The Moos Room™

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Emily: Welcome everybody to The Moos Room. OG3 is here. Welcome back, Dr. Joe, we missed you last episode.
Dr. Joe: I missed you guys too. It was fun listening to you. Just the two of you guys talk, but I did miss you.
Emily: Yes, it sounds so much better without you, doesn't it?
Dr. Joe: I'm not going to argue with that. I'm not going to argue with that at all.
Emily: No, no. We wouldn't be the OG3 without you, Dr. Joe, so we're glad you're back. We spent a lot of our last episode on a dairy topic, and this week we're going to really be focusing on beef, but I'm really excited about this episode. Joe and a team of people that he worked with from extension, the vet school, Minnesota Beef Council, recently did a survey just about Minnesota's beef industry. I've gotten a chance to look at the report a little bit. I know the full report just got released. The report's really interesting, a lot of stuff that we learned here but Joe, maybe just to start things off, why don't you give us just a brief overview of why you did the survey, what you were looking for in doing the survey?
Dr. Joe: For sure. This came up when we were talking, myself and a couple of colleagues, about what do we know about Minnesota's beef production and what do we think we know and what do we actually know. There's a lot of assumptions we were making about Minnesota's beef production in a lot of different ways. We just wanted to confirm some of those things that we had been assuming for a long time. That was part of the motivation behind it.
The main motivation in my mind was that there's just so many times that I read articles or research or something like that where everything is based in another state. One of the other major cattle-producing states, the one that I pick on the most, nothing against Nebraska, but I read a lot of research from Nebraska and not all of it applies to Minnesota, but we're constantly trying to make it apply to Minnesota.
The goal was to just let's learn as much as we can about the Minnesota beef industry so that we can direct our research to help Minnesota beef producers and make it specific as possible to Minnesota and our production system, and not try to take someone else's research from a different state and try to make it work here. That was most of the goal behind this whole project.
Emily: Yes, great. Like I said, it looks like it was a really thorough survey. There's a lot of great information in here. Let's maybe just kick things off. I'm curious, Joe, what is one result from the survey that you found the most surprising?
Dr. Joe: That's a tough question. Like I said, I think a lot of the things that we asked were things that we had assumed and then confirmed, but it's nice to know that those assumptions were correct. The biggest surprise was something I knew but I didn't know it was to that degree. One of the things we found was that when it comes to cow-calf producers and feedlot producers, there's just not that many people that are cow-calving and feedlot producers that consider it their primary source of income. I knew that but with cow-calf producers, when they consider their cow-calf operation, their primary cattle operation, those people only 21% of them consider their cattle operation their primary source of income. Then with the feedlot, the same thing set up. There's 35% of people that consider their primary cattle operation feedlot. Only 35% of those people consider their cattle operation their primary source of income.
Something I knew and I think we all knew, but to me to put numbers to it just really hit home to say, okay, only one in five people that have a primary cow-calf operation consider their primary source of income. That means there's a day job somewhere or something else. This is an income diversification strategy or a side hustle or whatever you want to call it. It's not their day job. I think that really frames what we can do in the state in terms of extension and programming and teaching and who we need to direct our programming to.
Bradley: For those listeners out here that don't really know Minnesota or are located somewhere else, Minnesota's a big state. It's a 12-hour drive from north to south, three to four across, there's a lot of differences in beef production. We have cow-calf, feedlots, hobby farms, you name it. What did some of those results show as far as the diversity of beef in Minnesota?
Dr. Joe: It showed, again, something that we assumed but didn't really have any numbers to put to it. There's a lot of cattle operations that are involved in different segments of the industry, the most prevalent being cow-calf so 75% of our respondents reported that they participate in a cow-calf operation. When we look at, okay, what else is everyone involved in? There's seed stock, show stock, stock or background, or in feedlot and there's so many people that participate in multiple sections of the industry. The most, like I said, 75% of our respondents reported they participate in a cow calf. 24% of our respondents said they participate in seed stock. 14% said they participate in show stock. 10% participate in stock or background or operations and then 29% of our respondents participate in feedlot.
