Oklahoma Quality Beef Network 2013 Summary Report

Oklahoma Quality Beef Network 2013 Summary Report

Oklahoma Qualtiy Beef Network Cattle sickness costs the industry millions of dollars each year. These losses negatively impact producer profitability and they impact each and every level of the beef production chain. Negative impacts are felt at the producer level through decreased performance, death loss, increased costs associated with treating sick animals, increased labor expenses and additional expenses for equipment, to name a few. At times, these losses extend beyond the cow-calf producer to each of the other sectors of the beef economy. Chronically ill cattle place a huge financial burden on the entire industry as the cost of carrying such cattle replicates itself throughout the life of the calf. Unfortunately the cost burdens associated with cattle sickness do not stop once the cattle are harvested. There are a number of welldocumented studies including the 1995, 2000 and 2005 Beef Quality Audits that clearly illustrate that sickness in cattle, at even an early age, can have dramatic impacts on carcass quality, tenderness, and in some extreme cases the condemnation of entire carcasses. In order to facilitate the adoption of best management practices that should result in reduced sickness and associated adverse effects, the Oklahoma Quality Beef Network (OQBN) was initially developed in 2001 and redefined in 2009. The objective is to add value to Oklahoma s calf crop and capture at least part of the added value. During the initial phase of the OQBN, a source and process verification system was implemented focusing on management practices around the time of weaning. In general, OQBN process verification (or certification) requires producers to wean their calves at the home ranch for a minimum of 45 days and follow specific quality assurance, vaccination and nutritional guidelines. OQBN offers unbiased information on beef cattle value enhancement. It provides producers and others in the beef industry education and tools to improve access to value-added programs. In the beginning of OQBN, the program was designed to be a process verification and certification program for preconditioned calves. Today, the OQBN is the complete value-added program as it is a network of Oklahoma State University, Oklahoma Cattlemen s Association, livestock auctions, beef producers, and allied beef industry. It offers participation in value-added markets such as health management verification, age verification, source verification, production system verification, and genetic verification. The Oklahoma Cooperative Extension Service in cooperation with the Oklahoma Cattlemen s Association recognized the increased interest and participation in value-enhancement marketing strategies for cowcalf producers. However, many producers are unaware and unfamiliar with value-added programs available to them. As a result of the challenges facing the Oklahoma beef industry, a Beef Cattle Value

Enhancement Specialist was hired in 2008 at OSU to assist producers in taking advantage of the programs and opportunities available. One of the first tasks identified was developing benchmarks for current participation in value-added programs by Oklahoma beef cattle producers. This benchmark was then repeated in 2012 it see changes in the participation of value added programs over a 5 year period. To identify programs in which Oklahoma producers were involved in 2007 and 2012, various marketing programs were contacted to measure producer participation and the number of cattle marketed through value-added efforts. Contacts were made with source and age verification companies approved through USDA, breed associations, feedyards, pharmaceutical companies, and livestock markets as reported by the USDA Agriculture marketing Service (AMSA). Oklahoma s Value Added Programs: Growth Companies reported the total number of Oklahoma producers who participated in the valueenhancement program and total number of calves enrolled. In 2007, 85,575 Oklahoma calves were enrolled in a value-added marketing program which is 4.3 percent of possible calves available annually of Oklahoma cattle numbers. Revisiting this in 2012, 127,759 calves were enrolled in a value added marketing opportunity; this is 7.28% of the 1,754,000 calves available for market in 2012 and an overall increase of 33% of cattle enrolled over the 5 year period. Oklahoma Quality Beef Network Vac-45 2013 Impact The weighted average OQBN premiums by weight category and gender for 2013 are illustrated in Figure 2. Note again that price differences attributable to other characteristics are not reflected in the weighted-average. OQBN steers and heifers earned market premiums over non-preconditioned cattle in every weight category. Both steers and heifers appeared to garner higher premiums per hundredweight over non-preconditioned calves at lighter weights. Relative to non-preconditioned calves, steer calf premiums ranged from $7.49/cwt to $22.15/cwt (weighted average basis) while heifer calf premiums ranged from $6.33/cwt to $24.88/cwt (weighted average basis), generally with higher premiums per cwt for lighter weight calves. Estimated value added to Oklahoma calves based on premiums alone, including the 1281 OQBN calves marketed outside of OQBN sales, is approximately $341,000.00. Using the Oklahoma Quality Beef Network Budgeting Tool, profit per head for 2013 OQBN calves (estimated gain of 1 lbs/day during the preconditioning period) is estimated at approximately $54/head when the cost of preconditioning and the benefit of additional weight gain between weaning and marketing is considered. The OQBN budgeting tool is available at www.agecon.okstate.edu/faculty/publications/3943.xlsx. The increase in net income does not consider the potential improvements in animal performance or carcass quality beyond the initial marketing (cow/calf) phase. Perhaps the most significant impact the OQBN has had on the beef industry in Oklahoma to date cannot be measured by participation in the OQBN Vac-45 sales alone but also OQBN cattle marketed through other value-added channels. There are several thousand additional value-added calves sold at the livestock markets after the OQBN portion of the sales. Producers are taking advantage of the increased buyers attending these sales seeking value-added cattle. The participation of OQBN producers and number of cattle increased 46% from 2012 enrollments. This can be contributed to the increase in forage availability and relief in feed prices from much need rains

