NFO-220 (AV10723): US Farm Report: NFO'S High Profit Feeder Cattle Operation

[music] hello everybody and welcome to us farm report on today's show our special guest is Robert Manki national head of the feeder program for the national farmers organization Bob it's a pleasure to have you on our show thank you Bill now like most of the other executives I've met here at national headquarters of n fo in Corning Iowa you too have a farm background do you not oh yes sir I have a farm in Wisconsin and after I started spending more time with the NFO I bought a another small farm in Iowa and I have beef cattle on that farm Bob why did NFO get a new feeder cattle marketing well first of all we noticed some very odd things happening last year there was great price variations in feeder cattle to give you an example the price of choice for two 455 pound feeder steer calves would vary as much as four to five dollars a hundred we also found one other thing out while we were running into this situation that were the low price feeders were they also had the cheap dressed beef so we thought there was a correlation between the cheap feeders and the cheap beef so in the area where we originally got started which was a Pacific north northwest we moved about three thousand head of feeder cattle out of that area mm-hmm and we moved them back to the Midwest at the higher prices we did not affect any of the feeders in this area because they just paid the going market price but the situation that we run into there that was real important is that a very large percentage in some reports will say seventy percent of the fat cattle are under contract so they had a choice of either driving the feeder price down to make a market selling their beef cheap or paying the ranchers organizing and putting pressure on this end for them to raise the feeder price so with the advent and this is one thing that I'm sure it would be interesting to you bill they say that 1% of the feedlots now controls 60% of the fat cattle and with this great a percentage of control of the fat cattle in such a few hands it becomes just more important that we organize on the products that are supplying these feed London and the one truism that's real important is that anytime that you have a low-priced area if given time will tear down the whole price structure over the United States and we want to be able to pick these low-priced areas up and bring them up to protect both the feeder and the rancher at this point now in your department Bob here at national headquarters obviously you have made some very careful studies of the feeder cattle situation I'm sure that we have and here's a map showing him to read the fed cattle marketing's for 1968 the latest figures from USDA and the beef call numbers in 1968 with the zeros admitted now there's a minute there's one thing that we've got to remember each one of these on the beef count numbers would represent about 90 percent of the feeder cattle available in that area because that's about the liveability that would be a national average some places higher some places lower but again let's look at this situation in a state of Washington for all practical purposes they would feed out all the cattle if they've done then you've got Idaho and they've got a few extra but here is where we get down into the real wealth changes and movements of feeder cattle you've got California that's going to need approximately 1 million two hundred thousand head of feeder cattle and here's one that is changing just this here Texas which is the largest cow state is going to become a net importer rather than an exporter so here's where one of the changes are coming now you can use Nebraska here they're going to need about two and a half million head of cattle now we have these cattle in this area to move down into Nebraska and Kansas for all practical purposes we'll feed out all they have but then these cattle can come out to come into the state of Nebraska you've got the largest cattle feeding state here Iowa it's going to need three million head of cattle and the important part of this whole program is that we understand where the last uncommitted supply of cattle is and this is down in starting at Louisiana and Arkansas up over Kentucky and Tennessee and this is where the last free supply of cattle is left in the United States so if Peter price and a cattle price fat cattle price is to be maintained it is important that we be in all areas you can see by the size of Florida is right at the present time almost as important as California so it is necessary that we span this much area in order to control the marketing's Bob how can NFO raise the feeder cattle price well it's really very simple one of the truisms of collective bargaining is that you either accept the local market price or you have an alternative and NFO is offering that alternative again if you have an area with the soft market and the feeders in a certain area go down and get cheaper cattle and you get one load of cheaper cattle into that area it has a depressing effect on that market now what we do we mainly price our feeder cattle on the local mark price and with the efficiency of our program the people that are opposing our efforts and the people that have been in business in the past have to pay in and say that both groups of cattle or our people are moving cattle out at 36 cents with our efficiency these other people will have to pay 36 and a half cents so that at this point we tend to have a competition in the market and if the market goes up this will affect a local market price and we also have the same rules applying to both the independent feeder knees smaller feeder and the corporate feedlot and this will bring efficiency