News Update

News Update
April 9, 2008

K-State Economist Expects More Corn, Fewer Soybean Acres Than USDA Report

While the March 31 U.S. Department of Agriculture (USDA) planting intentions report contained several surprises, a Kansas State University (K-State) grain market analyst believes the U.S. won’t see the dramatic drop in corn acreage, the report indicated.

The report predicted a 6.5 million-acre drop in corn acres planted, based on the planting intentions of U.S. corn producers. However, K-State Research and Extension agricultural economist Mike Woolverton said he believes actual acres planted won’t be that much lower because market conditions have changed since the survey was taken a month ago.

“No one really believes we’ll see those acres,” Woolverton said. “Right now, producers can make more with corn.”

The report also predicted an 11 million-acre increase in U.S. soybean acreage. That sent shock waves through each market, with soybeans closing down their daily limit the day the report was released and corn prices reaching record highs on all contracts.

“I don’t think we’re to the panic stage yet,” Woolverton said. “I think we’ll see more corn and fewer beans (than the report indicated). But things could happen between now and then.”

Woolverton said one factor that could keep corn acreage down is the difficulty producers are having getting into the field. He said corn planting is already behind schedule in some areas. Producers and investors will begin to breathe a little easier once some significant acreage has been planted, he said.

The soybean market, Woolverton said, may be a little more volatile. The U.S. has picked up more soybean export business due to a strike by farmers in Argentina. However, the strike is on a 30-day hiatus following political pressures surrounding a disruption in that country’s food supply caused by the strike. Woolverton said the Argentine government has begun to show some willingness to negotiate with farmers, but the strike may not be over.

“I think if after 30 days the government has not relented, they’ll go back on strike,” he said.

However, producers in Brazil are about halfway done harvesting what is expected to be a record soybean crop for that country. Woolverton said Brazil has started to take export business on the new crop, which he said is evidenced by a 50% drop in U.S. soybean exports for the week ending March 30.

But Woolverton said if the troubles in Argentina continue, it could boost U.S. soy markets.

“The strike is showing Argentina can be an unreliable supplier,” he said. “Buyers are starting to look around.”

— Release provided by K-State Research and Extension.

Lung Adhesions: The Invisible Cost

When cattle get sick, it hurts performance and quality. But it’s not always easy to tell those cattle from the healthy ones. Cattle with chronic pneumonia can cost producers nearly $80 per head, without showing signs of illness.

“The loss of gain would be the biggest cost, and then loss in quality grade would come in second,” said Darrell Busby, Iowa State University (ISU) Extension beef specialist. “The third loss would be in treatment cost.”

ISU and Certified Angus Beef LLC (CAB) analyzed six years of health data from the university’s feed-out program. Of nearly 27,000 head in the Tri-County Steer Carcass Futurity (TCSCF), 4% had lung adhesions.

“It’s showing us chronic pneumonia with that lung adhering to the rib cage,” Busby said. “At the packing plant, they have to literally take a knife and cut the lung away from the rib cage.”

Larry Corah, CAB vice president, presented the research at recent meetings of the Midwest section of the American Society of Animal Science (ASAS) in Des Moines.

Since it is not routinely part of carcass data collection, many feeders may have no idea when their cattle have lung adhesions.

“We had a load of cattle in the plant and the kill floor supervisor came over and said, ‘I want to show you this lot of cattle that have really bad lungs,’ ” Busby said. It was taking them more labor to harvest those cattle and they had increased trim loss, so Busby decided to start collecting the data to see what difference it made to producers.

As it turns out, the effect is huge.

Average daily gain (ADG) decreased from 3.3 pounds (lb.) per day on the healthy cattle to 3.1 lb. per day on the cattle with lung problems.

Quality also suffered. The majority graded 68.8% Choice and above, but that dropped by more than 8 points in cattle with lung adhesions. On cattle eligible for the Certified Angus Beef® (CAB®) brand, average acceptance rate was 20.9%, compared to only 14.9% in those with lung adhesions.

“It also increases your discount cattle, your Standards,” Corah said. “Those are huge discount cattle with $15 to $20 per hundredweight (cwt.) in carcass costs.”

More than 73% of cattle with lung adhesions went untreated in the feedyard.

“That can relate to two things,” he said. “Either their sickness was missed during the feedlot phase or health problems occurred prior to the feedlot.”

All cattle with lung problems lost performance and quality grade, but the treated cattle fared worse than non-treated. Percent Choice or better was 10 points lower, and CAB acceptance was cut in half among the treated cattle, compared to non-treated with lung adhesions.

“This much more dramatic impact on those that were treated suggests they were very seriously sick cattle,” Corah said.

Or the non-treated cattle got sick earlier in their lifetime.

