Wednesday May 08 Ag News

Cattle, other feedlot costs and the economy
Alfredo DiCostanzo, Nebraska Extension Beef Systems Educator

Data from the 2022 Ag Census now available online (List of Reports and Publications | 2022 Census of Agriculture | USDA/NASS) indicate that cattle feeders in Cuming County, Nebraska sold 561,000 cattle from 113 operations during that year. This figure is impressive as Cuming County feeders continue to lead our state in this category.

All cattle feeders strive to do the best they can to conduct their business. Yet, the business of feeding cattle rarely permits wide margins. Cattle purchases and many other expenses respond to market fluctuations well beyond the control of any cattle feeder. Many items are purchased at retail prices to produce a commodity that sells at wholesale price, which itself is affected by many external factors.

Viewed from a different perspective, items belonging to the expense side of the ledger generate economic growth in communities where the commodity is produced, or the service is

rendered. The largest of these expenses, by far, is the cost of feeder cattle and the interest generated by the bank note associated with this cost.

Calculating the economic impact of purchasing 560,000 head of cattle today represents a cash outlay of 1.1 billion dollars (550 lb bought at $3.50/lb). In other words, the communities where feeder calves come from benefit at the tune of one billion dollars yearly because of the economic activity generated by feeding cattle in Cuming County.

Banks where cattle feeders conduct business also benefit. Each note, at current interest rates, represents $100/head in interest or fifty-six million dollars.

Moving 560,000 head of cattle into feedlots from the locations where they are raised or to the packing plants from the locations where they are finished generates additional economic impact. Assuming 550-lb feeder calf weights for calves that will travel at least 500 miles to their feedlot destination, dictates the need for 5,600 truck trips or 2.8 million miles. Although freight rates vary, using $5/loaded mile, common for long hauls, reveals an additional economic contribution of 14 million dollars. Trucking finished cattle to packing plants at a cost of $15 per head contributes another 8.4 million dollars.

If you haven’t been adding these figures, so far, the economic impact of feeding cattle in Cuming County using 2022 Census data and current prices is: 1.1 billion dollars to buy cattle, 56 million in interest, 22 million in freight for a sub-total of nearly 1.2 billion dollars.

Labor, repairs, utilities, and other non-feed costs are often lumped into a single category labeled yardage. Thus, it is difficult to separate labor costs from this figure. However, if an assumption is made that a 550-lb calf requires 260 days on feed to finish, then one-time capacity can be derived from this estimate. Dividing 365 days in the year by 260 days in the feeding cycle results in feedlot space turnover of 1.4 times a year. Therefore, 560,000 head finished in a single year represents a one-time capacity of feedlots in Cuming County of 400,000 head.

Two additional assumptions are needed to determine contributions from the cattle feeding activity to labor: 1) one individual can manage up to 1,000 head, and 2) average pay rate is $1,320 per week. Using these assumptions, we determine that 400

individuals are working to feed cattle in Cuming County and, collectively, they are paid $27 million dollars a year for their work.

Corn, corn silage, corn co-products, forages and supplements are used to supply nutrients in balanced diets formulated for cattle growth. Of these, corn usage would represent the largest contribution to the diet. Feeding 560,000 head from 550 lb to harvest weight would require the equivalent of 80 bushels of corn per head for another economic contribution of 200 million dollars to the local economy.

Without including other feed and non-feed costs, or economic activity generated after cattle are delivered at packing plants, the economic activity generated by feeding cattle in Cuming County, Nebraska is around $1.4 billion dollars. To place this figure in context, the state of Nebraska reported 3.5 billion in direct travel spending (expenditures in goods and services, travel arrangements, convention, and trade show operations) by tourists and visitors to our state in 2021.

For a county with a surface area of 574 square miles (0.74% of Nebraska’s area), the yearly economic contribution from one livestock production activity—cattle feeding—is impressive.



Scientists from USDA and universities work together to set priorities, collaborate on beef research

Beef producers must continue to improve efficiency to stay in the cattle business, and beef research needs to support that.

