The company said it plans to resume production on Monday, following a blaze Wednesday night in the facility’s loading dock area. The plant processes about 6,000 cattle per day, which accounts for roughly five per cent of daily U.S. production.

Local media outlet KSN News reported the fire began in loading trailers and spread to the building. All employees were safely evacuated. Most of the damage was to trailers loaded with boxed beef, however overhead doors in the loading dock and the building’s exterior walls were also affected.

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Intensifying production where it makes most sense has the lowest impact, according to the study, and supports research showing that grain-finished beef has a lower carbon impact than grass-finished beef.

Why it matters: There’s significant pressure on the livestock sector to reduce carbon emissions, but having proper science to start the conversation is important.

“There has long been a popular belief that grass-fed beef is environmentally better than grain-fed or confined beef operation,” says Daniel Blaustein-Rejto, lead researcher on the project. “However, for a number of years academic papers have been suggesting the opposite.”

The Breakthrough Institute is an American non-profit think tank that looks for technological solutions to environmental problems. Blaustein-Rejto says it takes no company or industry funding for research such as the beef project.

“When you’re producing beef more intensively, like in the grain-fed system, ultimately there’s less total land required, even considering the corn and soy acres that are needed to produce feed,” he says.

Blaustein-Rejto and his colleagues analyzed about 100 studies from 16 countries to reach their conclusions.

The researchers used regression analysis to determine that using 10 per cent more land is associated with a 4.8 per cent increase in production emissions, but also a nine per cent increase in carbon footprint, including production emissions, soil carbon sequestration and carbon opportunity cost.

The researchers say that for the first time, they also looked at what they call carbon opportunity costs — the potential carbon impact of land remaining in a different state than beef production.

This highlights the issue of increased demand being filled by areas with new production, versus being filled in places where beef is already produced.

Most studies of carbon impact and cattle don’t account for carbon sequestration of land if it is turned back into natural vegetation such as forest, or the potential of grazing cattle to sequester carbon, he says.

“In the coming decades, demand for food, including from beef and other animal products, is expected to keep rising,” says Blaustein-Rejto.

That pressure can only be filled in two ways: increasing intensification and yields or increasing land footprint.

“Unfortunately, a lot of new production even today around the world happens through extensification, through farmers converting grasslands and other lands to pasture and to cropland,” he says.

It’s better to intensify current production systems that have lower impact, as has been done in Canada and the United States where grain is used in the final growth phase of animals, he says.

In fact, choosing to use land in a less productive way, where it makes sense, tends to shift production to areas where more harm can occur.

Brazil illustrates the point. Forests in that country are converted to grassland and cropland. That’s driven by demand pressure from the rest of the world, and by policy changes; for example, when a significant proportion of the American corn crop is used for ethanol versus livestock feed, or when European countries increase regulations on farms.

Western Canada’s system of using native prairie grassland for grazing doesn’t fit the assumption that any land use change that is better for cattle will be negative for the ecosystem and carbon.

“Maintaining carbon in the soil root system by preserving grasslands is really important for a number of environmental and ecological reasons, including carbon sequestration,” says Blaustein-Rejto.

“So certainly, I can imagine that there are cases where preserving grasslands may be ultimately beneficial. It’s not something our study sheds much light on, especially in the Canadian context.”

Most Canadian cattle, while raised for most of their lives on pasture, are finished using grain in feedlots.

The study also looked at the carbon impact of grazing cattle to market weight and concluded that the other carbon negatives in the production system outweigh any sequestration benefits from grazing cattle.

The bottom line for Blaustein-Rejto is that higher productivity has environmental benefit, no matter the type of operation, compared to expanding production in new areas.

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Blizzard-like conditions had left meatpacking workers stranded on highways on Monday while others spent the night at the slaughterhouses where they work, the companies and state officials said.

Disruptions at plants slashed beef production at a time prices remain high after U.S. ranchers reduced their herds. Nationwide, meatpackers slaughtered an estimated 94,000 cattle on Tuesday, down 25 per cent from a week earlier, the U.S. Department of Agriculture said.

