Beef Cow/Calf Marketing

Transcription

1 4/6/2015 Beef Cow/Calf Marketing Workshop #8 Scott Clawson NE Area Ag Econ Beef Cow/Calf Marketing Fact or Fiction: As CC producers, we are trying to market forage to the best use and value. The limiting asset in operations is not cattle, it s land and thus forage Successful CC operations adapt to short and long run market and price issues Beef Cow/Calf Marketing CATTLE CYCLES Increases and decreases in the production cycle partially due to price signals sent enticing action at the CC level 1

2 4/6/ mil.? 10 mil.? 20 mil.? OK heifers to kept as replacements up 26% as of Jan 1 Beef Cow/Calf Marketing Will this cyclical nature continue? How can this be used a management tool? Strategic cow herd management Heifer retention at peak prices is more expensive Retention at low price levels allows heifers to be mature and productive at the peak of the price point in the cycle, hence we are selling at the peak, not retaining 2

3 4/6/2015 Beef Cow/Calf Marketing SEASONALITY Regular patterns of prices each year and cycles of prices and production over a period of years Based on strong production actions taken at the CC level of the system What are the two things that make the majority of revenues for CC producers? What two classes of cattle display the greatest variation in price through the year? 3

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5 4/6/2015 Beef Cow/Calf Marketing Where do we go with this information? Calf marketing Retained ownership (via programs like OQBN) can result in a seasonal upward price movement by moving out from typical October marketing Management of excess forage with purchased calves or longer term retained ownership Beef Cow/Calf Marketing Cull cow marketing Variability in prices is risk, also provides opportunity Separate venture? Beef Cow/Calf Marketing Thank you! 5

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7 Oklahoma Quality Beef Network Workshop #8 Gant Mourer Beef Value Enhancement Specialist Beef Industry Ickey Shuffle- Did You Know - GEICO.mp4 We must find ways to maximize production yield and revenue per head. The focus on cost will remain, but the emphasis must shift to increasing value Pete Anderson Midwest PMS LLC 1

8 Marketing Cattle Producer Options Sell Cattle Take a given price Market Cattle Work to create a marketable and profitable product Market Value Added Cattle Have a marketable and profitable product, 3 rd party verified Information is Key to Increase Confidence for buyers and sellers! Quality #1 in Profitability Quality Cattle and Management Practices Repeat A bovine that meets or exceeds production expectations in a given system or environment. Producers must establish marketing goals 2

9 Develop Heifers Natural Holder Brothers Beef Duff Retained Ownership Local Markets Akaushi Beef Stocker Cattle Purebred Commercial Alliance/Comingle Many More Marketing Value Added Programs Confidence to Cattle Buyers Programs Age and Source Verification Genetic Verification Production System Verification Health Management Verification 3 rd Party Verified USDA Certified Companies IMI Global, Verified Beef Breed Association Universities Pharmaceutical Companies OQBN Network of Producers, Educators, Veterinarians and Industry Professionals Continually Growing Improve Quality of Cattle All Segments Benefit Increase Communication Increase Access to Management Strategies Increase Access to Value Added Markets Animal Welfare 3

10 Oklahoma Quality Beef Network Cow/Calf Stocker/Grower Feedlot/Packer Age and Source Verification USDA Verified Program Cattle Records must be complete Calf Birth Dates and Ranch of Origin Verified by a 3 rd party company IMI Global Japan 20 months of age or less Feb months of age or less 40 50$ hd premium 5 years ago Genetic Verification Not necessarily a USDA Program 3 rd party Breed Associations Verified Beef CAB/Zoetis Identify cattle consist of high % of that particular breed Identify cattle that will Grow and Grade $17/hd (Genemax Focus, Genetic Merit Scorecard) 4

11 Production System Natural Livestock used for the production of meat and meat products have been raised entirely without growth promotants, antibiotics (except for ionophores used as coccidiostats for parasite control), and have never been fed animal by products. Organic Certified organic beef must come from a fully verifiable production system that collects information on the history of every animal in the program, including its breed history, veterinary care, and feed. Natural Beef Natural Beef Claims No implants lifetime or last 100 days No antibiotics No animal byproducts Grass fed Family farm raised No pesticides or herbicides Tested for residues NHTC and Never, Ever 3 Programs Organic Beef Organic Beef Claims Born and raised on certified organic pasture Never received antibiotics Never receive growth promoting hormones Are fed only certified organic grains and grasses Must have unrestricted outdoor access Must receive humane treatment No genetically modified cattle or embryos 5

12 Production System Both are USDA Verified IMI Global, Verified Beef Branded Products Laura s Lean, Nolan Ryan, Creekstone. Whole Foods Holder Bros Beef, Duff Cattle Company Grass Fed Beta Agonist Free Fairly Expensive High Premiums Set at beginning of production cycle, could be $150+/hd Performance Natural Conventional d 0 BW Final Wheat Weight Wheat ADG Feedlot in BW Feedlot final BW Feedlot ADG Feedlot DMI Feedlot F/G Net Returns Maxwell et al. 2013,2014 Production System Must Market as Natural (verify) or use technology and consumer driven!! 6