back to the smaller feeder we have with us today two young men leaders in NFO from two widely scattered points in the country would you agree Bob they're quite a ways apart yes they are and I think it's time we introduced them to our viewers on Bob's left is Carl Gribbins who comes from Kentucky Carl it's pleasure to welcome you to our show Glad to be here and on Carl's left is Devon Woodland from central Idaho these fellows are Ranchers they're NFO leaders in their area in fact we're fortunate to have them here attending a conference at national NFO headquarters in Corning Iowa fellows what effect did the program Bob's been talking about having your air is where cattle have been moved out Carl what about your area well it's had a good effect for both a feeder calf producer and also the cattle feeder for one thing it's eliminated the speculator and the Commission man and the middle man's profit that he's been taking off both the producer and the feeder and it also assures a the producer of a fair and better price or feeder cow prices are up quite a bit what it was last year and it also assures the feeder of ranch fresh cattle these regular feeder calves celled calves sometimes been two to three days in the yard and in a trucking while cash has to go through the NFO program are all off the farm one morning and on feed that night so it's been a big benefit for both the producer and the feeder yes and of course this is what we're interested in benefi benefits and Devon what effect as the program had in your area without question bill the most obvious thing is that the collective bargaining program does work and this movement of movement of cattle has been highly successful we know that the moving the cattle out of these low-priced areas into a high priced area has been effective we've noticed a price increase advantages we have done this nearly without exception to our members and also the industry has become more competitive in their bidding in the areas where the supply has been shortened the big feeders in our area know that if we're capable of moving out perhaps three thousand head of feeder calves that we're also capable of moving out $30.00 mm-hmm and this is a concern to them well in your opinion what's the intention of your area for the future moving out more cattle oh yes I'm sure this is in the process right now a bill we're blocking these calves together and because of volume we're going to be able to merit a premium for them mm-hmm and this is what the ranchers are doing and of course we're encouraging more participation in the program as they become more educated in this why the participation is gonna increase yes Carl how about Kentucky what are the intentions they're moving them out yes sir we've had already five sales at average around 700 calves for sale and we've got we're planning on about four or five more sales per month only into the fall and early fall in the winter well now can you fellas think of any more benefits to the feeder from this program you've mentioned some what are some of the other benefits can you think of any right offhand well the biggest benefit I would think would be the farm fresh cattle and he's receiving they don't get a truckload of sick and weakened cattle that stood around a yard and truck for long right because of the efficiency of handling because of the shortening of the time that's right and also the cut now some of the middleman he also place some money there making money on both end of us Carl it's been a pleasure having you on our show thank you very good luck to you and the other fine NFO members in Kentucky thank you and the same to you davon and my friend say hello to everybody out in Idaho for me this i'll do thank you very much how does the NFO program protect the feeder we have a very important graph here bill that I think spells that out as clear as anything back in the year 1967 we slaughtered 33 million eight hundred and sixty eight thousand six hundred head of cattle but we had an average price of 25 22 in the year 1968 we slaughtered 35 million fifty one thousand eight hundred head and here we see the price going up to reach a point of twenty seven ninety in January 1969 we slaughtered three million one hundred and twenty nine thousand two hundred head and that would put the figure well over the 36 million mark and the price was going up and this is where the three letters NFO comes very important this is group action working together now the rancher and the feeder have to work together and I know that sometimes statements have been made that feeder cattle prices are too high but this is just a statement made in order to bring disunity between the two parties now the corporate feedlots normally operate on a small profit or you know normally a five to seven dollar profit and they will contract their fat cattle and if they do this puts a ceiling on the fat cattle market now if we can raise the cost not really raise the cost but have fair prices for the factors that go in to their business then we can have a level of beef prices that are fair over the whole nation mm-hmm tell me this Bob who does the NFO supply feeder cattle to we supply first of all to the NFO member feeders the independent feed lots and of course some of them will go to the corporate feedlots now what are the benefits to the feeder well the benefits are quite numerous and some of them are worth a lot of money one of them is we have ranch fresh cattle we've had cattle in our gathering points that from the time that they left the ranch until the time that they were on trucks into the feedlots with the time lapse of three hours we have identity maintained normally and I would say in a large percentage of the cases the feeder