Cargill, a major producer of ground beef, said it idled a plant in Dodge City, Kansas, due to snow, cold and a loss of power. The plant will re-open once power returns and conditions are safe, which could come as early as Wednesday, the company said.

Cargill is “committed to minimizing any disruption” to customers, spokesman Chuck Miller said. He confirmed that “some employees got stuck on the road outside the plant” and said the company hired tow truck drivers to assist them.

About 50 employees out of 2,850 stayed at Cargill’s plant due to road closures, while the majority “made it home,” Miller said.

“Half of our plant has had power and heat for a majority of the winter storm, and everyone has had access to food, water and assistance,” he said.

In the eastern half of the U.S., wintry weather knocked out power to over 418,000 homes and businesses in 12 states.

Tyson Foods said it canceled both shifts at its sprawling beef plant in Holcomb, Kansas, after allowing some workers the option of “sheltering in place” there with a hot meal and drinks on Monday night. Employees were able to leave by Tuesday morning, the company said.

The winter storm left about 60 to 100 vehicles stuck on roads near Cargill’s plant on Monday, and others stranded near Tyson’s facility, said Steve Hale, spokesman for the Kansas Department of Transportation. The department advised Cargill on Monday that highways were being closed, he added.

“The roads are already treacherous and now we’ve got lots of vehicles that are all over the place, either stranded or waiting to get in or out of these plants,” Hale said.

Outside of Tyson’s plant, a highway resembled a parking lot with vehicles left overnight in the middle of the road and on the shoulder, said Trooper Anthony Calderon of the Kansas Highway Patrol.

“It looked like you were at the mall,” he said.

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“This update sets us up for continued progress to support beef farmers and supply chain participants to build trust in the
sustainability of Canadian beef,” said Kristine Tapley, chair of CRSB’s Framework Committee, in a new release.

The framework was launched in 2017 as a bid to recognize and monetize sustainable beef production practices. It came up for a scheduled five-year review in 2022.

The CRSB said a committee, composed of representatives from across the beef supply chain, reviewed all parts of the framework. It also got input from stakeholders, experts and the public.

This included a thorough review of the CRSB’s standards for production and processing; strengthened and protocols for certification to improve clarity and consistency; updates to chain of custody requirements; and how CRSB claims are enabled.

The claims associated with certified operations and sourced CRSB certified beef were also updated.

As of October, the Canadian Cattle Identification Agency (CCIA) is providing tracking of live cattle (outside of Quebec) for the program.

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This past week, focus of finishing feedlots switched from yearlings to calves. While there was still strong demand for grass yearlings, major operations were shopping aggressively for larger packages of quality calves. U.S and Ontario buying interest was also noted in the eastern Prairie regions in the lighter weight categories. There is a $22.50 carrying charge between the nearby October feeder cattle futures and the August 2024 contract. This price structure encourages feedlots to secure ownership earlier, rather than later. Despite drier conditions and poor pasture ratings, cow-calf producers are not selling calves earlier than normal.

South of Edmonton, medium- to larger-frame red steers straight off pasture weighing 952 lbs. sold for $312 and medium- to larger-frame mixed grass heifers averaging 895 lbs. dropped the gavel at $300. In the Calgary region, medium- to larger-frame black Limousin-based steers coming fresh off the range weighing 848 lbs. reportedly traded for $331. Northwest of Winnipeg, lower-flesh grass steers of Angus genetics weighing a shade over 800 lbs. silenced the crowd at $348. In central Saskatchewan, thin, medium-frame, British-blended heifers off pasture with recorded weight of 844 lbs. were last bid at $304.

In Lloydminster, Simmental-based steers weighing just under 700 lbs. caused the crowd to lose breath as the closing bid came in at $383. Southwest of Calgary, short-weaned, tan mixed steers off pasture averaging 640 lbs. notched the charts at $391. North of Red Deer, black mixed semi-weaned steers with full processing records weighing 520 lbs. set the bar at $412 and tan heifers weighing 550 lbs. moved through the ring at $371.

Northwest of Winnipeg, a small group of red and black bawling steers weighing 450 lbs. supposedly sold for $482. In Prince Albert, the market report had exotic featherlight steers averaging 300 lbs. with a sale price of $533.