13 Technology Implants 0.12 lbs/day suckling calf 8 10% increase in efficiency Zeranol

14 Economics lb gain $0.60 value of gain = $10.80 increase in revenue lb gain $1.30 value of gain = $23.40 $.85 value of gain = $15.30 Cost? Current Use of Implants Finishing and Stocker Percent of Operations Finishing Large Stocker Small Stocker Cattle Fax, Johnson (2008) Percent of Operations Current Use of Implants Cow/Calf National Animal Health Monitoring System 8

15 Percent of Operations Use Declining in Larger Operations? Superior Livestock Video Auction Percentage Lots Implanting / Not Implanting Superior Livestock, Implant No Implant '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 Source: Modified from King, Seeger, et al. JAVMA,2006, 2011 Pounds Dollars 5.1 Other 6.3 Other 94.9 Natural and Organic 93.7 Natural and Organic Source: FreshLook Marketing Data 13 weeks ending 12/28/14. 9

16 Price Advantage for Not Implanting Superior Livestock, $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 -$0.10 -$0.20 -$0.30 -$0.40 -$0.50 -$ No Implant Source: Modified from King, Seeger, et al. JAVMA,2006, 2011 Management Verification Precondition/Health Vaccination protocol Castration Dehorned Nutrition Weaned 3 rd party verification PI BVD Neg? Handling/Wellbeing New BQA Guidelines 3 rd party verification Tyson Farm Check Preconditioning Programs 10

17 OQBN Vac 45 Requirements Vaccination Protocol (3 Options) Castrated and healed Dehorned and healed Weaned at LEAST 45 days Verification of requirements 3 rd party (OSU) OQBN Vac 45 Recommendations Deworm and treat for external parasites Fresh Water and high quality forage Mineral Supplementation Coccidiostat Feed Concentrate/Bunk Training At least 7 days OQBN Precon In Addition to Vac 45 Program Multiple Sources Meet Health Requirements Cattle must be retained a minimum of 60 Days Verified OSU Comm Serv. 11

18 OQBN Precon Increase options for producers Include more producers Wheat pasture Western Ok Not ready to re stock Drought Conditions OQBN Program Benefits Reduced Cattle Stress and Shrink Improved Immune System Increased Sale Weight of Cattle Seasonal Price Increase Increased Market Demands Market at OQBN Verified Sale Where is the Premium Created? 12

19 Where is the premium created? Calf Health #1 production problem in feed yard Tom Brink JBS Five Rivers Lack of preparedness when cattle leave ranch! *750 to 825 lb. yearling fed steers sold Q3 of 2012 Calf Health Shawn Walter Professional Cattle Consultants, 2014 Shawn Walter Professional Cattle Consultants,

20 Why are is there demand for preconditioned cattle? Market Vac 45 % Treated % Death Loss ADG (lbs) Health Cost 13.54$ 8.95$ Step et al OQBN Premiums $25.00 $20.00 $19.99 $15.00 $10.00 $8.12 $7.84 $6.54 $9.23 $8.65 $5.00 $ OQBN likelihood of positive return of investment. Practice Net Return ($/Head) Likelihood of positive Return 45 Days Weaned $ % Vaccination $ % Dehorn/Polled $ % Wean+Vaccination $ % Wean+Vac+Dehorn $ % Certified Vac 45 $ % DeVuyst and Williams,

21 Vaccination Trends Change in the proportion of non viral vaccinated beef calves selling in Superior Livestock video s Summer Sales Only O.88% of lots were not vaccinated in 2013! % Lots Source: Modified from King, Seeger, et al. JAVMA,2006, Arkansas Livestock Market, 2010 Purchase Price, $/cwt AVG Discount $8.07/cwt Bulls Steers Effects of arrival sex on breakeven % 1.2 Breakeven, $/lb Bulls Steers 1.14 P <

22 Feedlots that rated pre arrival management as extremely or very effective for reducing sickness and death USDA APHIS, Introduction to feed bunk Respiratory Vaccine at least Respiratory Vaccine a Weaned 4 weeks prior to COFE 1994 Feedlot '99 Feedlot ' Calves Dehorned Calves treated and castrated for parasites Opportunity USDA APHIS, 2013 Opportunity USDA 2013 USDA APHIS,

23 Preconditioning Returns Preconditioning Gross Returns $ Vaccinations $10.00 Labor $2.00 Transportation Wormer $4.00 $3.25 Ear Tag $1.50 Feed Hay $26.78 Weaning Ration $34.65 Interest 6% $17.83 Death Loss 0.5% $8.34 Total Expense $ Preconditioning Net Returns $ Health is extremely important to the industry Marketing programs are to meet consumer demand Develop or locate genetics to a market that you deem profitable Maintain records Profitable!!!! 17

24 Questions? Gant Mourer (405)