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Cattle Inventory Expected to Show Decline in Beef Cows

USDA will release on Friday, January 27 the results of its semi-annual survey of US cattle operations, offering an estimate of the number of cattle and calves in the US as of January 1, 2012. The table below presents the inventory survey numbers for the previous three years as well as analysts estimates ahead of the USDA report.

The report is expected to show further reductions in the size of the US cattle herd, with particularly sharp declines in the number of beef cows and further contraction in the number of heifers held back for beef cow herd rebuilding. Analysts on average expect the survey to show a 1.6% decline in the size of the cattle herd. This implies a total inventory of 91.1 million head, the smallest since at least 1958 when the total cattle inventory was pegged at 91.176 million head. To be sure, beef production today is significantly larger than it was back in the 1950s, thanks to tremendous productivity gains. In 1958, US commercial beef production was pegged at 12.983 billion pounds, compared to 26.297 billion pounds in 2011. In addition to producing heavier animals, the feedlot system has allowed producers to significantly accelerate the time it takes calves to come to market. Consider that in 1958, US cattle slaughter was 23.555 million head while in 2011, overall slaughter is estimated at 34.2 million head. The average carcass weight of cattle that went to slaughter in 1958 was 575 pounds, compared to 773 pounds in 2011. So while the headlines after the inventory report will likely focus on the fact that cattle numbers are the lowest in some 50 years, keep in mind that cattle slaughter in 2011 was about 46% bigger than it was in 1958 and carcass weights were 34% larger than they were then. Today, we produce more than double the amount of beef from the same size herd (indeed the beef cow herd is smaller today that it was then).

The concern going forward is that much of the productivity growth in the future will be incremental. The low hanging fruit has already been taken and the industry is now running against biological barriers. It will be difficult to further increase beef production without increasing the size of the cattle herd. While there are plenty of signals for expansion in 2012 and 2013, the January survey will likely show that producers continued to liquidate the herd in 2011, largely due to escalating feed costs and limited pastures. The beef cow inventory on January 1, 2012 is expected to be down 2.5% while the number of heifers held back for beef cow herd replacement is expected to be down 2.1%. One thing to watch for in the upcoming report is how the distribution of the US cattle numbers changed in 2011. Drought stricken states, such as Texas and Oklahoma, likely saw a sharp decline in their beef cow herd, while other states probably saw notable gains from a year ago. The expectation is for producers to increase heifer retention in 2012 as calf prices hit record highs. In some areas, however, that may be limited by long term drought conditions and limited feed supplies. The overall expectation is for smaller beef supplies in 2012 and 2013, the inventory survey should tell us how big the decline will likely be.

Choose Chicken Over Beef To Cut Stroke Risk - Study



(Reuters) - While a high-protein diet may have health benefits, not all protein is equal -- eating lots of red meat raises the risk of having a stroke while poultry lowers it, according to a U.S. study.

"The main message from this paper is that the type of protein or the protein package is really important for the risk of stroke," Frank Hu at the Harvard School of Public Health said of the study, which was published in the journal Stroke.

"We have to consider protein in the context of the foods."

Hu and a team of researchers collected data from two massive health surveys that tracked nearly 130,000 men and women from roughly middle age to their senior and elderly years.

Over the 20-some years of the study, nearly 1,400 men and more than 2,600 women had a stroke.

To see what influence different types of dietary protein had on the risk of stroke, the researchers divided up the people in the study based on how much red meat, poultry, fish, dairy and other sources of protein they typically ate each day.

Men who ate more than two servings of red meat each day, which was at the high end of the meat eaters, had a 28 percent increased risk of stroke compared to men who on average had a third of a serving of red meat each day, the low end of the meat eaters.

Women who ate nearly two servings of red meat a day had a 19 percent higher risk of stroke than women who ate less than half a serving each day.

Swapping in one serving of poultry lowered stroke risk by 27 percent, a serving of nuts or fish was linked to a 17 percent drop, and a serving of dairy dropped the risk by 10 to 11 percent.

A serving of red meat was considered to be 113 to 170 grams (4 to 6 oz) of beef, or a hamburger patty. A serving of poultry was considered to be 113 grams.

People who ate the most chicken or turkey each day, about a half serving for women and three-quarters of a serving for men, had a 13 percent reduced risk of stroke compared with those who ate barely more than a serving a day.

Researchers did not prove that beef is to blame for the increased number of strokes, but Adam Bernstein, lead author of the study, said it could be that the fat and iron in red meat play a role.

An earlier study led by Susanna Larsson at the Karolinska Institute in Stockholm, Sweden, also found that eating red meat had a link to the risk of stroke.

