds wisely and effectively, and the Supreme Court recently confirmed that USDA has appropriate and adequate oversight to ensure that Checkoff funds are being spent in compliance with the Beef Promotion and Research Act. As Checkoff dollars are budgeted for projects, the Federation is at the table with producer input guiding decisions through a grassroots process.

This annual report touches on some of the programs that producers help direct. From research and promotion to consumer and industry outreach, these efforts demonstrate the positive impact that national programs have when extended at the state level. These success stories confirm that we are better and stronger when we work together!

As we look forward to 2023 when the Federation of State Beef Councils commemorates its 60th anniversary, let’s take time to celebrate our accomplishments, plan for the future, and continue to work together to drive beef demand.

Sincerely,

Brad Hastings Amarillo, Texas Chair, Federation of State Beef Councils

Federation of State Beef Councils Executive Committee Chair

Brad Hastings, TX

Vice-Chair

Clark Price, ND

Region I

Allan Robison, OH

Region II

Don Terry, TN

Region III

Janine Moore, IA

Region IV

Jess Kane, OK

Region V

Andy Kellom, MT

Region VI

Mark Wintch, UT

Region VII

Gary Deering, SD

Rev. Seat

Barb Downey, KS

Rev. Seat

Jim Ramm, NE

Rev. Seat

Dan Gattis, TX

Federation Members - Beef Promotion Operating Committee Front Row, left to right: Chris Jeffcoat, PA; Travis Maddock, ND; Kiley Martinell, MT; Nancy Jackson, MS; Scott Lake, WY Back Row, left to right: Brad Hastings, TX; Clark Price, ND; Al Lyman, IL; Dan Gattis, TX, Jeff Rudolph, NE DIRECTIONS 2022

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As a division of the National Cattlemen’s Beef Association (NCBA), a contractor to the Beef Checkoff, the Federation of State Beef Councils represents the 44 Qualified State Beef Councils (QSBCs). Collectively, these QSBCs include more than 700 state board members representing every segment of the beef industry. The vision of the Federation is to build beef demand by inspiring, unifying and supporting an effective state and national Checkoff partnership.

higher consumer confidence; believing in producer control of Checkoff funds through the Qualified State Beef Councils, which are the foundation of the Beef Checkoff; and believing in the industry Long Range Plan as a guidepost for the Beef Checkoff and the principle of “one vision — one plan — one voice.”

The Federation’s statement of beliefs includes believing in the success of a strong state and national partnership resulting in increased consumer demand for beef and

The following pages include an overview of national programs developed by NCBA, a contractor to the Beef Checkoff, which were supported by the Federation of State Beef Councils and extended by states locally. To learn more, find the 2022 Federation of State Beef Councils Investor Report online at NCBA.org/federation.

Better and Stronger Together

Research

The Federation of State Beef Councils builds a larger, more impactful, coordinated plan that is executed as a partnership between the Federation and individual state beef councils (SBCs). State beef councils voluntarily invest in the Federation each year, and more than 50% of those contributions supplement tactics within Authorization Requests (ARs) approved by the Beef Promotion Operating Committee (BPOC).

Supplementing these tactics helps the national Checkoff program have a larger impact on consumer demand.

$745,000

In 2022, the Federation contributed $4.5 million to supplement the approximately $40 million national plan funded by the BPOC for promotion, research, industry information and consumer information. Specific programs made possible by SBC contributions to the Federation include but are not limited to the following:

Consumer Information

Promotion

The Federation supported foundational research projects in the areas of: •

Product Quality

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Beef Safety

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Human Nutrition

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Beef Sustainability

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Market Research

$2,439,000 •

Conducted e-commerce projects with nationwide retailers encouraging consumers to add beef to their online carts.

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Distributed more than 3,000 Pediatric Health Professional In-Office Educational Toolkits in 32 states to highlight the importance of beef as a complementary food for infants and toddlers.

$1,165,000 •

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Celebrity athlete Tony Romo served as the new spokesperson for Beef. It’s What’s For Dinner. and was utilized across multiple campaigns throughout the year.

For the second year, the Federation sponsored the Beef. It’s What’s for Dinner. 300, the 41st season-opening race for the NASCAR Xfinity Series, at Daytona International Speedway in February 2022.

Beef was the star of the holidays with 125 ads airing during the holiday season on the Hallmark Channel including during Thanksgiving weekend with a sponsorship of a movie premiere.

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Industry Information $150,000 •

The Masters of Beef Advocacy (MBA) Program reached 20,000 graduates.

•

The Trailblazers program, a yearlong training program, was developed to prepare a new generation of advocates to protect the reputation of the beef industry.

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1970s 1960s • In 1963, the Federation of State Beef Councils was established as the Beef Industry Council (BIC) of the National Live Stock and Meat Board.

• With a small budget, partnerships were essential, and the BIC joined with the American Dairy Association for a “Buttered Barbecued Steak” promotion and with the American National CowBelles in promoting “Beef for Father’s Day.” • The Federation’s inaugural year also brought the first television advertising campaign.

• In 1973, with a grant from the Texas Cattle Feeders Association, the BIC increased public relations with advertising in major city newspapers in the East.

• The “Bicentennial Beef Cookbook” featured great beef dishes from America’s first 200 years and reached 100,000 consumers.

1990s 1980s • After several failed attempts, the Cattlemen’s Beef Promotion and Research Act was passed and approved by producer vote, creating the national Beef Checkoff.

• The goal for newly acquired funds was to focus beef advertising and promotions in top markets in the United States.

• By the late 80s, the BIC launched major campaigns including “Beef. Real Food for Real People.” and declared that “Beef is Back.”

New Spokesperson Scores Points for Beef Beef scored points this summer with new spokesperson, Tony Romo.

The former professional football quarterback and current sports commentator is the new face of Beef. It’s What’s For Dinner., sharing his family’s passion for beef with consumers nationwide.

Market research shows that utilizing a well-known spokesperson consistently drives increased sales, stronger brand awareness, attraction of new customers, and credibility in advertising campaigns. Tony Romo built a career as a trusted, authentic and credible broadcaster, and his presence brings more consumer trust to the Beef. It’s What’s for Dinner. brand.

Romo promoted beef nationwide through digital and social media, outdoor advertising, on ESPN.com and through broadcast television ads on the Food Network, HGTV and the Magnolia Network. State beef councils extended this national programming through billboards, displays, advertising and other promotional efforts. Tony Romo’s Playbook on 18

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• Industry consolidation took place in 1996, with the Beef Industry Council merging with the National Cattlemen’s Association, forming the National Cattlemen’s Beef Association (NCBA).

• NCBA assumed the duties of the former BIC, including becoming home to the Federation of State Beef Councils.

• A 1991 study showed that the Checkoff had accounted for a 2.24% increase in demand, and a report later in the decade showed that more than 80% of cattlemen and women approved of the Checkoff.

• The well-known brand, Beef.

It’s What’s For Dinner., was born, launching one of the most successful campaigns ever.

• The Checkoff began funding Beef Quality Assurance (BQA) programs in states, and the first National Beef Quality Audit began in 1991.

www.BeefItsWhatsForDinner.com also highlighted new recipes and valuable information about beef’s taste, nutrition, versatility and sustainability.

Putting Beef in Online Baskets In November and December 2021, a nationwide club store promoted beef and the Beef. It's What's For Dinner. brand during the holidays on the retailer’s digital properties. Holiday beef digital ads were placed on the retailer’s website and app directing consumers to a page where they could add beef to their shopping cart. Almost 40,000 consumers interacted with the ads, and those ads drove more than $8 million in beef sales with 8.6% new buyers to the beef category. The return on ad spend for the campaign was $41.72, which means that for every Checkoff dollar spent on the project, nearly $42 was returned in beef sales. In addition, the effort was supported by 14 state beef council partners which helped increase the overall reach and impressions and brought additional beef sales to individual states.

Promoting beef through online shopping platforms complemented other promotional efforts as well. For example, when the Federation of State Beef Councils, on behalf of the Beef Checkoff, partnered with Daytona International Speedway to sponsor the Beef. It’s What’s For Dinner. 300 in February 2022, promoting beef to consumers at home reached a broader DIRECTIONS 2022

2000s • Checkoff-funded muscle profiling research reinvented and added value to the chuck and round, which were previously underutilized and undervalued, by developing “new” cuts including the Flat Iron Steak and Petite Tender.

• Television ads featuring composer Aaron Copland’s iconic “Hoe Down” music and Sam Elliott’s voice promoted beef nationwide.

• Following the discovery of BSE in the U.S., the beef industry worked with food safety experts to reassure consumers about beef’s safety.

FEDERATION THROUGH THE DECADES

2020s •

For the first time ever, the Dietary Guidelines for Americans made recommendations for infants to include nutrient-rich foods, like beef, starting around six months of age.

•

In response, NCBA, on behalf of the Beef Checkoff, created the “Beef in the Early Years” campaign to educate health professionals and parents incorporating beef as an early complementary food. Through the Federation, state beef councils extended the campaign locally.

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Beef. It’s What’s For Dinner. returned to broadcast television with ads airing during Hallmark Channel’s popular “Countdown to Christmas” movies.

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The popular “Drool Log” made mouths water and reminded consumers that beef is the star of the holiday meal.

2010s •

Beef promotions extended to digital and social media to reach consumers where they find information and make buying decisions.

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To better connect consumers with producers, several beef-related websites were consolidated into a single site — www.BeefItsWhatsForDinner.com

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The Checkoff-funded Beef in an Optimal Lean Diet (BOLD) study provided evidence that the inclusion of lean beef as part of a heart-healthy diet is as effective in lowering heart disease risk as the Dietary Approaches to Stop Hypertension (DASH) diet.

audience and extended the positive beef message beyond NASCAR fans.

Funding provided by 13 state beef councils made an e-commerce campaign with a nationwide retailer possible, which drove the beef message home for families while they were shopping for groceries online.

Finding New Ways to Educate Health Professionals About Beef Keeping up to date with the latest research and medical information can be overwhelming — especially for health professionals working in the field. With their busy, fast-paced work schedules, many medical professionals struggle to find time to attend conferences, workshops or even live virtual events, like webinars. Health and medical experts, such as physicians, registered dietitians and even credentialed fitness professionals, are required to participate in a specific number of continuing medical education hours annually in order to maintain their licenses and/or credentials.

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A recent partnership with board-certified general pediatrician, Candice Jones, MD, created the “Making Every Bite Count” podcast series that explored the importance of feeding beef in the early years to support infant and childhood development. In this four-part podcast series — accredited for medical doctors, physician assistants, nurse practitioners and registered dietitians — Jones interviewed pediatric nutrition experts to discuss the value of introducing nutrient-dense foods, like beef, to infants around six months of age. By tuning in, health and medical experts gained continuing medical education hours for listening and learning from the podcast.

Since the series was released in October 2021, more than 2,800 participants have listened to the episodes, with 85% of these listeners, such as physicians, nurses and physician assistants, having direct contact with patients.

Podcasts are just one of the ways educational resources and continuing medical education opportunities are provided to health professionals. The success of this cost-effective effort demonstrates the value podcasts have in continuing health education efforts targeted to health professionals and confirms the importance of sharing beef’s nutritional message in new ways.

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Beef Advocates Blaze New Trails The new Trailblazers program takes advocacy to an unprecedented level by giving participants the tools and training they need to promote beef to new audiences while addressing and correcting myths. Ten Trailblazers from across the country attended a multi-day training, which provided them with the resources, information and engaging activities they need to become expert communicators, excel in media interviews and understand how to build confidence in beef-related practices when talking to consumers.

approved beef recipes to learn more about beef production across the country. An important aspect of the online content was kids sharing their stories of life on the ranch with their urban neighbors, helping bridge the gap between pasture and plate.

The Beef. It’s What’s For Dinner. Holiday Campaign Put Beef at the Center of the Season

During the training, Trailblazers focused on actively working to acknowledge the importance of connections outside the industry, discovering new ways to connect with consumers and defend the work of the Beef Checkoff in their own communities.

The Trailblazers were able to coach one another, receive feedback from subject matter experts, and watch their peers complete interviews with a focus on contentious issues facing the beef community.

During the holiday season, families were inspired to enjoy the moments that matter most with simple “how-to’s” on selecting, preparing and serving delicious and nutritious holiday beef meals. With additional funding from the Federation of State Beef Councils, Beef. It’s What’s For Dinner. television ads aired during the Hallmark Channel’s Countdown to Christmas movies, as 87% of consumers planned to watch holiday movies, including those shown on the Hallmark Channel, at home.1

Trailblazers representing six state beef councils are (from L to R): Marya Haverkamp, Kansas; Kacy Atkinson, Wyoming; Jaclyn Wilson, Nebraska; Jonathon Black, West Virginia; Markie Hageman, California; Shaye Koester, Nebraska; Haley Ammann-Ekstrom, Minnesota; Natalie Jones, Nebraska; Brianna Buseman, Nebraska; Sebastian Mejia Turcios, California.

Promoting Beef to the Next Generation of Consumers Beef’s role in social, economic and environmental sustainability goes far beyond today’s grocery shopping consumer.

Kids are influencing their family’s buying behaviors and are more engaged with social issues than ever before. Fun and exciting ways to reach the next generation of consumers were developed to educate America’s youth about beef’s positive sustainability story.

As part of reputation management initiatives around sustainability, kid-focused media outlets, such as The Week Jr. and ScoutLife shared beef’s positive message. Kids and parents alike were directed to the newly created Beef Sustainability for Kids page on the Beef Checkoff-funded Beef. It’s What’s For Dinner. website.

