May 2024 Edition

Agriculture & Natural Resources
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Russell County Agriculture and Natural Resources May 2024 Newsletter 

In this issue…

•    Off the Hoof: Beware of reducing feed at Calving
•    Farm Progress: Thompson optimistic about passing farm bill
•    Economic Update: Stocker Outlook for 2024
•    Recipe: Creamy Cucumber & Chicken Salad
•    Upcoming Events and MORE!

Jonathan Oakes, CEA for Agriculture and Natural Resources

Russell County Extension Office 
2688 S. HWY 127 
Russell Springs, KY 42642 
Phone: (270) 866 - 44 77 I Fax: (270) 866 - 8645                                                                                                                                                                                                             russell.ca.uky.edu 

Beware of Reducing Feed at Calving! 
Dr. Les Anderson, Beef Extension Specialist, University of Kentucky 

I presented at a Master Cattlemen session last night and, after the meeting, got asked a common question about body condition and feeding cows at calving. His question was he had heard that he should reduce feed to his cows before calving to keep birthweights lower to reduce calving problems. He indicated that the BCS of his cows as they begin to calve was only 4. This is a frustrating question because it comes up often and nothing could be further from the truth. 
Several researchers have addressed this issue over the last 20-30 years. Each of these experiments had cows that were fed to maintain weight, decrease weight, or increase weight right before calving began. The result of underfeeding cows before calving results in the exact problem the producer is trying to avoid. The research demonstrated that poor nutrition and low BCS precalving: 

•    Increased calving problems
•    Decreased calf health (low colostrum consumption and poor-quality colostrum)
•    Increased calf death loss
•    Increased the number of days for females to resume estrous cycles.

One of the most extreme research trials on pre breeding nutrition in cows was conducted by Dr. Steve Loerch at The Ohio State University. At that time, the cost of hay was much higher than the cost of grain and Dr. Loerch was examining the impact of feeding corn as an alternative to hay for gestating and lactating cows. The cows used were large framed Charolais-cross cows and were either fed around 11 pounds of whole shelled corn, 2.5 pounds of a pelleted supplement, and 2 pounds of hay (dry matter basis) or offered hay and a salt and mineral mix free choice from November to April. Hay was predominantly first-cutting orchardgrass testing around 72% neutral detergent fiber (NDF) and 9.5% crude protein (CP). Cows fed free choice hay ate twice as much feed resulting in double the feed costs compared to limit feeding the corn-based diet. 
In this study, cows consuming the corn-based diet had fewer calving problems than the cows consuming forage-based diets. Limit-feeding corn to meet the nutrient requirements of cows did not negatively impact calving performance, pregnancy rate, or calf weaning weight. I don't bring this trial up to 
endorse feeding gestating cows corn-based diets but rather to reinforce that feeding cows prior to calving does not increase calving problems even if cows are fed corn-based diets. 

This producer indicated that his cows were at a BCS of 4 prior to calving and this is going to create some issues for him. Rebreeding performance of cows is greatly influenced by BCS at calving. Cows that are thin (BCS < 5; visible ribs) at calving take longer to resume estrous cycles and therefore are delayed in their ability to rebreed. As precalving BCS decreases, the number of days from one calving to the next (calving interval) increases in beef cows. Females with a precalving BCS <5 tend to have production cycles greater than 1 year. For example, cows with a precalving BCS of 3 would be expected to have a calving interval of approximately 400+ days, while a cow with a precalving BCS of 6 would have a calving interval of approximately 360 days. Thin cows are anestrous for a longer period of time and are therefore more likely to be open at the end of the breeding season. They may also result in lighter calves to sell the next year because the calves from these thin cows will be born later in the calving season. 
Let's consider the impact of an estrus and calving date for a herd in BCS 4 that calves from March 1 until May 10. Bull turnout is May 20 and the length of anestrus for mature cows (BCS 4) is 90-120 days and for young cows is 120-150 days. A mature cow (BCS 4) that calves on March 1 will begin to cycle sometime in the month of June and will likely conceive later than desired. However, the thin mature cow that calves on April 20 won't cycle until end of July/middle of August and her opportunity to conceive is minimal. Thin two-year olds nursing their first calf will likely begin cycles 4-5 months after calving and will have limited opportunities to conceive. 
Reducing nutrients before calving is a huge mistake but this strategy has been circulating in the beef industry for decades. At first glance, it seems logical, but no research supports the notion of limit ­feeding cows prior to calving and this dogma has cost the industry millions of dollars. So, beware of reducing feed to your cows at calving. It won't impact calf size but will impact your cows ability to rebreed. 

