By Warren Rusche, SDSU Extension Cow/Calf Field SpecialistWatertown Extension Center
12:05 AM AKST, November 23, 2012
There's been a lot of ink spilled discussing the last growing season and its associated challenges. By now there's no secret that feed costs and availability are significant challenges for the beef industry, not only in South Dakota, but across the United States. Rather than focusing on the problems, this week I'd like to talk about what I feel are some opportunities for us here in South Dakota and the upper Midwest.
Genetics: Some of the best beef genetics in the country are produced here, both on the seedstock and commercial level. As input costs and cattle value increase, those genetic differences are worth more now than in the past. Where other parts of the country are trying to get, genetically speaking we're already there.
Feed: While not necessarily cheap, compared to many places in the country we're blessed with more options on the feed supply side. We've seen this year the value of being able to use cattle to add value to drought damaged crops that otherwise would have little to no value. We're also well situated to combine by-product feeds with lower-quality roughage to cut costs. I believe that our ability to integrate livestock and crop production will be a huge competitive advantage for us in the future.
People: I think that one of our greatest strengths is the management ability of the beef producers here in this region. If we think about management ability and the value of those differences, our advantages are worth more now when costs and cattle values are high compared to when feed was cheap and cattle weren't worth as much. When calves are only $80 per hundred, a two or three percentage difference in pregnancy rates is not nearly as valuable compared to when calves are worth $150 or more per hundred. Feed efficiency and performance has a greater value in a $7 corn world than when corn is only $2.
Where I think our opportunity lies is in the ability to combine those three strengths. There are places in the corn belt that can produce by-product and crop residue feeds like we can, but the infrastructure, know-how, and desire to raise cattle is disappearing or already gone. There are some really exciting approaches to integrating livestock with grain production in the works that we're in a perfect position to capitalize on.
We also have the potential to be the genetic supplier for large areas of the U.S. that may be looking to re-stock or expand when drought conditions ease. We might not be able to send cattle to the Gulf Coast of Texas, but we can ship commercial and seedstock to many other locations, not only in the U.S. but overseas as well.
My hope is that as we get close to Thanksgiving, that I've provided some dose of optimism. It's been pretty easy this year to get down about various aspects of the beef business, considering feed costs and a host of other factors. But I do think that it's important to not focus so much on the challenges that we lose sight of the possibilities that exist.
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