Efficient feeding and innovative ways of marketing livestock will keep beef producers in business.

"Within 10 years, only 30 percent of the meals consumed at home will have been prepared at home," said Rod Smith, staff editor for Feedstuffs agribusiness newspaper. "You need a product that fits the consumer and the consumer's lifestyle."

Speaking at the 2003 MFA Beef Innovators seminars at Columbia and Springfield, Smith noted that beef will be increasingly "de-commodified" as branded products become increasingly important to consumers.

"The new economy is about information and knowledge," Smith went on. "Consumers have the buying power; they are taking control; they demand more choices. Producers who do not supply what consumers want, when and where they want it are in trouble. We are still producing too many of the wrong things and selling them in the wrong way. Agriculture is consolidating and integrating for one simple reason: It has to."

Smith foresees the day when food production systems will be consolidated into larger, coordinated production units.

"Consolidation is already an established fact," he added. "Essentially five U.S. companies control most of the field seed business, four or five companies control most of the meat packing business and 10 companies control half of the food retailing. Consolidation is indisputable and irreversible in every industry, not just the food business."

Smaller producers also need a harbor of size, but expansion requires a lot of capital. The next best thing for moderate-sized producers is to consolidate through alliances and marketing agreements. "That brand insistence will domino back through the entire beef industry," Smith added.

"A producer must be big enough to match the scale of the next player in line; big enough to be diversified; big enough to globalize. Only 4 percent of your customers are located in North America."

"Missouri has the quantity and quality of cattle to be a major player," said Paul Colman, vice president of Cactus Feeders, the Texas-based company with more than a half-million head feedlot capacity. "Missouri has 2.1 million beef cows, but in average herds of about 30 cows. Marketing arrangements such as the MFA Health Track Beef Alliance can pull smaller groups of cattle together in quality-assured volume."

Cactus Feeders markets 22,000 finished beef animals each week. That's about 16.5 million pounds of red meat per week.

"We have complete carcass and kill data on all of the cattle we feed," said Colman. "We have formed alliances both up and down the production chain. Our feeding clients range in size from 80 head to 25,000. And we have value-based marketing arrangements with packers; virtually all of our cattle sell to IBP and Excel on their formula grids."

Most beef marketing grids set a base price (usually for Low Choice, Yield 3 carcasses), with a system of premiums and discounts from that base.

"Discounts and premiums vary by season and by what the packer needs at a particular time," added Colman. "For example, oversized carcasses usually incur more discount in fall. Lighter carcasses are discounted more in spring."

The feeder cattle market faces the same seasonality, said Mike John, manager of MFA's Health Track Beef Alliance.

"Year in and year out, the absolute worst time to sell feeder cattle is in the fall," John pointed out. "This is when spring-born calves are weaned and sold; there is a bigger volume of feeder cattle in the fall than at any other time of the year."

Fast-forward 6 months in a typical year and the market picture changes dramatically.

"Late winter and early spring are the seasonal high prices in most years," John noted. "Why? Usually, smaller supplies of feeder cattle are coming to market during this time. Also, demand picks up, as stocker operators begin bidding for cattle to go on wheat pastures and summer grass."

In the past 3 years, Health Track has marketed well over 100,000 head of source-verified, process-verified cattle, from 1,100 different producers. While Mike John does not try to outguess the feeder cattle market short term, he and his colleagues provide a market decision planner to help Health Track producers plot the optimum time period to sell their cattle.

"Health Track is about eliminating market discounts, whenever and however alliance calves are sold," he said. "We market cattle that are documented as to origin and health treatments, which are reported to the buyer, and we sell in volumes that make a critical mass of cattle for a buyer to bid on."

Every Health Track calf is fitted with a special red tag and the tag number is entered into a central database, along with farm-of-origin; health and management processing details; when, where and to whom the calf sold (and when possible, feedlot and carcass information).

"Our health database is as complete as we can make it, and is unique in the beef industry," said John.

Good records alone do not make cattle any better genetically, of course. But each calf is born with certain genetic possibilities. Whether he reaches his potential or not depends largely on the management and nutrition he receives.