Forage Timely Tips: April

■    Graze cover crops using temporary fencing.
■    As pasture growth begins, rotate through pastures quickly to keep up with the fast growth of spring.
■    Creep-graze calves and lambs, allowing them access  to highest -quality pasture.
■    Finish re-seeding winter feeding sites where soil disturbance and sod damage occurred.
■    As pasture growth exceeds the needs of the livestock, remove some fields from the rotation and allow growth to accumulate for hay or haylage.
■    Flash graze pastures newly seeded with clovers to manage competition.

Thompson Optimistic about Passing Farm Bill 

House Ag Committee Chair promises legislation before Memorial Day. 

There just might be a new farm bill this year. During a Tuesday press briefing with the National Association of Agriculture Journalists, House Agriculture Committee Chair Glenn "GT" Thompson indicated committee members are close to finalizing a new farm bill. 
While he revealed few specifics, Thompson says the bill should be agreeable to members of both parties. Notably, he says new farm safety net program funding will not come from nutrition program cuts or repurposed Inflation Reduction Act funds, two key sticking points with Democrats. "While I wish we could have gotten this farm bill done earlier, there were some forces outside of our control that obviously prevented that," Thompson said. "However, I'm happy to say without a doubt that the committee will mark up a farm bill before Memorial Day." 

Over the coming weeks, he says final details will be ironed out with USDA and the Congressional Budget Office. Thompson says he doesn't consider those issues to be "hurdles," just a few "technical things." 

Senate Agriculture Committee Chair Debbie Stabenow, who spoke shorty before Thompson, says things are also moving along in the Senate. While she wasn't ready to predict a date for Senate legislation, she says committee members have finished "over half" of the 12 farm bill titles. 
"We've gotten substantial bipartisan agreement and have been able to, I think, predominantly bring those together," she said. "We're still working on the rest of it, so we'll move once I know that we can actually get this done." 

While getting bills through the committees would be a significant achievement, it would also be just the start of what could be a contentious process. Both chambers of Congress would have to agree on a final bill to send to President Biden. Many of the "forces outside of our control" that Thompson alluded to still exist. 

Due to the razor-thin majority Republicans hold in the House, Speaker Mike Johnson will have to get Democrat support for anything to pass. That could anger more conservative congressional reps who are already upset with Johnson for working with Democrats. Rep. Marjorie Taylor Greene is still considering moving forward with a motion to vacate that could potentially remove Johnson from the Speaker chair. 

During remarks on Monday, Agriculture Secretary Tom Vilsack praised Thompson's efforts to pass a bipartisan farm bill but cautioned that the key will be in the details. 

Vilsack noted 21 Republicans on the House Ag Committee are also members of a study group that recently issued a 2025 budget proposal titled "Fiscal Sanity to Save America." That report includes a recommendation to eliminate all subsidies for farmers with an adjusted gross income of more than $500,000. The study proposes a $40,000 cap on subsidies for all farmers and a 14% reduction on crop insurance premium assistance. Conservation and technical assistance programs could also be significantly cut or eliminated altogether.                                                        
Vilsack called the recommendations "pretty radical," and example of just how hard it will be to get a bipartisan farm bill passed. 
Stabenow said she was "shocked" when she heard the study commission's recommendations. Still, there is no indication those provisions are being seriously considered during the current farm bill negotiations. Thompson, for one, says he's excited with the progress lawmakers have made. 
"I think we've found some pretty creative ways to find what I think will be a transformational and highly effective farm bill," he said . 