Alberta packers were buying fed cattle on a dressed basis at $390/cwt, unchanged from last week. Live prices were quoted at $230-$231/cwt f.o.b. the feedlot in southern Alberta. For April 2024, Alberta live cattle prices are projected to reach up to $260. We’re forecasting U.S. 2024 third-quarter beef production to be estimated at 6.25 billion lbs., down 400 million from the third quarter of 2023. This is elevating prices for lighter calves.

— Jerry Klassen is president and founder of Resilient Capital, specializing in proprietary commodity futures trading and market analysis. Jerry consults with feedlots on risk management and writes a weekly cattle market commentary. He can be reached at 204-504-8339 or via his website at ResilCapital.com.

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The food sufficiency metric must reflect what each type of food production supplies, including environmental benefits, social structures or sustainability credentials, said Dr. Vaughn Holder, Alltech’s ruminant research director.

Why it matters: Accurate analysis of livestock’s impact on global food security can swing the food production, safety and security narrative.

“The metrics are important when we’re trying to match up protein supply with protein requirement. You have to use the same metric,” Holder said during the recent Beef Farmers of Ontario annual general meeting.

For example, land and freshwater use and GHG measurements position wheat, rice and maize as the most efficient with the lowest GHG production. However, Holder said measuring the plant’s protein digestibility or amino acid production changes the story.

A paper entitled The Population Protein Intakes and Food Sustainability Indices: The Metric’s Matter, released in June 2021, dissected plant and animal-based protein contributions based on protein, population protein intake and associated environmental metrics of 190 countries and territories.

Initial results indicated almost every country had sufficient protein supply with current plant and ani- mal production.

“Protein isn’t everything, but it’s a pretty important measurement of our sufficiency of food production from a global basis,” he said. “Problem is, this is crude protein, right? And our requirement for protein is in digestible amino acids.”

When corrected for plant-based protein digestibility and amino acid profile, 103 countries didn’t meet the requirement, as measured by the Digestible Indispensable Amino Acid Score. Eliminating animal protein from the data set resulted in a significant deficit.

“So, a totally different narrative when you correct for the appropriate metrics. Wheat, rice, maize, when you don’t correct it, look like that’s the way to go for the future of food,” Holder said.

“But when you correct those for the amount of food they’re actually providing, you end up with rice and maize being more greenhouse gas intensive than eggs and pork.”

The metric has eggs, pork and milk using less fresh water and about the same land per crude protein production as rice and maize.

This is a direct contrast to the United Nation’s agenda toward plant-based proteins, especially when the world needs to increase food supply, said Holder.

Protein isn’t everything

A 2021 study, conducted by Ty Beal on the environmental impacts of food based on nutrient density, turned the current plant-based narrative on its head.

“Beef liver is the most resource or greenhouse gas un-intensive food you can eat when it comes to these nutrients (iron, zinc, calcium, folate, vitamins A and B12),” said Holder. Whole grains and refined grains are the worst.

Only ruminants produce more human-edible protein than they eat, with cattle creating 2.8 times the protein by converting 14 kilograms of feed to produce one kg of beef. The ruminant’s diet consists of byproducts from grains and cereals unsuitable for human consumption.

Holder said on a yearly average, North American dairy cattle eat 40 million tonnes of byproducts (like distillers’ grain) and turn unrecoverable nutrients into food products.

Without ruminant consumption, the derivatives would be composted or sent to landfills, where off-gas would create five to 50 times the methane than if put through a cow.

He estimates the byproduct carbon footprint would be twice the enteric methane footprint of dairy cows in North America.

He also suggested that applying the fossil fuel conversation to agriculture’s biological cycle gives a false impression because it only measures methane emissions.

Soil and grasses naturally produce methane and CO2 emissions when uneaten grasses ferment and soil off-gasses. Then the methane breaks down in 10 to 12 years and returns carbon to the soil in a net carbon emission cycle.

A study of Buck Island in Florida, done by ecologists and animal scientists, measured the environmental consequences of the ruminant production cycle from an ecosystem standpoint.

