HERD HEALTH CHECK

by Meredith Bremer for University of Nebraska, Lincoln, Extension Service

24 California Cattleman May 2020

Weaning time is just around the corner and cowcalf producers are now faced with the decision of calf placement after weaning. Producers have a few options for their calves after weaning. • Calves can be sold immediately after weaning. • Calves can undergo a preconditioning period before sale. • Calves can be retained as long or short yearlings and then sold. • Calves can enter a feedlot with retained ownership.

A preconditioning program is a period of time, typically a minimum of 45 days, in which a cow-calf producer will work to build the health status of the weaned calf prior to sale. Calves are also “bunk broke” during this time and acclimated to a dry feed diet.

If calves are sold at the sale barn, sold via an internet auction, or sold to the same feedlot each year, premiums may be awarded to those producers who precondition their calves. Before a producer begins a preconditioning program the economics of the program need to be evaluated carefully.

Two potential gains associated with preconditioning are added premiums at calf sale and added calf weight.

Some costs associated with preconditioning programs include: labor, vaccinations, death loss, additional feed costs and interest expenses on borrowed money. Two additional factors to consider are, the seasonal patterns of the cattle market and the price slide on increased calf weights.

In a Drovers article, John Maday, DVM, a bovine veterinarian, described the benefits of preconditioning for all aspects of the beef industry. Maday stated that the long-term average death loss at JBS Five Rivers feedyards, the feedlot he consults for, had always been roughly 1 percent. In the last three years, that value has increased to 2 percent. Initially the increase in death loss was attributed

to the drought and poor nutrition early in the calves’ lives. However, even after a year of increased moisture the death loss average has not decreased.

Maday evaluated cattle that had been preconditioned for 45 days prior to feedlot entry and found that those calves experienced one-third the morbidity and one-half the mortality of those calves that were not preconditioned. Preconditioned calves also gained 0.3 more pounds per day compared to calves that were not preconditioned in his study. Conclusion

A preconditioning program is not for every cow-calf producer. Not only should the factors stated above be considered, but producers have to determine how a 45-day retention of calves will affect their grazing program, if they have the proper facilities to feed calves and bunk break them, and if they have the extra time and labor to dedicate to the weaned calves.

As an industry, the need to better prepare calves for the feedlot in terms of stress, health and getting cattle ready to eat a concentrated diet is a must. If more calves are “feedlot ready” the beef industry will see improved cattle health and feedlot performance while potentially reducing the use of antibiotics.

At LMA member markets, you can be sure you’ll get top dollar for every head you sell – no matter if you’re selling two or 200. You can also be sure there won’t be any compliance issues with state and federal ADT rules. As for knowing the check in your hand is a good one? It doesn’t get any better than that. OK, maybe except for the coffee.

FIND A TRUSTED MARKET NEAR YOU. lmaweb.com | 1-800-821-2048

101 Livestock Market, Inc.

A&M Livestock Auction, Inc.

Cattlemen’s Livestock Market, Inc.

Dos Palos Y Auction Yard

May 2020 California Cattleman 25 Fresno Livestock Commission, LLC Humboldt Auction Yard, Inc. Newman Stockyards, LLC Orland Livestock Commission Yard, Inc. Overland Stockyard, Inc. Petaluma Livestock Auction Yard, Inc. Producers Livestock Marketing Association, Madera Branch Sam Avila - Avila Cattle Co. Shasta Livestock Auction Yard, Inc. The Stockman’s Market, Inc. Tulare County Stockyard, Inc. Tulare Sales Yard, Inc. Turlock Livestock Auction Yard, Inc. Visalia Livestock Market Western Stockman’s Market Western Video Market Fallon Livestock, LLC Nevada Livestock Marketing, LLC

Governor Newsom Outlines Critical Indicators the State will Consider Before Modifying the Stay-at-Home Order and Other COVID-19 Interventions

On April 14, Gov Gavin Newsom unveiled six key indicators that will guide California’s thinking for when and how to modify the stay-at-home and other orders during the COVID-19 pandemic.

