News Update
March 23, 2010

Coffey Selected to Represent Angus at YCC

James Coffey of Hustonville, Ky., has been selected to represent the American Angus Association at the 2010 National Cattlemen’s Beef Association (NCBA) Young Cattlemen’s Conference (YCC).

The Angus Foundation will sponsor Coffey’s registration and travel expenses.

This is the eighth year the Angus Foundation has funded an Association member to attend YCC.

YCC allows young leaders the chance to see firsthand and further understand all aspects of the beef industry. Attendees participate in a nationwide tour of the beef production chain from ranch to feedlot to packing plant, through marketing and regulatory affairs and finally ending at consumer foodservice.

“YCC is another outstanding opportunity for the Angus Foundation to invest in the education of our young Angus breeders and members. By investing in education, one of the three priorities in our mission statement, we hope to provide our members with the continuing knowledge they need to succeed in the cattle business,” states Milford Jenkins, Angus Foundation president.

A partner in Branch View Angus, his family’s registered Angus operation, Coffey has excelled in leadership roles throughout his life. With membership in a number of organizations, including the Kentucky Angus Association (KAA) and Kentucky Cattlemen’s Association, he has shown his passion for serving the cattle industry. As the chairman of multiple committees within the KAA and a past president of the Central Kentucky Angus Association, it’s plain to see his peers recognize his talent as well. Read more.

Public Lands Council Holds Spring Legislative Conference in D.C.

Public Lands Council (PLC) members representing 11 Western states are in Washington, D.C., this week for the annual legislative fly-in. During the two-day conference, members will meet with agency and congressional representatives to discuss legislative and regulatory issues affecting public lands ranchers, including sage grouse and wild horse and burro management; Equal Access to Justice Act reform; Forest Service land management; and death tax relief.

“Our legislative conference is an important opportunity for us to meet with lawmakers and help put a face on America’s ranchers,” said Skye Krebs, PLC president and rancher from Ione, Ore.

“Our ranchers work day-in and day-out to feed the world and take care of the land. We can’t do this without sound public policies that promote a stable business climate for producers and the conservation of our Western resources and heritage.”

The conference kicks off this morning with briefings by Bureau of Land Management (BLM) Director Bob Abbey and Natural Resources Conservation Service (NRCS) Chief Dave White. Later today, the group will head to Capitol Hill to attend a joint meeting with Arizona Sens. John Kyl and John McCain.

Tomorrow, representatives from the U.S. Fish and Wildlife Services, Forest Service and BLM will join the group for a discussion on the Endangered Species Act and other range-management issues.

Also during the conference, PLC members will meet with a number of congressional representatives from their respective states, including: Sen. Jim Risch and Reps. Greg Walden, Jim Matheson and Jeff Flake.

— Release by The Public Lands Council.

Eating Less Meat Won’t Curb Climate Change, Air Quality Expert Says

Consuming less meat will not reduce our greenhouse gas production, a leading air quality expert said on Monday, March 22, Agence France-Presse reports. Frank Mitloehner, a professor at the University of California-Davis, delivered his remarks during a conference of the American Chemical Society in California.

Mitloehner is the author of the published study, “Cleaning the Air: Livestock’s Contribution to Climate Change,” which asserts that despite often repeated claims, it is simply not scientifically accurate to blame livestock for climate change. The study was published in the peer-reviewed journal Advances in Agronomy.

Mitloehner traces much of the public confusion over meat and milk’s role in climate change to a 2006 United Nations report, titled “Livestock’s Long Shadow,” which he says overstates the role livestock play in greenhouse gas emissions.

These statements are not accurate, yet their wide distribution through news media have put us on the wrong path toward solutions, Mitloehner said.

“We certainly can reduce our greenhouse-gas production, but not by consuming less meat and milk… but by increasing efficient meat production in developing countries, where growing populations need more nutritious food,” Mitloehner says.
 

To view the abstract of Mitloehner’s report, click here: http://bit.ly/91CYEf.

— Release by the American Meat Institute.

Cattle Markets Have Been Steadily Trending Upward Since The First of the Year

“We are approaching our seasonal price peak for calves, which usually occurs in April or May,” said Kenneth Burdine, livestock marketing specialist for the University of Kentucky (UK) College of Agriculture. “For 7- and 8-weights (cattle weighing in the 700- and 800-pound range), the market typically peaks near the end of the summer. It’s an appropriate time to discuss backgrounding, since spring is quickly approaching and many backgrounders are already looking to place calves.”

Since the first of the year, prices for stocker cattle have increased, almost on a weekly basis. Summer feeder cattle futures have been increasing as well. For backgrounders, it is this potential buy-sell margin that should drive decisions, Burdine said.

“Even with prices changing recently, gross margin for adding 300 pounds (lb.) has been hovering around $250 per head,” he said.

Gross margin is the difference between the expected value of a feeder when sold in the future and the current value of a stocker or light feeder now. From this gross margin, cattle producers must cover feed, medical expenses, minerals, labor, interest, death loss and any other expenses they incurred during backgrounding.

“For example, recently 5-weight feeder steers averaged about $1.11 per pound on a state average basis. That would put placement value around $610 for a 550-pound feeder steer. At the same time, the August feeder cattle futures contract was trading around $109 per hundredweight (cwt.),” he said. “While many factors can affect this, I would expect August basis to be around $8 or $9 less for groups of 8-weight feeder steers. Using this as a price expectation, we would expect to sell 850-pound feeders in August for about $100 per hundredweight. We estimate our gross margin by subtracting the cost of the stocker ($610), from the expected value of the 8-weight this summer ($850). This would put our expected gross margin around $240 for cattle placed now to be sold in August.”

Burdine took it one step further to discuss the target cost of the gain.

“If we expect gross margin to be $240, and we are adding 300 pounds during 5 months, we know our total cost of gain must be 80¢ per pound to break even,” he explained. “Similarly, if we can put those 300 pounds on for 70¢ per pound, we can clear $30 per head. And if we can put those pounds on for 60¢ per pound, we can clear $60 per head, and so on.”

Burdine emphasized that backgrounders should constantly look for opportunities in the market to place calves on an expected gross margin that will lead to profits, given feed prices and expected cattle performance.

“The quick scenario I just worked through was realistic and very timely, at least as of the first 10 days or so of March. However, we clearly run the risk of placing those calves and seeing the market move against us, reducing our gross margin,” he warned. “This is precisely what happens when cattle prices decline after placing calves. Similarly, feed prices could rise, which would increase our expected cost of gain. These are common risks backgrounders must manage year in and year out.”

Just as producers look for opportunities to place calves at attractive times, they should also look for opportunities to manage risk. If feed prices appear favorable, they should consider booking at least a portion of their feed needs. Burdine said producers can manage price risk on feeders by using forward contracts, commodity futures and options or through relatively new Livestock Risk Protection Insurance. Backgrounding is a margin business, and it’s important to constantly manage those margins to ensure profits.

— Release by UK College of Agriculture.

— Compiled by Mathew Elliott, assistant editor, Angus Productions Inc.