Time to expand
As I stand by the registration desk at the 2011 Cattle Industry Convention in Denver, Colorado, I watch a trickle of farmers and ranchers register. Normally, 6,000 or more cattle producers attend, but not this year. Weather wrecked many travel plans.
As three ranchers wrap up registration, I corral them to ask four questions: Why do you come here? What product are you most interested in at the trade show? What was your best moneymaking idea last year? Is it time to expand?
Bob and Delores Ness, Estherville, Iowa
This couple has 70 commercial cows, along with a cropping operation. A soil and water conservation commissioner in his county, Bob serves on a National Cattlemen's Beef Association (NCBA) committee that deals with environmental issues. The head of the USDA soil and water conservation department will be at the Convention and Bob has a question. “I want to know why we have to burn off the vegetation that grows on our buffer strips along rivers and streams. The law says it has to be burned, but doesn't that defeat the purpose?” he asks.
As for products, Bob is looking for new feed additives to add to distillers' grains (DGs) to reduce the toxic sulfur content. He feeds cows and calves a mixture of ground cornstalks, ground hay, DGs, and supplements. The DGs come from an ethanol plant 45 miles away, at about 50% moisture, and the last load was $70 a ton. Last summer, he was buying DGs for $24 a ton. “When corn goes up, so do by-products.”
As for moneymaking ideas, he kept some 2009 corn in storage until last November and sold it for $5.50 a bushel. “I tell everyone I knew what I was doing, but it was pure luck,” he admits.
And yes, it's time to expand. “Everybody else is getting out, and that's the time to add cows,” he says.
Chuck and Char Feikema, Luverne, Minnesota
They farm with Chuck's brother and two sons. They have 3,600 calves on feed at a time and have a farrow-to-finish hog operation. “We've come to this convention for 30 straight years,” says Char. “Cattle are Chuck's first love, and we enjoy the people.”
Cattle are fed ground corn earlage, mixed with cracked shelled corn, a supplement, and DGs. The last batch of DGs from the ethanol plant was $54 a ton in wet form.
“I'm not really here to buy anything,” says Chuck. “Although, I may have a look at a manure truck. With all our livestock, manure is a big part of our fertilizer program (5,000 acres).” Most years, the Feikemas feed all the corn they grow. Not this year, because the farm averaged 220 bushels per acre!
With cattle markets in record territory, Chuck says it's probably time to expand. They sold fat cattle the first week in February at $1.68 a pound in the meat, which translates to about $1.10 a pound live. “Those cattle will make a nice profit, above average,” he smiles. “But as for expansion, the risks are a lot higher now, too. There's potential for gain, but the potential for loss is also much greater.”