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Bringing more dollars into Missouri

Bringing more dollars into Missouri

While 95% of Missouri cattle are finished and processed out-of-state, retained ownership provides an opportunity for producers to retain profits.

Not long ago, I heard Jim Gerrish refer to Missouri as the "Garden of Eden" of grazing. It's not hard to see why. For a long time, Missouri has been a prime location for cow-calf producers. In fact, Missouri ranks third in beef cow numbers in the U.S. after Oklahoma and Texas, according to USDA's National Agricultural Statistics Service's 2015 cattle inventory report. After adding 103,000 beef cows in 2013, Missouri added another 61,000 in 2014, the total is now 1.881 million.

ADDING VALUE: One of the ways Missouri producers can add value to their cattle is through retained ownership through programs like Missouri Steer Feedout and Quality Beef by the Numbers. "It may show up on a financial statement they were sold in Kansas, Nebraska, or Iowa, but if you're retaining full ownership that money will come back to Missouri," says Eldon Cole. "The bottom line is there's still a lot of money that can be brought back to Missouri."

Missouri has also expanded its cattle herd as a whole for the second year in a row, according to a statement Missouri Cattlemen's Association made on the USDA-NASS report. The report puts Missouri's total cattle inventory at four million head, making Missouri one of the top six states for herd expansion.

Despite this, Missouri ranks ninth in cattle value, as Governor Jay Nixon noted back in January at the Missouri Beef Summit. "Missouri generates approximately $1.9 billion annually in cash receipts for cattle," Nixon said. "Our neighboring states, states that don't have as many cow-calf pairs, generate far more through their cattle operations. For example, Iowa has half as many beef cows as we do but generates more than double the income. Kansas cattle ranchers earn annual receipts of $7.8 billion a year. Nebraska comes in at a whopping $10.3 billion a year."

A shift in cattle feeding
The difference, Nixon said, is these states feed, finish, and slaughter far more cattle than Missouri. 95% of Missouri cattle are finished and processed out-of-state.

There has been quite a shift since Eldon Cole first started with University of Missouri Extension in Saline County in 1964. "Every farmer had a little feedlot at that time. We had packing plants in Kansas City, St. Joseph, and one in the Rockport area," says Cole, Extension livestock specialist. "In the 1970s, we started seeing the large feedlots in western Kansas and Nebraska taking off, and we started seeing plants close, and the smaller feedlots were encountering water management problems and that was creating some unrest."

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Despite efforts to keep cattle in Missouri, many went west where the arid climate gave feedlots an edge in waste management and animal health, and the lower population gave and advantage in community relations. "We gradually became a forage state and accepted it," Cole says. "We realized we could produce feeder calves and graze cows here better than we could have feedlots at that time."

However, that may be changing with the recent push to bring more value to the cattle industry in Missouri. In January, Governor Nixon posed the question, "How can we keep more of this value in Missouri?" "We need to figure out a way we can finish more here," Nixon said. "Missouri is ideally situated to become the new hub in the beef supply chain. We've got a central location, superior genetics, abundant clean water and land, and some of the most innovative cattle farmers and ranchers in the world."

Opportunity for added value
One of the ways Missouri producers have added value to their cattle is through the Missouri Steer Feedout program, which started in Lawrence County in 1981 with the help of MU Extension staff. "When we set out in 1981, we had a couple goals. We wanted people to learn that Missouri does produce a better quality calf than we had a reputation for at the time," Cole says. "We knew we had some good, quality cattle and we needed a little better credibility. Since then, we've gained a lot of respect for the quality of cattle we have down here."

In 2012, MU College of Agriculture, Food, and Natural Resources rolled out the Quality Beef by the Numbers program, offering additional opportunity in retained ownership. The QB program works with Certified Angus Beef, AI companies and feedlots to produce high-quality cattle.

Retained ownership comes with some risk, and Cole says it's best to know something about how cattle will perform before retaining ownership. For example, when feeding with Missouri Steer Feedout, rather than sending 50 head to the feedlot, producers may wish to send five or ten for a representative sample. However, whether or not producers make a profit, there's still opportunity to learn something in the data that's collected on cattle. Cole says by retaining ownership, producers with high-quality feeder cattle retain profits, even if the cattle leave the state.

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"It may show up on a financial statement they were sold in Kansas, Nebraska, or Iowa, but if you're retaining full ownership that money will come back to Missouri," Cole says. "The bottom line is there's still a lot of money that can be brought back to Missouri."

For more information on the Missouri Steer Feedout program, visit www.swmobcia.com. More information on the QB program is available at www.quality-beef.com. To learn more about the discussion on adding value to Missouri's beef industry, check out the February Missouri Ruralist.

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