The 2012 North Dakota Beef Industry Survey: Yesterday, Today and Into the Future

Transcription

1 The 2012 North Dakota Beef Industry Survey: Yesterday, Today and Into the Future C.R. Dahlen 1, J.C. Hadrich 2 and G.P. Lardy 1 A survey was conducted during the spring of 2012 to determine how current beef producers perceive the future direction of the industry, determine attitudes regarding methods of enhancing farm/ranch profitability, and determine how our educational programs can evolve to meet the future needs of North Dakota beef producers. Responses from 527 surveys returned will be the basis for discussion during meetings of the large stakeholder groups and will be relied upon heavily to focus educational, programmatic and legislative priorities within and among the respective participating organizations. The survey goals included determining: How current and future producers perceive the future direction of the North Dakota beef industry Attitudes regarding methods of enhancing farm/ranch profitability How agencies and groups involved in the beef industry can meet the future needs of North Dakota beef producers Introduction Decreasing cow numbers, increasing input costs, unprecedented commodity market volatility and competition for labor resources: Beef producers face these issues and many more as they strive to maintain their livelihood and plan for the future of their operations. For these reasons, a group of industry stakeholders has engaged in an ongoing dialogue to develop more profitable beef systems to meet the needs of a changing beef industry structure in North Dakota. To ensure programmatic efforts are meeting the needs of the beef industry, gathering input from current and future producers is imperative. One of the action items the industry stakeholder group highlighted was the development of survey 1 Department of Animal Sciences, NDSU 2 Department of Agriculture and Resource Economics, Colorado State University instruments for current beef producers. Faculty in the Departments of Animal Sciences and Agribusiness and Applied Economics at NDSU collaborated to develop the survey. Considerable input was gathered from beef producers and members of the industry stakeholder groups. The survey was vetted by a stakeholder group that included members of the NDSU Extension Service, North Dakota Beef Commission, North Dakota Stockmen s Association, North Dakota Corn Council, North Dakota Soybean Council, North Dakota Bankers Association, North Dakota Department of Agriculture and independent beef producers prior to final approval and survey administration to ensure input from all stakeholders was considered. Experimental Procedures Survey questions were finalized and approved by the NDSU Institutional Review Board in the spring of A total of 2,500 surveys were printed and sealed, then delivered to the National Agriculture Statistics Service (NASS) North Dakota field office. Personnel at NASS randomly selected the names of 2,500 North Dakota beef producers (greater than 25 percent of current beef producers) to receive the prepackaged, returnpostage-paid surveys. Response to the survey was voluntary, and researchers had no knowledge of who received the survey mailings or who returned completed surveys. An additional survey packet was sent to all recipients two weeks after the initial mailing as a reminder with instructions to disregard the survey if recipients already had completed the initial survey. Results and Discussion Results are reported as a summary of responses to individual questions as those questions appeared in the survey. Future reports will differentiate responses among different producer demographics North Dakota Beef Report 59

2 The 2012 North Dakota Beef Industry Survey: Yesterday, Today and Into the Future Your participation in this survey is voluntary. If you choose to participate in this survey, your individual responses will be kept anonymous and confidential. Please answer all questions to the best of your knowledge. This survey was developed as part of an effort to determine how current producers perceive the future direction of the industry, determine attitudes regarding methods of enhancing farm/ranch profitability, and determine how our educational programs can evolve to meet the future needs of North Dakota beef producers. Farm/Ranch Location: County RED = total answers on that question. Are you currently a beef producer in North Dakota? Total: 527 (82.7%) Yes (17.3%) No. If no, please check the reason below. Total Responses: 91 (53.9%) Sold beef herd, still raising commodities (8.9%) Sold beef herd and ranch (31.9%) Other If you answered NO, please go to Question C8 on page 7. A. General Beef Cattle Operation Information 437 A1 What classes of beef cattle are raised on your operation? Please check all that apply. (94.5%) Commercial cow/calf (8.9%) Stocker (14.2%) Purebred/seedstock (6.4%) Feedlot (37.8%) Backgrounding 434 A2 Which forages were utilized on your operation for 2011? (78.3%) Annual grasses (54.4%) Grazed crop residue (85.7%) Perennial hay (17.7%) Cover crops (84.3%) Perennial pasture (7.8%) Other 435 A3 Do you graze your herd on federally owned grasslands (U.S. Forest Service, etc.)? (13.1%) Yes (86.9%) No 410 A4 Which of the following feedstuffs have you used to supplement your beef rations in the past year? Please check all that apply. (45.9%) None (4.9%) Soybean meal (11.2%) WDGS (2.5%) Soybean hulls (19.5%) DDGS (35.4%) Other B. Past, Current and Future Management Practices 419 B1 In the last 3 years, what is the approximate percent of your calf crop that you have retained ownership through the backgrounding/stocker phase? % 418 B2 In the last 3 years, what is the approximate percent of your calf crop that you have retained ownership through the feedlot phase? % North Dakota Beef Report

