Animal Agriculture Sailing Into a Positive Multi Year Outlook

The following livestock industry analysis is offered by Dr. Chris Hurt of Purdue University- and is a part of a regular series of analytical articles that are jointly released by Purdue and the University of Illinois. Dr. Hurt has been a part of the Ag Econoimics Department at Purdue since 1981.


Everyone is familiar with the phrase, "What goes up must come down!" Grain prices seem to be following this old axiom, with substantial questions remaining of "how far down?" For U.S. animal product consumption the phrase could be reversed, "What goes down must come up!"


How much did meat consumption "go down?" In 2007, meat consumption per person in the U.S. was 219 pounds for the big four of beef, pork, chicken, and turkey. Current USDA estimates for this year are down to 199 pounds per person, nearly a ten percent decrease in seven years. Out of the 20 pound total reduction, beef was down 11 pounds, pork was down five pounds, and chicken and turkey were down about two pounds each.  In percentage terms consumption of beef has been down 17 percent, followed by 10 percent for both pork and turkey and a more modest three percent for chicken.


Why would U.S. consumers be eating so much less meat? Some argue that diets have changed and U.S. citizens have made lifestyle changes that include less meat and that the new norm will be the current smaller per capita levels of consumption.   There is probably some truth to the lifestyle change hypothesis, but three other factors are more important.


On the production side of the cattle part of the equation- high feed and forage prices forced a national beef cow reduction of 12 percent from 2007 to 2014. In addition to high feed costs, Southern Plains producers had the additional problem of widespread drought. As a result of the double-whammy, producers liquidated 21 percent of the beef cows in that region, which is the largest production region. Click here to read more about the factors that helping animal agriculture head into several years of prosperity. 

Iowa Governor Terry Branstad, vice chairman of the Governors' Biofuels Coalition, today called on the nation to recognize the accomplishment of the Poet-DSM Advanced Biofuels cellulosic ethanol plant, and other plants that have now come into production, in helping transform the nation's energy future.


That future was envisioned by the governors when they worked with Congress and President George W. Bush to launch an ambitious federal research program to deliver cost-effective advanced biofuels, such as cellulosic ethanol. The Coalition helped persuade Congress to pass the first Renewable Fuels Standard over a decade ago, accelerating the move away from imported oil toward domestically produced biofuels.


"The cellulosic ethanol industry has arrived and is an important avenue for adding value to agricultural products and spurring economic and family income growth in rural America," Governor Branstad said. The Poet-DSM plant will produce as much as 25 million gallons of cellulosic ethanol a year by utilizing corn stover, which offers farmers in the area an additional revenue stream. By removing only 25 percent of the corn stover from the field the soil retains the nutrients needed for sustainable crop production.


"Companies such as Poet and DSM have invested more than $1 billion to build the next generation of ethanol plants that can make biofuels from non-grain feedstocks. In addition, companies like Poet-DSM, Abengoa, DuPont and others have constructed advanced biofuel plants, putting thousands of Americans to work in building these plants," Governor Branstad remarked.


Other commercial and demonstration scale cellulosic plants that have recently begun production include the Quad County Corn Processors, Galva, Iowa; INEOS Bio, Indian River, Florida; and Abengoa Bioenergy, Hugoton, Kansas.  Click here to read more about the expansion of the biofuel industry in the US.
 

Mitloehner Busts Myth of Meatless Mondays 

Dr. Frank Mitloehner of the University of California Davis is a champion when it comes to telling the story of green house gas emissions as it relates to the beef industry. Through his research, he has found beef cattle produce 1.4 percent of all of the greenhouse gases in the United States.


"There are many people out there that claim that things like Meatless Mondays will make a big difference," Mitloehner said.  


I recently caught up with Dr. Mitloehner recently at his UC Davis office.  In assuming that the beef industry produces 1.4 percent of the nation's green house gas emissions, then by not eating beef one day a week that figure 1.4 percent would be divided by seven. Mitloehner said if all 300 million Americans were to stop eating beef on Mondays, then green house gas emissions would be reduced by 0.2 percent.


While green house gas emissions would be reduced, its a fairly small amount relative to other sources of green house gases.   Mitloehner said the transportation sector in the US represents 26 percent and energy production contributes 31 percent of the nation's green house gases.

 

Click here to read or to listen to my interview with Mitloehner about why the beef industry needs to fight back against Meatless Mondays and the work being done through the Beef Sustainability Project.   

