Farm Talk

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October 8, 2013

2013 K-State Beef Stocker Days

Parsons, Kansas — The gravel road to Kansas State University’s Beef Stocker Unit filled with dust on Sept. 26 as cattlemen and women from across Kansas and bordering states gathered to listen to industry leaders speak of the future of the beef stocker segment and how to make improvements in their own operations.

“We’re in the midst of several big changes,” KSU Agricultural Economist Glynn Tonser said. “Some will see opportunity, some won’t. That will dictate who comprises the industry moving forward.”

Dwindling national beef cow numbers has been a driving factor in change — something the self described cynic believes will take until 2015 to see improvements on.

A September USDA Cattle on Feed report shows this Sept. 1 feedlot inventory as the smallest September inventory since 2003 — down seven percent from a year ago. With an increase in bunk space availability at feedyards, Tonser believes opportunities await Beef Stocker producers willing to repurpose feedyards.

“There are probably going to be feedyards with low asking prices,” Tonser stated, adding that the open bunk space could be used to background cattle, intensifying the beef stocker segment.

Admitting this investment isn’t for every producer, Tonser said it should be something to consider if the opportunity to buy at a low asking price, locking down a low interest rate, presents itself. This would also help with the limited acreage availability.

“If we intensify the stocker segment, one way is  additional backgrounding on concrete, compared to what we’ve done in the past,” he said.

When it comes to marketing, Tonser believes a forward-looking approach is essential to economic success on the futures market.

“You’re projecting prices at points in the future. If the purchase is three weeks from now and the sale is 16 weeks from now, you have to look at what the world will look like then,” Tonser said. “The futures market gives us a starting point for that.”

Tonser reminded producers consumers control the market and  shared a tweet The Center For Food Integrity (@foodintegrity) from Sept. 4:

“Science tells us if we can do something. Society tells us if we should do it.”

In recent Beef Checkoff Program research, the Beef Demand Determinant Study (http://www.beef board.org/evalua tion/ 130612demanddeterminantstudy.asp) was conducted to find what checkoff programs should focus on to drive beef demand forward. Ranking in order of importance was:

1. Food safety

2. Product quality

3. Price

4. Nutrition

5. Health

6. Social aspects

7. Sustainability dimensions.

Tonser reminded producers that no matter what they thought, scientific feasibility was not the same as public acceptance, something Tom Field of the University of Nebraska-Lincoln agreed on.

“We can get it right or we can explain to customers and critics why we didn’t,” Field stated. “If we loose trust with consumers, we will loose market share that we will not recover.”

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