3 406 B3 If a meat packing plant opened in North Dakota, would you increase the number of calves finished on your operation and sell directly to the packing plant? (33.3%) Yes (66.7%) No B4 In the table below, please indicate how likely you are to use or continue to use each management practice in the next 1-5 years. Production Practices No. Responses Unlikely Likely Age and source verification % 57.6% DNA profiling/genetic testing % 17.5% Electronic ID % 30.0% Embryo transfer % 9.6% Implant calves % 31.5% Individually ID cattle % 75.8% Obtain carcass data from calves born on your ranch % 39.7% Routinely weigh calves or cows at your ranch % 44.3% Test feedstuffs for nutrient content % 60.5% Use artificial insemination in your herd % 39.5% Use scales to monitor amount of feed delivery % 39.2% Use a TMR mixer to deliver feed % 39.5% Utilize practices to extend grazing season % 81.9% Vaccinate cattle % 95.8% Technology Use Cell phone % 90.6% Electronic mail for routine communication % 63.3% Use cell phone to access Internet and/or % 43.6% Use social media (Facebook, Twitter, etc.) % 25.1% 398 B5 Which of the following production tasks would you be willing to hire other qualified people from outside your operation to perform for your cattle? Please check all that apply. (31.2%) Administering vaccinations (15.3%) Gathering cattle (35.9%) Artificial insemination (83.7%) Pregnancy testing (11.1%) Branding cattle (56.5%) Ration formulation (11.6%) Deworming cattle (65.6%) Feed testing (5.0%) Others B6 Please identify the degree to which you feel the following factors could negatively impact profitability on your farm/ranch. Please check the box that reflects your opinion for each factor. Factor Scores: 1= Small, 3 = Neutral, 5 = Large No. Responses Avg. Score Animal health issues Animal rights concerns Changes in government farm programs Changes in environmental regulations North Dakota Beef Report 61

4 Food safety concerns Labor availability Oil exploration and associated business activity Poor nutrition Reproductive failure Severe weather Variability in the following areas: Cattle price Cattle weight gains Input costs (fertilizer, fuel, etc.) Labor cost Pasture yield Rented pasture availability Alternative feedstuffs price Corn price Hay price Soybean price B7 Please indicate how effective you feel each of the following management strategies could be in reducing potential losses (risk) for your ranch. 1 = Not Effective; 3 = Neutral, 5 = Very Effective Management Strategy Production Strategies No. Responses Enrolling herd in CHAPS or other herd management program Enterprise diversification Individually ID cattle Maintaining good animal health Niche marketing Value-added production Services/Consultants Using an agronomy consultant Using a feed consultant Using a financial consultant Using a legal consultant Using a ranch management consultant Financial Strategies Forward contracting cattle Having off-farm income Maintaining financial reserves Using futures and options Score Using Livestock Revenue Protection insurance (LRP) North Dakota Beef Report

5 B8 Please indicate the type(s) of marketing method(s) used for each phase of production on your farm/ranch. Marketing Method Calves Stockers/ Backgrounding Fed Cattle Breeding Livestock Cull Cows No. of Responses Forward contracting 19.5% 14.6% 13.6% 1.6% 1.3% Internet sales 8.2% 8.7 % 4.9% 7.7% 0% Private treaty 28.2% 21.4% 21.4% 48.4% 3.9% Retain ownership 11.6% 13.6% 21.4% 8.5% 1.6% Sale at auction/auction barn 83.7% 77.7% 48.5% 65.5% 97.4% Sold directly to packer 1.2% 0% 30.1% 0% 5.4% Video auctions 10.8% 6.3% 3.9% 5.3% 0.2% B9 Which of the following items do you consider to be barriers to expansion of your herd and/or reasons that may cause you to exit the beef industry? If you do not feel these items will affect your herd, please check Not applicable. Factors Changing consumer preferences Animal welfare/animal rights/humane handling No. Responses Barrier to Expansion May Cause Exit from Industry Not Applicable % 28.1% 53.0% Choosing other protein sources over beef % 17.3% 60.0% Antibiotics, growth promotants, ionophores % 13.7% 72.3% Food safety % 14.7% 64.0% Changing regulations Environmental (manure management & water quality) % 35.2% 37.0% Zoning ordinances % 22.3% 56.4% Current Infrastructure Cattle handling facilities % 6.2% 75.8% Cattle watering system % 8.4% 73.0% Feed availability % 12.8% 55.2% Labor availability % 12.9% 52.5% Land availability % 16.4% 34.2% Pasture availability % 17.8% 32.1% Wind protection % 7.8% 73.9% Financial issues Borrowing capacity % 12.9% 64.4% Input costs % 27.8% 33.8% Limited number of buyers for fed cattle % 17.6% 62.5% Other Increased oilfield activity % 19.1% 66.7% 2013 North Dakota Beef Report 63

