Tuesday, February 10, 2015

Beef Producers to Vote on Illinois Beef Checkoff

Illinois beef producers have the opportunity to invest in the future of their industry by voting for the Illinois Beef Checkoff as ballot boxes open Monday.

With anticipated robust beef demand and continued high retail beef prices on the horizon, the need for strong promotion and marketing strategies will become increasingly important to make certain demand for beef products remains strong among consumers. A state-level beef checkoff program in Illinois can address this dynamic trend. All money collected in Illinois through the voluntary Illinois Beef Checkoff will stay in Illinois. This means state checkoff will not go to any national organization. The state checkoff is different from the national program in that it does not have the constraints placed on the national $1 checkoff. Namely, our state checkoff could be used to promote beef raised specifically in Illinois, which is not allowed under the federal program.

All beef producers in Illinois are entitled to one vote in the referendum. A producer is any person, regardless of age, who has owned or sold cattle in the previous year or presently owns cattle.

The referendum will be held during a 12-day window in February 2015 offering three ways a producer can cast a vote. Illinois producers are strongly encouraged to vote in-person at any Illinois FSA county office from Feb. 16-20 or at the Illinois Beef Expo in Springfield Feb. 19-22. If a producer is unable to access in-person voting locations, a mail-in ballot may be requested from the IBA office by contacting 217-787-4280 and postmarked between Feb. 16-27.

Producers with questions about the procedures and eligibility for voting in this referendum or for more information on how funds generated by the assessment can be used, can contact the Illinois Beef Association at 217-787-4280 or visit www.illinoisbeef.com.

American Heart Association® Certifies Extra Lean Ground Beef as Part of a Heart-Healthy Diet

The Beef Checkoff Program announced today that Extra Lean Ground Beef (Ground Beef that is at least 96% lean, 4% fat) is now certified by the American Heart Association® to display its recognized and respected Heart-Check mark. Retailers now have the opportunity to help identify eight different extra lean beef items as options for part of an overall healthy diet to their shoppers using one of the most trusted nutrition icons on food packaging today.
The extra lean beef cuts that meet the American Heart Association’s® requirements for heart-healthy foods as part of an overall healthy dietary pattern, and are certified to display the Heart-Check mark, include:

“Beef has many nutritional benefits and having the American Heart Association certify yet another beef cut empowers consumers to feel good about including beef in their diet, not only for its great taste but for its nutritional value,” said Jo Stanko, a cow-calf operator from Steamboat Springs, Colo., and vice chair of the Checkoff’s nutrition and health subcommittee. “Beef farmers and ranchers like myself share a common goal; to help consumers make shopping decisions to fit their needs and lifestyles by educating them about the health benefits of their food. To this end we will continue to support valid science to show consumers how extra lean beef is part of a healthy diet.”

Before putting its Heart-Check mark on any food, the American Heart Association® evaluates it against nutrition requirements based on sound science regarding healthy dietary recommendations, food categories, specific product ingredients and nutrient values.
Multiple retailers with hundreds of stores across the U.S. currently display the Heart-Check mark on certified beef items in the meat case. Retailers and processors can work with the Beef Checkoff Program to receive a discount on the certification fee for the American Heart Association® Food Certification Program.

Resources such as on-pack labels, posters and recipes are available for retailers to use in store and in shopper communications to promote the certified beef cuts.

To learn more about participating in the American Heart Association® Food Certification Program, please visit www.BeefRetail.org.

For more information about your beef checkoff investment, visit MyBeefCheckoff.com.

CattleFax - Weekly Recap

Fed cattle trade in the South was at $160 to $162 last week, steady to $3 higher compared to the previous week. Live cattle trade in the North was not established as of press time but the market tone was steady to firm compared to the previous week. The beef complex was lower last week but firmed at the end of the week as buyers stepped back into the market.

Feeder cattle were $3 to $5 higher last week. Calves also found support last week as they were steady to $6 higher. Cull cow prices were steady last week.

Corn was stronger last week as an early week rally provided strength to the corn market.

Check out today's Chart of the Day. For recent market news and analysis, visit CattleFax.com.

Economics of Bull Buying

How much can I afford to pay for a bull?

Submitted by Travis Meteer, U of I Beef Extension Specialist for Illinois Beef magazine

A popular question this time of year is “How much can I afford to pay for a bull.” My go-to answer is usually – “How much revenue loss would you have from a pasture full of open cows?” After all, we often de-value the role of the bull. We forget that he is a crucial part of the equation to making our product.

Now, the question is a good one to ask. Especially after watching calf prices climb seemingly all of 2014 and the prices paid for bred heifers at year-end, it is only logical to wonder what a good bull will cost this spring.

