COW/CALF CORNER The Newsletter From the Oklahoma Cooperative Extension Service March 7, 2016

COW/CALF CORNER

The Newsletter

From the Oklahoma Cooperative Extension Service

March 7, 2016

In this Issue:

A herd expansion progress report

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

Oklahoma Quality Beef Network’s fall 2015 sales: The tide has receded

Kellie Raper, Associate Professor and Livestock Market Specialist, Agricultural Economics

Gant Mourer, Beef Value Enhancement Specialist, Animal Science

Eric DeVuyst, Professor and Farm Management Specialist, Agricultural Economics

Derrell Peel, Professor and Livestock Market Specialist, Agricultural Economics

Rodney Jones, Associate Professor, Agricultural Economics

Incidence of multiple births in beef and dairy cattle

Glenn Selk, Oklahoma State University Emeritus Extension Animal Scientist

A herd expansion progress report

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

We are now two years into herd expansion and that leads to questions of how much more herd expansion is ahead and, to a lesser degree, questions about how fast remaining herd expansion will occur.  Beginning with a January, 2014 low of 29.1 million head, the beef cow herd expanded (based on USDA-NASS revised 2015 numbers) 217 thousand head in 2014 and another 1.03 million head in 2015. The January 2016 total of 30.3 million beef cows represented a 3.5 percent year over year increase in the beef cow herd, an undeniably aggressive rate of herd expansion. The sharp adjustment in cattle prices in late 2015 has been viewed by some as a result of this large herd increase and the feeling that it was, perhaps, too much, too soon and a sign that herd expansion is mostly over.  I don’t believe that is the case.  It looks now (with the benefit of hindsight) that the spike in feeder cattle prices from 2013 through 2014 was a market signal to ensure that herd expansion got an aggressive jump-start.  Having succeeded in that, market prices have adjusted back to levels that allow the industry to follow through with what has been started.  Therein lies the question of how much more expansion will occur.

In 1990-1996, the last complete herd expansion in the beef industry, the beef cow herd increased about 2.9 million head, from 32.5 million head in 1990 to 35.3 million head in 1996.  This included one year of expansion of 3.7 percent, three years of growth in the range of one to two percent annually, spread out on either side of the big expansion year, and two years of very slow growth at the beginning and end of the expansion.  The patterns we have seen so far in this herd expansion are similar and consistent with the 1990s.  Should we expect something like 2.9 million head of herd increase this time?  Probably not, after all, it’s really pounds that matters and we will not need that much increase in beef cows to increase beef production.  Carcass weights are over 100 pounds heavier now compared to 20 years ago. 

However, this expansion did not start when it intended to begin.  The industry attempted herd expansion beginning in 2004 with a herd size of 32.5 million head - the same level at which the 1990 expansion started.   After two years, with minimal herd growth (less than 200 thousand head), the herd continued liquidating in 2006 in the face of unprecedented cost shocks, a recession, etc. In 2011, the industry showed signs of herd expansion with an inventory of 30.9 million cows, but drought forced additional liquidation to the ultimate bottom of 29.1 million head in 2014.  The current 30.3 million head is still smaller than pre-drought levels.  The real question may be: where does recovery stop and where does expansion really begin? A moderate pace of herd growth in 2016, perhaps 1.5 - 2.5 percent year over year, might leave the herd inventory close to pre-drought levels going into 2017. 

Ultimately, it is demand that will determine the size of the industry.  Domestic and international markets will be the key to how big the beef cow herd will be.  Beef carcass weights will also be important in determining how many animals are needed to meet that total market demand.  It seem clear to me that expansion will continue in 2016 , albeit at a more moderate pace than 2015, and into 2017 as well.  At this point, it seems likely that the herd will peak cyclically at an inventory somewhere between 31 and 33 million head. The ultimate total is a moving target that must monitored along the way.  Unfortunately, that will be more difficult given USDA’s recent announcement to suspend the July Cattle report.  This means that there will be no indication of the size of the 2016 calf crop; the status of heifer retention; nor the estimated feeder supply until 2017.

