Bernard Doré, agronomist Bovi-Expert Advisor

Bernard Doré, agronomist

Bovi-Expert Advisor

West-Montérégie Beef Day

Valleyfield, December 6th 2014

Cattle prices have exploded…

Your situation versus the industry

Beef management 101

My main targets

Winning strategies

Monetary impacts

Your tool box

Take home messages

“ Experts say; plan accordingly when cattle prices are strong. “

Reference : FCC Express, November 14th, 2014, Richard Kamchen

Commercial herd with 50 cows

Selling 40 calves in the fall (20 steers et 20 females)

Selling 5 culled cows

Price reference = Week of November 10 to 17th

Reference : FPBQ

2013 Income Number $ / lb $ / head $ Total

20 steers (647 lb) 1,58 $ 1022 $ 20440 $

20 females (554 lb) 1,40 $ 776 $ 15520 $

5 cows (1500 lb) 0,6022 $ 903 $ 4515 $

40475 $

2014 Income

Number $ / lb $ / head $ Total

20 steers (649 lb) 2,64 $ 1713 $ 34260 $

20 females (559 lb) 2,41 $ 1347 $ 26940 $

5 cows (1500 lb) 1,0068 $ 1510 $ 7550 $

68750 $

Extra gross income : + 28 275 $

Increase rate : + 70 %

Increase / cow : + 566 $ / cow

Low cattle inventories in North America

Natural disasters (drought, polar vortex…)

Average age of the beef cattle producers

Lack of young & motivated new producers

Strong demand for beef meat

Other meat supply (pork, chicken)

Grain prices, cattle feeding costs

Profit margin

…..

What am I going to do ?

A new pick-up truck ?

A new tractor ?

Don’t panic !

I stay calm and I take time to visit with my advisors

Ask yourself the following questions :

Why is the cattle market suddenly so strong ?

Is it temporary or do we see a new trend happening?

How can I take advantage of that?

What are going to be the long term effects on my farm ?

What is my actual situation ?

What are my needs, my priorities ?

This is when you must be a GOOD MANAGER !

GOOD MANAGERS make a multitude of small decisions to collectively keep costs low relative to the value of the weaned calves they produce.

EXCELLENT MANAGERS do the same, but ALSO understand and find leverage in the production system. These managers make a few strategic changes that have long-standing systematic benefit to the operation.

ALL MANAGERS need a clear view of the financial position of the ranch and the drivers of net income and return on assets.

Clay P. Mathis, King Ranch® Institute for Ranch Management, BIF 2014

What are my actual results (data) ?

Am I going to get some $ from the ASRA program ?

What do I want to improve ?

Do I have the resources (land, feed, $$…) ?

I look at my data and I make comparisons

(« benchmarking »)

I check my farm budget (financing needs)

I work on an action plan with my advisor

I go by order of priority (productive investment)

Lead group Bottom group Variation

Number of farms 18 18

Number of cows, head 140 97 43

Pounds of calves, lb/cow 586 488 98

Total calf sales, lb 79 265 46 972 32 293

Sale weight, lb / calf 687 668 19

Calves born, head / cow 0,97 0,87 0,10

Calves weaned, head/cow 0,90 0,78 0,12

Calves sold, head/cow 0,86 0,73 0,13

Cow replacement rate, % 11 % 16 % - 5 %

Forages (excluding pastures), kg/cow 4 701 5 477 -776

Supplement, kg/cow 242 200 42

Cultivated land, ha/cow 2,20 1,74 0,46

Hay land, ha/cow 1,28 0,83 0,45

Hay yield, t/ha 4,68 4,68 0

Pastures, ha/cow 0,75 0,76 - 0,01

Labor, hours/cow 35,6 39,7 - 4,1

CENTRE D’ÉTUDES SUR LES COÛTS DE PRODUCTION EN AGRICULTURE _CECPA_ MARS 2012

Calves born + 10 %

Calves weaned + 12 %

Calves sold + 13 %

Weight/calf sold + 19 lb

Calf produced/cow + 98 lb

ANALYSE COMPARATIVE, VEAU D’EMBOUCHE - 2010

CENTRE D’ÉTUDES SUR LES COÛTS DE PRODUCTION EN AGRICULTURE _CECPA_ MARS 2012

Beef herd of 100 cows (lead group)

97 calves born (+10 calves)

