Wallace's Farmer, IA
05-23-07
Growing Iowa's Cattle Feeding Business
Rod Swoboda rswoboda@farmprogress.com
Iowa State University Extension and the Iowa Beef Center sponsored three
workshops for producers who were interested in starting or expanding a cattle
feeding business this past winter. A total of 35 producers participated in the
workshops. With distillers grains becoming more available to include in cattle
rations as ethanol production continues to expand, there is a renewed interest in
cattle feeding in Iowa.
Russ Euken, ISU Extension livestock specialist in north central Iowa,
initiated the idea of the workshops. He says, "With an increasing number ethanol
plants in the area, there is interest and opportunity for feeding cattle. However,
many farm operations in the area have not fed cattle for quite a few years if at all.
If they are going to start in the business and be successful, they need to do their
homework and the workshop is meant to help in that process."
A few of the topics that were covered included opportunities for cattle feeding,
business planning, site selection and facilities, basic nutrition and health and
marketing fed cattle.
Cattle feeding poised to expand in Iowa
Many of the producers that participated had cattle experience either at an earlier
time or had a cow-calf operation. Some had never worked with cattle. A few of
the participants had existing feedlot operations. Several were working on plans
for expansion or getting into the business.
This was a pilot effort and future educational opportunities will be possible. There
is the possibility of some of the workshop topics being offered as a home study or
Web-based topics, but there is value in having participants be together in one
setting to be able to share thoughts and ideas.
Producers or others with interest in the workshops looking at a start up or
expansion of a cattle feeing business can contact Russ Euken at
reuken@iastate.edu or 641-923-2856 or contact their local extension beef
specialist or county office.
Demand for DDGs continues to grow
Some livestock producers are skeptical that ethanol production is driving up corn
prices and making it harder for livestock producers to show a profit due to
increased feed costs. "It takes some knowledge and experience to figure out how
to best use these distillers grains in livestock rations," says Bill Northey, Iowa
Secretary of Agriculture. "Any change like this will take some time so people can
successfully adapt."
Farmers are figuring out exactly how distillers grains work in their operation. "The
success depends somewhat on the size of livestock operation you have - how
much of the wet distillers grains can you handle," says Northey. "Also, what else
do you have that you are blending with it in the ration. I think cattle feeders are
getting very used to feeding it and like being able to use it."
Of course the pork and poultry business can't use distillers grains nearly as well
as cattle can. "For pork and poultry producers, ethanol is competition for buying
corn and certainly one of the reasons we have higher corn prices now," notes
Northey. "There is still some adjustment in all of this. Livestock and poultry
producers are looking at ways to become more efficient. They used to feed $1.50
corn but if corn is now going to be $3.50, they can be more efficient and get a
few more pounds or a few more eggs out of that bushel of corn potentially. Now
that matters to them more. It didn't matter as much when corn was cheap."
Ruminants find DDGs most attractive
ISU economists Bruce Babcock and Dermot Hayes say that doubling the
renewable fuels standard for ethanol to 15 billion gallons used in the U.S. is
going to negatively impact the livestock industry. Hayes says while cattle
producers can utilize more distillers grains in the ration than hogs can, the DDG
prices tend to follow corn prices higher, which negates some of the advantage for
cattle producers.
"When you take that much corn off the market, there will be a big demand for
distillers grains by ruminants," says Hayes. "But there is such a demand by
ruminants for feed here in the U.S. and throughout the world that the price of
DDGs increases with corn prices. So beef rations go up by a similar percent,
almost as much as poultry and hog rations. We think the price of DDGS will
eventually reflect the feed value of DDGs to the species that finds them most
attractive, and that's the ruminant animal."
Hogs and poultry can use dried distillers grains and do very well on it, up to a
certain percent of the ration - maybe only 8% or 9% for hogs and poultry. "It
amounts to a change in the way livestock producers think and function," says
Hayes. "The ethanol industry has reshuffled the deck on corn prices."
Will cattle feeding come back to Iowa?
Kevin Carstensen, a cattle feeder at Odebolt in western Iowa, is feeding wet
distillers grains. Carstensen is president of the Iowa Cattlemen's Association.
"With the increased availability of the distillers grains as a coproduct of ethanol
production, it looks to me like we are going to bring cattle feeding back to the
state of Iowa, which is something we've been looking forward to for quite awhile.
"As I understand it, the highest cattle numbers Iowa had was in 1942," he adds.
"The reports I'm seeing now is that cattle numbers are starting to come back.
They haven't rebounded to the historical high levels yet, but we are increasing
the beef herd and the number of cattle on feed in Iowa again.
"We use wet distillers grains hauled from the ethanol plant at Galva, Iowa," says
Carstensen. "We're using it up to 40% now in our rations. We're contemplating
moving up from using 40% distillers grains and some liquid - and backing off
almost totally on our corn use. The production and use of distillers grains is a
win-win situation here in Iowa. As cattle feeders in Iowa, we're smiling from ear to
ear because the Texas cattle feeders don't have the advantage anymore."
Thus, Carstensen may move to feeding even less corn, by using a ration that is
almost straight DDG, and he believes more of the DDG will stay in Iowa and be
fed here and not go to Texas.