Oklahoma Quality Beef Network’s Fall 2015 Sales: The tide has receded

Kellie Raper, Associate Professor and Livestock Market Specialist, Agricultural Economics

Gant Mourer, Beef Value Enhancement Specialist, Animal Science

Eric DeVuyst, Professor and Farm Management Specialist, Agricultural Economics

Derrell Peel, Professor and Livestock Market Specialist, Agricultural Economics

Rodney Jones, Associate Professor, Agricultural Economics

Last year we titled the Oklahoma Quality Beef Network’s (OQBN) 2014 Sale Summary “A rising tide lifts all boats.” After record prices – and record premiums – in 2014, the feeder calf market in the latter part of 2015 took a different track.  If you are involved in the cattle business, you know that the tide definitely receded. That said, as feeder calf prices fell throughout the 2015 fall sale season, OQBN’s 2015 calf enrollment numbers reached the second-highest in program history and OQBN premiums, though not at 2014 levels, were still quite good. 

OQBN’s goal is to enhance value adding opportunities for Oklahoma’s beef industry. This collaborative project reaches across research and extension as well as across disciplinary lines, involving Agricultural Economics faculty, Animal Science faculty, and Vet Med faculty. The Oklahoma Cattleman’s Association also provides support for the program. The most visible component of OQBN is arguably its fall OQBN Certified VAC45 calf sales held at livestock markets throughout Oklahoma. The OQBN Website (http://oqbn.okstate.edu/) and Facebook page provide information to producers and extension educators of upcoming sales, weaning and management protocols, useful educational information and research findings on an ongoing basis. Information is also linked to Oklahoma State University’s Beef Extension website (http://www.BeefExtension.com) to further facilitate awareness and access for producers.

Sale results provide feedback for participating producers as well as useful information for producers considering OQBN’s VAC45 certification program.  In 2015, eight OQBN value added calf sales were hosted by livestock markets around the state. Data were collected at Blackwell, Cherokee, El Reno (OKC West) (x3), McAlester, Pawnee and Woodward between October 28, 2015 and December 11, 2015 on approximately 6,095 OQBN certified calves sold in 501 lots at designated OQBN sales. An additional 2,796 head of OQBN certified calves were sold directly through private treaty. Including OQBN calves, data were collected on a total of 17,981 calves. The overall weighted average OQBN premium over calves with no preconditioning for 2015 was $11.08/cwt, a value comparable to premiums from 2011-2013 (Figure 1).  It does not reflect differences attributable to lot size, weight, breed, hide, color, sex, fleshiness, and muscling. Figure 2 illustrates 2015 OQBN premiums by weight category and by gender.  Premiums were higher in lighter weight categories, but for calves weighing 700 pounds or less, premiums were generally near $10/cwt or higher for both steers and heifers.  Estimated value added to Oklahoma calves based on premiums alone, including the 2,796 OQBN calves marketed outside of OQBN sales, is approximately $584,000. 

 Figure 1. OQBN Premiums, Overall, 2011-2015.

Figure 2. OQBN Premiums by Weight and Gender, 2015

Producers can access the OQBN budgeting tool at estimate the value of preconditioning for their individual operations at www.agecon.okstate.edu/faculty/publications/3943.xlsx. See http://www.oqbn.okstate.edu for educational information and for more detailed information on the health management protocol and the certification process.

Incidence of multiple births in beef and dairy cattle

Glenn Selk, Oklahoma State University Emeritus Extension Animal Scientist

Producers and newspaper writers often call to find out the probability of triplets or quads happening in their herd or in herds near them.  Very little research is conducted to specifically examine the incidence of multliple births.   One investigation, Rutledge et al, (1975) reported on the the frequency of twins in beef and dairy cattle.   This paper was in the Journal of Animal Science, Volume 40; page 803. 

They found small differences in the likelihood of twins in two different breeds of beef cattle.  Herefords were reported to have 0.4% or about 1 out of 250 births to be twins.   Angus had a slightly higher incidence of twins at 1.1% or about 1 out of each 100 births.  Dairy cattle have been notorious for more twinning.  This study indicated that Holsteins and Brown Swiss have 3.4% and 8.9% twins, respectively.  Dr. Gilmore of Ohio State reported twins in beef cattle occur at a rate of 1 in every 227 births.  (Herd Health, Hoard’s Dairyman, 1993)

To report the incidence of triplets and quadruplets, a very old paper published in the 1920 Journal of Dairy Science (Volume 3; page 260) by Jones and Rouse was found.  They indicated that the incidence of triplets in beef cattle averaged 1 in 105,000 births, but was much more likely to occur in Brown Swiss (1 in 3500 births).  Gilmore estimated the incidence of triplets at 1 in every 7621 births.  Quadruplets are extremely rare in beef cattle, occurring naturally at the rate of 1 in 665,000 deliveries and 1 in 14,000 births in Brown Swiss. 

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