Traditional Roles Are A'Changing

The financial crisis currently plaguing midwestern farmers and shifts in production management methods are changing the roles of agencies that serve these producers. This is particularly true in Iowa, where new partnerships are being formed to try to revitalize the cattle-feeding industry.

From an all-time high of 2,213,000 head of cattle on feed in the early 1970's (first in the nation in marketing grain-fed beef), Iowa declined to a reported 670,000 head on feed January 1, 1986, with a rank of fifth in the nation in marketing. The 70% reduction in cattle-feeding has meant a loss of almost $2 billion of agricultural economic activity and about 17,000 job1 of considerable consequence to a state that depends on its agricultural industries.

Iowa's Cattle Industry

The backbone of the cattle industry in Iowa has been the farmer-feeder, characterized by having more than one enterprise to manage. In the past 15 years, the farmer-feeder in Iowa has made little change in production management. In contrast, cattle feeders in Texas and other cattle-feeding states such as Kansas and Oklahoma have adopted new technologies, becoming large-scale, highly specialized commercial operations. These operations are characterized by high volume, low profit margins, and extensive use of outside capital for ownership of the cattle. Scales, computers, and nutritional and veterinary consultants have turned their cattlefeeding operations into highly competitive business ventures.

A survey by Cattle Fax estimated that 75% of the cattle feeders in Iowa had no records from which to compute costs of production.2 Without cost-of production records, the farmer-feeder has no leverage to secure financing, doesn't have the "proofof-performance" necessary to solicit outside investment capital, and lacks the essential information to reduce financial risk through the placing of hedges or options on the Chicago Mercantile Exchange.

Numerous studies have shown that Iowa has a definite cost-of-feed advantage over the large feedlots in the south and southwest. But Iowa farmerfeeders don't have the tools and skills with which to compete. They must adopt modern management technologies to regain a competitive posture in the cattle-feeding industry.

Technological Answer

Feedlot Monitoring Program

In 1980, Iowa State University Cooperative Extension Service developed a series of sophisticated feedlot management microcomputer programs to aid farmer-feeders. Our initial focus was on programs to help balance rations, with a more recent focus on decision-aid programs related to efficiency and cost of production. The cornerstone of our management programs is the Feedlot Performance Monitoring Program, a program that allows monitoring of cattle performance and costs of production on a weekly basis from data on the cattle's dry-matter intake. We have successfully field-tested the management program with selected feedlot operators in the state, and its accuracy was articulated by one farmer-feeder:

It has not been a good year as far as the bottom line. I am quite pleased with our performance, though. I'm still amazed at the accuracy of the weight projections (using ISU's Feedlot Performance Monitoring Program). We were only 9 pounds off for the average on 3,758 head. It has been fun telling the packers what the cattle will weigh.

The Feedlot Performance Monitoring Program has the potential to help revitalize the cattle-feeding industry in Iowa. It can provide state-of-the-art feedlot management and marketing technologies to Iowa's farmer-feeders at a moderately low cost. However, I estimate less than 10% of the cattle feeders in Iowa own a computer. Without the computer hardware to record and process data, Iowa's farmer-feeders couldn't benefit from the management program. Our problem was how to bring the research-based information and management technologies from the university to farmer-feeders who didn't own the necessary hardware. Changing roles and new partnerships were the answer.

Mail-In Service

The Extension livestock specialist in the Council Bluffs Extension Area decided to offer the management program to cattle feeders in the area by providing a mail-in record processing service, a change in the traditional role of delivering educational programs. On a weekly basis, cattle feeders mailed in consumption records of their cattle on a lot-by-lot basis for analysis. Performance reports, showing projected gains on the cattle, ration adequacy, and break-even prices were then mailed back to the producers.

This information allowed producers to make appropriate ration changes and to make knowledgeable decisions about marketing strategies. Within three months, the Extension specialist was swamped with requests for the service and couldn't handle the workload. This led to a new partnership.

Private Practitioner Partnership

The Extension specialist teamed up with a local veterinary clinic. The clinic took over responsibility for data entry and record processing using ISU's Feedlot Performance Monitoring Program-a change in the veterinary's traditional role. Relieved of clerical duties, the Extension specialist now had more time to help in nutritional consulting and interpretation of the performance and cost-analysis projections. The veterinarian eventually took on a larger share of the feedlot consulting workload as his understanding of the management program increased.

The partnership between the ISU Extension Service and a private veterinary practitioner has increased use of the Feedlot Performance Monitoring Program. The impact of the management program has expanded through one-on-one clientele contacts made during the routine activities of a veterinarian. The role of the practitioner in the community is changing to include a much broader range of service to customers, customers that might be lost unless they become competitive with large-scale commercial feedlots.

Commodity Organization Partnership

The results of the Cattle Fax Survey helped bring about a shift in emphasis of membership services needed by the Iowa Cattlemen's Association. The association has historically had a political orientation. But, it now recognizes the fact that if the state's cattle feeders don't adopt the production and marketing technologies of the large commercial feedlots, there won't be an industry to serve.

In September, 1985, the association joined in a partnership to bring the ISU Feedlot Performance Monitoring Program to its membership. The association agreed to offer a mail-in service to its membership, including the processing of cattle consumption records to predict average daily gain and breakeven prices using ISU's management program.

The association also uses the program to compute invoice billing data for those farmer-feeders who are custom feeding cattle. A major part of the association's service is to provide summaries of records collected from all feedlot performance and cost closeouts. These summaries can be used by participating feedlot operators in gauging individual performance with similar operations.

The association has taken on a new membership service role that would have been traditionally handled by a state beef improvement group. State Extension livestock specialists are providing nutritional and management consultation, training association staff, monitoring outputs, and conducting workshops for subscribers. We'll be using the data collected from this mail-in service to further research activities related to cattle feeding.

Summary

The partnerships are completing their first year and will soon undergo critical reviews. If numbers of participants continue to grow, we could have a new cattle industry service in Iowa. These partnerships are taking research-based information and technology from the university to clientele in new ways. The Iowa State University Extension Service and its partners may be responsible for saving a dying industry in Iowa.

Footnotes

1. Daniel Otto and Gene Futrell, "Economic Effects of the Decline in Iowa's Cattle Industry " (Ames: Iowa State University, Fall, 1984).
2. John Landon, The Iowa Cattle Feeding Industry (Englewood, Colorado: Cattle Fax, 1984).