The Governor noted that the progress in flattening the curve, increased preparedness of our health care delivery system and the effects of other COVID-19 interventions have yielded positive results. However, these actions have also impacted the economy, poverty and overall health care in California. Any consideration of modifying the stay-at-home order must be done using a gradual, science-based and datadriven framework.

“While Californians have stepped up in a big way to flatten the curve and buy us time to prepare to fight the virus, at some point in the future we will need to modify our stayat-home order,” said Governor Newsom. “As we contemplate reopening parts of our state, we must be guided by science and data, and we must understand that things will look different than before.”

Until we build immunity, our actions will be aligned to achieve the following: • Ensure our ability to care for the sick within our hospitals; • Prevent infection in people who are at high risk for severe disease; • Build the capacity to protect the health and well-being of the public; and • Reduce social, emotional and economic disruptions. California’s six indicators for modifying the stay-at-home order are: • The ability to monitor and protect our communities through testing, contact tracing, isolating, and supporting those who are positive or exposed; • The ability to prevent infection in people who are at risk for more severe COVID-19; • The ability of the hospital and health systems to handle surges; • The ability to develop therapeutics to meet the demand; • The ability for businesses, schools, and child care facilities to support physical distancing; and • The ability to determine when to reinstitute certain measures, such as the stay-at-home orders, if necessary. • The Governor said there is not a precise timeline for modifying the stay-at-home order, but that these six indicators will serve as the framework for making that decision.

He also noted that things will look different as California makes modifications. For example, restaurants will have fewer tables and classrooms will be reconfigured.

FEATURING CALIFORNIA LIVESTOCK AUCTION YARDS WHO HAVE ADVERTISED THEIR SERVICES IN THIS ISSUE

12495 Stockton Blvd., Galt, CA 95632

OFFICE....................................... (209) 745-1515 E-MAIL.................................... info@clmgalt.com WEBSITE................................. www.clmgalt.com CONTACTS Jake Parnell, Manager................ (916) 662-1298 CATTLE AUCTION........................... Wednesday MEMBERSHIPS....... NCBA, CCA, LMA, CLAMA

16575 S. Hwy 33, Dos Palos, CA 93620

OFFICE........................................(209) 387-4113 FAX ............................................. (209) 387-4476 WEBSITE...........................www.dpyauction.com CONTACTS Joel E. Cozzi ............................... (209) 769-4660 Joel A. (Joey) Cozzi .................... (209) 769-4662 Jarod Cozzi ................................. (209) 587-6082 Col. Doug Gallaway.................... (209) 617-5435 Mike Vieira................................... (209) 761-6267 Bill Enos ...................................... (209) 761-1322 Col. Garrett Jones....................... (209) 710-7904

AUCTIONEERS..................... Jake Parnell, Brian Pachaco, Mark Fischer UPCOMING EVENTS CLM will feature large runs of calves and yearlings during special feeder sales and county cattlemen’s sales May 11, May 20, June 1, June 10 June 15 and June 24. Join us July 8 for our annual Bred Cow & Pair Sale. Visit www.clmgalt.com for an up-to-date list of upcoming events and market reports.

CATTLE AUCTION................. Monday and Thursday MEMBERSHIPS.............. NCBA, CCA, LMA, CLAMA AUCTIONEERS.......Doug Gallaway and Garrett Jones UPCOMING EVENTS Holding special upcoming feeder sales Friday, May 22 and June 20. See our ad on page 21 for details.

ESCALON Livestock Market, Inc. P.O. Box 26 25525 Lone Tree Rd, Escalon, CA 95320 OFFICE........................................(209) 838-7011 FAX ............................................. (209) 838-1535 WEBSITE.......www.escalonlivestockmarket.com E-MAIL......escalonlivestockmarket@yahoo.com REPRESENTATIVES Michael Machado........................ (209) 495-9208 Joe Vieira .................................... (209) 531-4156 Thomas Bert................................ (209) 605-3866 Tony Luis..................................... (209) 609-6455 CJ Brantley.................................. (209) 596-0139

CATTLE AUCTION........................................ Monday MEMBERSHIPS.............. NCBA, CCA, LMA, CLAMA AUCTIONEERS.............................................CJ Brantley

UPCOMING EVENTS Big strings of yearlings and calves sell Mondays and Wednesdays with large runs of feeders every Monday in May. See our ad on page 10.

