EVALUATE MARKETING STRATEGIES IN CURRENT MARKETS

by: Stephen B. Blezinger
Ph.D., PAS

Part 2

In Part 1 of this series we started by pointing out the obvious, that the beef cattle markets have been exceptional and that profits to the cattleman have been unprecedented. While attending a recent conference I had the opportunity to listen to a presentation by Dan Basse, the founder of AgResource, an ag market research and consulting firm who works daily to keep in tune with all the dynamics affecting multiple facets of production agriculture. His observations were highly optimistic for both beef and dairy producers. For the beef cattle producer he noted that with the current dynamics in place the current strong markets could remain in place for a minimum of 5 to 7 years. Quite a prolonged up market.

This provided additional support to the observations made in Part 1. Once again, the question for the producer becomes, how do I take best advantage of this situation? The answer to this question varies depending on the producer's situation including what the operation has been through over the last few years especially where moisture conditions made normal operation quite the challenge. This same situation continues to be seen in some parts of the US where the drought continues to linger (parts of Texas and the Southwest, Central Valley of California as well as other CA cattle producing areas). In those areas where moisture conditions have allowed some or complete recovery these questions are a bit easier to answer. But in general the producer has to ask some of the following given the strong markets:

1) Do I work to rebuild my cow numbers, increasing herd size in order to produce a larger number of calves now that pastures and forage conditions will support the numbers? The most cost effective way to do this currently may be to retain and develop heifers.

2) Concurrently, developing heifers as replacements for sale as open or bred females will also generate exceptional revenues since markets are so strong.

3) Do I take advantage of the strong markets and market most of my heifers in addition to the steers (maybe keeping the best of the best females as replacements) in order to maximize current revenue generating opportunities and put the cash in my pocket. This will help to more immediately replace savings dollars or to repay loans needed to continue previous year's operations and purchase forages.

4) Take steps to maximize production with existing or rebuilding herd numbers in an effort to maximize the pounds of beef marketed. In other words, taking those management steps that might have been by-passed in recent years simply because the operation was in survival mode. With some additional fund availability, investments in productivity and performance can result in higher calving percentages as well as increased weaning weights.

Obviously there are numerous other questions but it boils down in many cases to just two things: does the producer sell most of his calves or retain heifers for herd growth and what steps should be taken to optimize productivity? This part of the series will focus on the second question – improving health and nutrition programs to improve breeding percentages, reducing dystocia and increasing calf health and performance.

Improving Herd Performance

One of the most obvious and direct ways to maximize the opportunity this market presents is to simply produce more pounds of beef per acre of owned and or leased property. Concurrently this needs to be done as efficiently as possible although the added revenues can provide the option to “experiment” a little. By experimentation this means that the producer can have the latitude to try different products and practices to determine which will work the best in his or her program. There are a multitude of good products and services available that can produce positive results for health, reproduction and nutrition as well and animal handling and management to name a few. In many cases these products and practices may be relatively new and not have extensive research documenting case after case of positive responses. Nonetheless, many of these may be very helpful in a given operation but it will take some testing and evaluation on the part of the producer. As mentioned, since most operations have a little economic leeway, now is a good time to take new opportunities for a spin.

But let's start with some basics – those management applications that have been proven, repeatedly, to improve animal performance, starting with nutrition.

1) Improve protein and energy supplementation

The net result of improving protein and energy nutrition is two-fold. In the cow, meeting the animal's protein and energy requirements help keep the animal in better body condition and which normally leads to improved breeding performance. If this better protein and energy plane is maintained prior to conception and through gestation, the nutrient supply provides for improved fetal programming insuring that the basic ground-work is being laid as the embryo and fetus are developing and growing. Current work by a number of researchers suggests that cow nutrition during the production period will have lifetime effects on the calf. This includes reproductive performance in heifer calves and gain and carcass performance in calves destined for the feedlot. For the cow-calf producer this can result in heavier weaned calves as well as more productive replacement females.

Equally important is the effect on cow health as well as on the reproduction process. Proper protein and energy levels support the health of the animal as well as her ability to cycle, breed and conceive effectively and efficiently, keeping her on an annual production cycle (breeding and raising one calf per 12 month period. This also has herd effects by supporting the herd's ability to maximize overall conception to calving as well as conception to weaning rates. In other words, maximizing calves weaned per cows exposed.

Since the average operation is built on its forage supply, the first step is maximize what you can get out of your forage base (pastures, hays, silages). This is a matter for quantity and quality – both much be in place. Assuming weather conditions cooperate, good management allows you to produce high volumes of high quality forage. And depending on exactly what your forages are, you may still have to supplement protein and energy at some points in time to handle deficiencies with a proper forage production and management plan, this supplementation can be minimized, at least where protein and energy are involved. This involves aggressive, periodic forage sampling and analysis. A typical, detailed forage nutrient analysis will cost somewhere around $25.00 per sample and can save many times this amount.