will know who he got the cattle from he will know the price that the rancher was paid how are the feeder cattle put together well we believe the feasible number of cattle put together in any one gathering point for a day is eight hundred head this is when we can get the best sort both for weight and quality and we go and operate the points where the cattle are close to the source of the cattle we have an assignee that handles a transaction between the rancher and the feeder and anytime that NFO members have put 800 together we need ten days from that point on and then we can have the sale of these cattle consummated our orders handle from people wanting feeder cattle we have an NFO feeder order for NFO members and they can fill this out as a tentative order and this is sent in here to the office and they might fill it out a month in advance might fill it out two weeks in advance and some of them have been filled out a lot longer and when this time that they normally would want cattle the assignee would contact them stating the price where the cattle would be delivered from so they'd know the freight rate so they would know the total cost delivered to the feedlot at that time they have the right of acceptance or rejection Bob why does the NFO something to offer that no other organization has at this time many of the other organizations have been based on county line state lines area lines we know that when it comes to marketing that the national scope of marketing is very important that the cattle are the tarantula in the southeast affects the prices of the cattle rancher in other areas we have to have people over the whole United States working together and it takes a national organization to do that and we believe that we have something to offer that no other organization has and all we're asking for is a fair price you have just heard how the NFO cattle feeder program has affected NFO members advantageously in the states of Idaho and Kentucky now we're going to talk to two cattle feeders NFO members in the state of Nebraska to get their reactions to the NFO cattle feeder program we're speaking to you at this time from the farm of Vinnie and Richard Medina near Colon Nebraska this is a father-and-son farming operation and it is our pleasure to welcome two u.s. farm report the son half of this team Dick Medina Dick it's nice to have you on our show where's your dad today Dick he's a member of the federal land bank board and he's attending a meeting in Lincoln today well then we're going to ask you do all the work okay okay now Dick and his father Vinnie farm 900 acres here they also feed out about a thousand head of cattle per year now Dick with this kind of operation you must have some challenges in terms of storing feed how do you accomplish that well we've got to 24 by 50 cement upright silos and we fill these a couple times and then we also for additional storage have a above the ground silo that was we try and have fed up before winter sets in then we have quite a bit of dry grain storage we store collect government storage and then we buy back to scorn as we need it for feed well now in order to feed out 900 head of cattle and farm or rather a thousand head of cattle and farm 900 acres you must have a terrific investment in equipment well equipment I suppose runs around a hundred thousand dollars the tractors and dryer come by and so forth what sort of overall investment that you feel that you and your father have here Dick Oh with the land and everything we own and rent it must be around a million dollars now you and your father have been NFO members from almost the very beginning dating back to when about 1955 about 55 when NFO came into this area uh-huh what is your source of feeder cattle well we've been getting a cattle from NFO ranchers and since they've gotten their feeder program started and what do you feel Dick have been the advantages to you a cattle feeder as a result of the NFO feeder cattle program well we like to get our cattle right from the rancher you don't get as much disease and and you know what kind of cattle you're getting and you get them the way you want them they're in good shape when you get them well now it's a two-way street as mr. manky has just pointed out in an earlier interview on our show the NFO feeder cattle program helps not only the cattle feeder like yourself but also the NFO rancher can you speak for the rancher what do you think some of the advantages are for him well I know they're real pleased to buy them they know where they go and they they can get a report on what the cattle do when they get finished out and I think they come out ahead too well would you agree then that the NFO feeder cattle program keeps this particular aspect of farming in the hands of NFO members where they can bargain together and sell together right the cattle all the way right from the cow to the packing house or in NFO control and it will keep the family farmers and ranchers going well now the family farm is something that is threatened and do you feel that the NFO program is helping here I think so it gives us a little leverage and you know as long as you stay efficient and we'll be able to compete let's talk about the market has there been in your opinion as a result of this program more stability in the market well the cattle market say the past six months has been the steadiest it's ever been and I attribute this mostly to NFO having control of a large part of that production huh-huh now what about yourself in the last year for example how have the prices you've received for your feeder cattle compared to the prices being paid let's say at the Omaha terminal well when they're finished and we sell and then we figured we were