The Sun is Rising on Kentucky's Beef Industry
by Randy Weckman
If you were able to hoist yourself high enough on a really tall flagpole so that you could see the breadth and depth of Kentucky, you might see that a great deal of the state--about 7 million acres of so of it--comprises a savannah of various grass species. You most certainly would notice that the enormous expanse of prairie, stretching from the Mississippi River to the eastern limits of the bluegrass region, is well suited for grazing animals. You also might notice that even in the eastern timbered mountains there are glades of grassland that could offer sustenance to grazing animals.
Although the beef cattle industry has a long and illustrious history in Kentucky, known in the early days for blooded cattle stock, the industry has often taken a back seat to tobacco production. Tobacco is very lucrative but also highly labor intensive; its future is in jeopardy. So farmers are looking carefully at the beef industry as a means to replace lost tobacco income.
Kentucky's beef industry today is centered largely around small commercial cow-calf operations, which are ideally suited to Kentucky's abundant grasslands. It ranks thirteenth in the U.S. in the number of cattle, with about 2.65 million head, and ranks eighth in the number of beef cows, with about 1.1 million brood cows. But even with those impressive numbers, the resources afforded by Kentucky's topography are only used at about half their capacity. In other words, Kentucky could easily support twice as many cattle as it does now.
"Kentucky's cattle industry could be much bigger than it currently is. And although cattle production is one of Kentucky's major agricultural commodities, ranking in value just behind horses and tobacco, it could become the king of enterprises here," said Darrh Bullock, Extension beef cattle specialist. To make it reach its prime status, however, requires greater profitability in existing herds.
Bullock and other faculty members at the University of Kentucky are in a full court press to achieve greater economic returns from cattle. Their strategy, incorporated into something called the Integrated Resource Management plan, aims to make the cattle industry much more profitable by providing information and education to livestock producers to improve their production and their profits.
Backing up the IRM team is a cadre of researchers in a variety of disciplines who are investigating better, and more profitable, ways of producing beef. The Extension and research work is being funded in part by a $350,000 grant from U.S. Department of Agriculture through the offices of Kentucky's congressional delegation.
The research, much of which will be conducted at the Animal Research Center in Versailles, on UK's Woodford County Farm, will investigate forage production, nutrition and metabolism, and managing beef cattle systems for environmental safety. Other research will involve forage demonstration plots throughout Kentucky.
Currently, the beef cattle production industry generates about $1.38 billion in economic activity in the state; doubling the production of beef in Kentucky would increase that to about $2.8 billion, said Lee Meyer, Extension livestock marketing specialist.
"While doubling production probably wouldn't have a great impact on the price of beef cattle nationally, we need to keep in mind that expansion in Kentucky would probably parallel expansion nationally. And that's why the IRM program focuses so much on herd profitability and efficiency," he said.
Initiated as a statewide program in 1995, the IRM program emphasizes beef producers' systems of production, including equipment, health, genetics, feeding, forages, and more. The program's approach implies that different situations demand different inputs and management for maximum profitability.
The IRM program is a big picture concept that acknowledges that increased profitability can be achieved through a variety of techniques. The concept also acknowledges that all facets of the operation must be in synchrony to achieve maximum profitability.
Bullock said, "Sometimes, I wish that some of our farmers in the program would improve the genetics of their herds (because that's my program area), but I know that doing so without making changes in other aspects of production such as feeding, health, and the like wouldn't allow the genetic improvement to mean much financially to the producer."
Bullock also said that the IRM program's heavy emphasis on education allows producers to make intelligent-- and profitable--changes in their operations over time, a sort of ratcheting up process. This helps producers stay profitable even when beef prices decline, which they do every few years in response to the 10-12 year beef cattle cycle of expansion and overproduction culminating in massive herd dispersals.
"We're providing information cattle producers need to make informed decisions on their herds in times when prices are high and when they are low. We're also encouraging county industry groups to work together to address issues that each producer in the county faces, but which cannot be addressed by any one producer," said John Johns, Extension beef cattle specialist.
Pioneering efforts to improve profitability in Kentucky's beef cattle industry ae the basis for the current IRM program.
One of those early efforts was in Washington County, where Rick Greenwell, county Extension agent for agriculture and natural resources, saw that beef producers needed help with their operations so that they could increase profits. That was in the early 1980s. And because herd size of beef producers in Washington County ranges from very small to medium-sized, with each operation varying in facilities, genetics, and management style, he knew he had to gear his Extension programs toward an individualized approach.