That's scattered all over the state and it's definitely concentrated in certain areas. I'm really proud that we had almost every county in Minnesota represented in this survey. 78 out of the 87 counties in Minnesota were represented. I think we got enough of a distribution across the state for this data to mean something and us to probably draw some conclusions as long as they're not too much in the weeds.
Really what we saw is that, again, something that we probably knew, but nice to put numbers to that most of our cow-calf operations are in north central, southwest, and southeast Minnesota, and then our feedlots are concentrated in southwest, southeast, and then south central Minnesota. So more of the southern half of the state with a little bit of a smattering in north-central Minnesota. I think it just tells us where our audience is. It tells us where everyone's located and that beef industry in Minnesota is still diverse and it's still widespread and it's still a big thing.
Emily: It's really interesting to see, yes, how obviously there's a lot of respondents that have more than one operation type with their beef cattle. If we look at the percentage of respondents for each operation type, it adds up to well over 100%. Were there any trends you noticed in that or there any relationships you noticed between some of the different operation types for people that had multiple?
Dr. Joe: I think it's really interesting because we allowed people to identify themselves. We didn't define any of these operations styles, so we allowed people to identify themselves in whatever operation style they had. Seed stock and show stock most often identified also as a cow-calf and that makes sense. It's basically a specialized cow-calf operation. The one that got really interesting was feedlot and the size that people identified as feedlot. We had everything from really pretty big operations for Minnesota up over 2,500 head to one. There's someone out there who feeds one steer or heifer out, and they're considering themselves a feedlot operation.
It was really interesting to see how people identify themselves in the game and how they have the mentality of that for their cattle operations. Even though they were feeding one animal, they still consider that a feedlot operation, which I think is cool because it brings people closer together in the industry when people are willing to accept all those different definitions. I think that was pretty cool. Those are the major trends that I like to see is that just a huge range in operation size and what people chose to identify as.
Emily: I think that's a really great thing about the survey and what I like about it just reading the results is anybody could respond to it. Anybody with beef cattle and I really like letting respondents self-identify like you give the term but you aren't defining it as, oh, to be a feedlot you need to be feeding at least 50 head or any of those parameters that sometimes disqualify people from surveys like this. I think that's really good because then we get a better look at what the actual reality is for these operations and how that fits within just the overall agriculture industry of the state of Minnesota as well.
I think that that's a really good way to do it and it is really interesting to see who is doing what and how they define what their work is. I like too that then you ask people also what their primary operation type was so we can get a little more in-depth as to if they're doing more than one, what's their main one and what does that look like for them?
Dr. Joe: The cool thing is that this is a cattle survey, a beef industry survey, but we wanted to make sure that in some way it was people focused because that's who we're dealing with. That's who we talk to. That's who's running the show. The cattle aren't running the show, even though it might seem like they are at times. The people are what matter and that's what matters to us, an extension, and that's who the research matters to everything. I like that a lot of this probably somewhat unintentionally came out people-focused. That's what we wanted to see is fun to look at in the data, the context that we wanted to learn more about people, not just their operation.
Bradley: At some point, we have to market all of our beef, whether feedlot or cow calves. You found some interesting information related to marketing strategies with farmers, what they're unsure about. You talked about some new price discovery stuff. What are the big takehomes as far as marketing from a beef standpoint?
Dr. Joe: I think the biggest takehome is that auction markets still play a major role in Minnesota. I personally think that's a good thing. I like auction markets. I like being in auction markets so much so that I rambled for 15 minutes in one of our episodes not too long ago talking about just auction markets. I love auction markets. I think they provide a great service to the Minnesota beef industry. There's price discovery like Brad already mentioned. Reliability of payment is there. They're convenient.
Now there's some things that negatives associated with them too, but we won't get into too much of those today. I think they play such a huge role still, and I'd like to see that. I think it makes Minnesota somewhat unique in that aspect compared to some of our other big production states. We had, I think it was close to 75% of people market their cow calves still through an auction market. 72%, I'm looking at it right here. That's a huge number. When we look at it that way, this play such a huge part in the market still. Almost everybody is still using an auction market in some way. That was a big takeaway.