LIVESTOCK MARKET OFFICE........................................(209) 847-1033 FAX ..............................................(209) 847-4425 CONTACT Steve Haglund .............................(209) 847-1033 CATTLE AUCTION..........Monday and Thursday 6001 Albers Road, Oakdale CA 95361 F A R M E R S

MEMBERSHIPS...............NCBA, CCA, LMA, CLAMA AUCTIONEERS.....................................Clint Haglund

UPCOMING EVENTS Join us for auction sales every Monday and Thursday for dairy, beef and feeder cattle.

HUMBOLDT AUCTION

YARD, INC. 603 S. 3rd Street, Fortuna, CA 95540

OFFICE..........................................(707) 725-5188 FAX ................................................(707) 725-9822 E-MAIL.....................humboldtauction@hotmail.com CONTACTS Col. Lee Mora.................................(707) 845-7188 Col. Justin Mora.............................(707) 845-7388 CATTLE AUCTION........................ Wednesday

MEMBERSHIPS......................... CCA, CLAMA AUCTIONEERS................................. Lee Mora .........................................................Justin Mora UPCOMING EVENTS The Mora family invites you to join them ringside every Wednesday in Fortuna. Celebrating 51 years in the auction business!

MODOC AUCTION YARD Hwy 299 W, Alturas, CA 96101

OFFICE..........................................(530) 233-3442 CONTACTS Jerry Kresge...................................(530) 640-1302 CATTLE AUCTION........................February to August: first and third Saturdays; September to February every Saturday.

UPCOMING EVENTS Call us for dates on special feeder sales. See our ad on page 27.

P.O. Box 756 • 2011 E, Stuhr Rd., Newman, CA 95360

OFFICE..........................................(209) 862-4500 FAX ................................................(209) 862-4700 CONTACTS Col. John McGill.............................(209) 631-0845

CATTLE AUCTIONS ........Tuesday and Thursday MEMBERSHIP....................... CCA, LMA, CLAMA

AUCTIONEERS.......................... John McGill UPCOMING EVENTS Currently accepting cattle for Tuesday and Thursday sales plus Western Video Market sales from Cottonwood on May 8, May 29 and June 12. For details see our ad on page 27.

ORLAND

LIVESTOCK COMMISSION YARD, INC. P.O. Box 96 3877 Hwy. 99 West, Orland, CA 95963

OFFICE..........................................(530) 865-4527 FAX ................................................(559) 582-6261 CONTACTS Col. Ed Lacque ..............................(530) 865-2643 Col Wade Lacque, Manager..........(530) 570-0547 CATTLE AUCTION........... ................ .....Thursday MEMBERSHIP....................... CCA, LMA, CLAMA

AUCTIONEERS........Wade Lacque, Ed Lacque UPCOMING EVENTS Call us for details. Also see our ad on page 27. Join us Thursdays at noon for our regular beef sales. Also check us out on Facebook!

PRODUCER’S LIVESTOCK MARKETING ASSOCIATION 1022 S. Pine Street, Madera, CA 93637

P.O. Box 510 Madera, CA 93639

OFFICE..........................................(559) 674-4674 E-MAIL..............producersmadera@sbcglobal.net WEBSITE.................www.producerslivestock.com CONTACTS Matt Beechinor.................................559-676-0488 CATTLE AUCTION...................................... Friday MEMBERSHIPS........ NCBA, CCA, LMA, CLAMA

AUCTIONEERS..........................Kullen Wooton

UPCOMING EVENTS We hope to see you at our off-the-grass special sales May 8 and May 22. See our ad on page 21 for details. Also watch for big runs of calves and yearlings on our regular sale days in May and June.