"That management needs to start with the cow herd," said Dan Netemeyer, MFA ruminant nutritionist. "If you have limited dollars to spend on cow feed, the money is better spent feeding a cow near calving, a month before until a month after calving. Thin cows can eat a lot of feed, but they gain quickly and body condition improves quickly to get them in better shape to calve and to breed back with their next calf.

"Heifers that first calve at 2 years of age may need extra feed and attention," he adds. "A 2-year-old heifer still has to grow another 20 percent to get to her mature size and weight."

Once a calf is on the ground, the decision whether to creep feed comes into play.

"Creep feeding pays better at some times than others," Netemeyer admitted. "But there are good reasons to creep feed besides the extra weight calves can gain. Creep feeding can take a lot of pressure off of cows and it teaches a calf to eat dry feed from a bunk."

Netemeyer pointed to an on-farm experience where creep feeding economics paid off. Calves ate an average 340 pounds of feed and gained an additional 96 pounds per calf, compared with similar calves that received no creep-and did it on $32 worth of feed per calf.

"I'd start creep feeding early," Netemeyer added. "A cow's milk production peaks before the calf is able to utilize all of the milk; then production drops. By feeding MFA Cattle Charge for a while, then switching to MFA TrendSetter SLR, you can limit calves' intake as you desire. And TrendSetter SLR doesn't depress forage intake."

For post-weaning calves, TrendSetter SLR also makes a convenient, safe grower-developer ration.

"In fact, you can continue feeding TrendSetter SLR right through to finishing," he added. "TrendSetter SLR works well with whole shelled corn in finishing rations. In our trials with cracked corn and whole corn (both fed with TrendSetter SLR) there was little difference in feed intake and daily gains. The whole corn diet produced better feed conversion efficiency and lower feed costs per pound of gain.

"So, from start to finish, I'd make these recommendations:

• Keep cows in shape;
• Realize calves' genetic potential with creep feed;
• Get the most from post-weaning nutrition;
• Go for fast, safe growth;
• And consider finishing cattle to slaughter weights using whole corn opportunities."

C-O-O-L Confusion
Speakers at the 2003 MFA Beef Innovators seminars were lukewarm to COOL (country of origin labeling), as the legislation was enacted by Congress earlier this year. Rules are now being drafted by USDA's Agricultural Marketing Service and are to take effect a year from now, on Sept. 30, 2004.

"COOL will require a lot of paperwork by us-by all beef producers-and we aren't real sure yet how we'll go about it," said Paul Colman, vice president, Cactus Feeders. "It's probably going to take a national EID [electronic identification device] system."

COOL began as an idea to enhance the value of U.S. produced foods. The logic behind the program is the notion that producers will pay more for products "made in the USA," and that those products from other countries should be labeled as such so consumers can tell the difference. However, what came out of Congress has a dimmer side. The law establishes fines on food retailers and food processors of up to $10,000 for each violation of labeling regulations.

"To protect themselves, retailers want packers to indemnify them for any product that is not labeled or is mislabeled," said Colman. "Packers pass the buck back to feeders, feeders pass the buck to cattlemen and backgrounders, and so on.

"We will follow through, by requiring affidavits from responsible individuals-third parties-that cattle are of a particular origin," he added. "The need for record keeping is going to expand to everybody in the industry."

A paper trail will need to be maintained for each animal. Take a calf born on a Missouri farm, backgrounded in the Kansas Flint Hills, finished in an Oklahoma feedlot and slaughtered at a Texas packing plant. In each step, the calf is owned by different parties, each of whom will need to keep careful records, and this doesn't even cover what happens to the component cuts of the carcass downstream of the packing plant. Especially in the international trade.

"COOL is becoming a political hot potato," said Mike John. "There is a lot of activity to try to get the law changed, but as it stands now, COOL is going to impose a real burden on the entire beef industry. In the MFA Health Track Beef Alliance, we want to always be as good as we can be at documenting the origin and process of all alliance cattle. With the system we have in place now, we can meet any record-keeping requirements of the COOL legislation, but it's going to work a hardship on everyone in the beef business, from cowmen to retailers."