Livestock Wala'au

Ep. 10 Decision Support Tools for Hawaii Beef Producers

• Melelani Oshiro & Shannon Sand • Season 1 • Episode 10

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In this episode we’re going to talk about some decision support tools created by Dr. Dillon Feuz. Dr. Feuz is from Utah State University where he is a professor in the Applied Economics Department. His primary research and extension focus is in Livestock Marketing and Risk Management. Listen in about his current project he has been working on in collaboration with UH CTAHR Extension. 

If you have any questions, comments or request for special topics please contact us at walaau@hawaii.edu

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Shannon Sand:

Aloha Today's episode is brought to you by the University of Hawaii College of Tropical Agriculture and Human Resources and the livestock extension group.

Melelani Oshiro:

Aloha welcome, everyone to livestock Wala'au a podcast aims to provide educational support information, guidance and outreach to our livestock stakeholders in Hawaii. We are your hosts, Mele Oshiro and Shannon Sand. And today we are going to be talking with Dr. Dillon Fuez who comes from Utah State University, where he is a professor in Applied Economics Department. And his primary research and extension focuses in the Livestock Marketing and risk management area. So he's gonna be talking about some of his decision making tools that he's created. And some of his programs and background information, I guess. So I'm gonna hand it over to Dylan. Thank you for joining us today. Yes, thank you.

Dr. Dillion Feuz:

Thank you and aloha, everyone. I've learned a few Hawaiian words in my three months on the island. It's been been great. And I've been able to get out and talk with a few producers and learn a few things and see some some good cattle. Yeah, it's always I've told some other people that to me, the best site in the world is black cows on green pasture. Yeah. So I hope I didn't offend those of you that got white cows are bred cows. But for me, white cows on green pastures. That's a great sight. Yeah.

Melelani Oshiro:

I think that's my background. So you're fine, I guess. Yeah. That's in your background. There's Yeah, well, I took the picture. So people are mad at that.

Dr. Dillion Feuz:

But yeah, so it's been great to be here. You know, I put in for a sabbatical to come to Hawaii, I wanted to learn about Hawaii industry. And I've been an administrator for the last nine years. And I'd kind of gotten out of some of my extension work. And I knew that there was some software out there that would allow me to do some things that I hadn't done before. And so I was wanting to get some practice doing that. And so that's, I came here to learn about this industry, and to figure out how to maybe help create some online software tools that could help Hawaii producers make some management decisions. So that's, that's what I've spent the last three months doing is just kind of understanding the industry understanding the challenges here, and then seeing if I can model those in a manner that can help producers make some real time decisions.

Melelani Oshiro:

Yeah, yeah, that's great. Yeah. Oh, go ahead. Set. Shannon. I'm sorry. Do you have something? No, I just was saying that's nice. Yeah, yeah. And it's been great. We've all been in the project with Dylan, along with Mark Thorne. So it's been it's been good. It's been challenging because of COVID puts a stick in a lot of things that we're not able to actually have like a lot of in person stuff that we'd like to be able to do. But yeah, so you want to talk a little bit more than about your this sabbatical. Exactly what it's about. I don't know if everybody really knows what a sabbatical is. Right? It really didn't know until I came into this position. So maybe we talk a little bit about what that is. And what exactly have you been doing here in Hawaii and some of the project?

Dr. Dillion Feuz:

Yeah, sure. I guess some of my family and, and even colleagues back on the mainland and Utah. They think my sabbatical is hanging out on the beaches of Hawaii. Which

Shannon Sand:

think a lot of people think that's Hawaii in general, even if you work here, it's like I go to work, like every day like everybody else.

Dr. Dillion Feuz:

Yes, but in general, sabbaticals are set up. Universities have, I think there are some private businesses that I encourage their their people to bake sabbaticals, and generally, it's to kind of give you a break from what you've been doing. But as much as anything, you're hoping to go somewhere where you can learn something new, that then you can bring back to your own and sometimes that's new cultural ways of doing things. Sometimes that's new environmental challenges. You know, just people look at things differently and lots of times we get in our own bubbles. And we're only just talking to our our close neighbors. You know, there's there's a joke in marketing when and I do a lot with the futures markets, while the future Markets are based in Chicago. And so the joke is, if it's raining in Chicago, then corn futures will be down because all the traders think that it's raining everything everywhere, big corn crop, while there could be a drought going on in Iowa and Nebraska, but if it's raining in Chicago, it must be rainy here. And you know, lots of times we get bubbles. And so to me a sabbatical is help, helps you break out of that bubble, helps you interact with, with a wider clientele group, more colleagues. And so that's what I wanted. You know, I've known about why cattle industry just kind of, yeah, I know, Hawaii has cattle, but I've never been here. And I've visited the islands before strictly as a tourist primary, but I wanted to come, you know, really understand what some of the challenges are here. And then, you know, so my sabbatical lasts for one year. And so during that time, I'm not really doing work for Utah State University, I am doing work for University of Hawaii, extension. And so, for me, during that time, anything I can do that can help Hawaii producers, well, then, that's what I want to do. And so I'll talk about some of the specific things I'm doing. But towards the end, we're going to throw out, you know, some teasers, if there's something that you would like me to do. And I still have seven months to go in this sabbatical. So I have lots of time to work on stuff. So if I talk about what I'm doing, and you're saying, well, that's not what we really need, here's what we need, then we'll tell you how you can let us know.

