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New NCBA President talks about farm work, cattle numbers, feed costs
J.D. Alexander and his son, Josh, farm 2,000 acres of crop ground 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 that both J.D. and Josh are away from the farm.
This week was one of those times. They were both in Nashville, Tennessee, at the 2012 Cattle Industry Convention and Trade Show. There was a good reason they turned the farm chores over to employees and made this trip across four state lines to a fancy hotel and conference center in Music City: J.D. took over the reigns as the new president of the National Cattlemens’ Beef Association (NCBA).
J.D. took a break from official activities at the convention to visit with Agriculture.com
Q: What would you be doing if you were home today?
J.D.: Well, I’d be helping get ready for a snow storm they tell me is 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, and they’ll handle it fine back on the farm.
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 is fun. I’m fortunate to have Josh and the employees, so I can be away on this kind of business.
Q: Have you done any of your farm office work this week, while you’re here taking over as NCBA president?
J.D.: I sure have, I have all the technology I need, a smart phone and laptop. I can work from wherever I am. This week, I’ve sold cattle from here, and did really well on them. And I’ve done some commodity trading on both sides of the market, and I’ve done some other financial work as I found the time.
Q: What’s high on your priority list in the coming year, regarding NCBA business?
J.D.: 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 real high on my priority list. It’s scheduled to revert back to the old way, with a 55% tax rate on an estate 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?
J.D.: I was born in 1953, and they tell me we 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. One of them, of course, is the drought in the South. The other is 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?
J.D.: We have some programs in our organization 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 can see today in agriculture, and cattle specifically. I like that, I think we’re seeing more equal opportunity today on the farm when compared to urban jobs.
Having said that, it’s still not easy on the farm. We still have our challenges, and while there may be more dollars in agriculture with today’s prices, 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, it may take even more than twice as much capital in livestock. If I total up my feed inventory, cattle inventory, rental rates, machinery, it could be more than twice as much. My cattle alone may do that. 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 our cattle.
The market will dictate when we start to grow the cattle industry again, there’s really nothing we can do, it’ll happen when it’s supposed to.
Q: Do you feel the cattle industry is finding its place in the new era of U.S. agriculture, where we’re wired so closely to the energy industry?
J.D.: Yes I do, we’re a big part of the dynamics of agriculture. We use the byproducts of the ethanol industry, the distillers’ grains, that help make that industry viable.
We could probably find lots of reasons to complain about the cost of our inputs, like the effect of ethanol or exports, but I don’t do that. When our inputs go up in price, the cost of gain on our cattle goes up, too. We could complain, but in the end, all I can say is that our cost of gain went up, deal with it. Then, we find ways to cheapen our feed costs. We feed byproducts, corn stalks, you learn to get by any way you can. Cattlemen always do.