The other big takeaway is that something, again, we assumed and we knew from reporting in Minnesota and Iowa, but there's just a lot more cattle in Minnesota that are sold on a live weight basis compared to a lot of other major cattle-producing states. That gives us some cushion when it comes to price discovery. It makes it a little easier for producers to know how to plan what they're going to get, those things.
Again, I think it's a good thing. Some people might see it that we're behind the times and we haven't moved to marketing everything on a grid and doing everything through a contract, but I think it's a good thing. That hesitation might be rooted in some tradition, but I think it also provides us some benefits that these other major cattle states are struggling with and we're struggling with them too, but maybe not as much so as some of the other major states.
Bradley: Well, it's interesting you say that, Joe, about the livestock auctions. Then as we look into the future, what that might mean for the beef industry in Minnesota. When I was a kid, there was a lot more auction markets than what there are today. Hopefully, we can keep those going because obviously, it seems to be a very important part of the beef industry in Minnesota. If those smaller auctions disappear or go away, then it's going to be a little more difficult.
It's good to see that information that that's how people are still marketing their cows. Even from a industry perspective, we need to keep those going because that's the number one source of marketing for farms, especially with ones that are maybe not very large and that's what they rely on.
Dr. Joe: Yes, that's what one of the key takeaways for me from this whole project was that auction markets still play a major role and a lot of producers still depend on them. Like Brad said, there's less every year it seems like, or there's a lot fewer than there used to be. I think one of the areas of research that we really want to dig into is how do we maximize the strengths of auction markets in the beef industry in Minnesota. Well, mitigating some of the risks or the negatives associated with an auction market when it comes to cattle health and stress and things like that and biosecurity especially.
That's the area that I'm most excited to try to explore. How do we maximize the benefits of an auction market while mitigating some of the risks? That's been a topic forever. It's nothing new. I think it is somewhat unique to Minnesota that we depend on them so much and we really need to, I think, double down on the fact that we do depend on them. I think they're essential to the way our market functions.
Emily: Joe, would you say that the amount of cattle that we do have going through the auction markets is somewhat unique to Minnesota? Did you compare that to data or any available data from other states of how those things are moving? I know it's high compared to the bigger beef states like Nebraska, but do you have any insight into what that looks like in other states in the region?
Dr. Joe: I think it is somewhat unique. I think that auction markets still play a major role in other states as well. It all comes down to some inferring from our live weight percentage of our cattle that are still marketed on a live weight basis that allows us to say, "Okay, well, there's something different about Minnesota when we compare to Oklahoma, Texas, Nebraska, some of the big states that almost everything is sold on a contracted grid or a hanging weight basis."
It's just something that we found in Minnesota that's different. Again, we need to celebrate that it is different and be proud of that because we're looking at one and a half to two times more cattle are marketed on a live cash basis than on a dress formula or on a negotiated grid. That's different compared to a lot of the major states. I think it's a good thing.
Emily: Speaking of other states, I know we've talked about the comparison on the marketing side, but what did you find on the production and management side as far as how producers in Minnesota might measure up to producers in other states in the region? Are there a lot of differences in management production practices or is it pretty even keel across the region?
Dr. Joe: Well, one of the major differences that we saw on the cow-calf side was that in Minnesota there's only about 63% of producers that report preconditioning in some way. When we look at national data, comparing that to other states in the region, in the central region, it's low. We're low compared to that data. There's some disconnect there, whether cow-calf producers don't see the benefit in terms of pounds or avid price or we have a facilities issue where it makes it tough or there's some other logistics at play with crop farming and everything else that comes into that, we need to explore that a lot more.
Why aren't we doing it as much as other states? My opinion is that probably it is a combination of logistics and economics. If cowpath producers aren't seeing the benefit when it comes to price for doing those things, why spend the time on it? I can't blame you for not doing it if no one's going to pay you. That's what it comes down to. If I'm going to take the time to castrate early and get two rounds of vaccines in before weaning and do all these other things and make sure there's ear tags in every animal, if I don't see the return on that investment, then I wouldn't do it either. I think we got to look into that a lot more.