“Ruminant nutrition is measured by everything that goes in and every- thing that comes out, and we say that’s the model,” he said. “That’s not the model. The ecosystem is the model.”

Researchers found the cattle operation on Buck Island, which is sub- merged half the year, is net sequestering. Although emissions were slightly higher with cattle on the land compared to not, the increase in carbon storage was substantial. Without the cattle, carbon sequestration was significantly lower.

Holder said the value of ecosystem service provided by cattle through cereal and grain consumption, which prevents off-gassing and increases carbon sequestration, should be noted as an industry strength.

“When we’re trying to supply food to the world, it’s kind of important that we measure this instead of how much grass they ate versus how much meat they put out,” Holder said. “Because the grass is not on our menu and if we take it off their menu, we’re not going to have anything on ours.”

Processing can’t replace production

The current narrative positions plant-based and alternative proteins as meat replacements in the food system, said Holder, but food production can’t be replaced with food processing.

“They are not producing food. If you look at the ingredients list, these exist within our food systems already and are accounted for in our food production measures,” he said. “Just because you found a way to mix together plants to make them taste like meat doesn’t mean you’ve revealed a new source of nutrients that can enter our food supply.”

Dr. Michael Rogers, a University of Guelph researcher, released a study measuring plant-based burgers’ contribution to food security versus beef burgers through nutrient absorption and microbial gut population impact.

The high glycemic and lipemic index of the plant-based burger created a spike in glucose and fat and increased clostridium and citrobacter levels. Holder said citrobacter is a pro-inflammatory associated with irritable bowel syndrome and gastroenteritis.

The beef burger increased proactive bacteria species, some of which offer protection against diarrhea and produce beneficial short-chain fatty acids.

Producers and commodities need vital ammunition to argue against proposed food system changes and the consequences, said Holder.

“We don’t just need more food. We need more real food. That is clear.”

Holder said livestock producers and associations need to increase advocacy for their sector and talk about what they’re doing, why and the positive impact it makes.

“We can turn the footprint of agriculture off completely. We will also turn off food production and humankind as well, which will take care of all the problems,” Holder said.

“But that’s not the route we want to go. We already don’t have enough food. This is not a conversation that we can allow to happen. We need to point out the holes in these arguments.”

The post Another way to look at environmental metrics appeared first on Farmtario.

“Unfortunately, the ownership paused operation at the end of January for financial reasons,” said TruHarvest vice-president Chuck Oulton, when contacted at the Toronto plant in early March.

“It’s tough. The team worked very hard over two years to build what I think was a very successful business. It’s just unfortunate there wasn’t financing to build the capacity at the plant to where we wanted to get to, and to where we would have been able to meet the demand that’s out there.”

Why it matters: The Toronto plant closure significantly decreases slaughterhouse rail space available to Ontario’s beef producers.

Financed through the leadership of the Forest-based Burgin family, TruHarvest took over the former Ryding-Regency processing plant in early 2021. According to Oulton, the new company established a strong reputation in beef niche markets, including halal and kosher.

“I feel badly for some of our customers,” he said. “These companies, especially when it comes to kosher, really have no other place to go right now.”

The company vice-president said it was difficult to tell the plant’s 160 employees about the pending closure.

TruHarvest’s two-year business plan called for a production increase to 1,500 head a week, but instead it handled just 700 head a week at the time of closure, with employees working three days a week instead of five.

“With a new business, there’s only so much chance you have with the banks to get financing for expansions,” Oulton said. “The Burgin family put a lot out there to try and make this a success. I really do think they gave it their all.”

He believes there was justification for more provincial and federal funding to assist with TruHarvest upgrades, “but there just doesn’t seem to be any support from the government’s perspective.”

Cattle prices at sales yards have been strong over the last several months, which put upward pressure on processing costs.

“The market is the market. It’s not that part of the business that (led to closure),” said Oulton. “It’s the overhead.”

He estimated that a one-time investment of $5 million to $6 million would have allowed TruHarvest to increase capacity by 500 head per week. He still hopes “somebody comes up and want to do something with the operation” though they will need deep pockets to make it happen.