getting about a dollar over Omaha top a dollar over Omaha top on our way yeah you're married Dicker you not? right children I've got a boy it's gonna be two Dick we want to thank you very much for your hospitality today it's been a pleasure to have you on US farm report glad you come out and please tell your father that we're sorry we missed him I bet he wishes he could been here - we've been visiting today with Dick Medina who along with his father Vinnie operate 900 acres here near colon Nebraska and feed out a thousand cattle per year now we're going over to meet another NFO member and cattle feeder from this area mr. Stanley Caban Stanley how you doing I'm awful busy by golly got a lot of silage to cut a lot of other work to do I know you do and I appreciate your taking time out what I know is a busy schedule for you to say hello to us and to talk with us on us farm report now you're an NFO member and a cattle feeder and you've lived neighbors to Dick here and his father for quite a long while haven't you that's right and I suppose even though there are a number of miles separating you that since your interests have a lot of common ground that you fellas get together every now and then for a visit right generally an antenna phone meeting we visit back and forth our cattle are doing and other things also how many head of cattle do you run here Stanley oh we generally run 150 head annually and how many acres do you farm 480 now Stanley what is your routine with these cattle we're seeing behind us here how long ago did you receive these cattle these cattle came in Friday morning and we unloaded them getting a good drink of water they'd been on the truck for 1213 hours give them a good drink of water put some medication in the water and we immediately put them on Prairie hay and there's some chopped a in the barn there that they were had access to and they just went to work and they really made hogs of themselves really started eating and drinking water and that how soon are you gonna turn them out of here well within a day or so just as soon as I feel that they're they're settled down and now ready to go out in the pasture how many days do you figure you keep these cattle here Stanley before you you turn them to market well I don't feel I want to keep much longer than hundred and twenty days these bigger ones I'll probably move quicker than that yeah rest them I feel that they should be going 120 days well now how many years have you been a member of NFO Stanley well joined in 64 that make five years live year member and how long have you participated in NFO's cattle feeder program well since it started I think I was probably the first member in Saunders County that had cattle shipped in out of Colorado uh-huh now I mentioned at the outset that you like Dick and his father are a Nebraska cattle feeder Oh what is your mailing address here Valparaiso, Valparaiso, Nebraska there's an interesting story I think about your farm and I'd like for you to tell our viewers about it you're the third generation of Caban on this farm aren't you that's right your mother and father came over here from Czechoslovakia did they not well no my grandfather my two grandfathers yes that then agenor and father's came over from Czechoslovakia uh-huh where what part of Czechoslovakia did they come well my grandfather from my father's side that was from Bohemia and my grandfather from my mother's side was from Moravia uh-huh when was this do you know oh gosh yeah my grandfather from my mother's side I think he was 12 years old when he came and that must have been let's see he's been dead since 43 no excuse me 56 he's been dead six 56 or 57 I think it's 57 and he's 91 when he died so it's good many years ago well did that he is a young adult come here and acquire this land well he came here as an a young adult yes he this his family settled at Morris Bluff and Lynwood and then he broke off and the rest of his family a while actually he and his brother mm-hmm moved down into this country and they bought land here from the railroad then you were born and raised right here on this farm I was and so was my dad before yeah how many children do you have Stanley fire five children how old are they well the oldest is 22 and the youngest is 12 incidentally I'm expecting my second boy to come home from come home on leave from the Navy today wonderful wonderful lovely the eldest went up to get him happy reunion how long has he been gone he's been gone since the 20th of January year ago last january the 20th of janurry I know how happy you'll be to see him and him to see all of his family yes oh of course he's been home a couple times on leave but it's gonna be nice to see him he's been going to school he's been going away three months now see out he was home last Stanley let's get back to NFO for just a moment and talk about the prices since the nfo cattle feeder program has gone into effect that you've received on contracts and how they might compare with market prices like prices you'd receive at the Omaha terminal well I feel that we've had a definite advantage under our contracts and the contracts that are being ratified or had been ratified just recently are so much better than the ones we've had before you know we're just working it up all the time mm-hmm well we like to think of course that NFO's overall program is going a long way toward saving the the family farm and I would presume that you would agree to that that's right that's right Stanley it's been a pleasure talking with you and again we thank you for allowing us to drop by today and for your appearance on us farm report lots of good luck to you and say hello to that son of yours returning from the Navy okay thank you [music]