On the page, kids found videos, graphics, games, articles and kid-

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More than 125 Beef. It’s What’s For Dinner. television ads ran on the Hallmark Channel during the holiday season reaching an estimated 112 million adults, with an accompanying Hallmark.com digital advertising effort that earned about 2.2 million digital impressions. Beef. It’s What’s For Dinner. was also featured during the cable TV premiere of “Christmas at Castle Hart,” and 17 delicious, perfect-for-the-holidays Beef Checkoff recipes were included in Hallmark.com’s recipe listicle.

The BeefItsWhatsForDinner.com website was decked out for the season with holiday recipes designed for every celebration.

Social media included new Hanukkah content highlighting Brisket recipes, and a roasting video series on Facebook, Instagram and Twitter had a reach of 32,000 and generated 3,000 engagements.

Online engagement also kept beef front and center during the holidays with 11 food and agriculture influencers posting content throughout December. More than 30 posts generated a reach of 933,228 and nearly 45,000 engagements.

The holiday campaign is a perfect example of the importance of the Beef Checkoff’s state and national partnership that NCBA has through the Federation of State Beef Councils. At the national level, NCBA, through Beef Checkoff resources, managed broadcast television, paid media, influencer communications and earned media. Creative assets including radio ads and video ads were shared with state beef councils, which extended the campaign through a variety of tactics and digital platforms at a local level. Overall, the holiday campaign was a tremendous success, reaching families across the country and helping them make beef the center of the season.

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Holiday Campaign Research, Dynata Platform, September 2021

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Effects of Wildfire Smoke on Cattle: What Research is Out There?

By Julia Herman, DVM, MS, DACVPM Beef Cattle Specialist Veterinarian, NCBA, a contractor to the Beef Checkoff Wildfires across the country have consistently made headlines in the past decade. 2020 had the most acreage burned in a single year in decades with 10.3 million acres burned by wildfires in the United States, according to the National Interagency Coordination Center. Cattle producers, especially in the western U.S., are acutely aware of the hazards of wildfire as the frequency and intensity of these events continue to increase. Changing grazing patterns, loss of feed supplies including pastures, and suboptimal animal health are all major concerns when wildfires break out.

Animal well-being during stressful environmental events can be difficult to measure. Studies in California from 2017 to 2018 demonstrated negative effects on the cardiovascular system in cats and pregnancy rates in Rhesus macaques (a primate) at a research facility, in addition to immune suppression.1 While effects from wildfire smoke in humans could be inferred to animals, specified research looking at cattle is needed to truly understand the potential effects. While previous research in Australia and the U.S. has attempted to survey the effects of wildfire smoke in animals, focused studies on livestock remain scarce.

To better understand the production losses from wildfire smoke, a team of researchers at Oregon State University (OSU) sought to identify what impacts producers saw after wildfire season. Juliana Ranches, assistant professor and extension beef specialist, expanded on a recently published study (2021) that surveyed livestock producers in California, Nevada and Oregon about their perception on productivity in their herds post-fire.1 “Livestock in all sectors, including beef and dairy operations, reported lost productivity in some way,” Ranches explained.

“The producers helped us recognize both direct and indirect losses from wildfire smoke exposure.”

The survey found indirect losses were primarily associated with smoke inhalation and included cases of pneumonia and reproductive losses, such as reduced conception, low birthweight, rare abortions, poor weight gain and drops in milk production. Stress from evacuations or confinement following the fire was also considered. Burns and burn-associated deaths or euthanasias, evacuations and pasture losses were included in direct losses. The producers who contributed to the study demonstrated the wide effects that wildfire smoke can have on various livestock species, including beef cattle, dairy cattle, goats and sheep. Evacuations and loss of pasture were important factors in causing stress to animals. Commingling

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of animals at rescue locations also appeared to be a stressor.

All of these could potentially have long-term effects on overall productivity, though more research is needed.

Ranches, along with Jenifer Cruickshank, assistant professor and dairy specialist at OSU, started collecting baseline data on beef and dairy herds this year as part of a U.S. Department of Agriculture grant.

“Evaluating blood markers characterizing the immune response over time will provide more information on how smoke inhalation affects productivity,” Cruikshank added. “Data is still being collected but we are looking forward to the results and how it can help producers respond to wildfire disasters.”

More studies are being conducted to determine physiological effects of smoke inhalation in dairy cattle. Particulate matter is found in wildfire smoke and is a known air toxin that can contribute to illness in humans.2 Amy Skibiel, assistant professor at the University of Idaho, specializes in lactation physiology and has seen immune cell responses to wildfire smoke in dairy cattle.

“Smoke inhalation has a negative effect on circulating immune cells which can hinder the respiratory system, the first defense against smoke inhalation,” she explained. “Temperature Humidity Index (THI) also compounds the effects of wildfire smoke. Our studies showed negative impacts on metabolism, milk production, and immune system function when cattle were exposed to either or both wildfire smoke and high THI.” Not only was milk yield affected, but milk components such as protein and butter fat were negatively affected which can further impact the producer’s bottom line. Blood components including white blood cells and red blood cells also changed when exposed to wildfire smoke and particulate matter.

Pedram Rezamand, professor at the University of Idaho, studies how particulate matter affects dairy systems in the Pacific Northwest.

“Our research looks at the cellular physiological response and how wildfire smoke and particulate matter causes the reaction it does,” he described. “Pulmonary physiology is the same between dairy and beef cattle even though the management systems are different.”

The team recently completed a similar study in dairy calves and found that wildfire smoke and high THI negatively impacted the immune system and increased the risk of respiratory symptoms such as cough and eye discharge in days after the wildfire event.3 Since beef calves in the region are kept outside like dairy calves, the results could be considered comparative, though beef specific studies would confirm the results.

Continued on page 22

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Continued from page 20 Rezamand’s experience in dairy nutrition also reveals how the immune system responds to stressors such as wildfire smoke.

He said paying attention to vitamin and mineral status of feeds is essential to preparing the immune system before an environmental stressor occurs as antioxidant and anti-inflammatory properties will naturally occur with good nutrition. In the Beef Checkofffunded Beef Quality Assurance (BQA) program, nutrition is recognized as the cornerstone to a healthy animal, from the calf to the adult. BQA guidelines recommend working with the herd veterinarian to develop vaccination plans, including those for pregnant cows to optimize colostrum production, ensuring calves receive colostrum in the first four to six hours of life, and providing quality feed and clean water throughout the animal’s life. Drought can intensify the effects of wildfires, not only from fueling them, but also challenging producers to ensure supplementation or adding in feed varieties that offset the drought-stricken forage that may be lacking in nutrients.

When asked about how producers can best care for their animals during wildfire seasons, the researchers answered with strategies already recommended in the BQA program. When monitoring cattle, pay attention to signs of respiratory irritation such as coughing, fast or heavy breathing, and general signs of illness such as droopy ears or discharge from nose or eyes. Reducing exercise or movement during these periods will help the animals recover more quickly, as wildfire smoke and higher temperatures can cause increased respiratory rates and lead to increased harmful particulate matter into the body. Low-stress handling and good stockmanship will be even more important during times when air quality is poor. Constant and clean water sources for proper hydration are key because it will help the immune system, minimize effects of heat, and help clear respiratory airways. Even though the wildfires themselves are hard to predict or control, cattle producers can continue to provide quality care to their herds using BQA principles.

The long-term effects of wildfire smoke have not been studied yet, though both research groups are seeking funding to complete this research. Their ideas include identifying immune response factors to understand how health outcomes are affected by wildfires. In addition, discovering the indirect impacts on the fetus if exposed to smoke during pregnancy and whether this exposure and associated health effects go beyond one generation of cattle will be valuable to both beef and dairy producers.

The research realm of wildfire smoke effects on cattle is relatively new, and these studies have started raising awareness for this important area. As such, the collaboration that both research teams had with livestock producers during their studies was integral to finding results.

“Finding practical solutions to problems that producers are seeing is a major goal of our team, and having producers willing to participate was and will be key to future data collection,” Ranches said.

This sentiment is mirrored with the other researchers as exploring in depth how wildfire smoke affects cows, measuring that effect, and working on solutions. Skibiel sees it as a reciprocal process where both sides create awareness of the problem and find opportunities for resolutions.

“We want to interact with producers at every step because we want to test what they are observing out on farm,” Skibiel added.

While we may not have much control over the immediate effects of wildfires on livestock, there are ways cattle producers can prepare before the unimaginable happens. Emergency action plans (EAP) are important tools that all operations should develop prior to a natural disaster or emergency. These can be developed with your herd veterinarian, extension specialist or BQA state coordinator. EAPs contain phone numbers of important team members including family and employees on the farm, local first responders, veterinarian, brand inspector and more. Maps of an operation noting where important structures and roads are located are also included. Effective EAPs have a communication plan that can be found quickly during an emergency. A draft EAP can be found in the BQA National Manual at BQA.org.

As wildfires are predicted to increase in frequency and severity across the U.S., efforts to identify the impacts on cattle operations are ongoing. Cattle producers have adapted to new environmental challenges and will continue to do so. With new research being developed and collected every day, there are several researchers who are working towards practical tools to help producers adapt to these severe weather events. The BQA program strives to do the same by updating animal care guidelines using the latest scientific research. Staying up to date with BQA certification and utilizing BQA resources is one way that cattle producers can be proactive in their planning and preparation.

1.

O’Hara et al. 2021. Impacts from wildfires on livestock health and production: Producer perspectives. Animals 11, 3230. https://doi.org/10.3390/ani11113230

2.

Anderson et al. 2022. Effects of wildfire smoke exposure on innate immunity, metabolism, and milk production in lactating dairy cows. Journal of Dairy Science 105: 7047-7060. https:// doi.org/10.3168/jds.2022-22135

3.

Pace et al. 2022. Effects of wildfire smoke PM2.5 on preweaned Holstein dairy calves. Journal of Dairy Science 105 (Suppl. 1): 113.

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E C O N O M I C S U S TA I N A B I L I T Y Measuring Ranch Economic Sustainability

By Rick Machen, Jason Sawyer, Stan Bevers and Clay Mathis Prepared by the King Ranch® Institute for Ranch Management Sustainable foods and sustainable ranching are often discussed together. Much of this discussion, and the relative ‘sustainability’ of either products or practices, focuses on environmental or social concerns. However, sustainability of food production systems, and particularly those that involve ranching, are undeniably complex (Figure 1). Without consideration of economic sustainability, the systems will not be able to deliver either social or environmental services.

A Case for Ranch Sustainability According to triple bottom line accounting, sustainability is three dimensional, having environmental, social and economic (planet, people and profit) components. A viable production system must integrate and meet targets for all three dimensions. Metrics for environmental longevity are often defined in the context of environmental impact or resource-use intensity (i.e., the inverse of efficiency). For ranching systems, effective metrics should be indicators or predictors of future resource integrity or capacity to continue to deliver production, environmental or ecosystem services.

Social sustainability metrics are somewhat arbitrarily defined by various organizations and emphasize people and their communities.

These definitions are useful conceptually and imply that sustainable ranching requires sound stewardship of natural (soil, water and plants), animal (both domestic and wild) and human (families, employees, community, consumers) resources entrusted to the steward’s care. However, managers require metrics that determine or are correlated with the likelihood of operational persistence to effectively address stakeholder concerns and manage ‘sustainably’.

In contrast to the environmental and social dimensions, metrics for monitoring economic performance and viability of agriculture production at the firm level are well defined but have rarely been explicitly associated with sustainability.

When it comes to economic sustainability, seldom does public concern extend beyond the personal boundaries of food price. In some cases, the idea that ranchers would profit from managing natural resources and producing food and fiber is made to seem unpalatable.

A portion of the hesitancy to discretely define ranch economic viability metrics stems from there being at least three

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layers to ranch sustainability: 1) continuity of a ranching business (ranch ownership); 2) continuity of use of the ranch property for similar purposes; and 3) sustaining food and fiber production and ecosystem services to meet society’s needs. Multi-generational ownership of a ranch has long been equated with sustainability. However, if a ranch is sold outside of a family it does not necessarily mean the ranch is not sustainable, assuming the new ownership continues to use the natural resource for food and fiber production. If primary use of a ranch changes from its use as a platform supporting land-based enterprises, or if its natural resources are mined or eroded, and food and fiber production and wildlife habitat are no longer sustained, then the property is no longer sustainable as a ranch, regardless of ownership. Lastly, profitability of ranch enterprises changes annually, but as long as the sum of ranch enterprise productivity and financial returns are sufficient to meet ownership financial requirements, the ranch can remain sustainable under the current ownership.

Metrics for Ranch Economic Sustainability Numerous resources offer metrics for the three dimensions as they pertain to beef production, and others suggest systemlevel metrics. Production efficiency and financial metrics for beef production are examples (Table 1). Many of these metrics are interrelated and reflect outcomes of management action or decisions. In the context of persistence of a business, metrics associated with profitability, solvency and liquidity are standard elements in persistence-predicting models.

The purpose here is to nominate specific metrics for the assessment of economic sustainability of a ranch business.

These metrics consider a rolling, annual-average assessment of sustainability as well as the ability to endure potential black swan events.

Profitability Profitability is the primary prerequisite for ranch sustainability. Measuring ranch operational profitability involves accrual adjustments to pair revenue with expense during a fiscal year and includes an annual depreciation expense.

Ranch operations with a positive multi-year average net income can continue, even though some of the years are not profitable. Most ranches do not have to register a positive net income in every year as adjustments to capital asset purchases and contributions from outside capital (money invested from a source remote to the business) would occur. The ranch would continue to cash flow while profitability would be negative. Yet, at some point, even

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those capital assets will have to be replaced, requiring the ranch to make a positive net income or face liquidation.