Old rules of thumb are good to reflect on. For instance, “two times the value of a fat steer” or “four to five times the value of a feeder calf”, are both common measures used by old-timers to determine the value of a bull. So, I tested these figures with historical prices from the Illinois Performance Tested Bull Sale and prices paid for feeders and fats from National Agricultural Statistics Service (NASS). As it turns out, using values from 1996 to 2014 (the last 19 years) the average bull price was four times the value of a feeder calf and 2.1 times the value of a fat steer. Looks like those old rules of thumb work pretty well.

Using these multipliers, we can speculate to the average price of bulls this coming sale season. Looking at recent market reports, 500-pound feeder calves are bringing $2.40 or more. Thus, value of a 5-weight feeder calf is conservatively $1,200. History tells us four times that value will get us close to the average. Thus 4 x $1,200 = $4,800 for an average bull price.

A conservative price for fat steers weighing 1,300 pounds is $1.60. Therefore the math tells us a fat steer values out at nearly $2,100. The previously stated multiplier of 2.1 times the value of a fat steer would yield an average bull price of just over $4,400. Thus, we have a conservative range of $4,400 to $4,800 for the average bull price.

That said, there will be many bulls that bring in excess of those figures. So, what factors contribute to bulls bringing more than the average? Are they worth the extra money?
For simplicity, let’s say a bull breeds 25 cows per year for four years resulting in 100 calves over his lifespan. With these conservative assumptions, even a small improvement in a valuable trait can greatly increase a bull’s value.

For instance, Calving Ease (CE) EPD is defined as the difference in percentage of unassisted births. So, let’s say you purchase a bull that is five points better in his CE than the breed average for current sires. For both Angus and Simmental, that would mean purchasing a bull in the top 10 percent of the breed for that trait – not an unrealistic buy. The 5-point improvement should translate to five percent more unassisted births. In the real world, it’s fair to say half of assisted births don’t make it. Thus, a five percent improvement in CED could easily translate to 2.5 percent more calves. Out of 100 calves sired over a lifetime, that’s 2.5 more calves. The added value from improved CE would be $3,000 (2.5 more calves x 500 lbs x $2.40/lb.).

The most common example for added value of a bull is improved EPDs for weaning weight (WW). Let’s say you purchase a bull with a WW EPD of 60 (breed average for Angus is 50). That’s 10 additional pounds at weaning per calf. If the bull sires 100 calves in a lifetime and a pound is worth $2.40, then the result is $2,400 more income over his lifetime when compared to the average of current sires.

Another figure bull buyers can look at are $ values (Weaned Calf Value ($W), Beef Value ($B), All-Purpose Index (API), Terminal Index (TI)). These values are expressed in dollars and if you match your herd needs with the correct index, they can help you be more profitable. In the January/February 2014 issue of Illinois Beef magazine, I discussed these indexes in a column titled “Understanding and UtilizingEconomic Indexes in Sire Selection”. You can find this piece archived on my blog.

When selecting your next herd sire, identify the traits that can add dollars to your operation. Don’t sacrifice functionality, structural soundness, docility, and other traits that can affect longevity. View purchasing a bull as an investment and treat it as such. Investing in a good bull that can improve profitable traits in your herd can allow your farm to be more competitive no matter the market dynamic.

Bottom line, bulls are a significant contributor to profit or loss in your cattle herd. The have an impact now and for years to come if you are retaining replacement females. Look for traits that hold value in your market. Find a bull that can inject those traits. The “expense” of a bull can be a great investment in the future of your cattle herd.

Monday, December 8, 2014

Cattlemens Webinar Series: End of Year Tax Strategies for Cattlemen

Register Now for the free webinar on Dec. 9, 2014!
6:00 p.m. Mountain (MST)

When the clock strikes midnight on December 31st, there are very few options that taxpayers have to reduce their tax bill. With higher revenue this year and many unknown tax changes that may or may not be passed by Congress, it is important to understand the strategies that producers in agriculture have to keep Uncle Sam out of their pocket.

Presentation Descriptions:

Larry Kopsa, CPA

Larry Kopsa, CPA is a member of the firm Kopsa Otte located in York, Nebraska. As a principal in the 28 person firm, he is involved in all aspects of the practice with an emphasis on tax planning, succession planning and business consultation, along with firm management. Besides serving on the board of directors of the Nebraska State Chamber of Commerce, Larry is active on numerous local, state and national organizations. He is a frequent speaker, has authored numerous articles for various magazines, and also serves as an adjunct professor at York College teaching Income Tax courses.

Colin Woodall, NCBA Senior Vice President, Government Affairs
and Kent Bacus, NCBA Associate Director, Legislative Affairs

NCBA is focused on addressing tax extenders during the lame duck session of Congress and will focus on tax reform in 2015. Priorities for the lame duck include reinstating Section 179 expensing and 50 percent Bonus Depreciation to 2013 levels, as well as extension of the Conservation Easement Tax Credit and key Charitable Deductions. During the webinar we will also discuss upcoming tax reform efforts for 2015 and key provisions NCBA supports like estate tax (Sec 2032A), cash accounting, depreciation schedules, 1031 Like-Kind Exchange. Tune in and learn about these important tax provisions and how they may impact your operation.