90 calves weaned (+12 calves)

86 calves sold (+13 calves)

+ 19 lb / calf sold

Calves sold @ 687 lb

Additional 13 calves

Avg price (week of October 27th,2014, m-f, 601-700 lb) :

$ 2,55 / lb

13 x 687 lb x $ 2,55 / lb

+ $ 22 774

All my cows are pregnant

They calve annually by themselves, around the same time

I do lose as less calves as possible (mortality)

My cows are rebred back within normal delay

I get as much calves weaned as possible

My calves are gaining weight rapidly

I ship heavy & uniform calves to the auction

I keep an eye on my operating costs

I write down notes, which help me making decisions

Genetic

Cattle feeding

Reproduction and animal health

Pasture management

Forage production and storage

Soil improvement

Cattle performance

Data & information management

Cattle sales

Financial management

Herd sire with known genetic potential (and / or AI)

Data & qualities; EPD, ABC, indexes, conformation, specific bloodlines, disposition, carcass qualities, genomic…

Crossbreeding (triple, rotation cross)-Commercial herd

Raising/ purchasing F1 females

High-quality genetic = Investment

Please do your homework !

A. Bull’s disposition

B. Price (as cheap as possible)

C. Bull’s EPDs, ABCs, indexes…

D. Bull’s conformation

E. All these answers

Forage testing (adjust ration according to

body condition, temperature…)

Low waste hay feeders

Rations for dry cows, lactating cows,

first calvers, heifers

Heifers should not be fattened

Free choice mineral all year long

Cattle feed by-products (consider price / value)

Creep feeding (figure out costs / benefits)

Get your cattle scored (BC; 1 to 5)

…and don’t forget quality water !

A. 20 lb (9 kg)

B. All they can eat

C. 2,1 to 2,4 % of their live weight

D. 45 lb (20 kg)

Make sure your herd sire can do the job !

(« breeding soundness evaluation »)

Housing & care of your herd sire (winter)

Records & notes (heat, AI,…)

Pregnancy check

Estrus synchronization (timed AI or others)

Management of the breeding period (60-70 days)

Preventive health cares (vaccines, de-wormers, …)

Cattle chute / corral / scale

A. Every two years

B. Only on suspect cows

C. Each year & on all females

D. Never

Manage stocking rate according to grass availability

Respect a rest period

Consider rotational / stripped

grazing

Make hay if required

(early in the season)

Get the hay field’s re-growth grazed out (fall)

Seed mix recommended for grazing (all-season)

Water in quality & quantity in all paddocks

Frost-seeding

(alternative)

A. Strip grazing

B. All herd in one big field

C. Rotational grazing

D. No pasture at all

Identify dry hay / silage lots

Protect your dry hay (shelter, plastic…)

Making it or buying ? (pencil that out)

Feed quality to growing cattle

Start earlier !

A. By June 8th

B. On June 24th

C. Around July 15th

D. On Canada Day

Get regular soil analysis

Identify / correct drainage problems

Apply lime as per the identified recommendations

Clean ditches

Cattle manure

A. Over 5 years ago

B. This year

C. Last year

D. Never done any

Weigh your cattle, record performance data

Invest in a cattle scale

Manage your breeding heifer’s growth

Cull cows with problem (age, feet & legs, udder, low performance…)

Review your annual profile (per cow, global, per sire)

Cow age and cow productivity (When is she too old?), The Stock Exchange, November 4, 2014

(Source: Genho, 1984 Proceedings of the Beef Cattle Short Course, University of Florida)

A. YES

B. NO

C. I am thinking about it !

D. No way

Trait Average Top 25 %

Calving difficulty - %

4,0

5,9

Weaned calves / cow - %

83,6

96,0

Pre-weaning calf mortality - %

7,4

7,0

Average calving interval - days

367

364

Average age at weaning - days

234

248

Average weaning weight - lb

651

719

Birth– weaning ADG - lb / day

2,41

2,54

Up-to-date cattle herd inventory (ATQ)

Specific reading (Bovins du Québec, Cattlemen…)

Beef Days / « Congrès du bœuf » / Lessons

Internet searches

Advisory service (Bovi-Expert)

PATBQ

DSA-BOVIN

BIO-TRACK (ON)

ICALVE (Alberta)

ICattleMgrPro (USA)

A. Bovins du Québec

B. Internet (beef cattle related sites)

C. My Bovi-Expert advisor

D. Cattlemen magazine

E. All these answers

“SELL HIGH, BUY LOW”

Follow market trends (Internet, advisors…) www.finviz.com

Plan the sale of your calves

Pre-conditioning

Special auctions /

private-treaty sales ?