Rate of Return on Assets (Market Basis) The rate of return on assets (ROA) is a viable indicator of sustainability of a ranching operation; as ROA decreases toward (or below) zero, it becomes increasingly likely that the ranch will not persist in its current form. If ROA declines because the numerator (net income) is decreasing, management must react to seek increased income, reduced expenses or improved efficiencies.

Most operators in commodity businesses are price takers with minimal market influence, and therefore, inflation in input expense and/or decreases in market price and revenue will require operators either identify new markets or business models, add additional enterprises, and/ or increase enterprise efficiency to maintain ROA at acceptable levels. These same drivers affect net income.

Figure 1. Interconnectedness of sustainability factors in sustainable ranching systems. (o = opposite relationship)

When expressed on a market basis, ROA is subject to the externalities of increased demand for ranch real estate, and the valuations generated by this demand are often independent of production revenue potential. As a result, even a profitable (positive net income) operation may have a diminishing ROA due to factors beyond the control of the operator. In fact, good stewardship of the resources that leads to their improvement over time is likely to also increase the amenity value andNCBA desirability of the property relative17:20 to others in the August ad NEW.pdf 1 19/08/2022 agricultural real estate market. While this increase effectively rewards the stewardship by increasing owner equity, it may

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result in diminished ROA, and therefore, an incentive to sell the asset and reinvest the capital into a higher returning (or less risky) asset.

The relationship between ROA and sustainability of the ranching operation holds whether the operator is also the landowner (i.e., is engaged in both the passive real estate activity and the active operational pursuits) or not (i.e., an operator on land leased from another entity). In the latter case, increasing land values will reduce ROA to the landowner unless rents are increased; these increasing rents reduce net income, and therefore, lessee/operator ROA.

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Equity to Asset Ratio (Market Value) While any ranch operation must have a positive net income periodically, the balance of owner assets and liabilities indicates how long sustainability may persist.

This balance is best illustrated by the equity-to-asset ratio. This ratio is a measure of the financial leverage of a business and is an indicator of solvency, or the capacity of the business to meet its debt obligations.

With a target of greater than 50%, this ratio represents how much of the business is owned versus that portion owned by financiers. For ranching operations, owner equity is a result of owning real estate, breeding herds, market animals, etc. where the value of those assets are greater than the liabilities owed. Ranches with an equity-to-asset ratio less than 50% can have difficulty securing loans to purchase or support non-current inventory assets. Three noteworthy points follow: 1)

2)

3)

Table 1. Economic sustainability metrics for beef cow-calf operations Metric

Target

Pounds weaned per exposed female

> 460

Revenue per breeding female, $

> 950

Nutrition as a percent of total expense, %

30-45

Labor and management as a percent of total revenue, %

< 15

Operating expense as a percent of total revenue, %

< 75

Net income ratio, %

>5

Weaned calf total cost of production, $/cwt

< 170

Current ratio, % Total investment per breeding female (market basis), $

>2 7,500-12,000

Debt per breeding female, $

< 500

Equity to asset ratio (market basis), %

> 50

Asset turnover ratio (cost basis), %

> 15

Rate of return on assets (market basis), %

> 1.5

As market value of assets increase, the need to borrow money for additional asset purchases increases. Yet ROA at market value is low, making debt service difficult as the excess earning relative to asset value (debt obligation) is low.

This ratio has contributed to the sustainability of many ranches. As the real estate value of owned land increases, market-valued equity increases, although net income may be declining. The increase in equity-to-asset ratio allows cash acquisition through financing for either expansion (to increase gross revenue) or operations financing (to relieve cash flow constraints).

This ratio incorporates the need for current assets to pay current liabilities as well as non-current assets and possibly more in the case of a black swan event (internal or external).

Equity to Asset is a measure of resilience; an indicator of business capacity to withstand financial shocks. Current equity capital can be set aside as a risk management tool as in the case for drought management or a sudden drop in cattle prices.

The interaction of ROA at market value and Equity-to-Asset ratio at market value will influence whether subsequent generations foster ranch sustainability. Specific to cow-calf operations, productivity of the cowherd is maximized relative to the annual precipitation received, yet input costs will continue to rise due to inflation. How long a ranch can operate in this environment is dependent upon the Equity-to-Asset ratio. Subsequent generations may choose to exit the operation prior to driving the Equity-to-Asset ratio below acceptable levels.

Current Ratio Disruptive events such as drought, flood, wildfire, market interruptions and litigation can threaten ranch economic sustainability. It is imperative that a ranch has adequate liquid assets to pay current liability obligations to endure such circumstances; in other words, resilience is an important feature of sustainability.

The current ratio indicates the ability to pay short-term liabilities as well as quickly mitigate the impact of these unforeseen events.

A goal is to maintain a current ratio greater than 2%. Current assets can be cash, savings, investments, insurance, market livestock or other assets that can be quickly liquidated.

Ultimately, a ranch operation can meet each of these metrics under current ownership and yet not be sustainable into the future. If sustainability requires persistence across generations, only the coming generation will determine whether it will be continued. Subsequently, if the ranch is sold, the economic sustainability definition of past ownership has not been met, but the economic sustainability tenure for the new ownership is reset to zero.

In conclusion, sustainability of food production systems is often described as sustainability of an ‘industry’. However, it is the sustainability of the businesses within those industries that ultimately impacts the viability of the system. Numerous metrics are available for tracking the production efficiency and financial health of food and fiber production systems, but few have been nominated for measuring economic sustainability at the ranch level.

If only one measure must define ranch economic viability, the measure would be a positive multi-year average accrual-based net income. However, the complement of a positive multi-year average accrual-based net income, a market-based rate of return on assets greater than 1.5%, an equity-to-asset ratio of greater than 50%, and a current ratio greater than 2% is necessary to truly measure ranch economic sustainability.

The information in this article is abbreviated from the original white paper found at https://bit.ly/3LbBjg9 or by scanning the QR code.

E C O N O M I C S U S TA I N A B I L I T Y 28 NATIONAL NATIONAL CATTLEMEN CATTLEMEN 28

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C A R B O N MARKETS Should I Sell Carbon Credits?

A Decision Guide for Ranchers Prepared by the King Ranch® Institute for Ranch Management Increasing public attention to climate issues has amplified pressure on many industries to develop ‘climate neutral’ systems. A central goal of most ‘climate neutral’ strategies is for an entity to achieve ‘net zero’ carbon emissions by reducing direct emissions of greenhouse gases (GHG) where possible and seeking sources of carbon dioxide (CO2) emissions offsets (often called ‘carbon credits’) to balance emissions that cannot be eliminated. These ‘offsets’ or ‘credits’ represent CO2 being removed from the atmosphere and stored. Land-based carbon accumulation has long been considered an essential element of climate mitigation strategies, and is increasingly viewed as a potential source of purchasable credits for those seeking to offset emissions. This article describes the foundational concepts of carbon trading, risks associated with entering a carbon credit contract, and market considerations. Our goal is to inform ranchers so the best decisions can be made in an emerging and uncertain enterprise.

Carbon Credits and Carbon Credit Trading What is a ‘Carbon Credit’?

A carbon credit represents one metric ton (1,000 kg) of CO2 or CO2 equivalents removed from the atmosphere. From an accounting perspective, if the atmosphere is the ‘account’, then a release of CO2 into the atmosphere is a ‘debit’ to that account, and removal of CO2 from the atmosphere is a ‘credit’. A company may seek to reduce its emissions, but may not be able to completely eliminate emissions. If they wish to achieve ‘net zero’ emissions, then they will seek ‘credits’ to their atmospheric account that offset any remaining ‘debit’ amounts to balance the account. Sources of carbon credits include those associated with natural processes that begin with photosynthesis of plants.

These are the focal point of this decision guide.

Creating a Carbon Credit Plants effectively capture CO2 from the atmosphere, and combine it with water through photosynthesis to assemble it into carbohydrates. Some carbohydrates are translocated to the root of the plant, and may be excreted or assimilated into the soil as organic matter that contains ‘soil carbon’. This process transfers atmospheric carbon into soil carbon and is the basis of land-based carbon credit generation (Figure 1). Generating a tradeable carbon credit requires measuring, verifying, certifying, recording, and tracking the amount of carbon accumulated and retained in the soil. Much like an exchange traded contract for a commodity, several entities have created ‘Standards’ for the generation of carbon credits.

multiple entities that facilitate the trade of carbon credits, more than one standard exists. While the various standards share many similarities, they may also have key differences. Standards may also differ in their approach to and definition of questions of ‘additionality’ and ‘permanence’ of storage. These two items often form critical distinctions in how credits are accepted and valued, and understanding these differences is essential.

Carbon Market Facilitators Overall, entry into a carbon credit contract is similar to a commodity production contract with committed future delivery.

As such, the carbon market has several participants. The ranch is subject to production (accumulation) risk, price risk and various transaction risks that may be contained in, or mitigated by, the specific contract governing the transaction.

Production Risk Capacity to Accumulate Soil Carbon The fundamental consideration for a rancher contemplating a carbon credit enterprise is the physical capacity of the ranch to accumulate soil carbon. Strategies associated with ‘good’ grazingland management, that increase forage growth and reduce bare ground, are generally expected to promote soil carbon accumulation. The uncertainty of soil carbon accumulation rates, and factors like drought that are beyond the control of managers, can impact these rates and create ‘production risk’. Managers should consider this uncertainty in the development of the soil carbon accumulation enterprise.

It is difficult to gain precise measurement of soil carbon across large landscapes, and measurements can vary considerably across a single property or management unit. The change in soil carbon measurement (% carbon in a soil sample) that represents 1 tonne of CO2 per acre is very small, and reliable detection of small changes generally requires a large number of samples. This inherent variability creates considerable risk that small changes cannot be detected. Soil sampling is likely to be the greatest expense incurred in the development of a carbon credit project, and clarity about the magnitude of soil carbon increase that can be expected coupled with the number of samples required to detect that change are essential. Managers should seek reliable estimates of soil carbon accumulation potential and have clear understanding of sampling requirements before entering a carbon contract.

Contract Standards Standards define the credit units (e.g., 1 tonne of CO2) and the methods for measuring and validating accumulation and storage of credited CO2 equivalents. Standards may also describe required components and types of ‘projects’ intended to generate tradeable credits and other procedures governing accumulation and maintenance of soil carbon. Since there are 30

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Figure 1. Schematic of the global carbon cycle.

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Transactional Risk As with any contract, the devil is in the details in carbon storage contracts. There are no ‘standard’ contracts; and terms in currently offered carbon contracts are unique and may be unfamiliar. It is important to seek counsel from an attorney with experience in negotiating these types of agreements. The items below provide a starting point for contract evaluation.

Required & prohibited practices. Determine what activities will be required and what activities will be prohibited pursuant to the contract. Ranchers should ensure the contract clearly describes required practices.

Payments. The payments being offered to landowners can essentially be put into two buckets: ‘payments for practice’ and ‘payments for outcome’. A payment for practice contract is one where a set payment is guaranteed if a rancher undertakes the required practice. A payment for outcome contract offers a payment per metric ton of CO2 equivalent either captured in the soil or no longer emitted from production activities.

Term. Most currently offered contracts last 10 to 15 years.

Potential penalties. In every contract there will likely be various penalties that could be triggered based upon actions by the rancher. Taking the time to understand exactly what actions a rancher must take — or not take — to avoid penalties is critical.

Stacking prohibition. These provisions generally provide that a rancher cannot enroll the same land in multiple carbon contracts.

Some stacking provisions may state that the rancher may not participate in any other carbon contract or program. Contracts may also disallow participation in any government programs and prohibit the receipt of any government payments.

Data provision and ownership. All contracts will require landowners to provide extensive data about their land and operation. Many contracts allow the purchaser to enter the property for inspection and allow for aerial views by drones. Most contracts provide that all data generated and collected under these agreements is the property of the landowner.

Measurement and verification. Measurement and verification are central to any carbon contract. Clear reference to a standard outlining these requirements is important. Contracts should specify which party will pay for the cost of any measurements.

Taxes and insurance. A landowner should require the counterparty to the contract or the purchaser of carbon credits to be liable for any change in property valuation and/or increases in ad valorem taxes that result from the carbon enterprise. Ranchers should require the purchaser and any contractors entering the property to carry insurance and to list the manager as an additional insured.

Amendments and assignments. There are some contracts with amendment provisions that essentially allow the developer to make any contractual modifications they choose. Ranchers should pay attention to provisions related to how contracts may be amended.

credits are not eligible for sale, but are placed into a ‘reserve pool’ as a hedge against future potential accumulation reversals (i.e., drought). Additionally, fees are assessed by developers, verifiers and registries, and sampling costs are incurred. These may represent an additional 20% or more of gross potential revenue. The net price for generated credits is therefore 60% to 80% of the gross price.

There are multiple companies in this market paying producers to store carbon. There are differences in the contract terms that may make a given strategy more or less valuable for a given ranch. These different opportunities should be explored to find the highest value proposition, which may not always be at the highest transaction price.

In conclusion, the emerging market for carbon credits may offer an important opportunity to ranchers. As with the addition of any enterprise to the ranch portfolio, the costs, benefits and risks should be explored to make an informed decision.

To download the complete “Should I Sell Carbon Credits: A Decision Guide for Ranchers” white paper or view the recorded webinar visit: https://krirm.tamuk.edu/carbon-credits/ or scan the QR code.

