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Just deal with it, says NCBA president
J.D. Alexander and his son, Josh, farm 2,000 acres and run a 5,000-head cattle feedlot in northeast Nebraska, near Pilger. It's busy there every day of the year – in the feed yards, in the fields, in the farm office. It's a rare day when both J.D. and Josh are away from the farm.
The first week in February was one of those times. They were both in Nashville at the 2012 Cattle Industry Convention. There was a good reason they turned the farm chores over to employees and crossed four state lines to go to a fancy hotel in Music City. It's because J.D. took over as the 2012 president of the National Cattlemen's Beef Association (NCBA).
He took a break from official activities to visit with Successful Farming magazine.
Q: What would you be doing if you were home today?
A: I'd be helping get ready for a snowstorm moving into Nebraska. We haven't had much bad weather this winter, but, of course, it would come while we're away. I'm not worried; we've got four good full-time employees.
Josh handles most of the outside day-to-day operations. I'm usually in the office doing the purchasing, risk management, and most of the financial chores. I like this NCBA work; I think it's fun. I'm fortunate to have good helpers so I can be away from the farm.
Q: Have you done any of your farm office work this week, while you're here taking over as NCBA president?
A: I sure have. I have all the technology I need – a smartphone and a laptop. I can work from wherever I am. This week, I sold cattle from here and did really well on them. And I did some commodity trading on both sides of the market. I've done some other financial work as I found the time.
Q: What's high on your priority list in the coming year, with regard to NCBA business?
A: We seem to have more government regulations coming along that impact the cattle industry, and dealing with that is going to be on my plate. The estate tax issue is high on my priority list. It's scheduled to revert back to the old way, with a 55% tax rate on estates over $1 million. We need to get that fixed permanently; $1 million is just a quarter section of land today.
Q: What concerns you about trends in cattle numbers?
A: I was born in 1953, and the current national herd size (92 million head) is the smallest in my lifetime. Times are good for us with record prices, and we need to rebuild the herd. But you can't make people expand – only the market can work that out.
There are a couple of things working against herd expansion, such as the drought in the South and the cost to retain cows and heifers. This market gives people a great incentive to sell.
Q: What can cattle leaders do to encourage young people to get into cattle?
A: We have some programs in NCBA just for them, things like Cattlemen's College and financial planning programs. Throughout my lifetime, I think young people from farms saw a lot more opportunities in urban jobs. And many farms just couldn't support more than one family. That is changing. There are a lot of opportunities that young people see today in agriculture and cattle specifically. I like that. I think we're seeing more equal opportunity today on the farm.
Having said that, it's still not easy. There are a lot of regulations that get in the way, too. For instance, the banks are highly regulated, and they can't always help us as they should.We're in a very, very capital-intensive business. It takes twice as much capital to run a grain operation as it did four or five years ago. Livestock is no different. If I total up my feed inventory, cattle inventory, rental rates, and machinery, it could be more than twice as much. In the good old days, if we sold a steer and grossed $1,000, we thought that was really good. Now, we're bringing in the feeder calves at over $1,000 a head. I've paid over $8 a bushel for corn to feed!
Q: Is the cattle industry finding its place in the new era of U.S. agriculture, wired so closely to the energy industry?
A: Yes. We are definitely a big part of the dynamics of agriculture. We use the by-products of the ethanol industry – the distillers' grains that help make that industry viable.
We could probably find lots of reasons to complain about our inputs, such as the effect of ethanol or exports on our feed costs. But I don't do that. When our inputs go up in price, the cost of gain on our cattle goes up, too. In the end, all I can say is that our cost of gain went up, so deal with it. Then we find ways to cheapen our feed costs. We feed by-products and cornstalks, and we learn to get by any way we can. Cattle producers always do.