That was the message researchers from University of Nebraska—Lincoln, Colorado State University and USDA’s Ag Research Service took away from a two-day meeting at UNL’s Eastern Nebraska Research, Extension and Education Center recently.

The goal of the meeting was to bring together researchers from different institutions to set priorities for future research and identify overlaps and gaps in existing research.

"The primary discussion is how do we optimize a beef production system on a landscape or ranch," said Dr. Mark Boggess, director of the U.S. Meat Animal Research Center at Clay Center, Nebraska. "How do we give that producer the best tools or the best opportunity to most optimally match their genetics, their forage base and their management systems?"
While that’s enough of a challenge, Boggess said, research also needs to consider potential future effects of climate change, extreme weather events, socioeconomic factors like animal husbandry practices, and other emerging issues, like carbon and nitrogen, greenhouse gas emissions and public perception.

"We need to be able to demonstrate to the producers and society that maybe we are a lot better with respect to carbon and methane than we think," Boggess said. "But we need to be able to understand those challenges. We need the research in place to do the methane work and to do the nitrogen cycling and the carbon work and to help producers understand their opportunities, help them understand how it all fits together with ecosystem services. So it’s complex and growing. That’s why this meeting is so important, to bring all those people together."

The meeting included a tour of the Klosterman Feedlot Innovation Center, which is still under construction but is expected to start receiving cattle this summer. The KFIC is a commercial-scale feedlot research facility located at ENREEC that has been funded largely by industry donations, evidence that the industry understands the need for research that can both help improve efficiency and support the environmental benefits of beef production, said Galen Erickson, professor of animal science at UNL. The KFIC will double the current cattle feeding capacity at ENREEC to 5,000.

The meeting also tied into UNL’s Beef Innovation hub, a group of stakeholders including beef producers, allied industry professionals and researchers and educators from across all beef-related disciplines at UNL. The Beef Innovation hub includes representatives from range management to ecology, ag economics to genetics, meat science to social sciences, Erickson said. The industry advisors provide real-world input about the problems facing the beef industry, help researchers set priorities and identify funding opportunities, and give feedback about the results, shaping continuing projects.

Having those producers and industry professionals involved in the priority process with UNL allows UNL researchers to bring that perspective and those concerns to larger groups like this one, Erickson said, where researchers can share what they have already learned and collaborate and prioritize to maximize future research efforts.

For instance, Justin Derner, lead scientist with USDA ARS in Fort Collins, said their research into environmental, management and socioeconomic systems has been strong, but they would like to improve the genetics component of their research. "Because of this meeting we have connections now to enhance that genetics capacity and provide that sort of information to folks working in genetics, but also provide the value-added aspect to producers working with us from the genetic side. I’m pretty darn excited coming out of this that those sort of collaborations are now in place and I’m looking forward to the next four to five years."

Matt Spangler, UNL beef genetics specialist, said one of the most important aspects of this meeting, beyond the value of the research discussions, was getting to know people and understanding beyond the scientific questions. "There is a common interest in agriculture and helping address concerns that consumers have. It’s those one-on-one interactions, in my experience, that actually lead to long-term, sustainable collaborations," Spangler said. "We’ve got exciting times ahead. I would say, though, I think it’s going to be an impossibility to raise cattle in 2050, using science from 1950. And so the challenge is to make sure we address the needs of the beef industry and the consumer, and ensure beef cattle producers have the opportunity to deploy scientific discovery. That requires education of not only beef cattle producers, but also education of consumers, and consumers who are willing to be consumers of science as well."



City of Lincoln to Fuel Municipal Fleet with Biodiesel

The City of Lincoln has been awarded funding from the Nebraska Soybean Board (NSB) to begin incorporating B20 biodiesel in its municipal fleet.

This biodiesel incentive program marks a significant milestone in the City's ongoing commitment to sustainability and reducing carbon emissions, replacing 215,000 gallons of petroleum diesel in nearly 130 fleet vehicles.