1. Jason E. Sawyer, PhD1, David S. DeLaney, M.S.2, David P. Anderson, PhD3, Tiffany E. Dowell-Lashmet, J.D.3, and Clay P. Mathis, PhD2; 1East Foundation, 2King Ranch® Institute for Ranch Management, 3Texas AgriLife Extension

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Market Risk and Value of Carbon Credits Entering into a carbon credit contract is an additional enterprise to the ranch portfolio. The gross revenue is the contracted price of a carbon credit times the number of credits secured.

The gross unit price of a carbon credit in the United States is currently $18 to $22. Some fraction (often 20%) of generated DIRECTIONS 2022

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NON-FUNGIBLE TOKENS TO BEEF PRODUCTION Applying Non-Fungible Tokens to Beef Production and the Supply Chain The U.S. food and agriculture industry has evolved time and time again to meet consumer demands and farmers and ranchers produce the safest and most sustainable beef in the world. With the use of research and technological advancements, we have improved the eating experience for our consumers. But, what’s the next revolutionizing piece of technology? Blockchain is making its way into the food and agriculture sector and is changing the way information is shared and collected, and how commodities are bought and sold. By definition, blockchain is, “a time-stamped, distributed, decentralized, historical ledger of all the transactions on a crypto network; copies of the ledger are held on a global network of computers; it acts as a golden copy of time-stamped transactions that can replace intermediaries normally tasked with executing the transactions.”1 Why does blockchain technology appeal to those in the food sector? Blockchain technology is a trustworthy way to track food through the entire supply chain to ensure that consumers’ purchases are what they expect and what the labels claim to be.

There are many reasons why blockchain has grown in the news. Blockchain is decentralized. The information stored is not held on one single server or cloud network but on hundreds or thousands of computers (nodes) with no central or controlling body. This creates a new level of transparency. Because there is no single person or body overseeing the information, rather it is stored across multiple devices within the network, blockchain information is trustworthy and unlikely to be corrupted. Additionally, each participating person’s identity in the blockchain is protected, they are only seen by others via their public code; all transactions are public and seen by anyone within the network. Lastly, and probably most appealing in the food industry, blockchain cannot be changed, altered, or tampered with in the future. Once data has been established, it can be added to, but not altered. For this reason, many sectors have explored the use of blockchain technology where data security is important.

A part of blockchain technology is Non-Fungible Tokens, or NFTs. An NFT is a digital asset, something with a unique identifier that can be bought or sold. NFTs represent a real-world object like art, music or videos, but they are bought and sold online, usually with cryptocurrency. In 2021 and 2022, NFTs became notorious for buying and selling digital artwork. NFTs come with authentication to serve as proof of ownership, and they can only have one owner at a time and can be thought of as a digital signature.

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Jaclyn Wilson, manager and owner of Wilson Flying Diamond Ranch and Flying Diamond Beef in Lakeside, Nebraska, has personal experience with combining NFTs and cattle production.

Flying Diamond Beef started in 2019 with multiple partners, one of whom, Danna Schwenk, worked on several blockchain projects while simultaneously working with Flying Diamond Beef. Schwenk was approached by Wyoming-based company CattlePass about selling cattle as NFTs in 2021. This led to an entire project using steers born and raised by Wilson Flying Diamond Ranch that were marketed and sold as NFTs. “The biggest reason that I got involved in the project was the traceability aspect,” Wilson said. “NFTs can provide irrefutable proof that the product is what we say it is.”

Flying Diamond Beef is a direct-to-consumer (DTC) cattle business selling high-quality protein that is sold locally and shipped across the U.S. “With the increase in DTC programs, there were a lot of them that were saying they were selling home-raised, ranch-raised, grassfed, grass-finished beef. There are all those ‘labels’ they are selling. But, if a consumer actually thought about it, if they asked a producer to prove those labels, could they,” Wilson asked.

“And I had to think about that from a producer standpoint.”

This project gave Wilson the ability to prove to consumers how cattle are raised and treated with a step-by-step look.

“Unlike some NFTs where you just purchase a token, in this project, customers got a product,” she said.

“It was a really neat venture.”

Proof of life was the biggest hurdle, and Flying Diamond Beef could do this by working with a variety of companies partnering together for the trial to be effective.

“CattlePass had a partnership with a company in Australia called Livestock Labs. And they had developed this brand-new implantable sensor,” Wilson explained.

Livestock Labs wanted to test the ability of their sensor to track location, monitor heart rates, rumination activity and more. Their goal was to find a U.S. cattle producer willing to do the trial.

Wilson’s first step after the initial consult with Livestock Labs was to call her Beef Quality Assurance coordinator in Nebraska and inquire about the best steps to take since this was new territory.

After ensuring this was safe for her cattle, Wilson scheduled her vet to come install the implants into 20 of her feedyard steers.

In addition, Denver-based company Merkle Mountain joined the DIRECTIONS 2022

project to complete the transactions of NFTs to a real product for customers. Customers could either pay for the cattle (NFTs) in cryptocurrency, or they could convert the cost into U.S. dollars.

Merkle Mountain exchanged cryptocurrency into U.S. dollars to pay Flying Diamond Beef.

“We went through all our cattle on feed at our background lot on the ranch and selected 45 that we took genomic tissues samples of. We sent them down to Neogen’s office in Lincoln, and they tested all of them,” Wilson explained. “We then selected 20 steers based off the tenderness gene.”

On the same day the implants were completed, a company out of Texas called Plain Sight was present to create biometric algorithms on those 20 steers. To do this, they captured a panorama photo of the face of the animal and different pixelizations to put into their algorithm. Simply put, they did facial recognition of the steers.

“We tokenized those steers that same day through a NFT program,” Wilson said.

After the initial setup, the cattle were raised as they normally would be on Flying Diamond Ranch. In December of 2021, six months after the sensors were implanted, the cattle were harvested at the USDA-inspected plant that Wilson works with closely. One of her top priorities was ensuring the sensors were removed before the cattle entered the food chain.

Wilson admits that this trial may be ahead of the curve for where the cattle industry is right now. She believes it will take years before commercial, mid- to large-scale cattle operations are ready to implement a technology like this due to the cost and limited demand.

“Surprisingly, the biggest response and interest we’ve received has been from the finance industry,” Wilson said.

the health and status of an operation’s herd.

This new tool can be a benefit to the producer as well as the consumers and lenders, but potential value-add from NFTs in cattle production is still being discovered. Flying Diamond Beef was able to sell their NFT cattle for a significant premium compared to their non-NFT steers. In addition to safety, there is immense opportunity to select carcass quality traits that would improve the flavor of beef.

“The progressive producers are going to appreciate something like this in the future,” Wilson said. “I think it might be pushed down from the distributors or the end-sellers of the product, and producers may have to step-up their game.”

Companies like Walmart and Nestlé are already utilizing blockchain technology to reduce the amount of time to trace back any food contamination in their stores.2 It was a way for brands and stores to increase trust and transparency with their clients, something that is becoming ever more important. Customers can scan a QR code of the product and trace the history of the production and location of that product.2 With increased concerns over food-borne illnesses as well as foreign animal diseases, livestock traceability is an important conversation amongst producers and consumers.

Wilson is glad to say she can look back and know that Flying Diamond Beef was one of the first U.S. ranches to use blockchain.

For her, the most rewarding part of the trial was the feedback she received from customers. Many of whom came back and told her it was the best beef they’d ever eaten. For cattle producers, that is high praise and something we continue to strive toward.

1.

Shin, L. (2022). The Cryptopians. Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze.

2.

Blockhead Technologies. (March, 2021). How Blockchain is Revolutionizing Food Supply Chains. https:// blockheadtechnologies.com/how-blockchain-isrevolutionising-food-supply-chains/#:~:text=Blockchain%20 technology%20provides%20traceability%2C%20 security,have%20access%20to%20the%20information.

NFTs in the food chain provide more trust with financial lenders because there is less chance of marketing fraud or falsifying data. Rather than having an employee come verify headcount and data for a farm or ranch, NFTs offer validity of

Rancher Resilience Grant

To receive funds, you can head to NCBA.org, under the “Producers” tab and click “Rancher Resilience Grant”. There is a short application and some additional steps to complete.

We hope it’s an opportunity you take advantage of!

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The Rancher Resilience Grant is designed to support cattle producer attendance at impactful education events. This program awards funds for registration and hotel costs for educational cattle industry events across the country via reimbursement.

The grant is made possible by a partnership between the National Cattlemen’s Foundation and Cargill Protein and is administered by the National Cattlemen’s Beef Association.

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CONSUMER R E P O R T Today’s Beef Consumer The National Cattlemen’s Beef Association (NCBA), as a contractor to the Beef Checkoff, is continually tracking trends, monitoring issues, and surveying the general landscape that has the potential to impact the beef industry. NCBA does this through a variety of tools, most notably by conducting consumer and market analysis, funded by the Beef Checkoff, while also scanning secondary research resources. Across the food landscape, it appears that increased prices for domestic goods, notably food products, continue to play a major role in consumer sentiment and purchasing habits. While some recent optimism has been noted regarding the U.S. economic situation, consumers are still showing signs of worry. This article will touch on a variety of topics including the current state of consumers and beef, e-commerce, meat substitutes and sustainability.

The Current State of Consumers and Beef Before diving into specifics, it is important to understand the current consumer mindset. For many, current economic conditions have caused a good deal of apprehension when it comes to purchasing decisions for various goods and services. According to the University of Michigan’s Index of Consumer Sentiment, consumers are especially concerned about their current financial situations, and are feeling apprehensive for the trajectory of the U.S. economy. Sentiment levels nose-dived from 2020 to 2022, eventually hitting their lowest level recorded since data collection began in 1952.1 While sentiment has appeared to have increased slightly from June 2022 to August 2022, there is still a large gap between the index scores of 2022 and previous years.

Much of this apprehension can be attributed to inflation rates not seen since 1981.2 While energy price increases have been the main driver behind the recent levels of inflation, food prices have also increased 11% from July 2021 to July 2022.2 While this level of inflation is still alarming, price levels do appear to be curbing slightly. From June 2022 to July 2022, the Consumer Price Index (CPI) level for all items remained virtually constant (decreasing by 0.02%). Likewise, three out of the five major protein sources (beef, pork, chicken, fish/seafood and eggs) saw decreases from June to July. While food prices saw an overall increase of 1% from June to July, this increase was counterbalanced by a decrease in energy prices (mainly gasoline).2

Figure 1. Willingness to Pay for Steak compared to Average Steak Price per Pound5,6

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Consumers have already responded to these continued food price increases, as foodservice performance is expected to suffer.3 Dining out (and other leisure activities) was the number one choice to be cut by consumers in the face of household budget shortages.4 Throughout the second quarter of 2022, online and in-person restaurant visits decreased by 2% compared to the second quarter of 2021 and are currently down 6% from the second quarter in 2019.3 Throughout the first 28 weeks of 2022 ending Aug. 13, 2022, $20.1 billion worth of beef was sold in retail markets, up 4.6% from the same period last year.5 However, that $20.1 billion purchased 3.3 billion pounds of beef, which is 5.7% less pounds of beef purchased during the same period last year.5 Additionally, these 3.3 billion pounds of beef are also 12.1% less than the pounds of beef consumers purchased during the same period in 2020.5 These contradictory retail sales statistics indicate that consumers are purchasing less pounds of beef than they were last year but are spending more per pound on that beef.

While these increased price levels likely strained household food budgets, willingness to pay for beef remains strong. As Figure 1 shows, willingness to pay for steak has topped the average price per pound between April to June 2022.5,6 Willingness to pay for steak has not exceeded the average price per pound since April to June 2021, indicating that consumers still find value in purchasing beef, despite uncertainties within the broader economy.

E-Commerce An area that continues to see tremendous opportunity and growth in the marketplace is e-commerce. Throughout the grocery shopping space, the e-commerce compound annual growth rate has been projected to continually increase and account for 20% of total grocery sales by 2026.7 Online retail sales for the first quarter of 2022 totaled $231.4 billion, which is 14.3% of the total quarterly retail sales, an increase of 7% from the first quarter of 2021, and a 2.4% increase from the fourth quarter of 2021.8 Consumers began shifting their grocery shopping preferences largely during the COVID-19 pandemic.

During the pandemic, consumers began to favor online forms of shopping (both click and collect, and scheduled delivery).

Net intent* of consumers shifting to online forms of shopping increased by 42%, while decreasing by 14% for physical stores or food markets.9 Additionally, consumers are increasingly

Figure 2. Market Share of Animal Proteins vs. Meat Alternatives5

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choosing home delivery as their preferred mode of shopping when compared to click-collect in September of 2020. Fast forward to December 2021, and 63% of surveyed consumers preferred home delivery, while 37% preferred click and collect methods.9 Beef is a big part of the success in this area, with 44% of consumers including beef in their online carts, and 25% of these consumers including beef within the last month.10 This increased 7% since July 2021.10 As consumers continue to shift their preferences towards online-based grocery shopping, retail businesses will continue to invest in hopes to fulfill these needs.

Currently, grocery executives are expecting a continued interest in online shopping and have projected e-commerce penetration to more than double in the next three to five years.9 Meat Substitutes The protein landscape, including meat alternatives, is continually monitored by NCBA, a contractor of the Beef Checkoff. As Figure 2 shows, fresh meat alternatives represented less than 1% of both the entire fresh protein retail market (0.34%) and the fresh beef retail market specifically (0.54%) as of Aug. 13, 2022.5 For comparison, beef currently occupies 54% of the fresh protein market, and occupied almost 56% of the fresh protein market during the same timeframe in 2021.5 Market share for alternative proteins has also been declining for the past two years, declining more than 20% from 2021 to 2022 and declining almost 8% from 2020 to 2021.5 Most consumers who choose to eat meat alternatives do not cut out other protein sources from their diets.6 According to The Consumer Beef Tracker, an ongoing consumer survey managed by NCBA, as a contractor of the Beef Checkoff, people who consume meat alternatives on a weekly-or-more basis also consume beef and other proteins as much as the average consumer.6 Additionally, the current share of consumers entirely avoiding ground meat and only purchasing meat alternatives was estimated at around 3% between November 2018 to November 2020.11 Out of all households that purchased meat alternatives, 86% also purchased ground meat.11

a positive perception of beef production, with 37% claiming neutral perceptions of beef production, and 21% claiming a negative perception.6 These two pie charts indicate that many consumers view beef in a positive light, but that some have concerns over cattle production.

