Experts Predict 2014 Will Be an Excellent Year for the Cattle Market

cowsAfter a significant decline in revenue thanks to the Great Recession, experts are predicting 2014 will shape up to be an excellent year for the cattle industry.

The beef market has long been tied to the overall economy: the better the economy, the higher the selling price for cattle. Consumers looking to trim their budgets are generally reluctant to pay high beef prices, instead gravitating toward lower-cost poultry, pork and seafood products. As a result, the decrease in demand took a toll on cattle earnings: In 2009 and 2010, cattlemen saw a significant decrease in revenues with average cattle prices dipping by $140 a head. It also decreased the overall herd size, which is now at the lowest level it’s been since the early 1940s.

Thankfully, as the economy steadily improves, so does demand for beef and the overall value of cattle. Experts are expecting a significant increase in the prices for cattle, which is great news for the farmers wishing to increase the size of the herd, invest in new farm equipment and begin recouping the losses of the last half-decade.

Corn Prices to Play a Significant Role

Increased demand is not the only factor contributing to the rise in cattle prices and confidence in expanding the herd. After several years of drought and subpar weather conditions, corn animal feed prices were at record-high levels, around $4.50 per bushel.

If the predictions regarding the weather transpire and current weather patterns hold steady, the 2014 corn crop could prove to be one of the best crops in recent memory. As a result, corn prices are expected to drop considerably, to an average of $3.80 to $4.10 per bushel. This represents significant savings and will allow ranchers to receive a larger profit. Also helping with the reduced feed costs is the expected drop in hay prices.

Expansion Means Big Profitscow face

Although the demand for beef is lower today than it was 40 years ago — the average American now consumes just 50 pounds of beef annually as opposed to 90 pounds in 1970 — there is still a need to expand the herd. As a result, cow-calf producers are going to see their highest profits in nearly a decade, with most earning around $400 per head. Ranchers who reduced their herds’ size in the face of decreased demand and low prices are looking to rebuild, making cow-calf production one of the greatest growth opportunities today.

Another piece of good news for ranchers this year is the rapid expansion of foreign markets. There is strong demand for beef overseas, particularly in Asia; by some accounts, the export market alone is enough to support major growth in the American beef market for several years to come.

Taken together, the increased demand, lower feed prices and need to increase the herd are all signs this year will be a banner year for the livestock industry. While no one can predict the future with absolute certainty, the signs are positive and the ranchers have every reason to be optimistic.

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Extreme Winter Weather Means Extra Care for Cattle

ImageThis winter has been one of the coldest and snowiest in recent memory for most parts of the U.S. Even the normally temperate southeastern part of the country hasn’t been immune to the frigid temperatures, ice and snow. In fact, in mid-February, Florida was the only state in the U.S. that didn’t have at least some snow on the ground.

While the harsh winter is great news for snow plow crews and winter coat manufacturers, it creates some extra work for cattle ranchers, who are taking extra precautions to ensure their herd’s health and safety. Without the proper care, extreme cold can cause even a healthy animal to lose weight or become ill — not to mention the physical damage that winter storms can do to the farm facilities and equipment.

Understand Nutritional Requirements

Most ranchers rate cattle body condition on a scale of 1 to 9, with 1 indicating an emaciated cow and 9 indicating an obese animal. Ideally, a healthy cow should rate around a 5 or 6, or weigh an average of 1200 to 1300 pounds as measured on an accurate livestock scale. However, cows burn more energy when they are cold to maintain their body temperature, meaning that in harsh winter weather like that we have been experiencing, animals who don’t receive the right amount of nutrition can lose weight.

Ranchers point out the fluctuations in temperature during the winter months make it imperative to understand the nutritional needs of their animals. More specifically, one needs to know the point at which a cow reaches “critical temperature,” or the point at which food intake needs to increase. For the average healthy cow with a winter coat of hair, this point is usually between 20 and 30 degrees Fahrenheit. For a thinner cow, or a cow without a healthy coat, the critical temperature is much higher. Until the temperature reaches that critical point, the animal does not need to eat more than usual; for every 10 degrees below the critical temperature, the animal needs 10 percent more food to stay warm.

Cold Weather Equals Increased Prices

ImageAs a result of the extreme cold temperatures in normally temperate regions, consumers are seeing a short-term increase in beef prices at the grocery store. In December 2013, the price for a pound of choice beef was approximately five cents more than the same beef a year earlier. Experts attribute the increase in cost to decreased supply  — farmers have not been sending as many animals to market this winter out of fear the frigid temperatures could hurt them — and the increased costs to feed to the animals.