Biodiesel is a clean-burning alternative fuel made from renewable sources, with soybean oil being the primary feedstock. B20 refers to the 20% blended percentage of biodiesel in a gallon of fuel. As a drop-in replacement, B20 can be incorporated into the city fleet immediately without any changes to existing equipment or infrastructure.

"We are grateful to the Nebraska Soybean Board for selecting Lincoln as a recipient of these funds,” said Mayor Leirion Gaylor Baird. “Incorporating biodiesel into our fleet helps the City reduce our carbon footprint and advance our sustainability goals."

Kim Morrow, Chief Sustainability Officer with the City of Lincoln, said that studies have shown that the lifecycle emissions of pure biodiesel are 74% lower than those of regular diesel, underscoring the significant environmental benefits of this transition.

Morrow said the City’s commitment to sustainable improvements in its municipal fleet and the use of biodiesel in existing vehicles and equipment is an important step in reaching Lincoln’s Climate Action Plan goal to reduce greenhouse gas emissions by 80% by 2050. Another goal is to transition its fleet vehicles to 100% electric or alternatively fueled by 2040.

In addition to reducing emissions, the transformation of soybean oil feedstocks into biodiesel plays a crucial role in Nebraska's agricultural sector. It contributes approximately 13% to the price per bushel of soybeans, increasing the bottom line for farmers. It also lowers the price of soybean meal, a key ingredient for livestock producers and the food supply.

“This partnership is a win-win for the City of Lincoln and Nebraska’s soybean farmers,” said Wesley Wach, NSB Demand and Utilization Coordinator. “It is great that our state’s capital city is turning to a homegrown, value-added product to help meet their goals.”

The partnership comes during Renewable Fuels Month in Nebraska, which highlights the importance of how clean biofuels can help save consumers money at the pump, decrease America’s dependence on foreign oil, boost our nation’s economy and support thousands of jobs in rural communities.

To learn more about biodiesel and Renewable Fuels Month, visit nebraskasoybeans.org and biodieselNE.com. For more information on the City of Lincoln’s sustainability goals, contact Kim Morrow at kcmorrow@lincoln.ne.gov or visit lincoln.ne.gov/Resilient.



Livestock Marketing Association Announces 2024 Scholarship Recipients     
 
Nine students have been selected to receive $2,500 scholarships from the Livestock Marketing Association, or LMA, Scholarship Program.

The LMA Scholarship Program, now in its second year, was expanded to support more students with aspirations of using their careers to support the livestock and livestock marketing industry. Applicants must be sponsored by an LMA member livestock marketing business and answer essay questions on issues of importance to the industry.
 
The 2024 LMA scholarship recipients are as follows:
    Myranda Hansen, Norfolk, Nebraska, is a Norfolk Senior High School student with plans to study agriculture leadership, education and communications. She was sponsored by Columbus Sales Pavilion.

    Matt Bruns, North Platte, Nebraska, is a sophomore ag business and animal science major at Northeastern Junior College. He was sponsored by North Platte Stockyards.

    Payton Irick, Seminole, Oklahoma, studies agricultural communications and agricultural economics at Oklahoma State University. She was sponsored by Glenn Payne Order Buying.

    Drew Mickey, Taylorville, Illinois, will study animal science at Kansas State University. He was sponsored by Greenville Livestock Auction.

    Eric Quisenberry, Shattuck, Oklahoma, studies animal science at Oklahoma State University. He was sponsored by Beaver County Stockyards.

    Brooke Reininger, St. Hedwig, Texas, is a senior at Marion High School with plans to study animal science. She was sponsored by Seguin Cattle Co.

    Skye Schumaker, Stillwater, Oklahoma, will pursue a master’s degree in business administration at Oklahoma State University. She was sponsored by Carthage Livestock Sales.

    Kaley Wagner, Smith Center, Kansas, will study animal science and industry as well as pre-veterinary medicine at Kansas State University. She was sponsored by Mankato Livestock Inc.