When asked to describe any concerns related to beef cattle production, of the 51% of respondents who claimed to have a concern, animal welfare was mentioned most.6 Only 5% of respondents mentioned the environment as causing a concern, which suggests that consumers are more concerned with animal welfare than environmental concerns related to cattle production. These concerns can potentially be explained by a lack of knowledge consumers may have regarding cattle production methods and the various regulations in place to ensure animals are treated with respect and care. Currently, only 27% of consumers claimed to be familiar with how cattle are raised for food.6 Consumers have also claimed that they believe veterinarians and producers to be a highly credible source of information when it comes to production practices.6 This highlights the importance of industry programs such as Beef Quality Assurance and the emphasis producers place on animal care and welfare.

As we continue through 2022, it is critical to monitor both opportunities and challenges consumers have in the marketplace.

Consumers continue to enjoy beef in both retail and foodservice with high satisfaction ratings and have embraced convenient technologies like e-commerce. Sharing the industry’s commitment to animal welfare will continue to be important to consumers. Additionally, positive perceptions about the nutrition proposition that beef offers and the cooling of the meat alternative market means beef is set for strong consumer demand as a top protein.

1.

Index of Consumer Sentiment, University of Michigan, July 2022, Processed August 2022

2.

Consumer Price Index, US Bureau of Labor Statistics, Processed August 2022

3.

NPD, Inflation and Rising Menu Prices in Second Quarter Keep U.S. Restaurant Visits Below a Year Ago, July 2022

4.

Mintel, Inc., Consumers and the Economic Outlook, Summer 2022

5.

NielsonIQ, Discover, Yearly Volume Data Ending December 2021 and Half-Year Beef Volume Sales, Data Ending July 2022, Processed August 2022

6.

Consumer Beef Tracker; Directions Research, analyzed and summarized by NCBA, on behalf of the Beef Checkoff, August 2022

7.

Mercatus and Incisiv, eGrocery Transformed, 2021

8.

U.S. Census Bureau, Quarterly U.S. Retail E-Commerce Sales, May 2022

9.

McKinsey & Company, Navigating the market headwinds: The state of grocery retail 2022, May 2022

Figure 3. Consumer Perceptions on Cattle Production

6

Beef Perceptions NCBA, on behalf of the Beef Checkoff, seeks to better understand consumer perceptions of how beef is raised as a driver of consumer demand. As Figure 3 shows, overall beef perceptions are strong, with 68% of respondents claiming a positive view on beef. Of those positive responses, 41% claimed to have strongly positive perceptions, with 27% citing some positive perceptions.6 Additionally, only 13% of respondents claimed to have a negative perception of beef.6 Looking specifically at beef production perceptions, nearly half of the respondents (42%) claimed to have DIRECTIONS 2022

10. State of the Consumer Survey, Dynata Platforms, analyzed and summarized by NCBA, on behalf of the Beef Checkoff., August 2022 11.

Neuhofer, Z.T., Lusk, J.L. Most plant-based meat alternative buyers also buy meat: an analysis of household demographics, habit formation, and buying behavior among meat alternative buyers. Sci Rep 12, 13062 (2022). https://doi.org/10.1038/ s41598-022-16996-5

*Net intent is calculated by subtracting the percent of respondents stating decrease from the percent of respondents stating increase.

NATIONAL CATTLEMEN

35

M A R K E T U P D A T E

Despite Sharply Higher Prices, Drought Conditions Continue to Drive Liquidation

By Kevin Good CattleFax Vice President of Industry Relations Liquidation of the nation’s beef-cow herd seen in 2019 through 2021 continues. The July 1, 2022, USDA Cattle Inventory report showed the current U.S. beef-cow herd is 750,000 head smaller compared to July 1, 2021. The La Niña weather pattern, which developed in mid-2020, continued through 2021 and into mid-2022 and is forecast to extend into late 2022. It is the major reason why the beef-cow herd continues to experience liquidation. This is especially true in the western half of the U.S. where the drought is most severe.

Presently, nearly 50% of the U.S. beef-cow herd is in drought conditions, and 30% are in extreme or exceptional drought

conditions. Historically, these percentages are some of the highest noted over the last 40 years and would indicate that the cow herd will continue to liquidate until weather conditions improve.

Liquidation is continuing even though calf values are trading $20/cwt higher moving into the fall run compared to last year and $40/cwt higher compared to two years ago, and for the average cow-calf producer, would offer some level of profitability. Unfortunately, if you are in a region with limited moisture, the lack of feed and the high price for roughage is more than offsetting the stronger calf values as the decisionmaker for keeping or culling females. Year-to-date in 2022, beef-cow slaughter is running 15% above last year’s high numbers and well above the five-year average. Elevated cow slaughter is noted in not only the drought-affected regions but also in regions like the Southeast that had adequate moisture. This would suggest that factors other than drought have played a role in producers’ decisions to cull more cows through the first half of the year. Producers could be motivated by the highest summer cull-cow values since 2015.

Utility-cow prices are averaging near $85/cwt this summer.

Furthermore, inflation in input costs such as feedstuffs, fertilizer, energy and labor are all headwinds. In addition, the pandemic challenges and market volatility have exhausted some producers.

Year-to-date (January-July), the implied U.S. beef-cow culling rate is at 13%, substantially higher than last year’s 11.2%, and the highest year-to-date percentage in the last 50 years. By comparison, in 2010 to 2012, those three years were in the middle of a massive cow herd contraction and drought cycle that was nearing its end; the cull rate was at 10.9% for January through July.

36

NATIONAL CATTLEMEN

DIRECTIONS 2022

The number of heifers in feedyards and the number of heifers in the slaughter mix are elevated. Year-to-date the number of heifers in the fed slaughter mix is approaching 39%.

Historically, a percentage of 36 or higher indicates liquidation of the cow herd due to lack of heifer replacements, below those numbers indicate some expansion.

Moreover, the number of heifers moving in the country through auctions and video sales is also elevated. Many of these heifers were intended to be bred this year, but as adverse weather conditions continued, producers had to make the tough decision and send replacement-quality heifers to sale to preserve their dwindling supply of feed resources.

DIRECTIONS 2022

All these factors would suggest that massive beef-cow herd liquidation will continue through 2022. In addition, with the current weather forecast for La Niña to continue and with the number of heifers that have already moved from the county into feedyards, it is very likely that more beef-cow herd liquidation is in store for 2023. This will be primarily in regions of the country that are being adversely affected by drought. At the same time, due to greatly improved calf values, producers in some regions of the country with adequate feed resources are expected to keep back heifers and start expanding in response to profitability.

NATIONAL CATTLEMEN

37

WEATHER OUTLOOK La Niña Marches on Into Winter

By Matt Makens Atmospheric Scientist La Niña is the leading reason for the weather pattern delivering much of the country’s significant drought over the past couple of years. La Niña will continue through the fall and into winter before we may see the ocean temperatures change, which could initiate a pattern shift. La Niña typically means drought across the Southwest and South and wetness for the Northern Rockies. The months ahead are to follow that pattern.

2022 has had one of the strongest La Niñas on record. In April, the Southern Oscillation Index (SOI - one of many measures of La Niña strength) was the second strongest observed since 1951, and the history-setting pattern continued into May and June as they recorded the strongest La Niñas since 1950. If I average April through July, 2022 is at the top of the list. Although there has been some warming of the tropical Pacific since early August, we are not doing away with La Niña’s influence through the end of the year.

Through August, the ocean conditions in the tropical Pacific remained colder than average. The atmosphere responds to that ocean being cold, and the global pattern remains in a La Niña phase. This La Niña has made a historic "long-term" drought much worse in the "short-term."

Throughout the summer, we heard about the issues across Europe, from extreme temperatures to the lack of moisture.

Andrea Toreti, a senior researcher at the European Drought Observatory, said a drought in 2018 was so extreme that there have been no similar events in the last 500 years.

Across South America, the Chilean megadrought is one of the longest in 1,000 years. There have been noteworthy droughts in parts of Brazil, Paraguay and Argentina that led to the crop loss headlines of early 2022. It is also worth mentioning that the drought in the Horn of Africa is the worst in 40 years, with substantial animal loss. Across North America, Canada's drought conditions improved from the start of the year to summer. Mexico's drought had only some improvement with the year's monsoon.

For the U.S., conditions in the Northern Plains improved thanks to a wet end to the 2021/2022 snow season, and the country as a whole saw some temporary relief this summer; the monsoonal moisture from June through early September provided drought relief to parts of the Southwest and Southern Plains. However, overall dryness is still considered "long-term" because of a continued La Niña and how persistent the global pattern has remained the past 20 years.

I have discussed the megadrought in previous National Cattlemen articles. La Niña is a factor in that, obviously, but La Niña and El Niño are short-term variations that bring us these periods of “short-term” drought, and this will be the focus

38 NATIONAL NATIONAL CATTLEMEN CATTLEMEN 38

for us in this piece. What goes into the megadrought is much more involved and covers weather patterns lasting decades, not a couple/few years at a time.

To beat the "short-term" drought levels we see currently, we will need to shift away from La Niña to start. However, a "long-term" change to get out of the decadal drought pattern we have been in for more than 20 years is not likely until the Atlantic Ocean cools — and that is a topic worthy of its own article and does not change the outlook provided now.

The "short-term" pattern will potentially change toward the spring and summer of 2023. Should we see a transition away from La Niña, it begins this winter in the ocean, and then the question becomes how quickly the atmosphere and our local weather patterns shift.

For now, the basis of this forecast is created by comparing our La Niña and drought situation to years in the past that showed similar patterns. Of the five years selected, only one remained in a La Niña pattern; all others transitioned away from La Niña the following year. With that said, I want to focus on the six-month "cold season" of November through April, which remains under the La Niña regime.

For the incoming cold season, we will likely start with a warm fall, followed by some potentially extreme cold through the winter and early spring for the central U.S. Precipitation patterns will continue in a La Niña fashion, meaning drier for the Southwest and South with only isolated moisture, mostly focusing on the Northern Rockies.

Of the substantial impact areas, California and the West do not look favorable for receiving their usual moisture, and it will be warmer than average. The Plains' growing conditions will be impacted by dryness and potential cold outbreaks. Yet, producers in the Northern Rockies to the Pacific Northwest are the most likely ones to pick up some moisture — in the fall for the Pacific Northwest, shifting eastward to the Northern Rockies for the winter.

Let us look at the regional weather outlook for the cold season, the six months from November through April: Northwest: The precipitation pattern will shift throughout the period, most likely giving the best chances for moisture in the fall and early winter before the moisture moves eastward for the Northern Rockies and Northern Plains. Temperatures in the fall will be quite warm but will moderate after that. The cold season has equal chances of above- and below-average temperatures.

West: Remain hopeful that we can squeeze out some good brief precipitation, as we saw in December of 2021, because we will want to offset the overall dryness with that short-term period of wetness. Temperatures will be warmer than normal.

I expect the drought numbers to increase here through early 2023.

DIRECTIONS 2022 2022 DIRECTIONS

Northern Rockies: Storm systems will spread the best moisture to the west and to the north. Elsewhere, the outlook is drier than average and also colder than average. Some of the cold will depend on snowpack that may build toward the spring months, but the outlook is drier than average, so developing a snow field may be difficult. The coldest weather will focus on later winter and early spring following a warm fall.

The six-month average is warmer than average, but we will see increased chances for cold and precipitation late in the period.

Southwest: The region favored the monsoon during the summer, but the cold months look drier than average, allowing drought numbers to increase again. Temperatures will be quite warm, especially in Arizona. The northern mountains of the region have the best chance of breaking even for the cold season.

South: Drought remains, despite short-term moisture moving through. The fall will be the warmest, with potential for cold temperatures into the winter and early spring. Through April, it will be drier than average and also colder than average.

Upper Midwest: After a mild fall, we open the door to cold for the winter and early spring, particularly later in the winter. Snowpack may be able to develop for northern areas as they are most likely to catch moisture, and that snowfield will reinforce the cold across the region.

Ohio Valley: The fall and winter transition from warmer to colder than normal temperatures. Regarding precipitation, some of the higher elevations getting closer to the Appalachians and the Tennessee Valley will get moisture, but the six-month average leans toward the dry side overall. Temperatures will also have the potential to be cold later in the winter and early spring, particularly along the Mississippi.

Southeast: Barring late-season hurricanes in 2022, which would increase moisture greatly, the region has a dry outlook for most, although Florida may break even for precipitation.

Temperatures will be warmest for southern Florida, elsewhere within a normal range unless the cold is much more pronounced in the Central U.S., in which case we will see the cold move into this region as well.

(303) 539-9300

Northeast: Moisture will be limited until later in the season.

DIRECTIONS 2022

NATIONAL CATTLEMEN

39

DIRECTIONS STATISTICS

The National Cattlemen’s Beef Association is pleased to present the 28th annual edition of Directions. This special edition of National Cattlemen includes useful beef industry trends and statistics, as well as information about NCBA and current priorities. The information included in this section is compiled each year by the analysts at CattleFax over the course of several months. The information comes from open, voluntary and proprietary sources. While every effort is made to ensure the information contained within is accurate, some individual operations may have been overlooked and others may have chosen not to be included. If you would like to participate in next year’s listings, please contact NCBA at 866-BEEF-USA and request to be included in the 2023 survey. Please note that all listings must meet the rankings criteria to be considered.