OFFICE..........................................(559) 582-0404 FAX ................................................(559) 582-6261 WEBSITE............... www.overlandstockyeard.com CONTACTS Doug Belezzuoli .............................(559) 816-2806 Ben Renteria..................................(805) 674-1505 Jason Glenn.................................. (805) 550-9893 Dustin Burkhart ............................. (661) 378-3504 Jim Sili............................................(661) 340-6848

CATTLE AUCTION........ Monday and Thursday MEMBERSHIPS.....NCBA, CCA, LMA, CLAMA UPCOMING EVENTS Watch for our calf and yearling spring sales coming up in May and June! See our ad on page 17 for details!

3917 N. Main Street, Cottonwood, CA 96022 P.O. Box 558, Cottonwood, CA 96022

tulare county stockyard

9641 Ave. 384, Dinuba, CA 93618

OFFICE..........................................(530) 347-3793 FAX ................................................(530) 347-0329 WEBSITE......................... www.shastalivestock.com CONTACTS Ellington Peek................................(530) 347-3793 Brad Peek ......................................(916) 802-7335 Davin Lower...................................(530) 864-0673 CATTLE AUCTION...................................... Friday

MEMBERSHIP...NCBA, CCA, LMA, CLAMA CATTLE AUCTION Join us for our regular Friday sales, as well as specials on May 8, 29 and June 12. Shasta Livestock is a representative for Western Video Market. Don’t miss upcoming WVM sales on May 7, May 28 and June 12 in Cottonwood. For more information, visit us online at shastalivestock.com or follow us on Facebook and Instagram.

OFFICE..........................................(559) 591-0884 WEBSITE...............www.tularecountystockyard.com CONTACTS Jon Dolieslager..............................(559) 358-1070 AUCTIONEER.............................. Jon Dolieslager

BEEF SALES EVERY FRIDAY AT NOON WITH COWS AT 2 P.M. Join us for Special Feeder Sales in May and June. Mark your calendars for the Angus and Brangus Bull and Female Sale on Sept.26 and the Leachman Bull and Female Sale Oct. 10.

10430 Lander Ave., Turlock, CA P.O. Box 3030, Turlock, CA 95381

OFFICE..........................................(209) 634-4326 FAX ................................................(209) 634-4396 WEBSITE......................... www.turlocklivestock.com CONTACTS Col. Max Olvera .............................(209) 277-2063 Col. Steve Faria ............................ (209) 988-7180

BEEF SALE DAYS...Tuesday, Wednesday & Friday

MEMBERSHIPS... NCBA, CCA, LMA, CLAMA AUCTIONEERS.........Max Olvera, Steve Faria, Chuck Cozzi, Eddie Nunes, Jake Bettencourt UPCOMING EVENTS Join us May 2, May 16 and May 30 for our Special Showcase Feeder events. See our ad on page 9 for details.

31911 Hwy. 46, McFarland, CA 93250

OFFICE..........................................(661) 399-2981 FAX ................................................(661) 399-0177 WEBSITE......www.westerstockmansmarket.com CONTACTS Dwight Mebane..............................(661) 979-9892 Col. Justin Mebane ........................(661) 979-9894 Frank Machado..............................(805) 839-8166 Col. Bennet Mebane......................(661) 201-8169

BEEF SALE DAY ................................... Monday Butcher Cows at 10:30 a.m./Feeders at 12:30 p.m. MEMBERSHIPS..................... NCBA, CCA, LMA UPCOMING EVENTS Special feeder sales in May and June with bred cow sales June 15 and July 13. See our ad on page 11 for details. Join us for our annual bull sale Sat., Oct. 17.

OFFICE..........................................(559) 625-9615 FAX ................................................(559) 625-9012 WEBSITE..........................www.visalialivestock.com CONTACTS Col. Randy Baxley .........................(559) 906-9760 Blaine Ketscher..............................(559) 905-1945 James Grantham ...........................(705) 610-0641 CATTLE AUCTION..................... ........Wednesday

MEMBERSHIPS......... NCBA, CCA, LMA, CLAMA AUCTIONEERS...............................Randy Baxley CATTLE AUCTION Join us for weekly sales and take advantage of our transporation options from the central coast! Join us Wednesdays in May and June for large runs of stockers and feeder calves. Our fall calving sale is June 27 and annual Cattlemen’s Select Bull & Female Sale is Sun., Sept. 27.

