Beef: Can feedlot operators cut corn usage and still please the packers?

Saturday, May 10, 2008

This is just one of the questions producers are pondering as they strive to find ways to reduce their losses in the face of high feeding costs

by DON STONEMAN

A frustrated Ontario cattle feeder, who doesn't want his name used, says that every time a truckload of cattle pulls away from his Bruce County feedlot, a piece of his farm's equity goes with it. He wants to cut down on his corn costs and thinks he is better off feeding for less marbling in the cattle.

In the big picture, is it reasonable to market cattle earlier and still keep the first market, the packer, happy?

Janette Richards, acting feedlot specialist with the Ontario agriculture ministry, says that it might be possible to reduce corn in the rations, but cattle must still go to market within the 30-month limit or feeders will face stiff discounts. On top of that, producers must still give packers the cattle that they want.

Cargill Limited kills the lion's share of the fed cattle in Ontario. On the advice of Cargill lawyers, Rob Meijer, Cargill's director of corporate affairs, will not "counsel" farmers to reduce the corn in their rations.

Meijer says that more farmers are already managing for beef with less marbling. Ontario is an "AA market'' and major retailers carry AA beef in their everyday counters, plus a "small amount of AAA product" in the service counters. Costco is alone in using AAA marbled beef only, Meijer says.

The reason? It's not just a desire for leaner meat. Package price is an issue with consumers. Carcasses in the 800-pound range are more desirable than those weighing100 pounds heavier. To achieve that, producers should be putting cattle on feed at lower weights, Meijer suggests.

"You can chase a triple-A market, but the cost of doing so is pretty high.

If you have too many people chasing that piece, you know how the open market works."

Dave Stewart, general manager of the Ontario Cattlemen's Association, says that Agriculture and Agri-Food Canada's weekly newsletter, "Beef Supply At A Glance," indicated at the end of February that there was a higher percentage of cattle grading AA and AAA for marbling in the first two months of the year than for all of 2007. That seems to indicate that beef producers were holding cattle back from market, waiting for prices to rise. In spite of what Cargill's Meijer says, the trend didn't seem to have changed in eastern Canada in March (see Figure 1).

Christopher Wand, an Ontario agriculture ministry beef cattle nutritionist, has some suggestions for cutting corn costs when feeding cattle:

1. Don't overfeed. When cattle start to lay down substantial amounts of fat, feed conversion slows down considerably.
2. Balance rations properly for protein and starch. Don't feed too much of either.
3. Use ionophores and implants, unless there is a good reason not to.

Farmers who don't "are giving up a lot of efficiencies."

Air dried corn gives better feed conversion than heat dried corn. Research says this is so, but it's not clear why, Wand says. Heat damage in the drier may reduce digestibility.

Wand also suggests feeding high moisture corn when possible, something to think about for the 2008 crop year. There are synergies when high moisture corn and dried corn are fed together because starch digestibility is different.

Janette Richards says that feedlot operators are trying hard to find ways to reduce their losses in the face of high feeding costs. She is going over operations, providing "another set of eyes" to try to find ways to reduce costs that they might have missed. BF