Most experts predict, though, this price increase is only temporary and that consumers should see prices decrease by the beginning of March, when the supply of beef increases. Based on predictions at the recent National Cattle Industry Annual Convention, thanks to marked improvements in the weather and the price of feed, consumers should see beef prices drop considerably more over the course of the year. In the meantime, ranchers are working diligently to care for their cows, keeping them warm and healthy until spring.

Truck Driver Shortage Only Expected to Worsen — Here’s Why

TruckerFollow behind any tractor trailer truck on the highway and you’ll probably see an advertisement that drivers are needed. Online job boards, newspaper classified sections, billboards and television advertisements send the same message: Trucking companies are in desperate need for drivers.

By some accounts, the American trucking industry is short by at least 30,000 drivers. As a result, the existing pool of professional drivers are expected to do more, such as taking longer runs, more runs and in some cases, possibly compromising safety by carrying heavier loads or driving faster than is prudent. Some people predict if changes aren’t made soon, the trucking industry could face serious consequences — consequences that could trickle down into the rest of the U.S. economy.

Before we can fix the problem, we need to understand why it’s happening. Experts point to a few causes in particular.

Pay

By and large, the greatest cause of a driver shortage is the pay, or more specifically, the low pay many drivers earn for their work. According to the U.S. Bureau of Labor Statistics, the annual median wage for a long-haul truck driver is $38,200, with the top-earning drivers only earning around $58,000 per year. While the median pay is slightly higher than the average annual income overall, it’s still not enough money for many people to consider trucking as a career. Factor in training costs, plus the out-of-pocket expenses of life on the road, and many people simply can’t make the numbers work.

Lifestyle

Driving a truck requires long periods away from home. For those with families, the idea of spending weeks, even months, away from home, isn’t appealing.

Retiring Drivers

Many of the drivers on the road today have been driving for 20 years or longer, and are readying for retirement. As they leave the workforce, they must be replaced.

Lady TruckerNew Safety Rules

The Compliance, Safety, Accountability (CSA) program launched in 2010 has made the trucking industry safer by introducing new regulations regarding driver training and experience, how long drivers can be behind the wheel and more, but it’s also reduced the pool of qualified drivers. Companies cannot hire younger, less experienced drivers and, as of July 2013, drivers cannot drive more than 72 hours in a week. That means more drivers are needed to get loads to their destinations on time.

Fixing the Problem

Some argue the best way to reduce the driver shortage is to increase pay. Some companies have increased sign-on bonuses, as well as other payments for performances. Improving productivity, by offering advanced tools to help drivers do their jobs better, can also improve pay as drivers drive more miles. Making it easier, and safer, for drivers to do their jobs will also help attract new drivers to the field.

As the economy improves, and more goods need to be shipped around the country, the need for qualified drivers will only increase. Without drivers, the shipment of goods will be delayed — and some areas could even experience shortages of items — and the economy will inevitably suffer. Some companies are looking into alternatives, such as rail transport and driverless vehicles, but few experts believe the need for qualified drivers will ever go away. In the meantime, companies will continue to recruit drivers and try to fill those open positions, and find ways to attract new drivers to the field.

Too Many Safety Violations Could Shut Down Your Trucking Operation

As the manager of a trucking company, safety is your most important concern. Protecting your drivers, your cargo and other motorists on the roads is the foundation of everything you do — and is reflected in your policies and training.

However, not every carrier has the same commitment to safety. As a result, we see all too often see news stories about horrific accidents caused by drivers or carriers with a long history of safety violation. With the passing of a new rule by the Federal Motor Carrier Safety Administration, carriers that demonstrate a pattern of safety violations can have their right to operate revoked and their trucks pulled off the road. The agency can also revoke or suspend authority to operate if a carrier employs someone with a history of egregious safety violations in a leadership position.

Understanding the New RulesImage

The FMCSA proposed the new rule in November 2012, after a string of deadly crashes involving carriers with prior safety violations or “reincarnated” carriers that were previously shut down and reopened under a new name. Essentially, the rule is designed to keep the roads safe by removing those carriers with a history of ignoring rules from them, while providing more incentive for carriers to maintain safety standards, keep equipment up to date and comply with the law.