As a result, Greenwell asked a team of Extension specialists to work with farmers on an individual basis --a SWAT team approach so to speak--to assess how each operation could incrementally improve the profitability of their herds. And so a team of experts would make a farm visit and in conjunction with the producer make a plan of action to increase profitability. The only problem with the approach was that the plan couldn't accommodate life changes of the producer or price changes, either.
As he worked with the producers, Greenwell noticed that many shared a common need for low-cost supplies used routinely in cow-calf operations. As a result, he worked with local producers to organize the Washington County Beef Cattle Alliance to work cooperatively to find least-cost supplies.
During its first year of existence, the Alliance put together a list of products that members needed and asked vendors to bid on providing those supplies. From that, a preferred vendors list was developed that allowed the producers to save $12 on supplies needed for each cow/calf unit.
But what was perhaps even more important, the members realized a $28 premium for each calf they produced--above the $12 they saved on supplies. The $28 came from the improved quality of calves they produced and from selling the calves as a group .
"Our producers, who had followed the recommendations of the Extension team, produced feeder calves ready to go. And the buyers were willing--and still are--to pay a premium for a calf they know will be healthy and ready to feed out," Greenwell said.
Focus on the producer-- When the IRM program in Kentucky became a state-wide initiative in the mid 1990s, the approach taken was a bit different from that pioneering program in Washington County. Instead of working on a farm-by-farm basis, the team decided that a more fruitful-- and manageable--approach would be to educate producers in all aspects of the beef business, so that they could make better decisions that fit their changing needs and resources.
The program's heavy emphasis on educating farmers to assess their own situations, their resources, and their needs has proved to be a strong foundation. The locus of control clearly became the producer himself.
Another conspicuous part of the program, county producer groups, not only work toward the common good for members, but also serves to help energize each other.
County producer groups in more than 20 counties have organized and are pursuing excellence and profitability using expert education provided by the state IRM team.
In Hardin County, for example, more than 100 beef producers organized the Hardin County Beef IRM Group. Their goals were to develop a group purchasing program for the inputs they need (such as vaccines, minerals, wormers), to enhance forage quality for feeding calves for quicker weight gains, and to improve the genetics of beef cattle in the county.
Last year, the group made a list of inputs that most of them purchase to use in their operations, and sent it to 20 local, regional, and national vendors for bidding.
A local vendor provided the lowest prices on the products, so members of the group were able to purchase such inputs as wormers and vaccines at savings from 18 to 50 percent.
According to Doug Shepherd, Hardin County Extension agent for agriculture and natural resources, the program has been very helpful to producers, with 61 percent of producers buying at cheaper prices through the local vendor. On minerals alone, the group saved more than $10,000. That's $10,000 that stayed in the producers' pockets that helped each become more profitable.
This year, the bidding process yielded three vendors that have agreed to provide cost savings to the IRM group.
The Hardin County IRM group is now working on improving forages. Extension agronomist Jimmy Henning is setting up demonstration plots for pasture renovation and also helping producers select high-yielding alfalfa varieties for hay production.
The group also is working with Les Anderson, Extension animal scientist, to educate producers about synchronizing the estrus of beef cows so that calving will occur within a short window of time. Synchronizing heat also will allow producers to use artificial insemination to improve the genetics of the calves. The third advantage of synchronizing heat in the beef cows across the county is that producers can take the improved calves and commingle them to sell in larger lots, which should improve the prices they receive. Buyers prefer truckload lots of genetically similar healthy calves and pay a premium to obtain them from cow-calf operators. They are willing to pay between $30 and $35 per head more for such calves, said Roy Burris, Extension animal scientist. Burris also chairs the IRM team.
According to Gay Muse, a beef producer who along with Warden Thomas and Extension agent Doug Shepherd organized the beef interest group, the program has been marvelous.
"The group purchasing program is a real plus to producers, but probably what will be even more important to profitability is learning new ideas that will allow us to produce premium calves cheaper," Muse said.
Muse, who like many producers in Kentucky works a full-time job and supplements his income with a small beef herd, believes that the program's emphasis on educating producers in all aspects of the industry is the key that will help Kentucky's industry grow.
UK Beef IRM Program
Jim Akers, Coordinator, Beef IRM Activities
Roy Burris, Chair
Jennifer Hunter, Coordinator, Recordkeeping