$/cwt throughout the United States. Cattle producers also took advantage of record high prices in 2013, which also limited the number of cattle enrolled in value added programs. Many ranchers sold calves early for those record prices instead retaining them and taking advantage of value added programs that still saw premiums benefiting cattle producers. Evaluation Following sales in 2013, surveys were mailed to all OQBN participants including both sellers and buyers. 54 surveys were sent buyers of OQBN verified cattle with a response of 5.5%. Sellers were more eager to respond at 59% returning surveys of 94 participants. 67% of all buyers reported no death loss after purchase of OQBN verified calves and the other 33% reported less than 1%. 92% of sellers of OQBN cattle will either definitely or probably participate in the program in the future. 10 9 8 7 6 5 4 3 2 1 0 OQBN Premium over Calves Marketed with No Preconditioning ($/cwt)* 8.12 7.84 6.54 9.23 8.65 2009 2010 2011 2012 2013 *Premiums calculated as difference in weighted average prices. Figure 1. OQBN Premiums at OQBN Calf Sales, Fall 2009 though Fall 2013

$/cwt 30.00 25.00 20.00 15.00 10.00 5.00 0.00 2013 OQBN Premium over Calves Marketed with No Preconditioning ($/cwt) 300-399 lbs 400-499 lbs 500-599 lbs 600-699 lbs 700-799 lbs Steers 22.15 11.33 15.66 10.07 7.49 Heifers 24.88 13.73 7.25 9.45 6.33 Figure 2. Fall 2013 OQBN Premiums, by Gender and by Weight Category References DeVuyst, Eric A., Kellie Curry Raper, and Daniel Stein. Oklahoma Quality Beef Network Budgeting Tool. March 2011. Available at www.agecon.okstate.edu/faculty/publications/3943.xlsx. McKinney, Doug, Eric DeVuyst, Kellie Curry Raper, and Galen Williams. Oklahoma Quality Beef Network: Summary of Fall 2010 Sales. Master Cattleman Quarterly, Oklahoma Cooperative Extension Service, Volume 10, Page 4, March 2011. Raper, Kellie Curry and Doug McKinney. Oklahoma Quality Beef Network: Summary of Fall 2009 Sales. Master Cattleman Quarterly, Oklahoma Cooperative Extension Service, Volume 6, Page 6-7, March 2010. Raper, Kellie Curry, Eric DeVuyst, Derrell Peel and Doug McKinney. Oklahoma Quality Beef Network: Summary of Fall 2011 Sales. Master Cattleman Quarterly, Oklahoma Cooperative Extension Service, Volume 14, Page 4-5, March 2012.

Appendix

2013 OQBN Vac-45 Sales* Location Contact Phone Number Sale Date Wean Date Cherokee Livestock Tim Starks 580-596-3361 October 30, 2013 September 16, 2013 Elk City Livestock Brandon Hickey 580-497-6095 November 1, 2013 September 17, 2013 OKC West Bill Barnhart 800-778-9378 November 6, 2013 September 22, 2013 McAlester Stockyards Lindsey Grant 918-423-2834 November 19, 2013 October 5, 2013 Blackwell Livestock Gary or Grady Potter 580-363-9941 November 23, 2013 October 9, 2013 Tulsa Stockyards Joe Don Eaves 918-760-1300 December 2, 2013 October 18, 2013 OKC West Bill Barnhart 800-778-9378 December 4, 2013 October 20, 2013 Pawnee Livestock Will Conway 580-220-9454 December 7, 2013 October 23, 2013 McAlester Stockyards Lindsey Grant 918-423-2834 February 25, 2014 January 1, 2014 McAlester Stockyards Lindsey Grant 918-423-2834 April 1, 2014 February 15, 2014 *Sales as of April 22, 2013 For additional information about the Oklahoma Quality Beef Network visit www.oqbn.okstate.edu, your local OSU Extension Office or: Gant Mourer 201 Animal Science Stillwater, OK 74078 Phone: 405-744-6060 Fax: 405-744-7390 gantm@okstate.edu