The plant and the potential employee base remain, he said.

“One of the hardest things to accept is that we worked for two years to build that great team.”

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Cargill recently announced the Certification Recognition Credit, an incremental payment issued in conjunction with existing qualifying cattle credits for cattle processed in 2022.

“We want to recognize that just being certified is a huge value to all of us,” said Cargill’s Jeffrey Fitzpatrick. “It’s gratifying to see how many producers have certified.”

Why it matters: The beef sector has several levels of production and funds from programs don’t always flow to all of them.

Fitzpatrick joined Cargill in 2020 to become BeefUp Sustainability’s North American engagement lead, but he was also heavily involved in beef programs as McDonald’s national sustainability and agricultural lead for 16 years.

BeefUp Sustainability is Cargill’s program to lower its carbon emissions by 30 per cent by 2030.

Through the pilot program, launching in early 2023, the Canadian Cattle Identification Agency (CCIA) will track producer credits applied to certified operators who maintained a Canadian Roundtable for Sustainable Beef certification through 2022 into 2023.

Using that data, Cargill will make incremental payments to qualified participants to ensure everyone receives a minimum of $400 from the program regardless of gaps in the supply chain.

[RELATED] Funding, quality industry programs play a big part in on-farm beef sector investments

Previously, if cattle moved through a non-certified producer in the value chain, (for example, the cow-calf and feedlot operators were certified but not the backgrounder,) they couldn’t claim the $20 per head premium.

Operators who made $400 or more from the program throughout the year will not qualify for payments.

Fitzpatrick said the payment will remain after the pilot ends, subject to modifications.

In addition to the credit, Cargill is partnering with the beef roundtable to make a broader-scale change within the program. In the second quarter of 2023, it will launch a monthly payment schedule reflecting the prior month’s slaughter. This is designed to address the two-to-four-month delay producers now encounter.

“Naturally, with doing that, you’re likely to see smaller payment amounts, but they’re going to come more frequently, so hopefully that will help tie more directly to what animals these credit dollars attach to,” said Fitzpatrick.

Cargill began working with the CCIA last year to access the data that links animals to producers more efficiently and at no extra cost.

Fitzpatrick said data privacy and protection were common concerns raised by producers who were reluctant to participate in the audit, so it required a deliberate and thoughtful approach.

“The primary goal here is just really about focusing on maintaining trust with producers as we go,” he said.

Additionally, Cargill is working with cattle buyers on a system that provides ear tag reports on animals qualified for the program. While the tool may be feeder-facing, it can also apply to backgrounders and cow-calf operations to engage more of the value chain in the program.

“We’re encouraging feeders to take that one more step back and talk to the people they’re getting supply from — the cow-calf people, backgrounders — to say these ones qualified and these didn’t,” said Fitzpatrick.

The demand for CSBP products has far outstripped supply, reinforcing the program’s value from the producer side and from Cargill’s customer retailers like Loblaws and McDonald’s.

Program enhancements focus on retaining certified producers and encouraging new ones to join. The audit differences between CRSB and Ontario Corn Fed Beef Quality Assurance are negligible, and the $400 recognition credit and $20 per head premium offset the cost of certifying every five years.

The goal isn’t to create a niche product available only to those who pay a premium, but rather, to show that all Canadian beef production is sustainable, he said.

“Canada produces the safest, most sustainable, highest-quality beef in the world. This is a way to recognize the whole value chain, not specific actors.”

Fitzpatrick acknowledged these programs address only some of the issues, but Cargill aims to benefit all partners while recognizing upfront certification is a critical component.

Fitzpatrick said BeefUp and CSBP provide retailers and grocers with a powerful communication tool that connects with consumers of all ages.

The programs reflect a system with third-party audits, chain-of-custody requirements and proof of certified beef and producers’ dedication to quality and sustainability, he said.

“That will make them continue to want to buy (beef) and feel positive about it. The worst thing that can happen is that people start feeling beef is a guilty pleasure. We want people to understand the best thing you can do for climate change today is to eat Canadian beef.”

