Cattle producers need to take advantage of market opportunities as the cattle price cycle heads into the downward slop, says David Cross, newly-elected president of the Kansas Livestock Association.
"The cattle cycle is alive and well. It looks as if we're starting a downward trend for a few years," Cross said during the KLA's annual convention earlier this month. Despite a lull in prices, however, producers can take advantage of marketing opportunities.
"Source- and age-verified, alliance, premium or grid programs are available, and if producers have the right kind of cattle, they can make quite a bit of money," he says.
The cattle industry is entering an era in which individual animal information is important. Those that choose to participate in alliances – provided they raise high-quality cattle - will be rewarded financially.
"Whether a cow-calf producer feeds his own cattle or not, he needs to find out what kind of product he's raising and who feeds and processes them. That information can help a producer make adjustments down the road," Cross says.
The KLA adopted a resolution during its business meeting in December that pushes for producers to register their premises with the Kansas Animal Health Department.
"We think it's good for the industry and good for Kansas. Premise registration allows the industry to traceback disease to a specific location, if that were ever to occur. If we could keep such a disease contained, it would make a big difference how big of an area would need to be quarantined," Cross says.
Producers also have an economic stake in registering their premises, he adds.
"An operator can move from premises registration to individual animal identification and become involved in a source- or age-verified program. That leads to premiums and selling on a grid and alliance.
"If we're raising the right kind of cattle, feeding them the right way and taking advantage of source- and age-verification, that's where we're going to boost profitability on the feeding sector," he says.
Cow-calf producers, he adds, also must produce quality calves.
"No longer can we turn out some old bull that merely settles a cow. We need to know the kind of progeny that bull will settle and know the progeny from heifers that we keep. When we do that, and get the right kind of cattle, we can overcome a lot of the problems we have in the industry right now."
KLA's outlook for 2007
Cross is passionate about improving beef quality. However, there are other items on his agenda for the coming year. Among them:
Water. In western Kansas, 10 Intensive Groundwater Use Control Area's have been implemented. KLA is concerned that implementation of IGUCAs could limit water use by livestock producers and farmers. "This would impact our members quite a bit," Cross says.
Grain prices. "We need to learn how to use distiller's dry grain and corn gluten products from ethanol plants. As more ethanol plants come online, there will be more by-products available. We expect more corn to be planted, so corn prices should stabilize. They won't be cheap, but maybe not as high as some expect."
Exports. "We need to have trade partners that want to work with us using sound science. We need to export large amounts of beef. Demand for beef is good in the U.S., but 96% of the world's consumer live outside the U.S. That's a large market and we want to take advantage of it."