2013 Survey Sent to Sellers 59%Respondance (% of Respondents Reply) Oklahoma State University Dear OQBN participant, Thank you for participating in the Oklahoma Quality Beef Network in 2013. In an ongoing effort to determine strengths and weaknesses of the OQBN, we are asking for your feedback. Please take the time to fill out this brief survey and provide your suggestions, specific concerns and recommendations in the space provided. A summary of this survey data will be made available on the OQBN web site at www.oqbn.okstate.edu. Simply fill out the survey and place it in the self-addressed stamped envelope for mailing. Thank you for your assistance. ************************************************************************************************ Oklahoma Quality Beef Network Program (OQBN): 5. Estimate the premium ($/cwt) you received for your calves over the price they would have Please mark (X) the one most appropriate responses brought during a regular sale? which best describes your situation 1. How did you become aware of the OQBN program? Oklahoma Cattlemen's Association meeting (9%) Oklahoma Cowman Magazine (4%) OQBN Educational Meeting (6%) OSU County Extension Office (30%) Livestock Market Operator (19%) Friend or Neighbor (13%) Other (Specify) (19%) 2. To which livestock market(s) did you consign OQBN calves? Cherokee, Oct. 30 (4%) Tulsa, Dec. 2 (5%) Elk City, Nov. 1 (4%) El Reno, Dec. 4 (32%) El Reno, Nov. 6 (21%) Pawnee, Dec. 14 (9%) McAlester, Nov. 19 (9%) Non-OQBN Sale (2%) Blackwell, Nov. 23 (14%) 3. At the market in which you sold your OQBN calves, is that where you would normally market your cattle? Yes (76%) No (24%) 4. Number of OQBN calves sold in 2013 sales: 1-10 head (14%) 51-100 (21%) 11-25 (25%) 101-150 (7%) 25-50 (29%) 151 head or more(4%) (Circle one) 0(17%) 2(9%) 4(13%) 6(24%) 8(20%) 10+(17%) 5. Percentage of cattle that got sick during the preconditioning phase? None(84%) Less than one percent (5%) 1-5 % (9%) 6-10 % (0%) 11 percent or more (2%) 6. Percentage of cattle that died during the preconditioning phase? None (89%) Less than one percent (2%) 1-5 % (9%) 6-10 % (0%) 11 percent or more (0%) 7. What other information would you like prior participating again in a program of this type? Nutrition Cow herd mgmt. Forage management Breeding Genetics Other (Specify) 8. How comfortable were you with the overall enrollment and certification process? Very comfortable (70%) Comfortable (30%) Uncomfortable (0%) VeryUncomfortable(0%)

9. Will you consign calves to future OQBN Vac-45 sales? Definitely Yes (48%) Probably No (4%) Probably Yes (46%) Definitely No(8%) 10. The primary reason for my participation in the OQBN Vac-45 program was: (Please mark (X) only one response) Premium received (49%) The positive image created by selling reputation calves (11%) I normally pre-condition calves I sell anyway(26%) The potential of attracting a new clientele among buyers; therefore, enhancing competition for a quality product (8%) The opportunity to create a new image for the industry (4%) Other (Specify) (2%) 11. Did you market calves through OQBN in prior years? Yes(63%) No(37%) If so what year(s) 12. Would you be interested in an on-line enrollment process? Yes (69%) No (31%) Demographics: Please mark (X) the one most appropriate response which best describes you or your operation. 13. Age: <21 years (4%) 21-30(2%) 31-40(18%) 41-50(11%) 51-60(21%) 61-70(30%) 71 or greater(14%) 14. Type of beef operation: Cow/calf Commercial(75%) Purebred Operation(2%) Combination Cow/calf and Stocker Operation(18%) Combination Cow/calf and Purebred Operation (5%) Other (specify) 15. Number of years involved in Beef Cattle Industry: 1-5 years (9%) 6-10 years (11%) 11-15(9%) 16-20 (17%) 21-30(15%) 31 or more(39%) 16. Size of brood cow operation (head): 1-25 (16%) 26-50 (22%) 51-75 (7%) 76-100 (13%) 101-300(40%) 301-600(2%) 17. Number of calves marketed annually: 25 or less (20%) 26 50 (20%) 51-75(16%) 76 100 (21%) 101-300(21%) 301 600(2%) 18. Type of situation which best describes your operation: Full time ranching /no off ranch job (30%) Part time ranching / part time off ranch job(27%) Part time ranching / Full time off ranch job(20%) Full time ranching with manager/ Full time off ranch job(5%) One spouse full time ranch/one spouse full time off ranch job(7%) Part time ranching /both spouses full time off ranch jobs (11%) 19. Years of experience in pre-conditioning cattle: None(5%) 11-15(11%) 1-5 years (25%) 16-20(5%) 6-10(31%) 21 or more(22%) We appreciate your comments or suggestions for improving the OQBN program. How would you state your overall experience with the program? What needs to be changed to improve it? Please complete and return in the enclosed stamped envelope Return to: Gant Mourer 201 Animal Science Oklahoma State University Stillwater, OK 74078