6 C. Farm Succession 427 C1 What is the primary ownership structure of your operation? 79.9% Sole proprietorship 16.6% Partnership 1.6% Limited Liability Partnership (LLP) 0.7% Limited Liability Company (LLC) 1.2% Other, please list 379 C2 If you have an heir (son, daughter, grandchild, in-law, other relative) to take over the beef operation, are you encouraging them to do so? 64.6% Yes 35.4% No 406 C3 Would you be willing to work with a non-family member if an heir is not present or interested in entering the beef industry? 61.6% Yes 38.4% No 429 C4 Does the principal operator plan on exiting the beef industry? 4.4% Yes, in less than 2 years 17.0% Yes, within 2-5 years 26.8% Yes, within 6-10 years 51.8% No, I do not plan to exit the beef industry for at least 10 years 425 C5 Is there a succession plan for transferring your cattle operation upon exiting the industry? 32.9% Yes, next generation or secondary operator will take over cattle operation 2.1% Yes, another established producer will take over cattle operation 3.3% Yes, another beginning producer will take over cattle operation 5.9% Yes, cattle will be sold, land will be used for raising commodities 1.9% Yes, cattle will be sold, land will be used for non-ag purposes (e.g. hunting) 53.9% No, have not discussed farm/ranch transfer 379 C6a Please indicate your willingness to consider selling to each of the following potential successors. 86.5% Family member 46.2% Beginning producer, non-family member 47.8% Existing producer, non-family C6b Please indicate your willingness to consider each of the following methods of sale to each of the potential successors. Method of sale Family member Beginning producer, non-family Existing producer, non-family No. willing to sell Outright sale at full market price 14.5% 17.2% 42.5% Outright sale at discounted price 46.2% 16.9% 3.4% Gradual transfer of assets at full market value 29.6% 30.9% 14.8% Gradual transfer of assets at discounted value 75.4% 13.2% 1.3% North Dakota Beef Report

7 402 C7 If your operation had to expand to accommodate more operators or to remain financially viable, in which area of beef production would you focus? Check all that apply 82.8% Commercial cow/calf 19.4% Stocker cattle 15.4% Purebred/seedstock 21.9% Feedlot 36.6% Backgrounding C8 Please indicate how you perceive the following factors as obstacles or attractions for future generations entering the beef industry. 1= Obstacle; 3 = Neutral; 5 = Attraction Factor No. Responses Score Cost share programs (EQIP, LP3, SSP, etc.) Environmental regulations Expansion of corn acres Expansion of soybean acres Input costs Labor availability Rural lifestyle Salary Self-employment (being your own boss) Work hours Work with family Working with livestock ***If you are not a current producer, no additional information is needed. Please return the survey in the enclosed envelope and thank you for your participation.*** D. Producer Characteristics Many ranches have more than one operator, but the following questions apply to the principal operator of the ranch. The principal operator is defined as the individual making the majority of the management decisions for the operation. 432 D1 What is the age of the principal operator? 0.9% Less than 30 years 40.7% years 8.6% years 22.0% years 18.5% years 9.3% 71+ years 432 D2 How many years has the principal operator been a beef producer? 1.2% Less than 5 years 9.5% years 2.3% 5-9 years 18.1% years 6.5% years 62.3% 30+ years 432 D3 What is the gender of the principal operator? 97.9% Male 2.1 % Female 412 D4 What is the highest level of education attained by the principal operator? 44.4% High school diploma 17.0% Associates degree 30.3% Bachelor degree 3.9% Graduate degree 4.1% Other 2013 North Dakota Beef Report 65

8 411 D5 What level of participation in beef industry groups does the principal operator have at each of the following levels? Not Involved Attend Meetings Actively Involved Level Avg. Score Local 34.6% 7.3% 39.7% 7.5% 11.0% 2.5 State 53.6% 14.2% 18.8% 4.8% 8.6% 2.0 Regional 76.1% 7.1% 9.2% 3.2% 4.5% 1.5 National 83.8% 5.3% 5.3% 1.9% 3.7% D6 Were you involved in 4-H, FFA, other agriculture-related groups as a youth member? 63.3% Yes, please proceed to D7 36.7% No, please proceed to D8 294 D7 Did your participation in these organizations influence your interest in pursuing a career as a beef producer? 65.6% Yes 34.4% No 422 D8 How many educational meetings does the principal operator attend annually? 16.8% % % % None 297 D9 If you do not attend NDSU Extension meetings, what are your reasons for not attending? Please check all that apply. 21.9% Meetings are not offered in area 12.5% Not interested in meeting topics 69.7% Lack of time 10.1% Prefer other sources of information 10.8% Quality of information received 5.2% Other 407 D10 Which of the following methods of educational programming would you be most likely to get information from? 64.9% Extension bulletins 15.7% Recorded programs on Internet 59.0% Face-to-face meetings 4.7% Teleconferences 65.6% Newsletters 3.0% Social media: Facebook, Twitter 12.0% Interactive video meetings 1.2% Other held in county offices 321 D11 In what areas are you in need of further educational material? Please check all that apply. 35.2% Financial planning 43.6% Production cost analysis 16.8% Labor management 25.2% Reproduction 58.8% Nutrition 37.7% Succession planning 1.9% Other 410 D12 Are you a member of one or more beef cattle trade organizations? 40.5% Yes, please proceed to question D % No, please proceed to question D North Dakota Beef Report

