News Update

News Update
May 29, 2007

In Short …

The Greeley Tribune this morning reported the sale of Greeley-based Swift & Co. to J&F Participações S.A., which owns 77% of Brazil’s JBS S.A. JBS is Latin America’s largest beef processor, and Swift is the world’s third-largest processor of fresh beef and pork. The deal is reported to be an all-cash transaction amounting to $1.4 billion. For more information visit www.greeleytribune.com.

Yesterday Secretary of Agriculture Mike Johanns reported to the ag community the death of Japan’s agricultural minister and sent his condolences to Minister Matsuoka’s family and to the people of Japan. “I was saddened to learn today of the death of Japanese agricultural minister Matsuoka,” he commented Monday. “Since coming into office last fall, he had worked to resolve trade challenges, which brought us together on several occassions. He ably represented Japan’s agricultural interests.”

The Associated Press reports that CKE Restaurants Inc., the parent company of Hardee’s and Carl’s Jr., is suing Jack in the Box for advertisements in which it touts sirloin burgers as coming from a better part of the animal than Angus burgers.

— Compiled by Shauna Rose Hermel, editor, Angus Productions Inc.

Rising Costs Drive Need for Optimal Milk Genetics

Cow-calf producers face the continued challenge of rising feed costs, according to a recent study conducted by the American Angus Association.

“Our research indicates that combined pasture, harvested forages and other feed costs have been increasing at the rate of $5 per beef cow per year since 2000,” says Sally Northcutt, genetic research director at the Association. “The typical U.S. cow-calf operation will spend $35 more per cow in 2007 to meet herd nutritional requirements compared to what they spent at the beginning of the decade.”

A sizable increase, it underscores the need for producers to optimize cow size and milking ability according to their operation’s own feed availability and feed cost scenarios, she explains. Estimating industry average feed costs per cow was the primary objective of Association’s analysis.

“We have now incorporated this updated feed cost information into our web-based Optimal Milk Module, which was originally constructed more than two years ago, when feed costs were lower,” Northcutt explains. “This easy-to-use, interactive program is designed to help commercial producers identify Angus milk EPDs that are appropriate for their operations.

“Feed costs and the variability of feed supplies are important in determining the right milk level,” she adds. “The Optimal Milk Module uses this information to estimate the right milk genetics for each individual user’s herd.”

To quantify trends in national feed costs, Association staff evaluated more than 40 cow-calf enterprise budgets published between 1994 and 2006 by land-grant universities from 23 states. These budgets revealed that pasture and feed costs were on the rise well before expanding U.S. ethanol production sent shock waves through world grain markets last fall.

For example, in 1995, the average producer spent $192 per cow on all sources of feed. Five years later in 2000, annual feed costs had risen to $209 per cow. By 2005, expenses had increased further to $234. The 2006 average jumped to $239. Extending this trend yet another year would push total feed costs to nearly $245 per cow in 2007. Actual costs may be even higher due to the spillover effects of high grain prices on forage costs.

“Cost inflation is inevitable to some degree,” Northcutt points out. “Controlling expense as much as possible, especially feed expense, is a requisite to long-term success in the cow-calf business. You can’t simply shrug and accept the upward pressure in feed costs and remain profitable,” she says. “Each producer must find creative ways to combat these inflationary trends. Part of the solution is making sure your cows have the right mature size and milking ability for your environment.”

Producers in areas with less-reliable, higher-cost feedstuffs obviously need lower milk EPDs compared to those with lower-cost, relatively abundant feed supplies. The Association’s Optimal Milk Module takes this concept several steps further by providing specific milk EPD ranges tailored to unique herd environments.

“Finding the right level of milk for your individual cow herd is critical to profitability,” Northcutt emphasizes. “Milk production is a powerful trait that has a major impact on calf sale weights and calf crop revenue. However, lactation also requires large amounts of feed energy, so it is important each producer identify the right milk genetics for their own situation.”

Visit www.angus.org/tools/optmilk/index.html on the Association Web site to access the Optimal Milk Module.

— Release provided by the American Angus Association.

A Texas-style Challenge

More than 250 Angus breeders from Texas and elsewhere joined Klaus and Bonnie Birkel at their scenic Camp Cooley Ranch near Franklin, Texas, April 28 for the kick-off of The Texas Challenge. This event was hosted to raise funds to support Angus education, youth and research efforts through the Angus Foundation.

In January 2007, the Birkels pledged $250,000 toward the Angus Foundation’s ambitious Vision of Value: Campaign for Angus goal to raise $11 million by Dec. 31, 2011, if Texas Angus breeders and the Texas Angus Association raised $250,000 in matching funds at $50,000 per year the next five years.

Impressive by any measure, including the Birkels generous challenge, outright gifts and multi-year pledges received now total more than $487,000 in support of The Texas Challenge while counting simultaneously toward the $11 million Vision of Value: Campaign for Angus goal.

“Validated by over $75,000 in outright gifts and pledges far exceeding the 2007 first-year goal of $50,000 for The Texas Challenge, it is safe to say that Texas Angus breeders have risen to the challenge,” says Milford Jenkins, Angus Foundation president. “As a member of the campaign’s leadership cabinet, visionary Angus breeder and a philanthropist at heart, Klaus viewed it his responsibility to invest significantly in the Angus breed and help add value to education, youth and research for the benefit of future generations of Angus breeders in Texas and across the United States by supporting the Angus Foundation.”

The Texas Challenge provides donors the freedom to designate how their gifts will be used by the Angus Foundation in the areas of education, youth and research. The Birkels unselfishly earmarked $75,000 of their contribution to establish a Texas Angus Association Scholarship Endowment Fund in the Angus Foundation to provide scholarships to Angus youth from Texas. With a keen interest in research and education, the Birkels have designated 50% of their personal pledge to research, with the remaining balance of their gift to education for Angus breeders.

“I am committed to this because I believe it is essential that we provide the next generation of young cattle raisers with the knowledge and skills essential to stay competitive and to make a business out of raising cattle,” Klaus says. “Additionally, there are still many open questions that research can answer about how to manage and raise cattle in a better way. Education and research must be continual and focused toward our industry’s special challenges. Bright young individuals must be encouraged to stay in this business and must see what is possible.”

Guests were treated to beautiful decorations around a “Six Flags over Texas” theme, live entertainment by the three-time Grammy nominee Dave Alexander and a delicious Certified Angus Beef® (CAB®) steak professionally cut by Freedman Meats Inc. of Houston, Texas.

Texas Angus Association President Randy Roden served as emcee for the event with guest speakers including John Crouch, American Angus Association(SM) executive vice president; Howard Hillman, chairman of Vision of Value: Campaign for Angus Leadership Cabinet; and Jenkins.

“The power of one idea; the power of one ranch and the power of one campaign are incredible,” Crouch said. “Using the above statements from our most successful national advertising campaign to date, I know that the power of one Texas Challenge will be phenomenal in influencing Texas breeders to support the Angus Foundation during a successful campaign. The Angus Foundation’s growth will help ensure future success of the beef industry for decades to come.”

For more information on The Texas Challenge and Vision of Value: Campaign for Angus, contact Jenkins at mjenkins@angusfoundation.org or 816-383-5100.

— Release provided by the Angus Foundation.