Cattle and Calves on Farms (000 head) Jan. 1, 2022

Cattle and calf numbers were down from the previous year at 91.9 million head, down from 93.8 million head on Jan. 1, 2021. According to the USDA’s National Agricultural Statistics Service, cattle numbers decreased in all regions from the previous year.

Region l 2021 TREND 2022

Region V REGION V

ALASKA COLORADO IDAHO MONTANA OREGON WASHINGTON WYOMING TOTAL

2021 TREND 2022 12.1% 12.0% 17 2,700 2,500 2,450 1,250 1,140 1,300

UP DOWN UP DOWN FLAT DOWN DOWN

18 2,650 2,550 2,200 1,250 1,130 1,250

11,357 DOWN 11,048

Region Vll REGION VII

2021 TREND 2022 20.6% 20.6%

KANSAS 6,550 NEBRASKA 6,850 NORTH DAKOTA 1,950 SOUTH DAKOTA 4,000 TOTAL 19,350

DOWN DOWN DOWN DOWN

DOWN 18,950

V

Vll

Vl 2021 TREND 2022 9.5% 9.6%

ARIZONA 980 CALIFORNIA 5,150 HAWAII 142 NEVADA 470 NEW MEXICO 1,390 UTAH 800 TOTAL 8,932

40

DOWN UP UP DOWN DOWN DOWN

Region lll

2021 TREND 2022 REGION III 15.6% 15.9%

ILLINOIS 1,050 DOWN 1,000 IOWA 3,700 UP 3,850 MINNESOTA 2,150 UP 2,200 MISSOURI 4,310 DOWN 4,040 WISCONSIN 3,450 UP 3,500 TOTAL 14,660 DOWN 14,590

lll

lV

Region Vl REGION VI

6,500 6,800 1,850 3,800

960 5,200 144 445 1,300 790

DOWN 8,839

NATIONAL CATTLEMEN

ARKANSAS OKLAHOMA TEXAS TOTAL

TOTAL

10,611 DOWN 10,415

1,690 5,200 12,700

20,180 DOWN 19,590

850 2,090 177 1,140 479 1,420 1,260 1,430 1,390 375

DOWN DOWN DOWN DOWN UP FLAT UP DOWN FLAT DOWN

11.3%

810 2,020 165 1,120 480 1,420 1,300 1,340 1,390 370

*Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, Rhode Island and Vermont

l Region ll REGION II

2021 TREND 2022 21.5% 21.3% 1,780 DOWN 5,300 DOWN 13,100 DOWN

11.3%

INDIANA KENTUCKY MARYLAND MICHIGAN NEW ENGLAND* NEW YORK OHIO PENNSYLVANIA VIRGINIA WEST VIRGINIA

ll

Region lV REGION IV

REGION I

ALABAMA FLORIDA GEORGIA LOUISIANA MISSISSIPPI NORTH CAROLINA SOUTH CAROLINA TENNESSEE TOTAL

2021 TREND 2022 9.3% 8.9% 1,295 1,700 1,090 775 920 800 330 1,790

DOWN DOWN DOWN FLAT DOWN DOWN DOWN DOWN

1,260 1,630 1,050 775 910 785 1,750

8,700 DOWN 8,160

DIRECTIONS 2022

CUT. RAKE. BALE

REPEAT.

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Deseret Cattle & Citrus

St. Cloud, FL Owner: Farmland Reserve, Inc. CEO/Manager: Clint Richardson States of Operation: FL Breeds: Brangus, Simbrah, Angus

Ranch 6 Padlock Company

Ranchester, WY Owner: Scott Family CEO/Manager: Dr. Trey Patterson States of Operation: WY, MT Breeds: Stabilizer Composite, SimAngus

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2

J.R. Simplot Co.

Boise, ID Owner: Simplot Family CEO/Manager: Thomas J. Basabe States of Operation: ID, OR, NV, UT Breeds: Angus, Hereford, Charolais

Ranch, Inc. 3 King Kingsville, TX

Bros. Inc. Spur Land 4 Lykes 5 Silver Tampa, FL and Cattle LLC

Owner: Descendants of Captain King CEO/Manager: Robert J. Underbrink States of Operation: TX Breeds: Santa Gertrudis, American Red, Red Angus

Owner:

Lykes Family

CEO/Manager: Johnnie P. James States of Operation: FL, TX Breeds: Brangus, Beefmaster, Angus

Encampment, WY Owner: N/A

CEO/Manager: Thad York States of Operation: CO, NE, NM, WY Breeds: N/A

Cattle Co. Ranches Ranches, LLC 10 True Ranches LLC 7 Lightsey 8 Singleton 9 Rollins Lake Wales, FL Lamy, NM Atlanta, GA Casper, WY Owner: N/A CEO/Manager: Cary & Layne Lightsey

States of Operation: FL, GA Breeds: Braford, Charolais, Brahman

NATIONAL CATTLEMEN

Owner: Singleton Properties LLC CEO/Manager: Alex Carone, President States of Operation: NM, CA Breeds: Angus, Hereford

Owner: LOR, Inc. CEO/Manager: N/A

States of Operation: FL, GA, TX Breeds: Red Angus, Brangus, Angus, Nelore, Charolais, Hereford

Owner: True Family CEO/Manager: David L. True

States of Operation: WY, CO, SD Breeds: Angus, Hereford

DIRECTIONS 2022

LESS WORK. MORE PAY. With the Plus2™ Accumulator, bale collection is a breeze, with pickup time cut in half.

That’s 50% more time you can spend doing whatever you want.

And when you reduce your time on the field, you reduce logistics costs, saving you up to $1.00 or more per bale.

That’s more money in your pocket for spending however you want.

Visit JohnDeere.com/Hay or JohnDeere.ca/Hay and learn how you can work less and save more with the Plus2 Accumulator.

PLUS2™ ACCUMULATOR A420R and A520R

TO P 2 5 C OW- CA L F Ranch Inc. Ranching Ranch 11 Parker 12Ellison 13 Adams Kamuela, HI Ft. Pierce, FL Co. Tuscarora, NV Owner: N/A CEO/Manager: N/A States of Operation: ID, NV Breeds: Angus-Hereford

Owner: Parker Ranch Foundation Trust CEO/Manager: Neil "Dutch" Kuyper States of Operation: HI Breeds: Angus, SimAngus, Charolais

Owner: Adams Family CEO/Manager: Mike Adams

Feeders 14 Cactus 15 Spade Ranches, LTD Amarillo, TX

States of Operation: FL

Breeds:

Braford, Abeef Composite

Owner:

Lubbock, TX

States of Operation:

Chappell and Bassham Families CEO/Manager: Wesley Welch

100% Employee Owned CEO/Manager: Paul Defoor & Bradley W. Hastings

Owner:

TX, KS Breeds: Angus, Charolais, SimAngus

States of Operation: TX Breeds: Balancer, SimAngus

Gamble Ranch Land & Ranch A Ranch 16 Winecup 17 Immokalee 18 Pitchfork 19 Riverbend 20 Circle Immokalee, FL Idaho Falls, ID Iberia, MO Ranch Cattle Co. Montello, NV

Owner: Collier Corporations

Owner:

N/A CEO/Manager: N/A

CEO/Manager:

C. W. "Buzz" Stoner, Jr.

States of Operation: NV

Black Angus, Red Angus, Beefmaster, Hereford

21 Williamson Cattle Co.

Okeechobee, FL Williamson Family

Breeds:

States of Operation:

Owner:

Optimum Agriculture FL, LLC

CEO/Manager:

States of Operation:

States of Operation:

Frank W. Williamson III

Brangus

44

CEO/Manager:

FL

CEO/Manager:

Breeds:

Descendants of Williams Family Mary Randolph Ballinger TX, OK

Breeds:

Owner: Frank and Belinda VanderSloot CEO/Manager: Rhett Jacobs

N/A

FL Breeds: Beefmaster, Brangus

NATIONAL CATTLEMEN

Owner: The Gust Family CEO/Manager: Dave Gust Sr.

States of Operation:

States of Operation:

MO Breeds: Angus, Wagyu, Wangus

ID, MT, TX, UT Breeds: Angus

Angus

Maximo Ranch 23 McFaddin Enterprises 24 IX Ranch Co. 22 ElMiami, Victoria, TX Big Sandy, MT FL

Owner:

FL

Owner:

States of Operation: Brangus, Beefmaster, Angus, Charolais

Breeds:

Guthrie, TX

Owner: McCan-Cannon Family CEO/Manager: Bob McCan States of Operation: TX Breeds: Victoria - Brafords

Owner:

Ranch, LTD 25 Ponoholo Kohala, HI

IX Ranch Co.

CEO/Manager: Richard W. Roth

States of Operation: MT Breeds: Leachmans of Colorado

Owner:

von Holt Family

CEO/Manager: Sabrina English

States of Operation: HI Breeds: Angus, Charolais, Tarentaise

DIRECTIONS 2022

Don’t let resistant flies come back to haunt your cattle next spring.

Put a big dent in resistant fly populations with a fall application of BRUTE®.

Studies show that the best way to stop resistant flies from attacking your cattle next spring is to hit them with an application of BRUTE® Pour-on for Cattle this fall. BRUTE® controls horn flies, face flies and other biting flies, as well as Gulf Coast ticks and lice. Best of all, BRUTE® protects your cattle for as little as 48 cents a head.

So make sure resistant flies don’t come back to haunt your herd next spring by treating your cattle with BRUTE® this fall.

Always read and follow label directions. BRUTE® and Y-TEX® are registered trademarks of Y-TEX Corporation. © 2020 Y-TEX Corporation.

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TOP 25 SEEDSTOCK Ranches 1 Express Yukon, OK Owner: Robert A. Funk Mgr./CEO: Jarold Callahan Subsidiaries: N/A

# Registered Females: 4,190 Total Marketings: 4,695 Breeds Utilized: Angus, Hereford Angus Ranch 6 Sitz Harrison/Dillon, MT

Owner: Bob & Jim Sitz and Family Mgr./CEO: Bob & Jim Sitz Subsidiaries: N/A # Registered Females: 2,380 Total Marketings: 1,617 Breeds Utilized: Angus

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Angus Ranch, Inc. Cattle of Colorado 2 Gardiner 3 Leachman 4 Ashland, KS Fort Collins, CO Owner: The Henry Gardiner Family Mgr./CEO: Mark Gardiner Subsidiaries:

Owner: Lee Leachman, Mike Browning, Tim Watts Family Mgr./CEO: Lee Leachman Subsidiaries: N/A # Registered Females: 12,500 Total Marketings: 2,960 Breeds Utilized: Angus, Red Angus, Charolais, Stabilizer

N/A

# Registered Females: 1,056 Total Marketings: 4,521 Breeds Utilized: Angus

Farms 7 Mead Barnett, MO

Owner: Alan Mead Mgr./CEO: Alan Mead Subsidiaries: N/A # Registered Females: 1,500 Total Marketings: 2,500 Breeds Utilized: Angus, Charolais, Red Angus, Hereford

NATIONAL CATTLEMEN

8

Vermilion Ranch Billings, MT Owner: Pat Goggins Family Mgr./CEO: Joe Goggins Subsidiaries: N/A # Registered Females: 1,400 Total Marketings: 2,130 Breeds Utilized: Angus

Ludvigson Stock Farms Billings, MT Owner: The Ludvigson and Newberry Families Mgr./CEO: Ryan Ludvigson Subsidiaries: LN Cattle Company, Orion Beef Group # Registered Females: 61 Total Marketings: 2,742 Breeds Utilized: Red Angus, Red SimAngus

Farms 5 44Cameron, TX

Owner: Bob McClaren Mgr./CEO: Tracy Woods Subsidiaries: 44 Steaks - Prime Pursuits # Registered Females: 1,550 Total Marketings: 2,635 Breeds Utilized: Angus

Angus Ranch Ranch, LLC 9 Connealy 10 Hoffman Whitman, NE Thedford, NE Owner: Connealy Family Mgr./CEO: Jerry Connealy Subsidiaries: N/A # Registered Females: 3,350 Total Marketings: 1,150 Breeds Utilized: Angus

Owner: Jason & Denny Hoffman Mgr./CEO: Jason Hoffman Subsidiaries: N/A # Registered Females: N/A Total Marketings: 1,150 Breeds Utilized: Hereford, Angus, SimAngus

DIRECTIONS 2022

IT’S TIME TO RAISE YOUR GRADE.

AND YOUR PREMIUMS. 1. Raise HeartBrand-sired cattle.

Use fullblood Akaushi bulls crossed with your cow-herd (live coverage or semen).

6. HeartBrand sells Akaushi beef.

Above-market price on superior beef = higher premiums for ranchers.

5. Improve USDA quality grade.

The past 120,000 head of HeartBrand Akaushi cattle harvested graded: 53% USDA prime, 45% USDA choice and 2% USDA select and no roll.

$

Ranchto-Table Buyback Program

2. Verify breed with DNA. Verify parentage with the American Akaushi Association.

3. Follow management standards.

No hormone implants and finished with no growth promotants.

4. Earn your buyback bonus. $100 to $150 premium for weaned calves and yearlings. $0.30/lb and up premium for finished fed cattle.

CATTLE

Visit heartbrandcattle.com or call 830-540-3955 to source Akaushi genetics for your herd.

