Livestock Economics for Western Producers

Livestock Economics: What Attributes Bring Higher Prices?

 

By Laurie Greene, Editor

 

At the 100th Annual California Cattlemen’s Association (CCA) & California CattleWomen’s (CCW) Convention last week in Sparks, Nevada, Tina Saitone, cooperative extension specialist, UC Davis Department of Agricultural and Resource Economics, described her research on rangeland and livestock economics. “Primarily, my focus has been on cattle — beef cattle to date — but I’ve also started some projects recently with sheep producers and the predator interactions they have specifically with coyotes. I am examining whether or not [producers] can use nonlethal depredation methods to mitigate those losses.”

“Right now, I have been concentrating on marketing characteristics of cattle,” she said. “I study those practices employed by producers, such as when they wean their cattle; how many vaccinations they have; whether they market [their cattle] as natural, grass-fed, or organic; and the impact that [these choices] have on their prices.”

Tina Saitone
Tina Saitone, cooperative extension specialist, UC Davis Department of Agricultural and Resource Economics

Interestingly, Saitone and her colleagues have mainly been using satellite video auction data. “Western Video Market Auction actually held their auction this month here in Sparks, Nevada because they can do it at different locations all the time. So, we use that data to figure out cattle characteristics and then determine the marginal impact that each of those characteristics has on price,” said Saitone.

Characteristics such breed, frame score, flesh score, and weight, are definitely controls in Saitone’s research model because those are main drivers of price. “But what we want to do is figure out — holding all those things constant —if a producer raises their cattle natural, what kind of premium does that bring them? We’re really looking for that incremental difference.”

One might expect certain factors such as natural or organic, to deserve a higher price, but there always has to be a buyer. “Right now, when prices are low relative to 2014 and early 2015, ranchers do have some opportunities to get some higher prices in what we would call niche markets. Consumers are increasingly demanding a wider range of characteristics. They want grass-fed. They want organic. They want natural, no hormones. All of these are what we would call credence attributes. If you go to the grocery store and you taste a steak, you probably don’t know if it was raised natural.”

Accordingly, the industry has third-party certification to assure consumers that when they pay a higher price for that product they are actually getting those traits. “Farmers actually have the ability to fill some of those niche markets that consumers have created with their demand and possibly get higher prices than just selling into traditional commercial channels.”

The data that Saitone has been looking at from Western Video is focused on Western states, including California. Certainly, location places Western producers at a persistent disadvantage because the majority of the processing capacity is in the central part of the country, with Nebraska being the hub. Saitone said, “When you think about cattle being raised in California having to be transported all the way to Nebraska, some 1600 or 1700 miles, not only do you have the cost associated with that transportation, but you also have shrink; you have mortality.

California Cattlemen’s Association (CCA)

California CattleWomen

UC Davis Department of Agricultural and Resource Economics

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California Leopold Conservation Award® Seeks Nominees

SAN FRANCISCO, Calif. – (April 28, 2015), the California Farm Bureau Federation and Sustainable Conservation are accepting applications for the $10,000 California Leopold Conservation Award. The award honors California farmers, ranchers and other private landowners who demonstrate outstanding stewardship and management of natural resources.

“The Leopold Conservation Award celebrates the people and places where innovative and creative thinking and experimentation are taking place,” said Judith Redmond of Full Belly Farm, recipient of the 2014 Leopold Conservation Award. “If you or a friend include conservation in your daily decision making – I hope you’ll submit a nomination. It’s okay to brag about good land stewardship.”

“Good intentions and luck take no farmer down the road to profitability and improved land health. Leopold Conservation Award recipients epitomize the creativity, drive and heartfelt conservation commitment it takes,” said Sand County Foundation President Brent Haglund.

Given in honor of renowned conservationist Aldo Leopold, the Leopold Conservation Award inspires other landowners by example and provides a visible forum where farmers, ranchers and other private landowners are recognized as conservation leaders. In his influential 1949 book, “A Sand County Almanac,” Leopold called for an ethical relationship between people and the land they own and manage, which he called “an evolutionary possibility and an ecological necessity.”

“California’s future gets brighter only if we all do our part,” said Sustainable Conservation Executive Director Ashley Boren. “The Leopold Conservation Award celebrates those deserving, but often overlooked, landowner heroes who do their part every day to steward our environment in ways that benefit people and the planet. The Leopold Conservation Award is proud to have recognized a diverse range of agricultural operations over nearly a decade – including CSA, dairy, rice, vegetable and tree crop farmers, as well as cattle ranchers.”

“The Leopold Conservation Award recognizes unique yet replicable strategies a farmer or rancher has developed in managing their land, to be the best steward of the natural resources on their farm or ranch. California farmers and ranchers are the most productive in the world and are trendsetters at maximizing the fullest potential of their land to produce food and other agricultural products with the least environmental impacts,” said California Farm Bureau Federation President Paul Wenger.

Nominations must be postmarked by July 10, 2015, and mailed to Leopold Conservation Award c/o Sustainable Conservation, 98 Battery Street, Suite 302, San Francisco, CA 94111. The 2015 California Leopold Conservation Award will be presented in December at the California Farm Bureau Federation’s Annual Meeting in Reno.

The California Leopold Conservation Award is possible thanks to generous contributions from many organizations, including The Nature Conservancy, American AgCredit, the Lynde and Harry Bradley Foundation, DuPont Pioneer and The Mosaic Company.

ABOUT THE LEOPOLD CONSERVATION AWARD

The Leopold Conservation Award is a competitive award that recognizes landowner achievement in voluntary conservation. The award consists of a crystal award depicting Aldo Leopold and $10,000. Sand County Foundation presents Leopold Conservation Awards in California, Colorado, Kansas, Kentucky, Nebraska, South Dakota, Texas, Utah, Wisconsin and Wyoming.

ABOUT SAND COUNTY FOUNDATION

Sand County Foundation is a non-profit conservation organization dedicated to working with private landowners to advance the use of ethical and scientifically sound land management practices that benefit the environment. www.sandcounty.net

ABOUT CALIFORNIA FARM BUREAU FEDERATION

The California Farm Bureau Federation works to protect family farms and ranches on behalf of more than 74,000 members statewide and as part of a nationwide network of more than 6.2 million Farm Bureau members.

ABOUT SUSTAINABLE CONSERVATION

Sustainable Conservation helps California thrive by uniting people to solve the toughest challenges facing our land, air and water. Since 1993, it has brought together business, landowners and government to steward the resources that we all depend on in ways that make economic sense. Sustainable Conservation believes common ground is California’s most important resource.—-

Mana Mostatabi | Digital Marketing & Communications Strategist

98 Battery Street, Suite 302 | San Francisco, CA 94111

(415) 977-0380 x350 | http://www.suscon.org

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