Friday, September 4, 2009

Realizing more value from your Bull Calves - USDA Rural Development Grants

Morris Halliburton, Hallibuton Farms, had a great newsletter this week as always. One topic Morris addressed was that of bull selection . . ."only about 1 out of 125 or more bulls born get to be a herd bull." The rest of those bull calves are destined for a place on someone's plate somewhere in the USA or across the oceans. So it is pretty critical to both small and large ranching operations that a fair price is realized upon sale at the local auction barn, or in sizeable lots sold straight to an order buyers' truck.

The value received at the local barn for the small producer is impacted by lots of variables; including the age, fatness, hide color, verifiable backgrounding, and probably the reputation of the seller to some extent. As well, each local barn has it's own variables in terms of facilities. Some barns are equipped and eager to recieve age and source verified cows and calves, which realize a premium in today's beef market -- but most local livestock barns are not.

The charming article in the Cattleman Magazine, "A Lifetime of Cow Sense", by By Ellen Humphries, comments on the now defunct National Identification System (NAIS). The veteran cowboy that is the focus of the article, Joe Fenn, correctly foresaw just how unworkable that plan was. The local auction barns would have to participate, and that participation would require technological advancement, and that would require dollars that most local barns could ill afford to part with to comply with the proposed NAIS.

Of course, if some of the 2009 stimulus money had been directed to upgrading local livestock barns across the country, providing tax credits to small ranchers for building pens and chutes, purchasing new ear tagging devices as well as the tags -- maybe the federal governement could have accomplished their goal. Apparently, Uncle Sam just wasn't just real motivated.

As Joe Fenn so astutely commented,
“Here’s another man up the road from where we live. He pens his cattle once a year. We ship the calves and they turn the cows back out. He hasn’t bought a bull in 19 years. The cattle are gathered by helicopter and from the rice fields. Now, how is he going to tag a calf? There are a lot of people who do just like these people. I’d say 40 percent are that way,” from the Coastal Plain up through the eastern part of the state."

British White seedstock producers have the pleasure of raising a remarkable breed of cattle, a breed so uncommon that it is not often seen in larger numbers at most local auction barns in the USA. When you consider that typically . . ."only about 1 out of 125 or more bulls born get to be a herd bull.. .", then the issue of realizing optimum fair value for those "herd bull" quality animals becomes one of great economic importance to the seedstock producer of rare British White cattle.

The feedlot industry today is operating on very slim to none margins, as I noted in a blog a week or so back. So risk taking by livestock order buyers on beef calves of a breed they aren't familiar with, is undoubtedly less likely to occur in today's economic environment.

Given that it is only the very few bull calves that ought to make it in life as a "herd bull", then British White seedstock producers have a ready supply of bull calves that ought to be steered and directed into a value-added beef program, or to participation in official feedlot tests for documenting carcass traits and value. Both would work toward realizing better value and perhaps more importantly, increased demand, by the commercial beef industry for your herd bulls through the documented carcass results -- as well as better value for your steer calves at your local barn. Documentation and education is a wonderfully influential marketing tool.

The establishment of 'regions' within the membership of the BWCAA will be discussed at the next annual meeting, scheduled for September 18 in Minnesota. It may be that through regional groups of British White seedstock producers, we can accomplish feedlot testing of our steers and establish regional value-added programs for marketing our beef calves, and maybe even with some financial assistance from Uncle Sam. The USDA via the Rural Business Cooperative Service has a Value-Added Producer Grant Program, established in the year 2000, to help producers move into value-added agricultural enterprises.

A Certified British White Beef program wouldn't be a fit with the requirements of the grant program, but a Certified British White Grassfed Beef or Certified British White Natural Beef, would perhaps meet the requirements of the grant program as they would be value-added.  Grant funds are available for 'planning' as well; which includes studies, etc... With a 'planning' matching grant, we could feasibly accomplish feedlot testing to determine which British White genetics perform the best under either a Grassfed or Natural approach, or both, as well as to help establish minimum carcass quality parameters for such programs as is typically done by other breed associations with value-added beef marketing programs.

This USDA program is a matching funds program, and is available to individuals and groups, including some non-profits. "Planning grants of up to $100,000 and working capital grants of up to $300,000 to successful applicants. Applicants are encouraged to propose projects that use existing agricultural products in non-traditional ways or merge agricultural products with technology in creative ways. Businesses of all sizes may apply, but priority will be given to operators of small to medium-sized farms operating as a family farm – those with average annual gross sales of less than $700,000."

The following are links which discuss the USDA's Value Added Producer Grant Program:

Center for Rural Affairs - Nebraska
North Texas E-News
National Sustainable Agriculture Coalition
USDA - Rural Development

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