Upcoming Forage Events

Posted on April 3, 2024

Electric Fence Troubleshooting School-This school is designed to provide students with tips on installation of new and troubleshooting of existing electric fencing, June 12 in Morgantown KY. Go to https://forages.ca.uky.edt /event to register or for more information, or contact Caroline Roper at 270-704--2254 or caroline.roper@uky.edu 

Originally published by UK Forage News, April 3rd, 2024

Economic & Policy Update

E-newsletter Volume 24 Issue 3
Department of Agricultural Economics                                                                                                                                                                                                                                    University of Kentucky

Stocker Outlook for 2024 
Author(s): Greg Halich & Kenny Burdine 
Published: March 28, 2024 

Temperatures are getting warmer, the grass is getting greener, and the calf market is starting to take off. These are tell-tale signs of spring in Kentucky, and we are experiencing all three. Calf prices in the Commonwealth have increased by more than $50 per cwt since early December. The highest historical monthly state average price for a medium/ large frame #1-2 steer was reached in March of 2015 and we are on track to exceed that price level this year. There are signs pointing to an early spring, which likely means that some stocker operators have begun placing calves in order to get ahead of the spring price run. At the time of this writing (March 13, 2024), fall 2024 CME© feeder cattle futures were trading around $270 per cwt, which is more than a $15 premium over the April contract. This suggests that heavy feeder cattle prices should get higher as we move through the year and partially explains the strength in calf prices. But the strong calf market does create questions for stocker operators purchasing calves for sale this fall. 

The purpose of this article is to assess the likely profitability of summer stocker programs for 2024 and establish target purchase prices for calves based on a range of return levels. While it is impossible to predict where feeder cattle markets will end up this fall, producers need to estimate this and not rely on the current price (March) for 750-850 lb. feeder calves. The fall CME© feeder cattle futures price (adjusted for basis) is the best way to estimate likely feeder cattle prices for fall. Grazing costs including pasture costs, veterinary and health expenses, hauling, commission, etc. are estimated and subtracted from the expected value of the fall feeders. Once this has been done, a better assessment can be made of what can be paid for stocker cattle this spring in order to build in an acceptable return to management, capital, and risk. 

Key assumptions for the stocker analysis are as follows: 1) Graze steers April 1 to October 15 (197 days), 1.4 lb./day gain (no grain feeding), 2% death loss, and 7% interest on the calf. The interest rate used in this analysis may seem high for producers who are self-financed or have very low interest rates, but is likely pretty close for those going through traditional lenders. Given these assumptions, sale weights would be 775 lbs. and 875 lbs. for 500 lb. and 600 lb. purchased calves, 
respectively. Using a $270 CME© futures contract price for October 2024 to estimate sale price, a 775 lb. steer is estimated to sell for $2.62/b and an 875 lb. steer is estimated to sell for $2.54/lb. This estimate uses a -$10 per cwt basis for an 800 lb. steer and a $8 per cwt price slide. 

Estimated costs for carrying the 500 and 600 lb steers are shown in Table 1. Stocking rates of 1.0 acre per 500 lb. steer and 1.2 acres per 600 lb. steer were assumed in arriving at these charges. Most of these are self-explanatory except the pasture charge, which accounts for variable costs such as bush-hogging, fertilizer, seeding clovers, etc., and is considered a bare-bones scenario. Sale expenses (commission) are based on the assumption that cattle will be sold in larger groups and producers will pay the lower corresponding commission rate. However, producers who sell feeders in smaller groups will pay higher commission rates which could exceed $50 per head based on the revenue assumptions of this analysis. Any of these costs could be much higher in certain situations, so producers should adjust accordingly. 

Table 7: Expected Variable Costs 2024 
500 lb. Steer 600 lb. Steer 
Pasture Charge $30 $36 
Vet $30 $30 
Interest $63 $69 
Death Loss $34 $38 
Sale $25 $25 
Haul $18 $21 
Mineral $20 $24 
Other (water, etc.) $20 $24 

Target purchase prices were estimated for both sizes of steers and adjusted so that gross returns over variable costs ranged from $100-$200 per head. Normally we would use a range of $50-$150 per head, but we feel that the higher return range will be more representative this year. This gives a reasonable range of possible purchase prices for calves this spring. Results are shown in Table 2. For 500 lb steers, target purchase prices ranged from $3.19 to $3.38 per lb. For 600 lb. steers, target purchase prices ranged from $2. 93 to $3.09 per lb. For an estimated gross profit of $150 per head, target purchase prices were $3.28/lb. for 500 lb. steers and $3.01/lb. for 600 lb. steers.
As an example of exactly how this works for a 500 lb steer targeting a $150 gross profit: 
775 lbs steer x $2.62 (expected sale price) $2031 
Total Variable Costs - $240 
Profit Target - $150 
Target Purchase Cost $1641 
Target Purchase Price= $1641 / 500 lbs.= $3.28 / lb. 
Total Variable Costs $240 $266-
Note: Interest and death loss varies slightly by purchase price. 