The other thing that we saw when we were comparing the other states is really looking at the FINBIN database and looking at general metrics related to production on the cow-calf side. When we're looking at cow-calf and production, we're looking at things like pounds of calf weaned per cow exposed, big metrics like that to take into account not only production of that calf and how much they gain but our reproductive efficiency as well. When we look at that number, we see that our best producers in terms of production in the state really stack up really nicely with all the other states. They're right there, same if not better than all the other best producers in the other states. The other states being North Dakota, South Dakota, Wisconsin, Missouri, and Nebraska.
Then when we look at the middle 50, right in the middle, what is our median or average producer doing in terms of production that stacks up really well as well to North Dakota, South Dakota, Wisconsin, Missouri, and Nebraska? Where we really fall off in that database at least is when we look at our bottom 10% of producers in terms of production. To be clear, that has nothing to do with size of operation, but it has to do with their production data. The bottom 10% in terms of production is way lower compared to some of the other states, specifically North Dakota, South Dakota, and Wisconsin.
That to me says that we have really good producers in the state and we're doing really well comparing to other states. At the bottom, we're leaving some people behind. Our industry would benefit a lot from making sure that we bring that bottom-up and pay some attention to making sure we don't leave that bottom behind. We can take our top higher but the biggest benefit is going to get those producers that are on the bottom to move up and that'll improve the Minnesota beef industry, I think more than trying to take the top higher.
Emily: I just want to note really quick, Joe, you mentioned FINBIN and I just want to give a quick plug for that database. If you aren't familiar with FINBIN, you should really check it out. You can find it @finbin.umn.edu, so F-I-N-B-I-N.umn.edu. You can find a lot of really great summary reports and benchmark reports about production and financials of all types of farming enterprises not just beef. You can look at whole farm, crop, livestock, and all of those broken down as well.
It's a really great management tool that's available to producers for free. It's put together by the Center for Farm Financial Management at the U of M. They do a really great job capturing this data and helping you figure out ways to look at it and how you can apply it to your operation and again, do some of that benchmarking compared to-- you choose how you want to look at that. Is it operations of similar size, operations of similar type? Whatever it might be. Just a little plug for FINBIN. If you don't check it out now, I really recommend that you start using it moving into the future because there's a lot of really great information in there.
Bradley: Joe, you do a big survey like this, obviously, there's some motivations behind it as far as where to put extension efforts or research efforts. Where are we going to go in the future? We've got all this information and obviously, we want to put it to good use for producers in the state. Where do we go or what direction is it showing that we should go?
Dr. Joe: Well, this is where we get into my opinion a little bit. It's backed up I think by the report and the survey results, but it's still my opinion, so we'll be clear there.
Bradley: You can have an opinion. Brad has an opinion every day.
Dr. Joe: Brad has plenty of opinions.
Bradley: It's okay.
Emily: The whole point of this podcast is it's our opinions.
Dr. Joe: That's true is true.
Emily: Carry on, Joe.
Dr. Joe: All right. Well, so in the future, I think the future and what we want to do is, again, I mean, we talked about the specific areas that we need to work on. One being auction markets. I think making the benefits of those better and doubling down on that, and then trying to figure out how to minimize or mitigate the negative impacts on cattle health. Then we talked about preconditioning and making sure that we get paid for those things in some way, and make sure that those things that we know benefit cattle health and benefit the feedlot producer, that cow-calf producers are getting paid for that and figure out how we can get more people to adopt those practices.
Bring the bottom up. That's the other piece of that we just talked about. In terms of how to do that, I think a lot of this comes down to something that we don't talk about enough. I think the general public often has a misconception about. When we talk about-- and based on the survey results, this is true. When we talk about the number of cattle in the state, the majority of the cattle are represented by a smaller number of large operations.