Under the new standards, a carrier can be stripped of its right to operate if it meets one (or more) of the following criteria

1.      Repeated noncompliance with statutory or regulatory safety requirements.

2.      Noncompliance with the directives of federal, state or local directives designed to fix safety issues

3.      Non-payment of penalties charged for safety violations.

4.      Failure to respond to law enforcement actions that result from noncompliance.

The FMCSA stresses that for a carrier to be stripped of its operational authority, it must show a pattern of deliberately engaging in the aforementioned behaviors, or of attempts to conceal such behaviors. In other words, a company will not be shut down for a single violation, but only for repeated violations over a period.

No More “Reincarnated” Carriers

The new rule also brings with it greater oversight and scrutiny of applications for operational licenses. There have been cases in which carriers that have had their license revoked apply for a new license under a different name. The new rules require more investigation into applications, as well as better consolidation of operational histories to avoid giving licenses to carriers known to be dangerous.

Avoiding SanctionsImage

The FMCSA notes the new rules are only likely to affect a few carriers, and that a company with a strong record of safety and compliance has nothing to worry about. In fact, only six carriers would have been impacted by the new rules in 2013. That being said, carrier managers and owners can ensure their vehicles are safe by offering extensive training, committing to vehicle maintenance, providing the latest safety and operational equipment to drivers (such as portable scales to ensure proper weight on all runs) and staying on top of the latest regulatory changes. Continue to make every effort to comply with safety directives and never attempt to conceal problems, and you’ll stay on the road and in the black.

How Warehouse Security Concerns Are Changing With Technology

ImageIt’s a popular scene in Hollywood films: the bad guys lurking in and around warehouses, trying to steal a shipment of unknown origin. In the movies, it’s usually not that hard to get into a warehouse. Usually, all that’s necessary is a bumbling (or sleeping) security guard, a pair of bolt cutters and a lot of nerve.

Of course, real life isn’t like the movies, and it’s usually a lot harder to break into a real warehouse. That’s because most warehouse owners and operators have invested a great deal of money and time into physical security precautions. Fences, lighting, security cameras, even armed guards are not uncommon at most warehouses — all with good reason, since most house millions of dollars in inventory and supplies.

However, security has become an even greater priority with the introduction of technology in most operations. These days, when someone gains access to a warehouse, there’s a good chance he will access a lot more than merchandise and equipment. Vital data about the business and its customers are also at stake, thanks to many warehouses moving to computerized functions for picking, packing and shipping. Just one device falling into the wrong hands could present a significant and costly data breach.

Protecting Sensitive Data

These days, almost everything in the warehouse is computerized, from inventory control systems to the scales used to weigh shipments. Because many of these systems are connected to the company’s central networks, they are a prime target for cybercriminals seeking to gain access to customer, business and financial data. It’s not always shadowy criminals who want to steal your customers’ names and addresses; a competitor may wish to access your inventory records to determine whether you can meet customer demand more effectively than they can.

For that reason, warehouse operators must treat cybersecurity with the same sense of urgency they would physical security. That means installing adequate antivirus software, establishing strong firewalls and using the latest security protocols, including encryption and two-factor authentication, to protect devices and servers and the data they contain. The same practices your organization would use in the main office must apply to the warehouse; for example, password management must extend to the warehouse staff as well.

The Human Element

ImageSecurity experts note the weakest link in many security plans is the human one — that is, the people using the devices. That’s why it’s of vital importance to provide training and education on security protocols as you transition to new technology in the warehouse. For example, do not allow workers to use tablets or handheld computers for personal use, and have a protocol in place for monitoring the whereabouts of all devices at any given moment. Ideally, portable devices in the warehouse should be able to be controlled remotely, allowing IT staff to disable or wipe the devices if they are lost or stolen, thus preventing unauthorized access to the warehouse system. At the very least, portable devices need up-to-date security software installed on them, and workers should only be able to access necessary programs and data.

Physical security of warehouses and warehouse operations will also be important — after all, robbery is always a concern — but the growth in warehouse technology highlights the importance of cybersecurity as well. As you begin implementing the latest technology into your operations, develop a plan for security as well or face costly consequences in the event of a breach.

3 Warehousing Trends to Watch in 2014

ImageThe start of a new year always brings with it changes and new trends. As businesses search for new ways to operate more efficiently, take advantage of technology and meet the new challenges presented by the recovering economy, warehousing has taken on new importance. No longer “just” sites for storage, picking, packing and shipping, warehouses have taken on a new strategic significance for businesses of all sizes. Customer satisfaction, overall operational efficiency and level and scope of service are all being linked back to the warehouse, putting what was once a back-end, little understood (and appreciated) function in the spotlight.