2013 Seller Comments Several people have asked me about what they need to vaccinate with. If you are able to make suggestions, it may help. Very pleased. Gant Mourer is great. I'm Happy. My Dad sold 200 steers the same day at the same sale, (not OQBN), and got a higher price than mine, just on quantity. Mine were better calves and OQBN, but the larger quantity still made more money. Pawnee sale is late in the year for my operation. The big run of Texas calves before the sale softened the market. My overall experience has been very good. Drop the pasturella requirement. Would like to see one in Idabel, but quantity of calves might be too low to attract buyers. Pay for tags as you get them and no charge at the sale. Start OQBN and Integrity sale earlier about 9-10:00. Very satisfied with overall program. Found Gant easy to work with and the program met all my expectations. Selling by myself is the only way I would participate again. I feel I didn't get any extra, and I need to know what receives a premium. I didn't receive any more than my brother who sold the week before and didn t condition anything. Great program. I'm surprised the number of cattle were so small. Similar sales in Sulphur Springs, TX. Held several things per year have 7-9,000 head each sale. They are in the heart of cow/calf country, though. Thanks Gant for running the program. I like the third party operations. It seems to help have a third party to inspect the calves. good Great program

I only question if a 30 day weaning requirement would suffice rather than the 45? 45 days is a long time, and I don't think most buyers can differentiate between a calf weaned 30 & 45 days. Would like to see a mid-summer sale. July or August or even early Sept. That is when my late fall calves are ready to market. Follow up with price comparison to non-oqbn cattle sold the same day or year! I like it because of the premiums and good advice from Gant. McIntosh County agent, Randy Burris, is very willing to certify the calf enrollment form. Quality of cattle in the OQBN; Pre/Post Inspections of cattle; Have a guarantee of XX of $$ over the average day of sale Thank you. Gary P. does good! Get sales in NE OK to receive the same prices as the better sales receive You are doing a good job. Thank you! Great program. Wish it could be held in early Nov. Went well. Would do it again. My experience was good. The program needs advertising: feed stores, banks, extension offices. If there were a small, pocket-sized booklet wherein we could write the vaccine information and any information needed, it would help. Vaccine type, dates applied, etc. Experience was good. No complaints. Appreciate Gant Mourer. Maybe some type of online access to sale results. The program is great. Good

2013 Survey Sent to Buyers 5.5%Respondance (% of Respondents Reply) Dear OQBN cattle buyer, Thank you for taking part in the Oklahoma Quality Beef Network (OQBN). In an ongoing effort determine strengths and weaknesses of the OQBN, we are asking for your feedback. Please take time to fill out this brief survey and provide your suggestions, specific concerns and recommendations in the space provided. A summary of this survey data will be made available on the OQBN web site www.oqbn.okstate.edu. Simply fill out the survey and place it in the self-addressed stamped envelope for mailing. Thank you for your help. ************************************************************************************************* Please mark (X) the most appropriate response which Receiving/growing yard best describes your situation Heifer Development (13%) Oklahoma Quality Beef Network Program (OQBN): 1. Number of OQBN certified cattle purchased: 19 or less (40%) 60 80(20%) 20 40(20%) 80 120(0%) 40 60(10%) 120 or more(10%) 2. Did you buy this group of OQBN certified cattle for a client or your own operation?: Client (50%) Own operation (50%) 3. Percent of this group of OQBN cattle that died up to sixty days after the OQBN sale: None (67%) Less than 1 % 1-1.9 % (33%) 2-2.9 % 3 3.9 % 4 % or more 4. Percent of this group of OQBN cattle that had to be treated for sickness up to sixty days after the OQBN sale: None (57%) Less than 5 % (29%) 5 9.9 % (14%) 10 14.9 % 15 19.9 % 20 24.9 % 25 29.9 % 30 34.9 % 35 39.9 % 40 % or more 5. Current management situation for this group of OQBN cattle: Wheat pasture (63%) Native grass/range(13%) Feedyard (25%) 6. Estimate the premium you paid in 2013 for this group of OQBN cattle over the price that you would have paid for similar quality cattle with no documented health history? 0(25%) 2(13%) 4(25%) 6(25%) 8(13%)10+(25%) $/cwt 7. What information would you like to have regarding the cattle you purchase in future OQBN sales? Specific vaccinations used and dates (30%) Weaning date (40%) Feeding Program (10%) More specific genetic information Genetic Testing For Growth Negative PI BVD Test (10%) Other (Specify) (10%) 8. How comfortable were you with the overall integrity of the certification process in 2013? Very comfortable (57%) Comfortable (43%) Uncomfortable (0%) Very uncomfortable(0%) 9. Will you purchase OQBN cattle in future sales? Definitely Yes(33%) Probably No Probably Yes (67%) Definitely No