Attend American Forage and Grassland Council Annual Conference

The American Forage and Grassland Council (AFGC) Annual Conference is scheduled for Jan. 11-14 at the Hilton St. Louis Frontenac near St. Louis, Mo. The conference brings forage producers, researchers and industry representatives from across the country to share forage related research and information. 

Jan. 11 begins with the AFGC board of directors meeting. However, the main conference begins at 8 a.m., on Monday, Jan. 12 with the keynote speaker, Dr. Temple Grandin, a nationally known consultant to the livestock industry, presenting Tips for Low Stress Cattle Handling. Additional topics on Monday include: Hay Preservatives & Additives: Are they Economical?; Keys to Success When Making Baleage; Can I Afford to Spray for Weeds, and other topics. Tuesday, Jan. 13 the agenda includes several workshops on the following topics: Using Cover Crops to Expand Your Livestock Operation; Recent Improvements in Cool Season Grasses; Baleage Fundamentals and Using NIRS as a Tool for Better Forage Management. The conference concludes on Wednesday, Jan. 14 with several sessions focusing on Plant Breeding and NIRS and Forage Quality & Using NIRS Nutrition Results.

The Conference will also include a commercial exhibit area, poster presentations, Emerging Scientist Competition, numerous networking opportunities and other activities.

A complete program agenda and preregistration information is available at http://www.afgc.org/. Early registration is due by Dec. 31 and one-day registrations are available. The AFGC Conference is co-sponsored by the Missouri Forage and Grassland Council and the Illinois Forage and Grassland Council.

AFGC is an international organization comprised of twenty affiliate councils in the United States and Canada with a total individual membership of about 2,500. Their primary objective is to promote the profitable production and sustainable utilization of quality forage and grasslands. Members represent members the academic community, producers, and private industry. Together, they unite in a common cause to promote and develop the forage industry.

Wednesday, December 3, 2014

Illinois Beef Checkoff Referendum Scheduled

IBA encourages a "Yes" vote to keep dollars in the state for beef education and promotion.

SPRINGFIELD, Ill. – Illinois beef producers will have the opportunity to approve a state beef checkoff program, controlled by Illinois cattlemen and women, that could generate additional funds to promote beef in Illinois.

Petitions signed by more than 700 producers were submitted to the Illinois Department of Agriculture requesting a referendum on the Illinois Beef Market Development Act. If approved, the 50-cent per-head that producers would pay into a state checkoff program would supplement the national checkoff program. The program will complement and extend current research, promotion of Illinois-raised beef, and efforts to educate the youth of our industry while strengthening beef demand in the marketplace. The Illinois Department of Agriculture will oversee the referendum process.

“Our current national checkoff started in 1986 and its buying power has been eroded by 56 percent due to inflation over the years,” said Reid Blossom, IBA executive vice president. “Just like input costs on the farm, the cost of promotion and education has risen. The industry must invest in order to reach Illinois consumers and ensure a viable beef business for years to come, and the proposed Illinois Beef Checkoff would help in a number of areas.”

The Illinois Beef Checkoff is a voluntary 50-cent assessment on all beef cattle in Illinois collected at the time of sale. The funds from this collection will be controlled by farmers serving on IBA’s Checkoff Division of the Board of Governors and any cattleman not wishing to participate can have their full assessment refunded.

Alan Adams, a beef producer from Sandwich, said for him, reinstating the Illinois Beef Checkoff makes sense.

“Our industry is up against tremendous adversity,” Adams said. “The national checkoff has been successful in combatting those challenges, but more resources are needed to more aggressively confront beef industry issues that are critical to our way of life. The fast completion of the petition process and early backing from the Vote Yes coalition shows that Illinois beef producers recognize the need to further support our great industry.”

All beef producers in Illinois are entitled to one vote in the referendum. A producer is any person, regardless of age, who has owned or sold cattle in the previous year or presently owns cattle.

The referendum will be held during a 12-day window in February 2015 offering three ways a producer can cast a vote. Illinois producers are strongly encouraged to vote in-person at any Illinois FSA county office from Feb. 16-20 or at the Illinois Beef Expo in Springfield Feb. 19-22. If a producer is unable to access in-person voting locations, a mail-in ballot may be downloaded from the IBA website, www.illinoisbeef.com, between Feb. 16-27 and postmarked no later than close of business Friday, Feb. 27, 2015.

Producers with questions about the procedures and eligibility for voting in this referendum or for more information on how funds generated by the assessment can be used, can contact the Illinois Beef Association at 217-787-4280 or visit www.illinoisbeef.com.

Illinois beef producers are being asked to consider a state checkoff in an effort to increase promotion and education efforts for beef.