TOP 25 SEEDSTOCK Charolais Ranch Charolais Cattle Co., Inc 11 Shaw 12 Eaton 13 DeBruycker 14 Dutton, MT Lindsay, MT Caldwell, ID Owner: Sam Tucker & Greg Shaw Mgr./CEO: Sam Shaw/Tucker Shaw Subsidiaries: N/A # Registered Females: 1,780 Total Marketings: 1,146 Breeds Utilized: Hereford, Black Angus, Red Angus

Owner: DeBruycker Family Mgr./CEO: Brett DeBruycker Subsidiaries: N/A # Registered Females: 2,200 Total Marketings: 1,075 Breeds Utilized: Charolais

Owner: Eaton Family Mgr./CEO: Scott Eaton Subsidiaries: N/A # Registered Females: 2,500 Total Marketings: 1,125 Breeds Utilized: Charolais

Cattle Co. Red Angus Ranch Family Farms 16 Bieber 17 HeartBrand 18 Yon Ridge Spring, SC Harwood, TX Leola, SD Owner: Craig & Peggy Bieber Mgr./CEO: Craig Bieber Subsidiaries: Bieber Holdings # Registered Females: 1,075 Total Marketings: 948 Breeds Utilized: Red Angus

Ranch 21KGThree Forks, MT

Owner: Paul Doddridge Mgr./CEO: Cody Jackson Subsidiaries: N/A # Registered Females: 700 Total Marketings: 825 Breeds Utilized: Angus

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Farms LTD 22 Nichols Bridgewater, IA

Owner: Kelly & Martie Jo Schaff Mgr./CEO: Kelly Schaff Subsidiaries: N/A # Registered Females: 800 Total Marketings: 924 Breeds Utilized: Angus

Cattle Farms LLC 23 Schiefelbein 24 Wulf Morris, MN Kimball, MN

Owner: Family Ownership Mgr./CEO: J. David Nichols Subsidiaries: Ayers Stock Farm, Havens Cattle Co, Lincoln Center Partnership # Registered Females: 2,000 Total Marketings: 730 Breeds Utilized: Angus, Simmental, South Devon

NATIONAL CATTLEMEN

Angus Valley 19 Schaff St. Anthony, ND

Owner: Kevin Yon Family Mgr./CEO: Kevin Yon Subsidiaries: N/A # Registered Females: 1,850 Total Marketings: 933 Breeds Utilized: Angus, SimAngus, Ultrablack

Owner: Beeman Family Mgr./CEO: Jojo Carrales Subsidiaries: N/A # Registered Females: 2,800 Total Marketings: 937 Breeds Utilized: Akaushi

Thomas Angus Ranch Baker City, OR Owner: The Thomas Family Mgr./CEO: Robert E. Thomas Subsidiaries: N/A # Registered Females: 825 Total Marketings: 1,018 Breeds Utilized: Angus

Owner: Schiefelbein Family Mgr./CEO: Don Schiefelbein Subsidiaries: Schiefelbein Feeders LLC # Registered Females: 1,200 Total Marketings: 667 Breeds Utilized: Angus, Simmental

Owner: Riverview LLP Mgr./CEO: Mitch Fehr Subsidiaries: N/A # Registered Females: 2,050 Total Marketings: 665 Breeds Utilized: Limousin, LimFlex, Angus

Cattle 15 Langford Okmulgee, OK

Owner: Watson Langford & Family Mgr./CEO: Watson Langford Subsidiaries: N/A # Registered Females: 1,156 Total Marketings: 961 Breeds Utilized: Hereford, Angus, Maine Anjou, Simmental, Chianina, Black Hereford

Diamond Dot 20 Stevenson's Cattle Co. Hobson, MT Owner: Clint Stevenson Family Mgr./CEO: Clint Stevenson Subsidiaries: N/A # Registered Females: 2,040 Total Marketings: 857 Breeds Utilized: Angus

Beef Genetics 25 Fink Randolph, KS

Owner: Galen & Lori Fink Family Mgr./CEO: Galen Fink/Megan Larson Subsidiaries: Larson Cattle Co. # Registered Females: N/A Total Marketings: 620 Breeds Utilized: Angus, Charolais, Red Angus

DIRECTIONS 2022

FA LL B U LL SA LE OCTOBER 22, 2022 • 10:30 AM (CDT) • CAMERON, TEXAS

600 PE R FOR MANCE ANG US B U LL S

FOR MORE INFORMATION, CONTACT ONE OF OUR TEAM MEMBERS:

Tracy Woods

405.880.3866

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208.590.6167

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308.870.6348

Jill Ginn

806.570.6185

TO RECEIVE A SALE BOOK, PLEASE CALL 254.697.4401 OR VISIT 44FARMS.COM

8 20 16

17

10

1 4

14

5

7

5

13

8 11 3 19 17 2 14

12

TOP 20

FEEDLOTS Rivers Cattle 1 Five Feeding, LLC

Johnstown, CO Owner: Pinnacle Arcadia Mgr./CEO: Mike Thoren Capacity: 870,000 Number of Yards: 11 States of Operation: AZ, TX, OK, KS, CO, ID

TIE

Cattle Co. 5 Foote Bucyrus, KS

Owner: Bob Foote Family Mgr./CEO: Scott, Brad and Greg Foote Capacity: 280,000 Number of Yards: 5 States of Operation: KS, NE

50

Feeders 2 Cactus Amarillo, TX

Owner: 100% Employee Owned Mgr./CEO: Paul Defoor and Brad Hastings Capacity: 603,000 Number of Yards: 10 States of Operation: TX, KS

3

Livestock 8 7 Innovative Services Inc. Great Bend, KS Owner: Privately Held Mgr./CEO: Jerry Kuckelman Capacity: 235,000 Number of Yards: 7 States of Operation: KS, NE

NATIONAL CATTLEMEN

Friona Industries, L.P. Amarillo, TX Owner: Privately Held Mgr./CEO: Donald Gales Capacity: 589,000 Number of Yards: 8 States of Operation: TX, KS

Cattle 4 Cobalt Company LLC

Garden City, KS Owner: Privately Held Mgr./CEO: Joel Jarnagin Capacity: 355,000 Number of Yards: 6 States of Operation: TX, KS, CO

TIE J. R. Simplot Co. Boise, ID Owner: Simplot Family Mgr./CEO: Thomas J. Basabe Capacity: 230,000 Number of Yards: 2 States of Operation: ID, WA

8 Oppliger Feedyard, Inc.

Amarillo, TX Owner: Don Oppliger Family Mgr./CEO: Ben Oppliger Capacity: 230,000 Number of Yards: 6 States of Operation: TX, NE, NM

TIE

& Doll Feed 5 Irsik Services, Inc

Cimarron, KS Owner: Privately Held Mgr./CEO: Scott Shill Capacity: 280,000 Number of Yards: 7 States of Operation: KS

Cattle Co. 10 Gottsch Elkhorn, NE

Owner: Brett and Bill Gottsch Mgr./CEO: Brett Gottsch Capacity: 195,500 Number of Yards: 3 States of Operation: NE

DIRECTIONS 2022

Driving Your Cattle Feeding Business Forward With a Special Breed of Financial Strength Helping your business thrive in today’s evolving industry is what our Agribusiness team does best. That’s why we’re proud to support the National Cattlemen's Beef Association.

W. Ashley Allen Bank of America 806.463.3911

“Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed. ©2020 Bank of America Corporation. All rights reserved. 01-20-2676

TOP 20 F E E D L O T S

8 20 16

17

10

1 4

14

12

Feeding Group Feeding Co. 12 Pinal 11 Tejas Laveen, AZ Amarillo, TX Owner: Mike Smith Mgr./CEO: Mike Smith Capacity: 155,000 Number of Yards: 4 States of Operation: TX

16

52

Adams Land & Cattle, LLC Broken Bow, NE Owner: Bill & Jerry Adams Mgr./CEO: Jerry Adams Capacity: 132,000 Number of Yards: 3 States of Operation: NE

7

5 8 11 3 19 17 2 14

Owner: Northside Hay Company Mgr./CEO: Earl Petznick Jr. Capacity: 150,000 Number of Yards: 3 States of Operation: AZ

Feed 17 Dinklage Yard, Inc.

Sidney, NE Owner: Shareholders Mgr./CEO: Rex Trumbull Capacity: 125,000 Number of Yards: 4 States of Operation: NE, WY, CO

NATIONAL CATTLEMEN

5

13

13

Pratt Feeders Pratt, KS Owner: Stockholders Mgr./CEO: Dave Latta Capacity: 139,000 Number of Yards: 4 States of Operation: KS, OK

TIE

-G Feedyard 17 Bar Hereford, TX

Owner: Livestock Investors LTD Mgr./CEO: Johnny Trotter Capacity: 125,000 Number of Yards: 2 States of Operation: TX

14

TIE

Harris Feeding Co. Coalinga, CA Owner: Central Vally Meat Holding Company Mgr./CEO: Brian Coelho Capacity: 135,000 Number of Yards: 2 States of Operation: CA, NV

Crofoot 14 Barrett Hereford, TX

Owner: Barrett and Weishaar Families Mgr./CEO: Robert Barrett Capacity: 135,000 Number of Yards: 2 States of Operation: TX

Livestock LLC Enterprises, Inc. 20 AB 19 Hitch Boise, ID Guymon, OK Owner: Hitch Family Mgr./CEO: Chris and Jason Hitch Capacity: 111,000 Number of Yards: 2 States of Operation: OK

Owner: Rebholtz Family Mgr./CEO: Robert Rebholtz Jr. Capacity: 110,000 Number of Yards: 5 States of Operation: WA, ID

DIRECTIONS 2022

CATTLE HERD INVENTORY

2010

2009

2008

Head (million) 41.69

Cows Total Cattle Calf Crop 96.03

36.16 41.13 94.72 35.93 40.53 94.08 35.74

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

40.07

DIRECTIONS 2022

92.89 35.36 39.52 91.16 34.47 38.85 90.10 33.63 38.17 88.24 33.52 38.64 89.17 34.09 39.48 91.89 35.06 40.54 93.30 35.76 40.90 94.30 36.31 41.04 94.8 35.59 40.68 93.79 35.50 40.29 93.79 35.09 39.5 91.9 34.6

NATIONAL CATTLEMEN

53

TOP 10 BEEF SLAUGHTER OPERATIONS 1

JBS U.S.A Greeley, CO

Owner: JBS CEO:

Tim Schelpeper

Subsidiaries: N/A Daily Slaughter Capacity: 27,000 2021 Sales: $14 Billion Slaughter Total: 7,000,000 Number of Beef Plants: 9

6

Caviness and CS Beef Packers Amarillo, TX & Kuna, ID Owner: Caviness Beef, JR Simplot Co. CEO:

2

Tyson Foods, Inc. Springdale, AR

Owner: Tyson Foods, Inc. (Publically Traded on NYSE) CEO:

Donnie King, President & CEO

Subsidiaries: N/A Daily Slaughter Capacity: N/A 2021 Sales: $14.4 Billion Slaughter Total: N/A Number of Beef Plants: 6

7

Greater Omaha Packing Omaha, NE

3

Cargill Wichita, KS

4

5

CEO: Tim Klein

American Foods Group, LLC Green Bay, WI Owner: Rosen's Diversified Inc. CEO: Steven W. VanLannen

Subsidiaries:

Subsidiaries:

Subsidiaries:

Daily Slaughter Capacity: 23,000

Daily Slaughter Capacity: 13,200

Owner: Cargill Family CEO: David W. Maclennan

N/A

2021 Sales: $15.4 Billion Slaughter Total: 6,000,000 Number of Beef Plants: 6

8

Harris Ranch Beef Selma, CA

National Beef Packing Company, LLC Kansas City, MO Owner: Marfrig Global Foods S.A., U.S. Premium Beef, LLC

National Carriers, Inc., National Beef Leathers LLC, Kansas City Steak Company, LLC, National Beef Ohio, LLC, Iowa Premium, LLC

2021 Sales: $11.7 Billion Slaughter Total: N/A Number of Beef Plants: 3

9

Nebraska Beef Omaha, NE

N/A

Daily Slaughter Capacity: N/A 2021 Sales: $3.9 Billion Slaughter Total: N/A Number of Beef Plants: 9

10

Agri Beef Co. Boise, ID

Owner: Privately Owned CEO: Henry Davis

Owner: Brian Coelho

Owner: Corporation

Owner: Rebholtz Family

CEO: Brian Coelho

CEO: William Hughes

CEO: Robert Rebholtz, Jr.

