Minnesota beef cattle numbers holding steady

Originally published in the November 13, 2009, print edition.

By Dick Hagen The Land Staff Writer

The Land — Balaton-area beef man Dennis Swan has been a member of the Minnesota Beef Council more than 20 years, and currently serves as its chairman. He and his farming partner also feed out about 1,200 head of cattle each year, giving him a broad perspective on the beef industry.

There’s no questioning the biggest dilemma today.

“It’s price,” Swan said, interviewed at the recent Minnesota Beef Expo at the State Fairgrounds in St. Paul. “Yes, now you could say we have over-produced, but there was no way to predict the sudden crashing of our economy and the almost immediate cutback in red meat consumption, both domestic and overseas. However, beef exports to Mexico, Japan, South Korea, even Canada are now rebounding as their economies also start rebounding.”

Despite increasing competition from both Brazil and Australia beef producers in world markets, Swan said foreign buyers favor U.S. beef for two key reasons: food safety and quality (taste).

“We have a reputation for safe food, plus the U.S. Meat Export Federation has been doing a tremendous job of promoting corn-fed U.S. beef. Asians are cautious people about jumping on the bandwagon for new products, so it’s taken time to tell the story of U.S. beef but it keeps looking better, especially as their incomes and lifestyles keep upgrading.”

Financing beef promotion projects both within the United States and overseas is the Beef Checkoff Program, which collects $1 per head for each animal sold. Swan said that to have the same promotional value today as that $1 fee did when the checkoff was initiated, today’s checkoff should be $1.94 per animal. “So I see down the road when the checkoff fee will be increased simply to keep pace with the ‘relative value’ of today’s dollar,” he said.

As expected, virtually every cost item involved in marketing has increased the past decade, thus a checkoff increase is logical. So too, however, has the cost of producing 100 pounds of beef. Swan acknowledges producers won’t get real excited about adding another dollar to their checkoff. The idea wouldn’t even have dared surface last year with corn, protein and other feed costs at all-time highs. Now with $3 to $3.50 corn, he indicated cost of gain is still around 60 to 65 cents. “So we’re barely into black ink. And the past two years there’s been lots of red ink for cattlemen.”

Despite the economic squeeze, Minnesota beef numbers haven’t crashed. A review of U.S. Department of Agriculture, Jan. 1 inventory numbers for cattle-on-feed tells the story:

• 2003: 300,000
• 2004: 310,000
• 2005: 290,000
• 2006: 290,000
• 2007: 285,000
• 2008: 325,000
• 2009: 280,000

Minnesota beef cow numbers reflect considerable stability, too: 405,000 beef cows in 2007; 397,000 in 2008, and 392,000 for Jan. 1, 2009. Perhaps surprising, however, is the fact that beef cow numbers show little change, regardless of herd size.

For example in 2002, the Minnesota Agricultural Statistics Service showed 13,200 operations of one to 49 head; 1,600 with 50 to 99 head; 680 with 100 to 499 head and 20 with 500 or more beef cows. In 2007, the numbers were 12,300 farms with one to 49 head; 1,400 with 50 to 99 head; 680 with 100 to 499 head and 50 with 500 or more beef cows.

Much like seed corn, perhaps improved genetics are the bigger change within the Minnesota beef industry. “Genetics pertaining to rate of gain, feed efficiency and overall vigor have increased significantly within the past 10 years,” Swan said. He also reflected that cattle feeders “went too big” 15 to 20 years ago when 1,400- to 1,600-pound animals became the market trend.

“We lost some of our efficiency factors. And we found we can’t sell those great big steaks into the restaurant trade anymore. We’ve got to downsize to 1,100- to 1,200-pound animals. We’ve got to produce what the consumer wants,” he said, reflecting that most diners just can’t handle those 16-ounce steaks.

He and his partner, Todd Miller (formerly Swan’s hired man), now do a little more shopping for genetics when they’re buying feeders each year. That means they don’t always select from the same rancher, but they do prefer cattle from the same geography.

Working best for Swan and Miller are crossbreds.

“I like the black, or Hereford, or Shorthorn blood crossed with the exotics. I’m not strictly one color. But I like our basic breeds for feed efficiency and to bring that animal size down. We do 500- to 600-pound calves each fall; then buy yearlings each spring that have been wintered on hay.”

His hopes for the future of the Minnesota beef industry? He puts it simply, “I’d like to see more young people take over.” Reflecting on his own situation, Swan and wife, Donna, raised three daughters, but all went to college, eventually marrying non-farmers. But that younger farm hand working for Swan really wanted to farm and is now in a 50-50 partnership agreement.

He said that today Upper Midwest cattlemen (Minnesota, North Dakota, South Dakota, Iowa, Nebraska) have a distinct feed cost advantage over the big feedlot states of Texas, Oklahoma and New Mexico. Increased freight rates for moving corn to southwest feedlots also have become a big factor.

Based on Jan. 1, 2008, USDA Cattle and Calves on feed, Minnesota’s top 10 counties in descending order are Nobles, Rock, Lyon, Cottonwood, Redwood, Murray, Stearns, Dakota, Brown and Stevens. Fillmore County, in southeast Minnesota, ranks No. 1 in beef cows with 18,200.