Livestock and Forages News Articles
Articles published in Arkansas Cattle Business
Animal Science: Today and Tomorrow - August 2006
Two months ago, we introduced a study to
determine the current strengths and limitations and future opportunities and
threats of the Arkansas beef industry. The study was supported by the Arkansas
Beef Council and was conducted by the Division of Agriculture of the University
of Arkansas and the Arkansas Beef Council. Five groups of 100 producers each
were randomly picked from approximately 2,000 representing cow-calf (small and
large herds), purebred, stocker/feeder and support industries in 66 counties and
were surveyed.
Two months ago, we discussed responses from
small cow-calf herds. This month, we will discuss the findings of the Arkansas
Beef Audit and highlight producer perceptions about current strengths,
weaknesses, future opportunities and threats of the large cow-calf segment (> 50
cows).
Demographics
Over 74% of the large herd respondents were over
51 years of age, and 83% had over 20 years experience in the cattle business.
Only 5.7% of the respondents were less than 40 years of age.
Current Strengths and Limitations
Large cow-calf survey respondents listed marketing as
a major strength. The ability to take advantage of more market options due to
having more calves to market was a strong advantage. Other strengths included
climate and land resources favorable to cattle production. Large-scale
production also allowed increased ability to spread input costs over a larger
number of animals which reduced investments and inputs per cow. The availability
of by-products for the use in animal feeds or as fertilizer was also listed as a
strength of producing cattle in the state.
Large cow-calf operators were extremely concerned about rising input costs.
Recent events in the beef cattle industry have added a great deal of volatility
to the cattle market. Survey participants felt that unpredictable market prices
and our current lack of export markets were important limitations. Additionally,
increasing environmental regulations, including regulations on phosphorus
levels, and the increasing number of animal rights and environmental activist
groups were found to be limitations. As cities grow and urban sprawl increases,
land available for expansion becomes both limited and expensive.
Future Opportunities and Threats
Use of production technology to increase production efficiency was an
extremely important future opportunity for large cow-calf producers. Maximizing
forage growth and utilization and taking advantage of improved cattle genetics
to meet consumer demands were listed as important opportunities. The ability to
take advantage of scientific knowledge will become increasingly important in
cattle production. Other future opportunities identified were related to
marketing, which included taking advantage of contracts and other marketing
options.
Increased input costs were identified as the number one threat. Producers
were worried that increased costs of production due to fuel, fertilizer, and
other inputs threatened their ability to turn a profit. Additionally, large
cow-calf producers rated animal health and disease issues as another large
threat to the industry. The loss of consumer confidence in beef, whether related
to disease or other issues, was also recognized as an important future threat.
Since the beef industry is a consumer-driven industry, loss of consumer support
would directly impact producers’ ability to be profitable. Another major threat
to large cow-calf operators was the recent effort to change the method of
determining land value for assessing property taxes (Table 1).
Educational Opportunities
Educational priorities for the large cow-calf industry centered on marketing
issues, input costs, public confidence in the beef cattle industry, and
environmental issues. Members of this industry were very concerned with their
future profitability and how they could manage costs.
Table 1. Responses by Large Cow-Calf Operators. (All responses are listed in
order of most important to least important)
Current strengths
- Marketability of product
- Climate and land favorable to forage
- Lower investment per cow
- Ability to diversify marketing
- Ability to select specific genetics
- Availability of by-products for feed & fertilizer
- Availability of educational opportunities
- Better economics of scale
- Infrastructure of the industry
Current
limitations
- Fuel costs
- Rising input costs
- Unpredictable market prices
- Export limitations
- Limited land for expansion
- Beef cattle and land management complexities
- Environmental regulations
- Increased urban pressure and encroachment
- Phosphorus issues
- Animal rights and environmental activists
Future opportunities
- Maximize forage utilization
- Increased marketing option opportunities
- Improvement of genetics to meet consumer demand
- Take advantage of scientific knowledge
- Advertising to promote products
- Take advantage of government programs
- Cooperative programs to pool resources
- Pooling larger herds to market
- Increase size of operations
Future threats
- Rising input costs
- Animal health issues (disease outbreaks, antibiotic
resistance, etc.)
- Downturn in calf prices
- BSE and other animal diseases
- Loss of agricultural value vs. commercial value in
determining property taxes
- Environmental issues
- Loss of consumer confidence in beef
For additional information, contact your local
county
Extension agent.
By: Dr. Keith Lusby and Dr. Tom Troxel
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