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Published: August 03, 2007 02:19 am
Beef tour showcases industry diversity
Originally published in the July 27, 2007, print edition.
By Dick Hagen
The Land Staff Writer
“The primary purpose of our annual tour is simply to highlight the various regions that host the tour each year,” said Tom Pyfferoen, president of the Minnesota State Cattlemen’s Association.
“We have an extremely diversified state both in terms of geography, and in our cattle producers as well. This annual tour lets us showcase all aspects of the Minnesota beef industry, plus the many agribusiness firms that help make this possible.”
The July 10 summer tour was hosted by the Glacial Ridge Cattlemen’s Association, with Glacial Plains Co-op of Sunburg providing the facilities for both indoor and outdoor exhibitors, plus sit-down space for a noon lunch and an evening steak barbecue.
“This Glacial Lakes area is one of the more diverse areas of Minnesota,” said Pyfferoen, a cattle feeder from the Pine Island area. “Lakes, tourism, thousands of acres of grassland in these hills and valleys, hundreds of acres of Conservation Reserve Program ground, a great mixture of wheat, corn and soybean crops plus sweet corn and peas. And up here, center pivot irrigation systems help nurse these crops along, especially this year.”
Nearly 1,000 cattlemen now make up the membership of Minnesota State Cattlemen’s Association, according to Deb Dahlke, MSCA’s executive director of management services. Even though farm numbers, especially livestock producers, continue to decline, membership in the MSCA is actually growing.
“In today’s competitive society, cattlemen know they have to stay educated, stay on top of consumer trends. So being an informed member of the association is simply the logical way to know what’s going on,” Dahlke said.
She and her husband have a cow-calf operation at Crosslake, north of Brainerd. “We’re very much tuned into coexisting with tourism, and other retail business.” She also noted that selling branded beef right from their own farm could be an opportunity for business diversification in the future. “There’s no doubt consumers more and more like the chance to buy locally grown foods, be it produce or meats.”
Impact of high feed costs
A common concern among producers on this tour centered on higher feed costs — Is the beef market looking strong enough to maintain good margins even with these production costs?
“Over the years when grain costs were low we took a lot of calves right off the cows, put them into feedlots because grain was cheap. That doesn’t work as good today,” Pyfferoen said.
“I think now we’ll be seeing greater value put into back-grounding operations utilizing pastures, and some commodity feeds to grow these cattle to a larger frame size, but do it with a little less grain. This will cheapen down the costs but it also will take a little longer, birth to market. But the history books tell us that cattle a little older will also grade a little better.”
He sees a bright future for the Minnesota cattle industry, partly because Minnesota farmers are so good at producing commodity feeds, but also because the state’s climate and soils are so good at producing forages.
He doesn’t see the ethanol industry as being competitive for cattlemen. With cattle numbers leveling off, beef exports increasing and consumer demand for beef staying strong, the economics look OK to him. “The reality of the ethanol industry is that we now have another feedstock, DDGs, at a very competitive price. The cow-calf sector especially can utilize these products, and feeders are telling me up to 20 percent DDGs in their finishing rations works good, too.”
Pyfferoen said the cattle industry continues to learn more about the nutritional values of ethanol byproducts — how to feed them and better utilize them in different rations. He noted there are some sulfur challenges if you have high sulfur content in your feedlot water.
“In our own stocker operation, we’ve gone from a corn-oats ration to keep them green to a ration using distillers products and mineral — that’s cut our costs immensely,” he said. “Probably cut our summer feed costs in half, yet we’re getting tremendous growth, lots of frame. By not getting them fleshy when they’re on grass, when you do put them on feed they just grow and really take off.”
He admitted much of what he knows about these new feedstocks is from “trial and error” but he also talks with other cattlemen, nutritionists, etc., to learn both the upsides and downsides.
He feeds four pounds on a dry matter basis and continues to rotate his pastures during this summer phase so cattle always have some fresh, green forage. He’s also fed the wet mash but currently is using what’s called a “modified DDG” product run through as a total mixed ration including high-moisture ear corn, sometimes potatoes (from North Star Potatoes), plus some hay — providing a 40 mega cal up to a 60 mega cal ration when cattle are being finished.
“The key is running these various inputs through a blender and offering it as a ‘fresh feed’ to your cattle daily,” he said.
Foreign markets
Pyfferoen’s take on the Brazilian beef processor buying out Swift Packing?
“I doubt there will be any impact, but the plus side is that Swift didn’t get absorbed into the ownership of the two or three major packers that pretty much rule the industry today,” he said. “It means there’s still another competitor out there. Knowing what Brazil is doing in beef, both domestically within their own country, and in foreign markets, this should keep a key player very much involved here in the U.S., too.”
Japan is now open to boneless meat under 20 months of age. The Korean market is more open now, taking short ribs. Hearts, livers and tongues are readily moving into the Southeast Asia markets.