Table 2: Target Purchase Prices For Various Cross Profits 2024 
Gross Profit 500 lb. Steer 600 lb. Steer 

$100 $3.38 $3.09                                                                                                                                                                                                                                                                                $125 $3.33 $3.05                                                                                                                                                                                                                                                                                $150 $3.28 $3.01                                                                                                                                                                                                                                                                                    $175 $3.23 $2.97                                                                                                                                                                                                                                                                                $200 $3.19 $2.93

NOTE: Based on costs in Table 1 and sale prices of $2.62/lb. and $2.54/lb. for 775 lb. and 875 lb. sales weight respectively for 500 lb. and 600 lb. purchased steers. 

For heifers, sale price for heavy feeders will be lower than comparably sized steers and they will not 
generally gain as well. In this analysis, we assumed the price discount for these heifers is $12 per hundredweight lower than the same weight steers and we assumed heifers would gain 10% slower than steers. With these assumptions, purchase prices would have to be $0.27 /lb lower for 500 lb heifers and $0.24 lower for 600 lb heifers compared to the steer prices found in Table 2. Thus, when targeting a $150 per head gross profit, breakeven purchase prices were $3.01/lb for 500 lb heifers and $2.77 /lb for 600 lb heifers. 
Your cost structure may be different from that presented in Table 1, and if so, simply shift the targeted gross profit up or down to account for this. If your costs are $25 higher per calf, then you would shift each targeted profit down by one row: For example, you would use the $175 gross profit to estimate a $150 gross profit if your costs were $25 higher. Another way to evaluate this is that a $1 increase in costs would decrease the targeted purchase price by $0.20 per cwt for 500 lb steers and $0.17 per cwt for 600 lb steers. 
It is important to note that the gross profits in Table 2 do not account for labor or investments in land, 
equipment, fencing, and other facilities (fixed costs). Thus, in the long-run, these target profits need to be high enough to justify labor and investment, as well as a management return. Typically, by the time this article is written in mid-March, calf prices are approaching levels that would place returns on the upper end of the profit range analyzed. While there is a lot of variation in the price of calves across Kentucky right now, a lot of calves are selling well below many of the target purchase prices estimated in this analysis. This is all the more reason that stocker operators should carefully think through their budgets and make rational purchasing decisions. 

In all likelihood, stocker operators will spend more money on calves this spring than they ever have. This means there will be a great deal of capital at risk from day one and there is always uncertainty about fall sale price. 2023 served as a perfect risk illustration as the feeder cattle market dropped sharply from mid-September until mid-December. The impact on the value of heavy feeders was drastic. That does not mean the same will happen in 2024, but it does speak to the importance of risk management strategies to protect potential returns. Forward contracts, futures and options have long been utilized for price risk management and remain viable strategies today. Livestock Risk Protection (LRP) insurance has greatly increased in popularity over the last few years and continues to be a viable strategy. LRP works similar to a subsidized put option in that it provides downside price protection (for a premium), but also allows the producer to capitalize on rising prices. But the beauty of LRP lies in its scalability, as it can be purchased in almost any quantity. Regardless of what risk management strategy is utilized, time spent considering price risk management is likely time well spent in these volatile markets. The best way to ensure profitability is to budget carefully and to manage downside price risk. 

Upcoming Events 

Hook and Cook Program 
Location: Russell County Extension Office 
2688 S. HWY 127, Russell Springs, KY 42642 
Date and Time: May 21st, 23rd & 24th 
All Sessions 5:30 - 8:30 pm CST 
NOTE: The May 24th session will require participants to have a fishing license.