The post Moving sustainability funds down the supply chain appeared first on Farmtario.

“We’re all businesses, and I think that’s a really important point that often gets overlooked in producer meetings like this one,” said Thomas. “We are really trying to generate a positive return on assets. Which is challenging … (when) we’re facing ever-increasing annual costs.”

Why it matters: There are ways to cut costs on cow-calf operations, but first question whether each cow is making money.

The University of Missouri state beef reproduction specialist shared his insight on the “silent killer” of cow-calf profitability at the Grey Bruce Farmers’ Week Beef Day.

“Remember that livestock comes from two words, not one word. It’s live, stock, OK?” said Thomas. “It’s stocks, investments, assets — they just happen to be alive.”

Despite the feeder calf market projected to be strong into 2023, additional costs will eat potential margins, he said, but using ratios like per-cow income over operating cost and income over total costs will help determine cow depreciation. 

He pointed to the 2023 Northern Missouri beef cow-calf income over operating costs planning budget for fall calving. The per cow income over operating costs was -$206, and the income over total costs sat at -$395.

“A fundamental truth, from a business perspective, is when cows are losing money on an individual animal basis, particularly when that top line is also negative, scale does not do very much for us,” Thomas said.

“We’re just scaling up a business that doesn’t actually have a profit margin in any of the products it produces.”

Thinking beyond typical industry practices

A commercial cow-calf producer could assess feed, stored feed and forage costs as the most accessible area to cut. While that could help, it could also deplete revenue by preventing a cow from reaching its optimal performance. Reducing costs and reaching optimal performance requires a more thoughtful approach.

A better approach is to think about the cause of the costs, said Thomas.

“For example, in that -$400 range in this budget, the real question I should be asking is, why. Why is my feed and stored forage budget so high?”

He compared the number of days of hay fed in Minnesota, Missouri and Mississippi and found they are similar in length and calving season. It forced him to question the reason for having long hay-feeding seasons, high winter feed costs, long calving seasons and potentially reduced productivity. 

Could those costs be better managed by looking at the expense of cow replacement, which is the second highest cost of production?

Thomas said it’s not unusual for producers to delay marketing cull cows due to perceived overvalue.

“Doesn’t that sound like later bred cows, or later bred heifers, or cows that failed to conceive in the breeding season that we want them to conceive in?” Thomas said.

“We are so tempted to make some kind of decision by rolling those animals into another breeding season, or whatever it is, choosing not to market them — because we overvalued them.”

Early breeding cows are more efficient

Using the example of a 60-day breeding and a 60-day calving season, Thomas explained how annual cow depreciation costs are calculated based on early conception. 

Those who catch and calve within the first day of breeding and calving seasons take full advantage of the 82-day break to cycle through a natural period of suppressed reproductive functionality and cycle around the first day of the next breeding season. 

Cows that catch and calve at the end of the 60-day breeding and calving seasons hit the first day of the next breeding season in the non-cycling postpartum estrus, incapable of becoming pregnant on the first day and disproportionately likely to be open at the end he said.  

“Because she only has cyclicity for the later portion breeds if she does cycle at all, she may only have one opportunity to conceive in a 60-day breeding season,” Thomas said. “That is a substantially different weaning weight produced by that calf and cow in the next year, and so a substantially different amount in revenue.”

Early breeding cows consistently wean heavier calves through their first six years, while a late-breeding cow produces and weans fewer and lighter calves over its lifetime. 

“Start to be really radical about your replacement heifer selection if you’re a commercial producer,” advised Thomas. “That pounds of calf weaned is really what you get paid on.”

Basing heifer replacement selection on early conception will generate the best return on assets. 

“To get the number of heifers that conceive early, we often need to develop a larger proportion of our heifer calf crop,” Thomas said, far more than the 15-to-18 per 100 usually selected. 

He suggested producers consider heifers as a “prospective replacement candidate” instead of a “replacement” until after they’ve preg-checked as early conceivers. 

Cow-calf producers invest in two different but overlapping enterprises, he said. On one side is the cow-calf operation and on the other is heifer development. The cow-calf side sells weaned heifer calves to the heifer development operation, which in turn sells replacement heifers back to the cow-calf.