OFFICE..........................................(530) 347-3793 FAX ................................................(530) 347-0329 WEBSITE.................................www.wvmcattle.com CONTACTS Ellington Peek................................(530) 347-3793 John Rodgers.................................(559) 734-1301 Brad Peek ......................................(916) 802-7335

MEMBERSHIP...NCBA, CCA, LMA, CLAMA UPCOMING EVENTS Join us for our regular Friday sales, as well as specials on May 8, 29 and June 12. Shasta Livestock is a representative for Western Video Market. Don’t miss upcoming WVM sales on May 7, May 2 and June 12 in Cottonwood. For more information, visit us online at shastalivestock.com or follow us on Facebook and Instagram.

Over the past eight years, WSR Insurance Services (WSR) has helped hundreds of CCA members with their Pasture, Range, Forage insurance needs. Last year, CCA expanded its partnership with WSR. In 2020, WSR will continue to partner with CCA to assist members with all their insurance needs. WSR’s commitment to their customers and the cattle industry makes this partnership a win-win for CCA members.

CCA members can benefit from WSR’s competitive pricing and best in the industry customer service. Give WSR a call today and find our what insurance packages may suit your needs at the best price! From the changing seasons to labor force to government regulations, WSR understands the unique challenges ranchers face and works to provide the best coverage for you and your business.

May 2020 California Cattleman 31 For more information on the partnership contact WSR’s: Kevin Hoppin, CIC kevinh@wsrins.com (530) 662-9181 Available Products:

Farm Property and Liability

Packages; Auto; Workers

Compensation; Pasture, Rangeland and Forage (PRF); Group Health/ Dental/Vision plans and more!

by Tina L. Saitone, Cooperative Extension Specialist in Livestock and Rangeland Economics, University of California, Davis

32 California Cattleman May 2020

Among the myriad of concerns surrounding the global COVID-19 pandemic is unease about the performance of the U.S. food supply chain. As grocery outlets and their suppliers and distributors struggle to keep food on the shelves, farmers and processors upstream are confronted with the challenge of pivoting away from conventional foodservice and restaurant product offerings, toward product forms that are accessible and desirable for at-home consumption.

The beef industry exemplifies these concerns. The recent pricing patterns and market dynamics observed in the industry have stimulated a lot of discussion about what the future holds. In this blog I discuss the short-term demand impacts and how these changes have influenced beef prices, as well as a variety of factors that are likely to impact the supply side of the beef market. Many researchers and analysts have been considering these topics from a variety of angles. I endeavor here to bring that information together in a comprehensive assessment and separate fact from fiction.

Changes in Consumer Buying Patterns – With the majority of states under “shelter in place” orders, there have been incredible spikes in grocery store sales across the nation. According to Winsight Grocery Business, the sales of major meat categories sold in supermarkets the week ending March 22, 2020, compared to the same week in 2019 had beef sales up 95 percent this year.

The majority of beef sold at retail (i.e., through grocery stores and super centers) is graded USDA Choice or Select; beef graded USDA Prime is primarily consumed in restaurants. The short-term increase in demand for beef at retail, in the latter half of March following many of the statewide shelter-in-place orders, is consistent with the price surge observed for Choice and Select boxed beef cutout prices (i.e., the gross value of a beef carcass based on FOB prices paid for individual beef items derived from the carcass).

Unprecedented increases in food purchases via grocery stores and supercenters were largely precipitated by the forced closures of restaurants and schools; eliminating consumers’ ability to consume food away from home. The question food industry leaders are seeking to answer is: will increases in food spending for at-home consumption compensate for the reductions in food-away-from-home spending. Just a few days ago, Rabobank released a report estimating that a 10 percent decrease in away-from-home food spending would result in an increase in retail food spending of 3 percent. Yet this estimated tradeoff needs to be considered in light of the fact that the costs associated with consumption away from home are likely higher due to labor and infrastructure costs associated with the provision food consumption in restaurants and food service operations. The question that everyone is waiting to have answered is: do people consume more beef when they eat at home or away from home?