2) Improve mineral supplementation

Proper mineral and vitamin supplementation is the core of any cattle nutrition program. It's like the nuts and bolts that hold your car together. You can operate OK with one or two bolts missing but if too many are loose or missing, things begin to fall apart. Operating at maximum productive efficiency for a cow-calf operation means keeping all these bolts (minerals and vitamins) in place and tight. Put another way it is attention to detail, making sure that you are providing for all the animal's mineral and vitamin needs. Minerals and vitamins are involved in every physiological process in the body. If a given mineral is deficient for an extended period of time, the processes (enzyme system, reactions, etc.) will begin to break down or simply not function as well. In cases where a given mineral is involved in a wide range of processes (take zinc for instance), the producer may see a variety of problems, or at least inefficiencies, develop.

In order to maximize performance, a well-designed mineral and vitamin program must be in place. Too many producers, because of cost, will go down to their local feed store and buy “whatever is cheapest,” not knowing that in many cases they might be creating more problems than they are solving. Mineral products have a cost and with current mineral ingredient prices, yes, these might appear daunting. But it is important to consider what you might be giving up by purchasing a less expensive, poorly balanced product (often very high in salt which is general not needed but which cattle will eat or high in Calcium which is very inexpensive and lowers the product cost). The most cost-effective mineral is the one that best meets the needs of the specific herd of animals and compensates for any shortages found in the forage base (note discussion concerning forage sampling and analysis above). Effectively meeting the mineral and vitamin requirements of the herd are instrumental to increasing the likelihood of maximized reproductive efficiency, greatest health performance (highest immune response) and optimized growth and gains in growing cattle. There is simply no substitute.

3) Make use of better nutritional and feed/supplement delivered “tools”

As we discuss nutrition we also need to discuss the various nutritional tools that are available in the market. Any and all tools should be considered for a role in the overall nutrition program if they can enhance nutritional performance by increasing nutrient digestibility, animal utilization or enhance digestive or other physiological functions. In some case these might also serve to reduce potential problems in the herd (i.e. foot root, bloat, acidosis, etc.).

Some of the well-established nutritionally-related tools include the ionophores. These are a type of fed antibiotic-type compounds that modify the function of the rumen. This helps forages and feeds to be fermented more effectively and efficiently and enhance produced nutrient constituents needed for energy and protein requirements and metabolism. These products include Rumensin®, Bovatec® and Cattlyst®. A similar product is GainPro® which produces similar results but has a different mode of action. In this capacity, these products are used to enhance performance.

A number of actual antibiotics such as chlortetracycline (CTC) are also commonly fed to improve the animal's ability to fend of various sicknesses that are digestive and respiratory in nature. In some areas these may be fed to cattle in an effort to prevent diseases such as anaplasmosis. There is an extensive list of products that are versions of CTC as well as related compounds. Generally, in these situations, these products are used to prevent losses (because of sickness or death loss), however some claims of performance improvement (increase weight gains) are also common.

Other products such as decoquinate (Deccox®) and poloxolene (Bloatguard®) are commonly used to aid in the prevention of coccidiosis and bloating respectively. Interestingly, at least a couple of the ionophores make a similar claim. In this capacity, these products are used as loss preventatives and should be used only in incidences where there is a risk of the problem developing.

Yet another class of fed nutritional tools can be referred to as microbial products. These are generally products, cultures, extracts or isolates of a wide variety of microbial organisms. The potential benefits include enhancing rumen fermentation, reduction of stress effects, improvement of appetite/feed intake, reduction of gut inflammations, binding/agglutination of other detrimental organisms (pathogenic bacteria, viruses) as well as binding of mycotoxins and others The various classifications include yeasts, bacteria, fungi, beta glucans and mannan oligiosaccharides (MOS). As noted the feeding of one or more of these can have a variety of benefits both as production enhancement and loss mitigant.

One category that has gained a great amount of attention over the years are the compounds known as organic trace minerals. These are also known as chelates or complexed minerals and function to improve the absorption of the mineral in question by the animal. In general, these compounds bind the mineral in question (Copper, Zinc, Manganese, etc.) to an organic molecule such as an amino acid, protein fragment, carbohydrate or organic acid. This complexing process is believed to “protect” the mineral from being broken down in the rumen and rebound into some insoluble molecule from which it cannot be extracted and absorbed in the small intestine. Other theories exist that this process can actually help or facilitate absorption at the intestinal level. In either case, the net effect is that the mineral in question is absorbed more efficiently that the same mineral when fed in an inorganic form (such as an oxide, sulfate, carbonate, etc.). The use of organic trace minerals is common especially in mineral programs targeting better performance.

Conclusions

Obviously there is a wide range of opportunities for the producer to use in order to enhance performance of the herd. Some of these are very basic and are just plain sound nutritional concepts. The tools are more subjective and the producer must decide when and if these might be implemented in the overall program. Again, the goal here is to take advantage of the strong markets to implement strategies that may have been overlooked to set aside in the past due to challenging economic conditions. Taking this time to build an aggressive management/nutritional/health plan can increase the operational performance and ultimately profitability.

In Part 3 of this series we will continue this discussion and evaluate even more opportunities available to the producer.

Copyright 2014 – Dr. Stephen B. Blezinger. Dr. Steve Blezinger is a management and nutritional consultant with an office in Sulphur Springs, TX. He can be reached at sblez@verizon.net or at (903) 352-3475. For more information please visit us on at www.facebook at Reveille Livestock Concepts.







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