"I do not think that poultry has been considered as a protein source that might lower the risk of stroke. This is new," Larsson told Reuters Health in an email.

One surprise was that fish seemed to offer no protection against stroke, although Bernstein said it was possible that the benefits of fish depend on how it's served.

"There's a lot of variation in how people cook and prepare fish, and we couldn't get down to that level," he said. SOURCE: bit.ly/w2FeDQ (Reporting from New York by Kerry Grens at Reuters Health; Editing by Elaine Lies and Yoko Nishikawa)


Build A High-Profit Beef Business

Lessons learned from high-profit operations


Written by
Harold Harpster 

(Farm Progress) Times are pretty good for cow-calf producers – except for those in drought-plagued regions. And, the future looks even brighter for at least the next several years.

So now's the time to plan for that future by studying successful components of profitable operations and avoiding those less successful. Consider a few lessons drawn from a 2011 study by Kevin Dhuyvetter, farm management economist at Kansas State University.

He boiled down five years (2006-2010) of production and profitability data from 88 cow-calf enterprises. He sorted out operations with average calf selling weights over 700 pounds, since that indicates a backgrounding operation instead of a true cow-calf operation.

Also excluded were farms with less than 10 cows, if cattle purchases were greater than 25% of their herd in any one year and if net sales (sales less purchases) of breeding stock were greater than 25% in any one year. Culling done, the remaining farms were ranked from high to low based on returns over costs.

Herds were corralled into three groups: high return (29); mid return (30); and low return (29). Average production and cost data were then summarized for each.

Cow-calf returns over variable costs have been positive for 23 of the last 32 years, notes Dhuyvetter. Feedlots would live a record like that!

Keep in mind that by "accepted cattleman accounting practices", most focus on variable costs. If “out of pocket” costs are more than covered, the year's a success.

But before you buy up neighboring herds, consider this: If you consider total costs (variable plus expenses such as depreciation, taxes, unpaid operator labor, and interest on assets), only four of those 32 years were "in the black".

Sizing them up           
First, let’s look at size and productivity. More profitable operations tend be somewhat larger, and tend to “specialize” more in the cow-calf enterprise.

The percentage of total farm labor allocated to livestock is 46% for the high-profit group, 39% for the mid-profit and 25% for the low-profit producers. When more time is spent with crops and less with the cattle, it shows in the bottom line!

High-profit producers wean heavier calves, but only 25 pounds heavier than the mid group and 30 pounds heavier than the low group. Calf sale prices are surprisingly close among all three producer groups. That was likely since we're still in a period of low supply and high demand for calves.

Cost control is key
Spreading costs over more animals is where the separation of profit groups kicks in. Although the high-profit group had the heaviest calf weaning weights, they accomplished it with a variable cost of $451 per cow versus $546 for the mid-profit group and $599 for the low-profit group.

In other words, the high-profit group produced heavier calves for almost 25% less cost! Per-cow costs were consistently lower for the high-profit group. Again, comparing the high versus low group:

* Feed costs per cow were 21% lower;

* Interest costs, 44% lower;

* Vet medicine and drugs, 21% lower;

* Marketing and breeding costs, 31% lower;

* Machinery costs, 31% lower;

* Labor costs, 21% lower;

* Other expenses, 34% lower.

Overall, the average five-year return over variable costs per 100 cows would have been $11,661 for the high-profit group and a loss of $14,647 in the low-profit group. It all comes down to smart management and controlling costs without harming productivity!

The bottom line is . . .
Studying these results carefully, you'll come away with three take-home messages. One is that there's tremendous variability in the profitability of cow-calf operations, regardless of year. Top producers find a way to be profitable even in bad years, and poor producers find a way to lose money even in good years!

Secondly, cost control is absolutely essential. There was a much larger difference between top and bottom producers in total costs per cow than in total income per cow.

Finally, “benchmarking” provides the real value in studies such as this. Compare your costs and returns to those of these operations. Identifying where you can make the most cost-effective improvements in your operation puts you well on the road to success.

For a copy of that dollars-and-cents summary table for cow-calf returns, email Harpster at hharpster@das.psu.edu.

Harpster is a Penn State animal scientist and a beef cow-calf producer.

Diminishing livestock population

By Zafar Samdani
The Dawn

Livestock plays an important role in the agriculture sector. Agriculture is regarded as the backbone of national economy and livestock is its jugular vein.

lt is vital for farmers, providing them with means for survival in times of duress, and enabling them to cope with the negative fallout of crops that are either lower than estimates and expectations or when market forces make the farming community's labour financially non-rewarding.

