News Update
June 23, 2009

Black Bonus — N.D. Sale Barn Study Quantifies Premiums

Producers have always known their genetic and management choices affect the bottom line. Now a North Dakota State University (NDSU) study quantifies how much some of those decisions are worth.

“We were in these sale barns at the key times of the year, from the start of the feeder calf sale to the end,” says Greg Lardy, NDSU animal scientist. “We tried to put ourselves in the seats of the buyers, collecting information that they would have access to as they bid on the calves.”

Lardy and his team recorded data from the sales of nearly 200,000 cattle in 18,178 lots by attending auctions in North Dakota, Montana and South Dakota.

Those factors included lot size, sex, color, vaccination history and natural eligibility. Steers had the greatest premium, at $9.68 per hundredweight (cwt.) ahead of heifers in fall 2006-2007. In winter 2007-2008, that premium was $8.66 per cwt.

Lot size showed the next biggest profit center. Those numbering more than 21 head sold at a $6.29-per-cwt. advantage to lots of five head or fewer in the fall, and at a $4.99-per-cwt. premium in the winter.

“We hear routinely that calves sold in bigger groups bring more dollars,” Lardy says. “This data set really starts to drive home the point that larger lot sizes can bring quite a few more dollars.”

The more calves the better, but the more alike those calves are the bigger the bonus.

“The adage of trying to find ways to market larger sets of more uniform calves is still important,” he says.

Black groups sold at the highest prices in both seasons, with $3.39-per-cwt. and $1.72-per-cwt. premiums, respectively. Black and black-and-white-faced mixed groups came in second, followed by straight black-and-white faced and then mixed color groups. Figuring that bonus on a 500- to 700-pound (lb.) calf translates to a per-head premium of nearly $17 to $24. 

“The bottom line is that there are a number of different alliance programs where people are looking for black-hided cattle,” Lardy says. “Certified Angus Beef ® (CAB®) and other programs have created quite a bit of value there, so you’ve got a number of different market outlets for those cattle once they’re finished.”

In the fall there were nearly four times as many black groups, as any other color classification, which speaks to the popularity of Angus genetics, says Larry Corah, vice president of Certified Angus Beef LLC (CAB).

“We’ve seen the amount of Angus influence steadily trend upward over the last decade,” he says. “We believe that’s because commercial cattlemen have found ways to be more profitable with them, whether that’s retaining ownership and reaping the benefits of carcass merit or selling at the sale barn and realizing a price improvement.”

A CAB survey of 12 auction markets across the United States shows this trend isn’t limited to the Dakotas and eastern Montana. For 10 years, CAB has tracked how known Angus genetics fare compared to non-Angus in its “Here’s the Premium” study. Last fall, 500-lb. Angus steers received $34.51 more at auction than non-Angus contemporaries.

“That was a 10-year record, even as calf prices slumped. That’s a powerful message,” Corah says.
For more information on the NDSU study, visit http://www.ag.ndsu.edu/livestock/2007-beef-report.pdf. 

For additional Here’s the Premium information, go to http://www.cabpartners.com/news/published/index.php.

— Release provided by Certified Angus Beef LLC (CAB).

Secretary Sebelius Releases New Report: Hidden Costs of Health Care

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius today released a new report titled “Hidden Costs of Health Care: Why Americans are Paying More but Getting Less.” The report documents the rising cost of deductibles, co-payments and out-of-pocket expenses that are making it more difficult for families with insurance to receive the health care they need, and is available at www.HealthReform.gov.

The report notes:

A person with employer-based coverage paid an average of $1,522 on health care (not including premiums) in 2006, compared with $1,260 in 2001. When including the added burden of higher premiums, out-of-pocket costs rose even more sharply, with a 30% increase from an average of $2,827 in 2001 to $3,744 in 2006.

Employer-sponsored health insurance premiums have nearly doubled since 2000, a rate three times faster than wages. In 2008, the average premium for a family plan purchased through an employer was $12,680, nearly the annual earnings of a full-time minimum wage job.

For preferred provider organization (PPO) plans purchased through an employer, the average family deductible increased 30% in just two years, from $1,034 to $1,344. This effect is more pronounced for small firms, where PPO deductibles increased from $1,439 to $2,367 — a rise of 64%.

In 2004, only one in five people with health insurance through an employer had a co-payment of more than $25, but by 2008 the number jumped to one in three.

“Millions of Americans don’t have insurance, and millions more are still struggling to afford the care they need,” Sebelius said. “We need to pass health reform this year to give these families the relief they need.”

Today’s report is one of a series of reports on the health care status quo that are available online at http://www.healthreform.gov/reports/index.html.

— Release provided by HHS.

Illinois Firm Recalls Ground Beef Due To Possible E. coli O157:H7 Contamination

International Meat Co. Inc., a Chicago, Ill., establishment, is recalling approximately 6,152 pounds (lb.) of ground beef products that may be contaminated with E. coli O157:H7, the U.S. Department of Agriculture (USDA) Food Safety and Inspection Service (FSIS) announced Monday.

The ground beef products were produced June 17 through June 19 and were shipped to distributors and restaurants in the Chicago, Ill., metropolitan area.

The problem was discovered through FSIS microbiological sampling. FSIS has received no reports of illnesses associated with consumption of these products. Individuals concerned about an illness should contact a physician.

Media and consumer questions regarding the recall should be directed to company Controller John Scorza at 773-622-1400.

The toll-free USDA Meat and Poultry Hotline is 1-888-MPHotline (1-888-674-6854) is available in English and Spanish and can be reached from 10 a.m. to 4 p.m. (Eastern Time) Monday through Friday.

— Release provided by FSIS.

USDA Announces $6.45M in Rural Grants

Agriculture Secretary Tom Vilsack today announced the selection of recipients for $6.45 million in grants to spur economic development and revitalization in rural communities.

“The funding announced today will be used for a broad range of economic development and revitalization projects in some of America’s neediest communities,” Vilsack said.

The applicants were selected to receive funding through the Rural Business Enterprise Grant Empowerment Zones/Enterprise Communities program and the Rural Economic Area Partnership program. These programs help communities plan and implement economic development projects. The grants to be awarded are part of USDA Rural Development’s annual budget and are not funded through the American Recovery and Reinvestment Act of 2009. Funding of each grant recipient is contingent upon the recipient meeting the conditions of the grant agreement.

USDA Rural Development’s mission is to increase economic opportunity and improve the quality of life for rural residents. Rural Development fosters growth in home ownership, finances business development, and supports the creation of critical community and technology infrastructure. Further information on rural programs and a list of grant recipients is available at a local USDA Rural Development office or by visiting USDA Rural Development’s web site at http://www.rurdev.usda.gov.

— Release provided by USDA.

— Compiled by Crystal Albers, associate editor, Angus Productions Inc.