As a result, there are a number of trends taking hold in the warehousing industry. These trends are changing the ways organizations and operations managers are handling warehouse functions. Several of these trends are moving to the forefront and will play a profound role in the design, operation and management of warehouses in 2014.

Increased Recognition of the Warehouse’s Role in Business Operations

In the past, the warehouse was considered mostly “space,” a place to hold stock and manage shipping it out to customers. However, especially in the retail segment, there’s been an increased recognition of the warehouse’s importance beyond simple storage and shipping. Shipments play an important role in customer satisfaction; when shipments are incorrect, late or damaged, it reflects poorly on the business. However, the warehouse’s importance extends even beyond the fundamentals of customer service. Companies are looking for added value from all aspects of their operations, meaning warehouses are being called upon to offer value-added services to clients. Services such as item assembly have now become the norm in some warehouses, when in the past they may have been a manufacturing function. As a result, warehouse have become revenue drivers — and just as important to executive leadership as other departments.

Increased Emphasis on Productivity and Efficiency

“Time is money” has long been a maxim in the business world, and as competition increases while resources become scarcer, it’s as true today as it was 100 years ago. As a result, companies are searching for ways to increase the efficiency and productivity of warehouse operations. Increased worker training, warehouse evaluations and redesigns, new and advanced tools and implementation of new technology are all being used to help warehouses move more goods in less time.

ImageIncreased Growth in Warehouse Technology

It should be no surprise technology is taking over the warehousing world. In fact, one study found more than 60 percent of all warehousing operations plan to increase their technological infrastructure over the next four years. Already, we’re seeing an increase in warehouse workers using handheld computers and devices in picking and inventory operations, and the coming months will see additional technology used to automate certain warehouse procedures. These technological advancements are expected to increase efficiency and productivity, while reducing costs.

These are only some of the trends analysts are seeing in the warehousing industry for 2014. Other factors to watch for include a focus on reduced inventory, a greater emphasis on security and more agility among warehouse service providers. In the meantime, expect to see a focus on cost-savings and efficiency take priority, and change the ways warehouses work.

How Reducing Stress in Cattle Increases Profits

CowIt’s not uncommon for humans to lose weight when they are under a great deal of stress — and that same phenomenon extends to members of the animal world as well. Animals, especially cattle, that experience stress are generally thinner than and not as healthy as those who have a more tranquil existence.

Happy Cows, Healthy Cows

The mental state of cattle and the effect on meat quality and milk production has been a subject of great interest to researchers for decades. Several studies have proven beyond a shadow of a doubt that those animals that are stressed tend to have lower body weights, lower-quality meat and other problems, including difficult temperaments.

For example, researchers at Colorado State University, led by Temple Grandin, discovered that cattle that were handled in the “traditional” ways — meaning they were placed in situations that caused agitation or excitement — did not produce meat that was as high quality as those animals that were managed via “gentle” handling methods. These findings were supported by additional work at Texas A&M, which reported that handling methods involving prods, hitting, shouting or other aggressive actions caused stress in animals, and as a result, lower weights.

Since the more an animal weighs, the more a rancher earns at market, it’s become increasingly important to handlers they use methods that keep the animals calm. In other words, the happier the cow, the healthier the cow, and the greater the potential to get a fair price at market.

A Weighty Issue

Cow HerdWhile researchers note keeping cattle stress-free is best, there are some situations in which agitation is unavoidable. One of those is weighing the cattle — you can’t exactly ask a 1,500-pound steer to simply step on the scale to be weighed.

The problem is compounded for those ranchers who have to bring their cattle to a scale to be weighed. For those in remote areas, weighing their stock often means driving the animals great distances, which can cause significant stress. The problem can be solved in some part by installing livestock weight scales at the ranch — most models are relatively affordable — but researchers are looking at new ways to use technology for weighing animals without causing any stress.

A former rancher who experienced the difficulty of transporting animals to be weighed is working with engineers to develop a portable, algorithm-based device to weigh cattle without ever leaving the field. The device uses small 3-D imaging cameras attached to the animal via neck strap, which take a series of images of the animal to create an accurate model. The animal’s weight is then calculated based on a series of algorithms. The researchers say these are nearly 100 percent accurate.

The image-based weighing device is still in the early stages of development, but it demonstrates the shift toward gentler and quieter means of managing cattle, which will help ranchers maximize their profits. In the meantime, ranchers looking to keep their animals happy and healthy can invest in on-site weighing systems to avoid having to transport their stock, and employ more humane practices, such as avoiding whips and prods.