A. Another 2 to 3 years

B. Less than 6 months

C. At least another 5 years

D. Will stay for ever

Consolidate your loans, reduce interest charges

Cash flow budget (5 years)

Group purchases (lime, fertilizers…)

(Regroupement des achats: www.rda2001.com)

Plan according to a lower ASRA cheque (or no cheque)

A. Discussing once with my banker

B. Reviewing last year’s bills

C. Studying my financial statements & cash flow budget

D. Doing nothing specifically

Spending all your extra cash from your cattle sales

Building a new barn (without needing one)

Buying more land (before improving your own)

Cancelling your ASRA coverage

Buying a 200 HP tractor to make hay !

etc

A 2 % improvement in reproductive efficiency =

Cost of production reduction : $ 16,50 / head

Financial impact on Canadian beef industry (2008 – 2012)

+ $ 176 Millions

Beef Cattle Research Council, Results Report (2009-2013)

A 1 % reduction in pre-weaning calf mortality =

Cost of production reduction : $ 7,50 / head

Financial impact on Canadian beef industry (2003 – 2011)

+ $ 44 Millions

Beef Cattle Research Council, Results Report (2009-2013)

25 % Inférieur Moyenne 25 % Supérieur

CARACTÈRES ÉVALUÉS

Âge au sevrage (j) 220,5 231,9 245,5

GMQ naissance-sevrage (kg/j) 0,968 1,053 1,143

Poids réel moyen au sevrage (kg) 251,0 283,5 321,0

Taux d'efficacité reproductive (%) 73,5 85,6 97,4

Intervalle moyen de vêlage (j) 377,3 372,1 368,1

REVENU

Revenu estimé par veau ($/an) 934,04 1 245,83 1 622,52

COÛT DE PRODUCTION 6,87 6,87 6,87

Frais monétaires par veau ($/an) 1 214,39 1 214,39 1 214,39

Frais non monétaires par veau ($/an) 878,41 878,41 878,41

BÉNÉFICE PAR VEAU

Bénéfice avant charges non monétaires par veau ($/an)

(280,35) 31,44 408,13

Bénéfice après charges non monétaires par veau ($/an)

(1 158,76) (846,97) (470,28)

ÉCART PAR RAPPORT À LA MOYENNE ($) (311,79) 376,69

Economical performances (1996 to 2013)

Profit margin variation / calf / year :

(between bottom 25 % and top 25 %)

+ $ 648 / cow / year

Beef herd with 100 cows :

+ $ 64 800

Bilan au PATBQ de 1996 à 2013, Performance économique, Hervé Herry, 9 octobre 2014

Breeding / crossbreeding plan

AI catalogs / test station reports

Forage, grain, soil analysis

Cattle health prevention program

A rotational grazing plan / crop management plan

Breeding, weigh, ID records

Annual financial statements

A business plan, define objectives

Many ideas all at once !

Go one step at a time

Know your practices, set priorities

Take time to visit with your advisors

Pay debts, payables

Consider advanced purchases (seeds, fertilizers…)

Stay on target with your budget

Get a 5 year cash flow budget

Invest in good genetics (qualified sires, AI, F1…)

Consider new alternatives (custom work, hay purchase, sharing equipments…)

Be better installed (corral, cattle chute, scale)

Herd expansion ? (not at any price, PAEF)

Keep an eye on markets (« futures »)

Be curious and visit other farms

Get our youths motivated

Reduce stress

Enjoy life beside your farm business

Take some rest / vacation

Be proud of being a beef cattle producer !

Beef cattle research council (2009-2013); Results report, January 2014

Bilan au PATBQ de 1996 à 2013, Performance économique,

Hervé Herry, agronome, 9 octobre 2014

“Consider investments in efficiency with extra cattle”, Southeast Cattle Advisor, September 19, 2014

« Enfin de bons prix pour le bœuf », par Martin Matte, agr.,

TCN-Montérégie, 17 septembre 2014

“Economic considerations for profitable cowherds”, Clay P. Mathis, BIF 2014

THANK YOU !