“That tells me those cattle had likely been challenged before and probably weren’t challenged in the feedlot,” Busby said. “That’s why they gained better and had better quality grades than the treated calves with lung adhesions.”

The TCSCF has strict vaccination and preconditioning protocols.

“In principle, these should be lower-risk cattle than industry averages,” Corah said. “Even so, we see the tremendous economic consequences of health problems when they occur.”

Busby explains that the program’s setup makes it somewhat unique.

“These people are retaining ownership, so it’s in their financial interest to get the cattle properly vaccinated, weaned and preconditioned. Ultimately, they’re the ones that pay the bill,” he said. “If we’re at 4.1% lung adhesions, my guess is that the industry would be higher than that.”

Other research in the project showed cattle treated twice for disease had 14% mortality rate and had a treatment cost of $54.07. That compared to a death loss of nearly zero on non-treated cattle and 5.49% on those treated just once.

“Health problems are huge challenges for feedlots because these are costs that go above and beyond the daily operation of feeding cattle,” Corah said. In addition to veterinary expenses, sick cattle require extra labor inputs, he explains.

Those treated twice for disease also suffered an 18 percentage-point drop in cattle grading Choice and above. CAB decreased from 21.4% to 14.8%.

— Release provided by CAB.

Cattlemen Oppose Expansion of Federal Water Jurisdiction

Representing the National Cattlemen’s Beef Association (NCBA) and the Montana Stockgrowers Association (MSGA), Montana rancher Randy Smith testified today before the U.S. Senate Committee on Environment and Public Works. Smith, of Glen, Mont., appeared in opposition to a legislative proposal that would greatly expand the federal government’s jurisdiction under the Clean Water Act. Senate Bill 1870 would strike the word “navigable” from the Clean Water Act’s definition of “waters of the United States” — thereby expanding the reach of the Clean Water Act to even the smallest and most isolated bodies of water.

Supporters of S. 1870 contend the bill simply restores the original intent of Congress with regard to the Clean Water Act. But Smith rejected that claim, and said this legislation would subject cattle producers to unprecedented and unwarranted federal regulatory intrusion into their private business operations. He also warned that broad expansion of the Clean Water Act would impose a significant financial burden on the nation’s farmers and ranchers and harm their private property rights, while doing little to improve the environment.

— Adapted from a release provided by NCBA.

Beef Cattle and Forage Crops Field Day Scheduled for May 1 Near Mound Valley

K-State’s Southeast Agricultural Research Center has scheduled a Beef Cattle and Forage Crops Field Day for Thursday, May 1. Registration for the event begins at 8:30 a.m. at the center’s Mound Valley Unit 2 1/2 miles west of Mound Valley, Kan., on U.S. Highway 160 (formerly K-96), then 1/4 mile south on Elk Road. The program begins at 9 a.m.

About 20 agriculture-related companies will have displays available and will sponsor a complimentary lunch. Presentations by K-State Research and Extension specialists include: Corn, Ethanol and Cattle: What’s Ahead in 2008?; Using Cow Body Condition Score to Determine Optimum Weaning Time; Selection of Legumes for Interseeding into Fescue Pastures; Forage Response to Fertilization; Supplementation of Grazing Stocker Cattle.

In case of rain, the event will be indoors. More information about the field day is available by calling the research center at 620-421-4826.

American Agri-Women to Promote Children’s Web Site Featuring Natural Resource Providers

American Agri-Women (AAW) met last week for their annual policy-setting meeting in Columbus, Ohio. After an exciting exchange with Provider Pals founder Bruce Vincent, a Montana logger, AAW members made plans to work with him to help promote the Provider Pals’ web site for children, a game called Provider World. This site provides children a safe environment in which to explore farming and other natural resource-based occupations, through exciting games and activities.

This site is an extension of the main Provider Pals program in which classrooms adopt a logger, fisherman, miner, farmer or rancher as their very own for a year. The children receive videos, letters, photo albums and e-mails from their provider, and once a year he visits the school to talk and answer questions. The program got off the ground in 1997 and has since expanded to include more than 300 classrooms in 20 cities across the nation and Canada, addressing the question, “Where does my stuff come from?”

The Provider World web site offers AAW members a unique avenue for reaching thousands of children to give them accurate information about farmers and how important farming is to them. The women took immediate action by collecting individual donations to sponsor a classroom for a year on the web site, and are planning to look into further fundraising possibilities.

In other actions taken at their annual midyear meeting, members took a stand for responsible management of horses and other farm animals and opposed the Horse Slaughter Prevention Act as introduced in Congress in January 2007, and all other attempts on the local and state level to outlaw horse slaughter.

For more information visit www.americanagriwomen.org.