“You’re both the buyer and the seller in that transaction, and that’s always really tough, so don’t sell yourself these poorly profitable, late-conceiving replacement heifers because you happen to be the seller and not just the buyer.”

Thomas has five rules to assess culling versus marketing cows. 

First is remembering you buy every cow, because the decision not to sell something, from a balance sheet perspective, is deciding to reinvest or rebuy it.

Strategically marketing cows likely not to conceive in the following breeding season and investing the equity into early cyclers who will consistently provide a heavier calf at weaning is worth culling early.

“That early conceiving animal that we replaced (the culled cow) with will also be more likely to hold her value and be bred back next season,” said Thomas.  

He added that cows who calve early in the season wean larger calves than late-season calves. 

“A modern beef calf will often gain about two pounds a day from birth to weaning. So, a 60-day difference in calf age can easily be 120 pounds,” Thomas said.

From a heifer longevity perspective, heifers that calved during the first 21-day period with their first calf remained in the herd longer than heifers who calved later. 

Between 70 and 80 per cent of those early-calving heifers bred back successfully for a second calf, while late-calving heifers achieved 65 per cent, and by year three, the divide increased.

“The real cost is the difference between cow replacement costs and cull cow sales. It’s that marginal difference we need to be controlling,” said Thomas. “It’s not necessarily only this cost of cow replacement.”

In the U.S., a weaned heifer that is bred sees a sharp increase in market appreciation value and two-year-old bred heifers that successfully breed back see another rise in appreciation. Strong performance throughout years three to five shows value retention before rapidly depreciating in years six to eight, after which lower value levels stabilize due to age. 

However, a two-year-old that failed to breed back and is too old to enter the premium quality beef chain has a much lower value, and a three-to-five-year-old open cow’s value is half of its bred-back counterpart. 

“It’s a tremendous value difference that we lose in that production cycle simply by failing to get those cows bred back, or failing to market those cows as bred cows rather than open cows,” said Thomas.

The post Are your cows being overvalued? appeared first on Farmtario.

That’s not an absolute statement. COP information from producers across the country over the past couple of years shows that some smaller operators with various-sized animals can be profitable as well.

But on average, the farms or ranches with 200 to 300 or more head running smaller-framed cows — between 1,200 and 1,300 pounds — tended to be the most profitable. The key is these larger operations tended to have higher returns and lower costs than smaller operators — generally the economies of scale improved profits.

Creating benchmarks

Farm profitability and cow size are part of the information being collected through a three-year project known as the Canadian Cow-calf Cost of Production Network, says Canfax executive director Brenna Grant.

“It is important for producers, particularly when making marketing decisions, to know their cost of production and also know how their operations compare with other beef operations. So we were hoping as we collect this information it will provide producers with a useful benchmarking tool.”

Collecting data for the COP network is heading into the final year of the initial three-year project. The deadline for producers to join the program and provide data from their farms was the end of November, but as of early December, anyone interested in being part of the project in 2023 can contact Canfax by email at: crs@canfax.ca to see if there are still time or room to join. The COP network can offer participating producers a $500 honorarium funded by the Beef Cattle Research Council. The three-year project wraps up in 2023, but it’s hoped funding will be available to extend it.

As of 2022, the COP Network was comprised of 46 benchmark cow-calf farms and three dairy-beef farms, with data collected from 186 participants across Canada. (Note: information collected from participating farms in 2022 was based on 2021 production information. Many parts of the country 2021 experienced a very dry growing season).

Comparing similar operations

Canfax research analyst Huiting Huang explains that the information provided by the 186 farms from across Canada was analyzed to determine similarities between production practices. Farms with similar production practices were combined to create a benchmark.

For example, one of the Alberta benchmarks is described as: “a cow-calf operation in the Aspen Parkland region of Alberta, Canada. This operation keeps Hereford and Angus animals, with a beef cow herd of 152 head. The cow-calf enterprise is located on 2,622 ac, in a semi-arid climate with chernozemic and gleysolic soils. Mean annual temperature is 1.5 C, and mean annual precipitation is 450mm with the majority of precipitation falling May-June.”