    Ryleigh Whitaker, Cisco, Texas, will attend Texas A&M University to study animal science/poultry science and agricultural communications and journalism. She was sponsored by Beeville Livestock Commission.

“The applications exceeded our expectations again this year,” LMA President Mark Barnett said. “Our industry has a bright future with young people like those that applied having an interest and desire to remain involved in agriculture.”



Teachers Invited to Summer Soybean Institute

The Nebraska Soybean Board is proud to announce its funding support for the upcoming 2024 Summer Soybean Institute (SSI), inviting twenty middle school and high school educators to delve into the fascinating world of soybeans. Hosted by the University of Nebraska–Lincoln College of Agricultural Sciences and Natural Resources (CASNR) in collaboration with local teacher-leader collaboratives, this enriching institute will be held on May 29-30 and July 16-18.

SSI aims to equip teachers with the necessary tools to instill a passion for soybeans in their students by delving into the intricacies of the Nebraska Soybean Story. Facilitated by content experts from CASNR, the Nebraska Soybean Board and local teacher-leader collaboratives, participants will engage in sessions designed to cultivate systematic thinking and foster a comprehensive understanding of soybeans as a system.

"This year, we are encouraging cross-curricular teams of teachers to apply, so students can see how soybeans are not only a good fit for science but also have strong connections to data collection, mathematics, economics, business and other areas," said Bailey Feit, CASNR/LPS focus program coordinator.

Participants will have the option to attend sessions at either the West Central Research, Extension and Education Center in North Platte or the FEWS2 Hub on East Campus of the University of Nebraska-Lincoln.

Teachers who complete all five days of the institute will receive a stipend of $1,050 along with a $250 lesson plan implementation bonus and up to $1,000 supply budget to further enrich their classrooms.

"As a member of the planning team for SSI 2024, I am very excited to see the creativity our teachers can bring to their classrooms," Feit said. "Educators everywhere are very innovative, and the SSI will allow them to learn about soybeans, how important they are to Nebraska and integrate them into their teaching."

The program teams for both locations include esteemed faculty members and experts from various departments within CASNR.

The Summer Soybean Institute is made possible through the support of the Nebraska Soybean Board and Nebraska Extension.



Naig Announces Increased Cover Crop Cost-Share Incentives

Iowa Secretary of Agriculture Mike Naig announced today that the Iowa Department of Agriculture and Land Stewardship is offering increased cost-share incentives for cover crop planting through the state’s Water Quality Initiative (WQI). The popular annual cost-share program, which is available to eligible first-time users as well as returning participants, is now open for Iowa farmers to begin enrolling their acres.

Farmers who are planting cover crops for the first time are eligible for $30 per acre. Farmers who have already experienced the benefits of using cover crops and are returning participants can receive $20 per acre. These figures represent increases of $5 per acre from last year. Additionally, producers transitioning acres to no-till or strip-till are eligible for $10 per acre. New users can also receive $3 per acre for utilizing a nitrogen inhibitor when applying fall fertilizer. Cost share funding through this program is limited to 160 acres per participant.

“Planting season is a great time for farmers to be thinking about conservation and making plans for implementing additional practices on their farms. Recognizing that input costs are rising for farmers and to keep our statewide cover crop momentum building, we are offering both first-time cover crop users and returning participants a larger cost-share incentive this year,” said Secretary Naig. “Iowa has set conservation adoption and investment records each of the last two years, and we want to keep breaking these records year after year. I would invite all Iowa farmers and landowners to stop into their county USDA Service Center, visit with our friendly staff, get signed up for this program, and learn about other available conservation and water quality programs.”

Last year, over 3,300 farmers and landowners enrolled in this cost share program. More than 375,000 acres of cover crops, 12,600 acres of no-till/strip-till and 3,200 acres of nitrification inhibitors were enrolled in the program. The state invested approximately $6.3 million, which leveraged $12.6 million of private investment.

Funds will be made available in July, but farmers may start submitting applications immediately through their local Soil and Water Conservation District offices. Farmers are encouraged to visit with their Soil and Water Conservation District staff within their local USDA Service Center and to inquire about additional cost share funds and other available conservation programs.