But it is a source of strength only as long as the breeding of animals continues and growth rate maintains pace with the consumption and export requirements. The scenario becomes a potential threat to the economy in general, the agriculture sector in particular, and a frustrating development for domestic consumers when the balance between the growth rate on one hand and consumption and export on the other, is tilted in favour of the later.

This is applicable to both milk and meat but these, however, are not exactly the same areas. Pakistan depends on milk from buffaloes and cattle, while meat needs are provided overwhelmingly by mutton. Admittedly, beef is also widely consumed by the people but only small quantities of beef are exported so far, while the export of mutton is on the increase.

The taste of Pakistani mutton has developed quite a following in many countries, particularly in the Middle East region and it is also less expensive than mutton from most other meat exporting countries. Moreover, imports from a Muslim country are preferred by people of the middle-eastern region. Pakistan's physical contiguity with the Middle Eastern countries is an additional advantage for mutton's export.

There is a tradition of export of small ruminants from Pakistan to Iran and Afghanistan as also the practice of smuggling of goats and sheep, more of the former to destinations in these countries. The two, export and smuggling currently seem to have hit an escalating streak that must have been good news for the government's efforts for building exports but this is likely to undermine sheep and goats resources.

In the absence of any noteworthy progress in the breeding of small ruminant gains for exports could get translated into losses for the local populace and hurting the goats-sheep availability in the country.

That process appears to have commenced already. At least 2,500 sheep and goats are daily exported from Lahore. This may not look like a frighteningly large number but one has no idea of the number of animals smuggled out of the country. Judging from the evidence - both direct and indirect, the smuggling of small ruminants is considerable and continuously rising.

The livestock minister of Balochistan has recently expressed his concern about both export of animals and their smuggling from the province and warned of serious action against people involved in illegal trading and official exporters who are not following their contracts.

Breach of a basic clause in the contract of exporters has serious repercussions for the sector. Exporters are required to breed animals but they are simply purchasing their requirements from the market and officials who are supposed to keep tab on the correct fulfilment of contractual clauses look the other way for one reason or another.

One need not go into details as most people know why malpractices take place in sectors that are exploited for financial gains by the individuals and groups. This happens because either corruption or influence peddling is in play. But this is the surest prescription for creating a shortage of mutton and a crisis in the country.

The impact of higher export and smuggling of mutton is already to be seen in the escalating price of mutton in the domestic market. It has gone up from Rs130 per kg to Rs180 for the same quantity within a period of about a year. On the other hand, judging from the number of small ruminants slaughtered, for instance in Lahore, mutton consumption has gone down.

A total of about 7, 000 goats are daily slaughtered in Lahore. While the population of the city has been rising, the number of animals slaughtered has remained unchanged for sometime.

This can only be interpreted as the reduced consumption of mutton, a major source of vitamins for the populace. The combination of higher price and static incomes of a majority of the populace has been instrumental in a shrinking demand for mutton. This would have negative implications for national health, already not an area of glowing health.

People in the livestock business say that consumption pattern is the same in most large or middle-sized urban centres across the country, particularly in Punjab and Sindh. According to these sources, mutton's consumption in the NWFP and Balochistan has, however, not declined.

These sources also maintain that the requirements of the two provinces are being increasingly met by inter-province trading, largely the sale of goats from Punjab to customers in the NWFP and Balochistan. Many of these animals are smuggled to Afghanistan and Iran.

While mutton consumption is high in the Frontier province, its own resources are limited as the province has, according to the livestock census of 1996, 2.82 million sheep and 6.76 million goat as against Balochistan's population of 10.84 million sheep and 9.36 million goats. Needless to emphasize that Balochistan is less populated than the NWFP.

As per the same census, Punjab has the highest population with 6.14 million sheep and 15.30 million goats; statistic for Sindh are 3.71 million sheep and 9.73 million goats. The total population of Pakistan was 23.54 million sheep and 41.16 million goats. The census estimated the annual nation wide growth rate at 0.11 per cent for sheep and 3.75 per cent for goats. Growth rate has been worked for a period of ten years from 1986.

While growth is on the lower side, more disturbing is the fact that breeding continues to follow traditional lines and exports are not being sustained by the setting up of breeding farms, as per the requirements of export contracts as also in the greater national interest.

Resources are thus rapidly depleting and nothing is being done to encourage sheep and goat farming on a progressive and scientific basis. This is bound to cause a disaster in the foreseeable future if concrete measures are not adopted for protecting the sheep and goat wealth of the country from merciless exploitation by mercenary elements.

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