“Here in the U.S. those items only bring maybe a buck a pound. In exports, they bring $4 a pound. ... An average 10-pound liver is only $10 here but $40 into those markets. Kill a thousand critters a day and you’re talking big money in a week,” Pyfferoen said.
He questioned the impact of China in future beef markets. “Yep, growing very rapidly and liking more and more the taste of western foods, including our meats. It sounds like our high-end products (well-marbled meats) are beginning to roll in China. They’re already big in Japan and Korea. These items really add value to that total carcass.”
Pyfferoen said he’ll continue to be cool to country of origin labeling until the current language gets changed.
“It puts the onus of truth on the packer and retailer as to the age and source of those animals. Penalties are heavy if there’s something not quite right,” he said. “Problem with that law as proposed is that a meat purveyor selling to a grocery store needs to provide background information, yet he can go two miles down the road and sell the same meat to a restaurant and there’s no questions about age and source of that meat.
“We need some consistency in what they’re trying to do with COOL. But we do see it as a value-added opportunity when selling to consumers because we know U.S. beef quality compares with beef anywhere in the world. And the producer needs an incentive for getting into COOL because there’s a lot of paperwork involved.”
Pyfferoen said today’s consumers identify more and more with branded products because of greater consistency. “The consumer is your boss. So once they reach a comfort level with your product, you’ve got a longtime customer.”
Pyfferoen can be reached at tpyfferon@pitel.net or you can visit www.mnsca.org.
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Pasture makes the beef
Carlson Farms of Hayes Township, Swift County, calved about 275 beef cows this spring, consisting of about 130 head of black and black baldie cows plus about 145 head of registered Herefords — cows that started as 4-H projects “once upon a time.”
Their 2,000 acres of crop land is used for corn, soybeans, wheat and hay, but pasture land is what makes the beef business work, said Ross Carlson, primary spokesman on the Carlson farm. “Crop production costs keep going up. Pasture is the key to keeping your total costs in check.”
Marketing is definitely a mixed bag for Carlson Farms, with feeder calves, breeding bulls and breeding heifers making up that mix.
“We usually sell a couple pot loads (about 160 head) of feeder calves. We also feed out a few, sell some registered breeding bulls and also a few breeding heifers, too,” said Carlson, one of five sons of Richard and Lorna Carlson, all of whom farm in the same neighborhood. They go back five generations to 1918 when Swedish immigrant Charlie Carlson moved here.
Feeder calves get sold both at area auction barns and “private treaty” sales right at the Carlson farm. “We prefer selling and delivering our calves rather than going the sale barn route simply because you know exactly what you’re getting for them the day they leave the farm,” Carlson said.
Their registered Hereford bulls and heifers get sold throughout the Upper Midwest, usually 15 to 20 bulls and about that many heifers too. “The purebred business has been good and looks to stay that way. I give a lot of credit to both the state cattlemen’s association and the national beef association — both are doing great work in promoting the quality and nutrition value of our beef.”
Regarding higher feed costs, Carlson said, “Yes, we’d like to see the fat cattle market at a dollar instead of 90 cents. Like everyone else, even though we produce all of our forage and grain needs for our beef operation, our costs have gone up, especially our energy costs in growing our crops.”
Convenience of providing protein and mineral needs to cattle was evident at Carlson Farms — Hubbard Feeds biodegradable licks are being used both in dry lots and pasture. The rolling terrain of the Glacial Ridge area is often more suited for grazing than crop farming so the bulk of the Carlson cows and calves graze during the summer and fall months on rough and rolling pasture ground.
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Make the cattle fit your schedule
Because cattleman Paul Gerde is also an independent contractor building and remodeling homes during the day, the 100 head of purebred Charolais cattle on the Gerde Triple Oaks Farm, located in the heart of the Glacial Ridge region, adjust to his schedule. That means evening, even night time feeding, whether in dry lot or the summer-fall grazing season.
“This system works good. We have very little night time calving and I think that’s partly because we feed late evening, generally after 6 p.m. when we’re home from construction work,” Gerde said. With wife, Bernie, and children, Peder, Petra and John, Triple Oaks truly is a family farm, even though all members of the family also have “off-farm” work. For example Bernie has been the office manager at Peters’ Sunset Beach Resort in Glenwood for 26 years.
Triple Oaks Farm consists of approximately 1,000 acres, of which only about 25 percent is tillable. Most of their pasture land lies on either side of the Crow River with some steep slopes and heavy woods. Native grasses are about all that can handle these sandy soils and it takes four-plus acres with adequate rainfall to carry a cow-calf unit through the grazing season.
“Unless it rains soon, we’ll need more acres this year, more like six or so,” Gerde told the cattlemen during a hillside stop on the July 10 tour.
They split their calving season with about 100 spring calves and about 60 fall calves.