[RELATED] Alberta Farmer Express: Consider feed requirements for beef cattle during cold weather

Another benchmark for Saskatchewan is described as: “a cow-calf and yearling grasser operation located in the boreal transition ecoregion of Saskatchewan, Canada. This farm keeps Angus/Hereford cross animals, and maintains a beef cow herd of 350 head. The cow-calf enterprise is located on 3,083 ac. with predominantly black soils. Mean annual temperature is 1 C, and mean annual precipitation is 500mm.”

So again, from the information collected from 186 farms, they created 46 benchmark cow-calf operations. Anyone interested can log into the Canfax website, click on COP analysis and then find one of the benchmark farms that most closely resembles their operation. Producers can see how their production costs and returns compare with a similar benchmark operation.

More smaller cows

While the COP network covers a range of herd sizes, within provinces and nationally, Huang says data from these benchmark farms for the 2021 production year show that higher-profit farms tended to have more cows, smaller cows and lower costs per cow.

Herd sizes ranged from 35 head of beef cows to 950 head. Among the 46 benchmark cow-calf farms, 19 had fewer than 100 cows, 10 farms were in the 100-200 cow range, nine farms had between 201 and 300 and eight farms had more than 300.

The 2021 results indicated that farms with a larger herd were more likely to cover their cash and depreciation costs. In part, this refers to the operators being able to pay themselves a wage as well as being able to set money aside for capital costs such as machinery replacement.

For the two groups that had fewer than 100 or between 100-200 cows, only 47 and 50 per cent respectively were covering their cash and depreciation costs in 2021. Once the herd size gets over 200 head, the percentage of farms covering these costs increased to 75 to 89 per cent.

The major driving factor behind this pattern was the economies of scale, as larger herd operations were able to spread overhead costs over more cows. Grant says it doesn’t mean that smaller operations are necessarily going broke. It just indicates that smaller farms likely relied on other sources of income other than beef cattle — they either had cropping operations, diversified into some other enterprise or worked off-farm.

Cow size does matter

It was interesting to note that smaller cows played an important role in farm profitability.

Mature cow weights on the benchmark farms ranged from 1,200 lbs. to 1,540 lbs. with an average of 1,355 lbs. This is similar to the average mature cow weight reported in the 2017 western Canadian Cow-Calf Survey (1,374 lb.).

When all the benchmark farms were divided into three groups (namely low-, medium-, or high-profitable) based on net income, the high-profitable group in 2021 tended to have lighter mature cow weights — not by a huge amount, but enough to make a difference.

Looking at all benchmark farms, mature cow weights in the high-profitable group were an average of 47 lbs. lighter than the low-profitable group. Within the benchmark farms with fewer than 100 cows, the difference was even greater. Average mature cow weights in the high-profitable group were about 78 lbs. lighter than the low-profitable group.

For the farms with more than 100 cows, the medium-profitable group had the heaviest average mature cow weights, while the high-profitable group was about 20 lbs. lighter than the low-profitable group.

Figures show that smaller cows did result in fewer pounds of calf weaned and fewer pounds sold. As mature cow weights declined from the low- to high-profitable group, weaning weights also declined by 19 lbs. between the two groups. However, weaning weight as a percentage of mature cow weights was steady at around 41 per cent across the three groups.

Even though smaller calves meant fewer pounds of beef marketed, Huang says the lower costs of maintaining smaller cows appeared to offset the lower revenue on lighter calves and improved profitability. This may be particularly true for the drought-affected farms in 2021 given the skyrocketed feed prices and relatively stable cattle prices — it took less feed to maintain smaller cows.

Grant says information collected through the COP network sheds light on some of the commonalities of the profitable farms. The results showed that profitability did not relate to a specific production system, farm structure or region. Each operation had a unique approach to achieving financial success.

For more information on the Cost of Production Network visit the Canfax website and click on the “resources” button.

– Lee Hart is a longtime agricultural writer, the editor of Cattleman’s Corner and a former field editor at Grainews. His article was originally published in the Dec. 6, 2022 issue.

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