Subsidiaries: Central Valley Meats

Subsidiaries: N/A

Subsidiaries: Washington Beef, LLC,

Daily Slaughter Capacity: 4,650

Subsidiaries: N/A Daily Slaughter Capacity: 2,900

Daily Slaughter Capacity: 2,500

Daily Slaughter Capacity: 1,500

2021 Sales: $1.7 Billion

2021 Sales: $1,8 Million

2021 Sales: N/A

2021 Sales: N/A

Slaughter Total: 1,095,000

Slaughter Total: 650,000

Slaughter Total: N/A

Slaughter Total: N/A

Number of Beef Plants: 3

Number of Beef Plants: 1

Number of Beef Plants: 1

Number of Beef Plants: 1

Terry Caviness

Subsidiaries: N/A

54

NATIONAL CATTLEMEN

Daily Slaughter Capacity: 2,500 2021 Sales: N/A Slaughter Total: N/A Number of Beef Plants: 2

DIRECTIONS 2022

DIRECTIONS 2022 20 20 20 21 3,348 Million Pounds

20 19 3,342 Million Pounds

3,057 Million Pounds

20 18

20 17

2,993 Million Pounds 2,999 Million Pounds

20 16

20 15

20 14

20 13

20 12

20 11

3,012 Million Pounds

3,368 Million Pounds

IMPORTS

20 21

20 20

20 19

20 18

20 17

20 16

20 15

2,947 Million Pounds

3500

20 14

2,250 Million Pounds

2,220 Million Pounds

2,057 Million Pounds

2250

20 13

2500

20 10

3447 Million Pounds

2,956 Million Pounds

3,022 Million Pounds

3,156 Million Pounds

2,860 Million Pounds

2,557 Million Pounds

2,267 Million Pounds

2,574 Million Pounds

2,588 Million Pounds

2,453 Million Pounds

2,785 Million Pounds

2,300 Million Pounds

2750

2,298 Million Pounds

3250

20 12

2750 1,935 Million Pounds

3500

20 11

3000 1,996 Million Pounds

3000

20 10

3250

20 09

2000

2,626 Million Pounds

20 08

2250

2,538 Million Pounds

Millions of pounds 2500

20 09

20 08

Millions of pounds

EXPORTS

— Others

1750 — S. Korea

1500

1250

1000 — Japan

750

500 — Canada

— Mexico

— Others

— New Zealand

2000

1750 — Mexico

1500

1250

— Australia

1000

— Nicaragua

750

500

— Canada

NATIONAL CATTLEMEN

55

125

TOTAL RETAIL MEAT SUPPLY 214.8

209.7

207.5

203.2

201.1

202.2

RED MEAT

100

200.1

209.5

Total Meat Supply

213.5

215.9

217.8

222.4

223.0

222.0

POULTRY

CHICKEN

BEEF

50

25

TURKEY

LAMB

20 21

20 20

20 19

20 18

20 17

20 16

20 15

20 14

20 13

20 12

20 11

20 10

VEAL

20 08

0

PORK

20 09

POUNDS PER CAPITA

75

TOP 10 CATTLE NUMBERS (*Thousands)

BEEF COWS U.S. Total *30,125

DAIRY

U.S. Total *9,375

56

NATIONAL CATTLEMEN

TOTAL CATTLE U.S. Total *91,902

CATTLE ON FEED U.S. Total *14,693

DIRECTIONS 2022

The bond between us is not a yoke. It’s a commitment, a ten-thousand-year-old promise to provide for our cattle as they provide for us. We are today’s advanced answer to that ancient pact. We are

Born Of TheBond.com

All trademarks are the property of Zoetis Services LLC or a related company or a licensor unless otherwise noted. © 2021 Zoetis Services LLC. All rights reserved. GCA-00507 DIRECTIONS 2022 NATIONAL CATTLEMEN

57

CATTLE INVENTORY BY CLASS - STATE AND UNITED STATES JAN. 1, 2021 AND 2022

Beef Cows That Have Calved State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming United States 58

NATIONAL CATTLEMEN

2021

Milk Cows That Have Calved

(1,000 Head)

(1,000 Head)

2022

Perecent of Previous Year

(1,000 Head)

2021

(1,000 Head)

2022

Perecent of Previous Year

697 7.3 192 925 660 659 5 1.8 929 499 76.4 464 346 184 860 1,457 973 445 10 45 7 100 335 482 2,035 1,389 1,880 245 4.5 8.6 463 95 370 965 292 2,159 525 215 1 166 1,799 900 4,635 345 14 585 211 190 290 702 30,843.6

677 7.8 171 905 680 638 4.5 1.7 895 487 79.2 498 339 184 925 1,422 966 451 10 42 8 96 360 478 1,941 1,299 1,832 244 4 7.8 453 100 366 945 312 2,131 505 190 1.1 158 1,610 893 4,475 331 15 599 224 188 295 681 30,125.1

97% 107% 89% 98% 103% 97% 90% 94% 96% 98% 104% 107% 98% 100% 108% 98% 99% 101% 100% 93% 114% 96% 107% 99% 95% 94% 97% 100% 89% 91% 98% 105% 99% 98% 107% 99% 96% 88% 110% 95% 89% 99% 97% 96% 107% 102% 106% 99% 102% 97% 98%

3 0.2 198 5 1,720 201 19 3.7 111 81 0.6 646 84 191 220 173 47 10 27 43 10 440 455 8 75 11 60 30 11 4.4 337 625 40 15 258 41 125 475 0.5 10 141 30 615 95 120 75 279 5 1,260 8 9,442.4

3 0.2 194 5 1,720 202 18.5 2.8 105 83 0.8 652 81 186 225 168 44 9 26 41 9.5 434 460 7 69 11 58 31 10.5 4.2 292 620 39 15 248 39 125 470 0.5 9 170 27 625 94 120 71 261 5 1,275 9 9,375

100% 100% 98% 100% 100% 100% 97% 76% 95% 102% 133% 101% 96% 97% 102% 97% 94% 90% 96% 95% 95% 99% 101% 88% 92% 100% 97% 103% 95% 95% 87% 99% 98% 100% 96% 95% 100% 99% 100% 90% 121% 90% 102% 99% 100% 95% 94% 100% 101% 113% 99% DIRECTIONS 2022

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DIRECTIONS 2022

NATIONAL CATTLEMEN

59

FEEDER IMPORTS

CANADA

307,797

2,143

1,448,242

225,689

309,609

975,910

285,099 326,870

917

2015

1,153,793

2016 2017

112,474

541,626 290,763 1,165,725

2018

329,023 110,999

11,786

182,128

590,118 336,043

193,814

8,981 26,748 32,650

1,255,184

307,264 103,939

172,318

12,757

622,893 374,449

185,075

1,304,606

379,282 104,140 118,181

343,552 1,434,452

291,601

2021

79,678

705,387

2020

6,116 25,470 12,516 60,038

24,580

935,138

118,544

9,811 34,425 26,893

1,730 22,920 14,782

427,820 232,310

333,336 78,341

6,070

14,041

172,484

2019

2015 2016

484,878 404,311

179,045

12,038 10,469 11,626

2017

280,644

275,008 119,168

6,561

2018

1,084,983

287,748

10,137 13,954 29,225

2019

466,189 333,695

264,604 186,810

7,104

2020

440,212 441,129

17,886 41,212 34,736

2021

398,556 282,859

311,350

19,699 32,785 60,858

2014

2013

2013

294,495

1,741

119,110 143,690

100,000

625,644 204,151 1,121,685

200,000

300,000

# of cattle

400,000

Washington Idaho Montana North Dakota Total Featured States Total All Other States U.S. Total

60

655,313

134,978

14,639 37,452 31,829

0

485,132

2012

132,835

2014

2012

21,174 41,078 19,142 51,441

MEXICO

NATIONAL CATTLEMEN

Arizona

# of cattle

New Mexico

U.S. Total

Texas

California had no imports.

DIRECTIONS 2022

You can’t tell by looking.

Not all “Angus” bulls are REGISTERED Angus bulls.

One is supported by the power of data.

One is validated by the power of a pedigree.

One is backed by the power of programs.

Look for the REGISTRATION NUMBER. Bring the Power of Angus to your herd.

Angus.org/PBA.

One is not.

SM

BEEF PRODUCTION

Bil. lbs.

COLD CARCASS WEIGHTS

lbs 840

27.00

830

26.50

820

26.00

810 800

25.50

790

25.00

780

24.50

770

24.00

PER CAPITA SPENDING

Dollars 800

20 21

20 20

20 19

20 18

20 17

20 16

20 15

20 13

20 12

20 21

20 20

20 19

20 18

20 17

20 14

20 16

740 20 15

23.00 20 13

750

20 12

23.50

20 14

760

$840.49

700

Beef

650

Pork

600

Broilers

550 500

Total

% Beef

450

46.34% 46.18% 45.84% 45.12% 45.03% 45.55% 46.31% 45.69% 46.73%

47.21%

47.11%

47.17% 47.27% 47.10% 48.18% 48.70%

400

$409.27

350 300 250

$230.34

200

$200.87

150 100

2006

2007

2008

2009

2010

2011

2012

450 lb

650 lb

$154.37

-10%

Fed Steer

$130.77 +13% $113.43 +13% $95.42 +15%

$148.00

2016

2011

0%

2012

+13%

80 100 120 140 160

$282.93 $227.41

NATIONAL CATTLEMEN

80 100 120 140 160

2020

$186.39 $160.30 $116.89 -3.6%

2021

+2%

$176.17 $152.67 $116.66 -0.2% $172.70 $146.62 $108.71 -6.8%

-2%

-4%

2021

$183.56 $156.69 +7% $122.48 +12.7%

-37%

180 200 220 240 260 280

-5%

-5%

2020

+4%

60

+4%

+4%

2019

+47%

$178.55 +1% $153.95 +2% $121.29 +0.5% 60

2019

2018

2017

+17%

180 200 220 240 260 280

-4%

-34%

2018

% Change from Previous Year

+43%

+23%

$177.32 $151.01 $120.74 -18%

$157.42 +20% $137.76 +21% $114.91 +20%

2017

+1%

$271.42 $223.24

2015

2010

62

2016

2014

2009

60

2015

STEER PRICES

$185.23 $156.13 $125.86 +2%

$115.93 -6% $100.66 -5%

$183.79 $155.46 $122.93 +7%

2014

2013

2008

$122.86 -6% $105.61 -5% $92.71 0%

$83.23

2013

80 100 120 140 160

+6%

180 200 220 240 260 280

DIRECTIONS 2022

CATTLE INDUSTRY CONVENTION

& NCBA TRADE SHOW

FEBRUARY 1-3, 2023

FOLLOW US ON SOCIAL MEDIA

#CattleCon23

CONVENTION.NCBA.ORG

TEXT BEEF TO 877-319-2142

LIVE CANADIAN IMPORTS IMPORT OF TOTAL SLAUGHTER CATTLE 2008

836,286

2009

750,522 839,256

2010 2011

597,285 675,521

2012 2013

724,315

2014

723,181 514,434

2015

573,809

2016

515,723

2017 2018

427,688

2019

528,157

2020

531,075

2021

487,677

FEED AND GRAINBarley

$/Bushel 8.0

Sorghum

Corn

Wheat

7.5 7.0

Wheat $ $6.84

6.5 6.0

Corn $5.40 Sorghum $5.35 Barley $5.03

5.5 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5

64

NATIONAL CATTLEMEN

21 20

0 20 2

9 20 1

18 20

7 20 1

6 20 1

15 20

14 20

3 20 1

12 20

1 20 1

10 20

09 20

08 20

07 20

20

06

0.0

DIRECTIONS 2022

You do it for the cattle.

Now do it for your road ahead.

BQA transportation certification helps increase consumer confidence in beef. Get BQAT certified online today. www.BQA.org

2006

2009 2010

Total Byproducts --- $10.49 Total Byproducts --- $7.61 Hides --- $3.30

Hides --- $7.92

47% of Total

Total Byproducts --- $13.17

48% of Total

Total Byproducts --- $14.20

51% of Total

Total Byproducts --- $15.88

50% of Total 48% of Total

Total Byproducts --- $12.92

2015

2021

Total Byproducts --- $13.19

Hides --- $6.34

2014

2020

50% of Total

Hides --- $6.16

Hides --- $7.20

2019

43% of Total

Total Byproducts --- $10.73

2013

2018

48% of Total

Hides --- $5.37

2012

2017

56% of Total

Hides --- $5.00

2011

2016

64% of Total

Total Byproducts --- $9.94 Hides --- $5.56

2007 2008

BYPRODUCTS

Total Byproducts --- $8.32 Hides --- $5.31

Hides --- $6.14 Total Byproducts --- $11.23

46% of Total

Total Byproducts --- $11.28

41% of Total

Hides --- $5.17

Hides --- $4.66 Total Byproducts --- $9.59 Hides --- $3.63 Total Byproducts --- $8.88

Hides --- $2.59 Hides --- $2.08

Total Byproducts --- $7.99 Total Byproducts --- $12.90

Hides --- $3.49

2023 REDBOOK

38% of Total 29% of Total 26% of Total 27% of Total

For over thirty years cattlemen and women have used the IRM Redbook to enhance profitability by keeping better records, and to track the productivity of their cow-calf operations.

Features of the Redbook include: Beef Quality Assurance Best Practices Injection Site Quality Control Calf Information Health Records

Customize your Redbooks in quantities of 100 books or more.

Contact gwebb@beef.org for more information.

Non-customized redbooks will be available for purchase online starting October 5th at store.ncba.org.

Nominate Your Neighbor FOR THE

2023 ENVIRONMENTAL STEWARDSHIP AWARD The Environmental Stewardship Award showcases cattle producers’ commitment to protecting the environment and improving fish and wildlife habitats while operating profitable cattle operations.

Help us highlight the great work being done on cattle farms and ranches across the country by nominating your neighbor.

NOMINATIONS ARE DUE MARCH 10, 2023

Nominations can be submitted by any organization, group, or individual on behalf of a U.S. cattle producer. Contact your state affiliate, ESAP sponsor representative, or NCBA staff member for more information on submitting an application.

For more information on how to get started, contact esap@beef.org or visit environmentalstewardship.org

MORE CHOICES. MORE CONFIDENCE.

From options like a new premium cab with more comfort and controls at your fingertips to a true 3rd-function mid-valve for easier loader installation and operation, the new 5E Series gives you more choices than ever. That includes choices that better connect you to your tractor, helping you plan for maintenance and even order parts from your mobile device. The new 5E 3-Cylinder tractor also features no regen, helping to simplify maintenance, bringing peace of mind to the ownership experience. It all leads to more confidence with every job.

TALK TO YOUR JOHN DEERE DEALER OR VISIT JOHNDEERE.COM/5E TO LEARN MORE.