Heifers are dry lotted and artificially bred to calving-ease bulls. They use artificial insemination in about 25 percent of their cow herd. Select bull calves get sold as breeders around one year of age. Their market is mostly western Minnesota and much of South Dakota. Calves not kept for bulls or replacement females are sold as feeders in Sisseton, S.D.
“We have an ideal farm for a cow-calf operation, but we’re not big enough without outside work. But we think this is about ideal,” Gerde said. “Having purebred cattle gets you out into cattle country and really keeps you in touch with both the opportunities and the challenges of the cattle business. We think it’s a great business and a great place to live, too.”
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Five generations, thanks in part to Red Angus
Red Angus are a nice supplement to Nelson Farms near Swift Falls.
The fifth generation farm family has 90 Red Angus females, artificial insemination bred with the emphasis on highly maternal cows that wean heavy calves.
Homesteaded in 1881 by Stanton Nelson’s grandfather, Thor Nelson, the major portion of today’s Nelson Farms is devoted to about 3,000 acres of grain production, plus a 50-cow dairy operation and a 150-cow commercial beef enterprise.
“Red Angus started as a 4-H project for Mark. We’ve had real good luck with the breed. It’s just sort of boomed for us. We like the disposition of the cattle. Our sales have been great,” said Troy Nelson, grandson of Stanton and Lorna Nelson and one of about 30 that make up the “local” family.
Always active in 4-H, including participating in county and major shows such as the Minnesota State Fair, the South Dakota State Fair, Nelson Farms became a Century Farm 26 years ago. The operation appears to have every intention of becoming a bi-century farm, with Red Angus cattle leading the parade.
Nelson said that even though Red Angus have been around a few years, it really seems to be taking off now. “Packers like the carcass quality. Feeders comment about rate of gain and feedlot disposition. We’re selling mostly breeding bulls but sales of breeding heifers is definitely picking up, too.”
Bulls are sold at about one year of age, semen tested and ready to go to work, Nelson said. They sell about 20 bulls per year; both private treaty sales off the farm and also eight to 10 sold at Watertown and Sioux Falls auctions. Last year they averaged about $1,900 per bull sold off the farm and that reflects a strong year-by-year increase.
“Three years ago we were at about $1,200; two years ago at $1,500. We get more for bulls we take to these special sales,” he said. The first sale for Nelson Farms is a special Minnesota sale around Thanksgiving each year, mainly for their Red Angus females but it also includes four specially selected bulls as well.
Nelson, 25, is enthused about the future of the beef business. “People have to eat. Beef has always been popular and I think always will be. I think there is a future, big time. We plan on getting bigger. We’re an expanding family and really want to stay connected in this beef industry. We’re a big family and want to keep everyone involved as much as we can.”
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Consumers, don’t blame us for high food prices
There’s a lot of talk these days about rising food costs and the question of who’s to blame. There’s also the question of whether the livestock industry can still generate profits in view of more and more corn going to ethanol.
The general consensus of producers participating in the recent cattlemen’s tour was a solid “yes we can.”
“I think we can compete with the ethanol industry,” said Dean Westheim, a Swift County cattleman. “People aren’t eating less beef just because the price of corn is higher. They relate to the fact that all food costs are higher, very likely because of higher transportation costs more than anything. I don’t think consumers blame us producers for higher beef prices. It’s part of this full-circle economy we’re in.”
Westheim runs 50 Angus-Gelbvieh cows and feeds out 250 to 300 Holstein steers, which are purchased at about 300 pounds. He uses DDGs in his ration, both for the finishing ration and often in the winter for his stock cows, depending upon hay quality.
“I don’t push the DDGs, probably only about 15 percent of the total ration on a dry matter basis,” he said.
He runs about 1,000 acres cropland for corn, soybeans and alfalfa hay, so he usually has some extra crop to sell. At age 57, he doubts he’ll be expanding their operation but admitted that expansion will likely be necessary for the next generation.
Westheim also sees more outside investors putting money into cattle, particularly in the finishing end. “The cow-calf operations around here will stay in single ownership because it gets to be too big an investment in pasture land.”
He favors an identification program for the beef industry. “We’ve got a superior product. So identifying that product to the consumer I think is smart marketing. If you produce a better product, let’s be proud and get a better price too. ID marketing is the route.”
Rate of gain and ease of calving are his two main criteria when selecting new genetics. Westheim uses three bulls, one at home with the heifers and two pasture bulls with the older cows. His cow herd is about three-fourths Angus, one-eighth Gelbvieh, plus some Red Angus blood. He also custom feeds replacement gilts for a multiplier herd — years back he was a swine producer until “hog dust” problems chased him out.
Like many cattlemen these days, Westheim said the bigger challenge is staying ahead of feedlot rules and regulations. He compliments all cattlemen when it comes to environmental issues. “I think cattlemen are all good stewards of the earth.”
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