10. If you purchased similar type and weight cattle during the same time of year with no documented health history, what was the rate of death loss? None Less than 1 %(17%) 1-1.9 % (17%) 2-2.9 %(67%) 3 3.9 % 4 % or more 11. If you purchased similar type and weight cattle during the same time of year with no documented health history, what percent had to be treated for sickness up to 60 days after you purchased them? None Less than 5 %(14%) 5 9.9 %(14%) 10 14.9 %(14%) 15 19.9 %(14%) 20 24.9 %(29%) 25 29.9 % or more (14%) 12. Please characterize your overall experience with the OQBN cattle that you purchased: Good (71%) Bad Worth the extra money (29%) Not worth the extra money Value Added: 13. Besides price, please rank importance of attributes when purchasing/receiving cattle? (1- most important, 5-not important) _3 Castrated and Dehorned 1 Good Genetics/Quality Calf 2 Vaccinated 5 Weaned over 30 days 4 Weaned over 45 days Other (Specify) 14. When do you consider a calf preconditioned? Vaccinated (70%) Dehorned and Castrated(40%) Weaned over 30 days Weaned over 45 days(45%) Verified through health program(50%) Other (Specify) 15. Would you purchase/receive more calves that were verified in a value added health program if available? Always(11%) Regularly(56%) Sometimes(33%) Never 16. Please rank what factors add value when purchasing/ receiving value added cattle? (1-most important 5-least important) Calf Health(1) Ranch Raised(4) Bunk Broke(2) Calf Uniformity(3) Truck load lots Available(4) Other (Specify) In your opinion, please describe calf characteristics (other than price) that have the most potential to make money for you or your customer. Demographics: 17. Years of experience buying cattle: 1-5 years(14%) 16-20 6-10 years 21 or more(86%) 18. Age: <21 years 21-30 31-40 41-50 51-60(57%) 61-70(29%) 71 years of age or greater(14%) 19. Number of stocker cattle (<750 lbs.) purchased or fed annually: None Less than 100 101-500(33%) 501 1000(17%) 1001-5000(33%) 5001-25,000(17%) 25,001-50,000 50,000 or more 20. Number of feeder cattle (>750 lbs.) purchased or fed annually: None Less than 100(43%) 101-500 501 1000(14%) 1001-5000 (29%) 5001-25,000(14%) 25,001-50,000 50,000 or more Please complete and return in the enclosed stamped envelope Return to : Gant Mourer 201 Animal Science Oklahoma State University Stillwater, OK 74078

2013 Buyer Comments 1. In your opinion, please describe calf characteristics (other than price) that have the most potential to make money for you or your customer. Health & gainability Health-flesh-bone structure Start faster, stand stress better Overall calf quality if they are to be used as replacements, if not really good (i.e. nice or top quality) I won't buy them at any price. But, I'll pay what-ever-premium I need to (in order to purchase) if I really like them. I won't waste my time on ones that aren't top quality. 2. We appreciate your comments regarding specific ways that you see the program can/should be improved: Weaned 60 days would help greatly Do not over fill the cattle on sale day. Therefore, buyer has less shrinkage to Feedlot & less scour problems upon arrival Order buy didn't track cattle. Sorry You do a great job & the program & the sale barns do as well. So, just keep up the great and hard work. Thank you. I didn't purchase OQBN cattle this year with limited wheat pasture. I already had my cattle. I wish I had OQBN, with my death loss 3% I will purchase more OQBN later or similar pre-conditioning.