Farmer sentiment declines to lowest level since June 2022 amid weakened financial outlook
April Barometer

April witnessed a steep decline in U.S. farmer sentiment, as indicated by the Purdue University/CME Group Ag Economy Barometer, which fell 15 points from March to a reading of 99. Both subindexes of the barometer also saw declines: The Current Condition Index dropped by 18 points to 83, while the Future Expectations Index fell by 14 points to 106. The month marked the lowest farmer sentiment reading since June 2022 and the weakest current condition rating since May 2020. The sentiment decline was driven by worries regarding the current financial situation on farms and anticipated financial challenges in the coming year. The April Ag Economy Barometer survey was conducted from April 8-12, 2024.

“Farmers’ sentiment took a significant hit in April, reflecting broader concerns about financial performance and farmland values,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Farm Financial Performance Index declined to 76 in April, marking a 7-point drop from the previous month and a 21-point decrease from last fall’s peak of 97. This downturn reflects farmers’ growing concerns about the upcoming year’s financial outlook, with fewer respondents expecting better or equal performance than last year.

Farmers’ expectations regarding interest rates and farmland values shifted in April’s survey. Only 24% of respondents anticipate interest rates rising over the next year, down from 32% in March. Fewer farmers this month also said they expect to see farmland values rise over the next year, despite the modest improvement in their interest rate outlook, while more farmers reported that they look for farmland values to hold steady. In the April survey, just 29% of producers said they expect farmland values to rise in the upcoming year, compared to 38% who felt that way in March. These shifts reflect farmers’ concern about farm financial performance in 2024, outweighing their improved interest rate outlook.

There is growing interest in using farmland for solar energy production, and solar lease rates appear to be increasing. This month’s survey revealed a 7-point uptick in respondents reporting discussions with companies about solar energy leases, reaching 19% compared to 12% in March. Specifically, discussions around solar leasing suggest demand for solar leases is increasing, with 58% of farmers reporting lease rate offers exceeding $1,000 per acre — up from 54% in March. Over one-fourth of respondents (28%) said they were offered a farmland lease rate of $1,250 or more per acre. Rising lease rates for energy production could be starting to impact farmland values, at least in some areas. Among producers who said they expect values to rise in the next year, 8% of respondents highlighted energy production as a key reason.

“Looking ahead, energy production activities could provide some support for farmland values and expectations in some regions,” Mintert said.



60 Years of Writing Legacies, Field by Field!

Celebrating a remarkable milestone, the National Corn Growers Association (NCGA) proudly announced the launch of its 60th annual Yield Contest on Wednesday, May 1 https://ncga.com/get-involved/national-corn-yield-contest. This iconic event—spanning six decades—has been a testament to the ingenuity and dedication of corn growers across the nation. From humble beginnings to its current prominence, the contest continues to attract participants eager to push the boundaries of agricultural innovation.

"As we celebrate sixty years of the Yield Contest, we reflect not only on the remarkable achievements of our past winners but also on the enduring legacy of innovation and excellence that defines this event,” said Minnesota grower and NCGA President Harold Wolle. “From generation to generation, this contest has not only showcased the incredible potential of American agriculture but has also fueled a spirit of camaraderie and collaboration among growers nationwide. As we look to the future, we remain committed to fostering this legacy, inspiring growers to push the boundaries of what's possible and ensuring a prosperous tomorrow for generations to come."

Open for entries from now until August 14, this year's contest promises to be another thrilling chapter in corn-growing history. Among the highlights is Class J, the Nitrogen Management Class, which enters its second year, showcasing opportunities to think differently about fertilizer management while still achieving high yields https://ncga.com/get-involved/national-corn-yield-contest/profile/nitrogen-management-class. As contestants vie for top honors, NCGA's Yield Contest stands as a testament to the relentless pursuit of excellence in American agriculture, inspiring generations of growers to achieve new heights in crop production.