9 137 D13 If yes, please rank the organizational services/features that are most important to you as a member, where 1 is most important and 7 is the least important. Average ranking is listed. 1= Most Important; 7 = Least Important Factor Avg. Rank Absolute Rank Discounts/incentives due to membership Educational workshops & materials Insurance Member magazines and publications Networking Policy-setting opportunities Social activities D14 What are your reasons for not becoming a member of a beef cattle trade organization? Please check all that apply. Reason for not becoming trade organization member Proportion of Responses Membership costs too much 10.3% Policies do not reflect my philosophy 24.8% Time constraints prevent my participation 59.0% I do not know how to become a member 9.3% I do not think trade organizations are effective 12.8% I get too many industry magazines/literature already 25.9% I do not want my name on a database that could be available to telemarketers 43.1% Other 2.4% 366 D15 How would you rank the following groups ability to promote the long-term growth and profitability of the beef industry, where 1 is the most important and 7 is the least important? For this table, the lower numbers represent higher perceived value. Group 1= Most Important; 7 = Least Important Beef promotion, research & education programs funded by beef checkoff dollars Avg. Rank Absolute Rank Corn research and promotion programs funded by corn checkoff dollars 4.4 tie-5 Soybean research and education programs funded by soybean checkoff dollars State and county Extension service programs Beef industry membership organizations/associations Feed company representatives and technical service experts Pharmaceutical company representatives and technical service experts 4.4 tie North Dakota Beef Report 67

10 E. Production/Financial Information E1a What was the average number of cattle maintained on your operation in 2011 for each of the following classes? Animals Commercial Cow-calf Purebred/ Seedstock Backgrounding Stocker Feedlot No. of Responses % 53.1% 21.2% 35.1% 37.7% % 16.1% 17.7% 14.0% 14.8% % 22.2% 32.5% 19.3% 18.0% % 2.5% 17.2% 17.5% 14.8% % 3.7% 5.4% 7.0% 0% % 2.5% 5.9% 7.0% 14.8% E2 What was the average number of crop and pasture acres used in 2011? Acres 423 Pasture 371Crop % 8.9% % 18.1% % 14.8% % 11.3% % 7.6% 1,000-1, % 12.7% 1, % 26.7% E3 Approximately what proportion of your total (gross) revenue is generated from the following enterprises? Beef production % Cash grain farming % Custom harvesting/planting % Secondary businesses (fence building, trucking, construction, etc.) % Other off-farm work % Total % 398 E4 If you are married, does your spouse provide off-farm income? 59.8% Yes 40.2% No 419 E5 Do you have off-farm revenue from mineral leases, oil/natural gas production, coal or other mineral sales or royalties? 20.7% Yes 79.3% No 417 E6 How are production records kept on your operation? 36.0% Computer spreadsheet 9.6% Management software (e.g. Cow Sense, Cow Pro, CattleMax, CHAPS) 60.4% Paper record book 2.9% No formal recordkeeping method used 7.9% Other North Dakota Beef Report

11 333 E7 How do you determine the per-cow cost of production on your operation? 23.9% Balance checkbook 5.1% Consultant 22.7% Management software (e.g. Easy-Farm, FarmLogic, Quicken, Quickbooks) 22.1% Tax returns 15.5% Do not calculate cost of production 29.3% Other The Beef Industry Survey was well-received, with a response rate that is very typical of this type of survey. The results of this survey will be the basis for discussion during meetings of the stakeholder groups and relied upon heavily to focus educational, programmatic and legislative priorities within and among the respective participating organizations. The ultimate goal of this collaborative group of stakeholders is to develop strategies to ensure the long-term sustainability of the North Dakota beef industry. Acknowledgments We express our sincere thanks to the producers who took the time to complete the survey. The final survey was 12 pages in length and it was not an insignificant task to complete. In addition, we thank the North Dakota Corn Utilization Council, the North Dakota Beef Commission and the North Dakota Soybean Council for providing funding for this effort. We also thank all of the members of the beef industry stakeholder group for their part in the effort to invest in the future of the industry North Dakota Beef Report 69