That's the story that everyone runs with. Everyone wants to talk about how operations are getting bigger and they're huge and big farms are bad, which is not true. I mean, let's get that right away. The other piece of that is that the majority of farmers, people are still on small operations. I think that's the piece that we don't talk about enough. When we talk about the number of operations, the majority of those operations, the majority of people are still involved on small operations.
Minnesota is still based when we talk about the number of people in small farms. That really provides us two vastly different groups a lot of time in how they run their operations, what kind of programming they're looking for, all of that. We have a decent divide. I'm not saying that you can't talk to both at the same time, but I think we need to really focus some of our programming knowing that when we're talking to producers, they have a day job and you can't just be throwing out recommendations that don't work for someone who has to be off the farm for eight hours a day most days.
I think that's one thing and then our research itself. I think applied research is the root of everything that we need to be doing at a land-grant university. That applied research should be the basis of most of our programming. Most of our funding, and Brad, you're the funding expert with your grant money, most of that is geared towards the really advanced stuff, advanced technology, cutting edge. That's usually what our large operations want to see.
I just see two different sets of programming, two different sets of research almost, where we say, "Okay, we've got our cutting edge, our advanced technology, and most of the time, that's going to benefit our larger producers but still could benefit our smaller producers." Then we have other things that confirm what we think we know and make sure that it is true and keep us moving forward in that direction by building a knowledge base of the basics so that a lot of people in the industry, we continue at the university to think horses are the solutions when we hear hoof beats rather than thinking zebras all the time.
There's not a silver bullet, there's not something special. It's not something that I can fix with a vaccine. It comes back to basic management that we talk about on the show all the time. In the future, I think we have two different sets of research that need to happen. Brad, am I way off on the funding side of things being skewed towards the cutting edge?
Bradley: No, I agree. Sometimes the basic applied research doesn't get the funding that probably is needed to help producers in the state. Everybody likes to do the new and upcoming technology. I like to do that stuff too, but there should also be ways to do the basics of how can you help producers do certain things that they're having trouble with and it can be hard to fund some of that stuff.
Dr. Joe: I see that as a big problem like when we have basic questions that we think matter, but we don't know. The fact that it's really hard to get that funded is tough to me because I know that the majority of the solutions out there are rooted in that basic management. If I can have more data to show that, I would love to get it but it's really hard to find that funding.
Emily: Joe, while you put your soapbox away, and yes, I just want to say that we need to be considering a lot of these things. Of course, organizations like Extension, and the partners that we're working with on the survey, we do want to know what people want and what the needs are and just making sure that we are covering those needs to the best of our ability. That's why we do this.
I'm sure there are many people out there listening like, "Oh, yes. Another Extension survey." When they get another one or an email or something about it, they're like, "Oh, gosh, here we go." I also want you to see that this is why we do that because this is really, really valuable information that will help inform not only our work but the work of other organizations in the state and in the region as well. It helps us find what those needs are as well. I think that's all really useful information to have as we wrap things up here. Where can people find the full survey, all the results, and everything?
Dr. Joe: Well, I will tell you that the full report, it's a read. It's 40 some pages, so light reading before bed is recommended. You can find the full report @z.umn.edu/mnbreport. Then you can find the summary, which I think a lot of people will be interested in, in z.umn.edu/mnbreportsum, S-U-M.
Emily: I also imagine that the links will be in the show notes for this episode as well, so you can find all that information. That is all that we have for you today. Please be sure to go, and read the summary or read the full report if you're really up for 41 pages of fun. As always, if you have questions, comments, or scathing rebuttals, you can email us at themoosroom@umn.edu.
Dr. Joe: That's T-H-E-M-O-O-S-R-O-O-M@umn.edu.
Emily: If you prefer to use your voice, you can also yell at us on our new voicemail, which you can connect to by dialing 612-624-3610. You can find us on Twitter @umnmoosroom and @umnfarmsafety. Be sure to check out our website, extension.umn.edu. Bye.
Dr. Joe: Bye.
Bradley: Bye.
Dr. Joe: Bye
Emily: Ooh, Brad did the little up thing this time.
Dr. Joe: I like it. We're getting to him.
Emily: Hahaha, breaking him down slowly but surely.
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