Oklahoma Genetics Variety Spotlight - Doublestop CL Plus

As wheat planting plans come into focus, the Radio Oklahoma Ag Network and Oklahoma Farm Report.com want to help you consider how the genetics developed by Dr. Brett Carver and his Wheat Improvement Team may fit into your wheat production system. A profile of several of the major wheat varieties that have come from the Oklahoma State University program have been showcased. 


Today we spotlight Doublestop CL Plus - a two gene Clearfield wheat variety that offers improved control of problem weeds such as feral rye and jointed goatgrass. Carver said Doublestop is a definite improvement over Centerfield a single gene variety developed by OSU that offered herbicide tolerance. Doublestop offers excellent test weight in a late maturing wheat variety that has good protein content and quality.


"Doublestop raises the bar in terms of yield potential, disease resistance, all of those things we looking for in a non-clearfield variety," Carver said. "I feel Doublestop was a variety that they would have released even without the herbicide resistance, it's that strong."  

In the 2014 OSU wheat variety trial, OSU Wheat Extension Specialist Dr. Jeff Edwards said Doublestop finished near the middle of the pack.


"I think a lot of that has to do with the later maturity and simply running out of moisture and trying to conduct grainfill during the hottest time of year," Edwards said. "In a more normal year where maybe we have a little bit more stored soil moisture hopefully I would expect it to perform back where it did in 2013 near the top of many of our trials." 


Click Here for the full article or to listen to Dr. Carver and Dr. Edwards view of Doublestop CL Plus.
 

Consumers say Beef is King

Beef ranks supreme among protein choices. That's according to Lindsay Chichester with University of Nebraska extension. She did her doctoral research in West Texas A & M on consumer preferences in the meat industry. Nearly half of the participants put beef as their number one protein choice and 97 percent indicated they ate beef between one and 12 times each week.


"Overwhelming consumers indicated they wanted a high quality tasty product that was something they would spend money or so they indicated," Chichester said.


The term Angus outweighed any other branding term including prime, tender, organic and grassfed in consumers perception, but words are not enough. Consumers are looking for performance to back up those terms and choose specification based brands like Certified Angus Beef.


"When they are willing to spend their money on steak they want to know they want to make sure its a quality product," Chichester said. "So they are willing to spend a little more money to get something they know will be guaranteed tender, flavorful, juicy, the things CAB markets for and targets specifically in their product." 

Click here to read or watch a video showing more about what consumers are demanding today.  

Preconditioning Adds Value to Fall Calf Sales

By Steve Swigert, Agricultural Economist Consultant for the Noble Foundation 

Cow-calf producers with calves to market in the fall of 2014 are going to have some interesting decisions to make. With calf market prices at all-time highs and feed prices lower than the past three years, are the calves going to be sold at weaning or are they going to be kept until a later date to make additional income?


It is crucial to determine what is best for the calves and what is best for the operation financially. There are several decisions to be made when working through this process.


The first decision is whether to market at weaning or keep the calves longer. If the calves are sold at weaning, income is available immediately and no more labor is needed to take care of the calves. If the labor and facilities are available to wean and precondition calves, assuming the calves have good to superior genetics, additional profits are available in most cases by keeping the calves after weaning.  Click here to read more about how to optimize margins through the preconditioning process. 

Boxed Beef Trade Volume Last Week Was Biggest Since Thanksgiving 2013 (in other words- the Best weekly volume in 2014)

The daily spot choice boxed beef cutout ended the week last Friday at $246.30 which was $3.47 lower than the previous week. There were 981 loads sold for the week in the daily box beef cutout, which was another very big week as retailers bought product for Labor day along with restocking shelves after the weekend. According to Ed Czerwein with the USDA Market News in Amarillo, this was the biggest week in volume since the week before Thanksgiving last year.


Czerwein adds "As we have mentioned in the previous weeks there had been very few outfront sales earlier that were aimed at this Labor Day weekend so buyers had to purchase product pretty much as they needed it. We had big outfront sales in the last couple of weeks but they normally don't actually get delivered for 22-90 days or longer which should start helping soon. 


"Another big test concerning the success of Labor Day will be measured this week, since the first few days after a big grilling holiday the orders usually roll in to restock the shelves."

To read more- or to listen to Ed's commentary on last week's wholesale boxed beef trade, click or tap here.