News Update

News Update
Jan. 24, 2007

AngusSource® now a viable CAB source

Cattle genetically verified through the AngusSource® program have been eligible for the Certified Angus Beef® (CAB) brand since June. Soon producers might start seeing premiums for those Angus-based fed cattle.

National Beef Packing Company LLC reported it has filed paperwork with the United States Department of Agriculture (USDA) to allow AngusSource cattle to be considered for its premium Angus programs. National will be the first packer to use this additional means to identify “Angus-type” cattle, historically defined by the phenotypic, 51% black-hided criteria.

Art Wagner, vice president of procurement, said he expects the system to be operational shortly.

“We’re working through all of the fine details,” he said. “We are currently working with USDA to get preliminary approval and schedule plant audits.”

For more than a year, AngusSource has led in the Angus genetic-, age- and source-verified arena. The USDA Process Verified Program (PVP) requires a minimum of 50% Angus parentage — calves must be sired by a registered Angus bull. Cattle are enrolled at the ranch of origin and documented by month, day and year of birth for the firstborn calf in the group.

Upon final USDA approval, Wagner expects National to begin accepting AngusSource cattle into CAB first at its Liberal, Kan., and then at its Dodge City, Kan., plant. The packer will limit harvest to specific dates, yet to be determined, and only load lots will be evaluated for the brand.

“We need to learn to walk before we run,” said Wagner, who predicts a fairly seamless flow of information. “With age-verified and all-natural cattle, we have experience in handling this type of information. We just have to make sure the communication goes all the way through.”

He explained that a buyer will visually confirm a set of cattle as AngusSource, and then give the producer instructions for the needed paperwork on delivery.

“A lot of them are already familiar with participating in other programs as well,” Wagner added. “Those cattle, based on whatever information accompanies them via AngusSource, might be eligible for a variety of value-added premiums.”

Mark McCully, director of supply development for Certified Angus Beef LLC (CAB), said implementation of the program presents new opportunities.

“This will obviously affect the producers who are using registered Angus bulls on a set of cows that might not produce black calves,” he said, citing a smoky Charolais-Angus cross. “Now that we know the genetics, those cattle that were previously not eligible will be evaluated for CAB and its premiums.”

McCully said the long-term effects will be much greater than the initial numbers.

“Short term, supply will be fairly limited because the AngusSource program is in its infancy stage,” he said. “We appreciate the leadership step that National is taking by putting this in place, even though there are not a tremendous number of these cattle out there today. They know that this will stimulate demand.”

Sara Moyer, director of AngusSource, said the PVP has enrolled more than 68,000 cattle since it began in October 2005. More than 13 million cattle were evaluated for the CAB brand in 2006.

Since 1995, packers have paid producers more than $200 million in value-based grid premiums for cattle accepted into the brand. For more information on CAB products and programs, visit www.cabpartners.com.

— release provided by CAB

Initial Ethanol Push Challenges Beef Market

Like it or not, ethanol is coming, and beef producers must be prepared to weather the transitional phase and capitalize on the potentials in the future, said two speakers at the Southwest Beef Symposium in Amarillo, Texas.

“The short run is going to be tough, but in the long run, things will work out,” said Steve Amosson, Texas Cooperative Extension economist.

Feed prices are being driven up by predictions of 3 billion gallons (gal.) of ethanol production capacity coming on line in the next year. Ethanol would require almost an 8-million-acre increase in corn acreage, which equates to an additional 1.1 billion bushels (bu.) of corn, Amosson said.

“I feel the corn prices will range from $3 to $4.25 per bushel on the board for the next couple of years, and the differential between corn and sorghum will narrow,” he said.

Competition for acreage will increase, forcing other feed sources and crop prices higher.

In the short run, fed cattle prices will remain relatively unchanged, and feeder cattle and calf prices may continue to soften, Amosson said. A rule of thumb, he said, is calf prices will drop $1.50 per hundredweight (cwt.) for every 10¢ rise in corn prices.

This is going to reduce the predicted expansion phase of the cattle cycle, he said. But in three to four years, that reduction will have cattle producers seeing record prices.

“Cattlemen also have a potential to gain market share relative to the swine and poultry industries because cattle can be fed the distillers’ grain byproducts, where the other industries can’t,” Amosson said. “We just have to learn to feed those DDGs (dried distillers’ grains).”

Jim MacDonald, Texas Agricultural Experiment Station beef cattle nutritionist, agreed, saying, “You don’t have to like it, but you had better learn how to feed it.”

And that, MacDonald said, is his job — helping cattle producers learn how to feed the byproduct.

While ethanol had its share of unfriendly comments during the two-day symposium, MacDonald said, “We’re going to get there, we just have to manage the transition.

“A lot of concern has come with ethanol in this area,” he said. “But we are better off with the plants here than not because we’re not the only game in town.”

DDGs from the Midwest are being shipped into the export market, he said. So the fact that the Panhandle will produce 600 million gal. of ethanol per year, resulting in 1.5 million tons of distillers’ grains, will help keep prices reasonable.

When corn is processed for ethanol, it breaks down to one-third ethanol, one-third carbon dioxide and one-third byproduct, or distillers’ grain, MacDonald said. These distillers’ grains still have all the nutrient profile of corn, only the starch has been removed, he said. It has 40%-45% fiber and 25%-30% crude protein (CP).

“It’s going to be a cheaper protein source in the future, and if used as a forage supplement, it can be used for both protein and energy supplementation,” MacDonald said.

— release provided by Texas A&M University Agricultural Communications

FDA Approves Expanded Dose Range for Rumensin®

The Food and Drug Administration (FDA) has granted an expanded dose range approval for Rumensin® for improvement in feed efficiency and prevention and control of coccidiosis in feedlot cattle. According to Elanco Animal Health, the approval increases the upper end of the dose range to 40 grams per ton (on a 90% dry-matter basis).

— compiled by Crystal Albers, associate editor, Angus Productions Inc.