Another related consideration, on the supply side, is how quickly will beef packers be able to pivot their restaurant products (e.g., cuts, packaging, etc.) to products that are attractive to consumers at retail. Many news outlets, including the New York Times, continue to remind us that there is “plenty of food in the country,” but the challenge is allocation of products and distribution.

Cattle Supplies and Beef Processing – While beef prices at the wholesale level have increased in response to short-term demand increases, cash prices for calves and feeder cattle have declined. This inverse relationship has caused some to question if beef packers are using market power to suppress prices they are paying for fed cattle (e.g., Crosby). While it is obviously in each beef packers’ self interest to procure fed cattle at the lowest possible prices, it is not viable in the long run because if cattle feeders are driven out of business, they will leave processors without adequate supply. In furtherance of preserving their relationship with the feeders that supply fed cattle, Tyson and Cargill (two of the four largest processors in the U.S. that process roughly 85 percent of beef cattle) announced they would pay a one-time premium for cattle slaughtered the week of March 20 to help ensure supplies to their operations. While Cargill’s premium wasn’t available, reports indicate that Tyson paid producers $5/cwt. live weight.

Beef processors also increased their slaughter volumes week-over-week at the end of March. This increase in production also runs counter to the argument that processors are exercising their market power to suppress prices. Under this theory of market (i.e., monopsony) power, processors would reduce their production.

A major fear among analysts and cattle producers is that one or more processing plants will “go down” due to a significant number of employees contracting COVID-19. Many are using the fire that shuddered a Tyson beef packing plant in August 2019 as a harbinger of the impacts that would likely manifest in beef markets. In the weeks following the fire, boxed beef values increased substantially

($23.83/cwt. increase in two weeks) while fed cattle and feeder prices dropped significantly. The increase in packer margins during the early days following the fire incentivized other packers to increase the amount of cattle they slaughtered, often by adding extra shifts and moving cattle across plants. I would anticipate that this response would happen again if significant processing plant closures occur due to COVID-related closures.

A possible omen from another animal-processing industry is Sanderson Farms’ announcement that they would preemptively close their Moultrie, Georgia broiler processing plant, despite no documented COVID-related illnesses, reducing the number of chickens slaughtered by 1 – 1.3 million over the next month. Plants going offline, even temporarily, will have regional impacts and create more macro uncertainty in cattle markets. Late yesterday (April 6) Tyson announced that they would be suspending operations at two of their pork processing plants in Iowa. Also yesterday, JBS announced that health officials in Colorado and Nebraska were investigating concerns about some employees testing positive for COVID-19.

Something we must all remember is that prices of calves and feeder cattle and beef prices are correlated but over a longer period of time. This is because calves and yearlings being raised right now, won’t hit the slaughter floor for months or maybe a year. So calf and feeder prices today will not be directly influenced by wholesale beef cutout prices today; rather those live cattle prices

are more influenced by expectations about future beef demand. These expectations about the future took a big hit when this global health crisis came to the forefront of our collective consciousness. Also, long before COVID-19, projections indicated we were headed for record meat and poultry production, with beef production slowing by only 1 percent compared to 2019. The anticipation of large supplies of meat and poultry production would, absent the current crisis, have had a moderating affect on live cattle prices.

Following the retail demand surge, the futures prices for many agricultural products declined rapidly. According to the American Farm Bureau Federation, the cumulative percentage change in the commodity futures price since the COVID-19 outbreak was confirmed in China (Jan. 14, 2020) was up substantially. The live cattle futures price declined by 25 percent during this period, which is likely more reflective of the concern and predictions that COVID-19 will push the U.S. economy into a recession. If recession does hit, beef being a higher priced animal-based protein is typically hit hard by demand reductions (i.e., it is more sensitive to changes in income than other, lower priced animal-based proteins).

In summary, I disagree with those suggesting that the beef market is “broken.” Instead I would characterize the beef supply chain as operating very efficiently and responding quickly to the black swan event that is the COVID-19 pandemic.

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