Melelani Oshiro:

Yeah. And I think that's important, right? Because I Shannon, and I always talk about this learning from our neighbors. And I think a lot of us don't know, maybe that we're going through the same problems or having the same issues with somebody, right, that went through something. So that's, I think, really important of stepping outside of your bubble of understanding and you know, being able to be open to look at different things that are going on and relate back to other industries. And, you know, it's the industry here is different. Oh, yeah, in a lot of ways, and similar in a lot of ways. So I really think it's a big value to have somebody come, you know, from working in other markets, and in other areas, it's very important to put that information and toyed kind of look back at what we can add. Yeah. So yeah. Very, very, very good. So,

Dr. Dillion Feuz:

yeah. So, you know, I was thinking, in fact, I was talking with somebody, I don't remember who the other day. So I grew up on cattle ranches in Wyoming. Couple different ones. Well, on the mainland, Wyoming is really quite isolated from what I would call mainland, beef cattle industry. I mean, it's, yeah, there are cattle ranches in Wyoming. But you're a long way from any major markets. And I remember as a, like a young boy listening to my father and grandfather talk. And there was a mistrust. Like, if you sent your cattle to Nebraska or Kansas, yeah. Heavens forbid Texas to get fed. You know, you didn't trust those those people. Yeah, I was having this conversation with a small cattle producer here on the Big Island. And he was talking about how his father had sent some cattle to I don't remember now, if it was Washington, or, or California did bad. And they ended up costing them rather than making money. And so there was a mistrust there, because they just didn't know anybody. Well, for 10 years in my career, I worked in Nebraska. And in Nebraska, the cow calf guy is neighbors with the feedlot guy. And so they're sharing coffee in the morning, or they're cheering on their same kids at the high school volleyball game or basketball game, whatever. And so they know each other. Yeah. And so the markets actually work better there. Because there's that trust build up. And so I think that's one of the challenges that that Hawaii producers face is there are more opportunities on the mainland, for their cattle, but trying to establish those kinds of relationships where you could target a partner there that you can trust. I know, there's a co op on the island that some of the producers are part of that tries to establish some of those relationships. But that's one of the challenges and that's one of the things I'm trying to model is okay. What's the what's the price I can receive my calves today in Hawaii, versus if I knew somebody on the mainland. What's the cost of shipping to get Um, there. And then what? What would be the potential profit in terms of feeding them for? You know, and I know, the coop I think takes most of the calves cleared a slaughter weight. But that wouldn't necessarily have to be the model that that a producer could follow. They could just send them and have somebody feed him for 60 days on pasture and then sell them in an auction market. But how do you build up those relationships and trust? I mean, I can model it. But establishing those relationships will be the difficult things.

Melelani Oshiro:

Yeah, you still have to have that outreach from those producers to certain contacts and whatnot. Yeah. So hard. Yeah. Yeah, that's sometimes difficult thing, I think.

Dr. Dillion Feuz:

But I've been amazed at just as I've gotten to know, people, and, you know, obviously, most of you on this listening to this podcast wouldn't know, but I've been living in in Waimea. And, you know, so I get out and, and talk with people. And, and it amazes me, it seems like everybody has a family member. Of course, I've also come to understanding the why and culture, anybody older than you as your aunt or uncle, and anybody Your age is your cousin. But some of them tell me they really do have cousins, or aunts or uncles or siblings on the mainland somewhere. And so sometimes I think, maybe using one of those relatives to help establish some relationship with somebody where you can build up that trust and where maybe your family member can just go verify Oh, yeah, cattle, they're on feed in that feedlot or they're out on pasture there. They look good. This reduces that. Anxiety, that risk? Yeah. All about risk management. Well, yeah. When risk human uncertainty is a big one.

Melelani Oshiro:

Yeah. Yeah. Yeah. Yeah. And I think to just understanding to what the markets there, the buyers there want, right, as well as the animals, you know, and what's going on? Well, yeah, conditions of what your animals should be going into those feeders and what they kind of look for, that's the important thing, information to understand and what not to build on top of those relationships as well. But yeah. Wow. So you, you talked more to take a step back, because you talked about your sabbatical research in the you did a lot of digging into what's going on here in Hawaii and our our cattle markets and producers here. So then you took that now, what are you going to do? Can you talk a little bit more about what you doing with that information that you gathered? Sure.

Dr. Dillion Feuz:

So what I've, you know, what I'm trying to do is, it appears to me that, especially for the smaller producers, who are primarily just selling their cattle to a broker here, there is limited ability to know ahead of time what that price may be, it's time to when they're ready to take their 10 head 20 Head 50 head, sell it, the broker says, Okay, I'll pay you 90 cents a pound today for your steers and 80 cents for your heifers. And it's kind of a take it or leave a market. And then I talked to somebody else. And you know, one person told me they got 90 cents, and somebody else told me they got 70 cents. Well, is that was there a reason that one Got 91 Got 70. And I've studied a lot on markets on the mainland. And you can there we have reported data auction reported data. So in even in an auction that it's occurring today on the mainland, cattle that are delivered that same day, there could be that much spread and the prices that those cattle are receiving based on quality to cattle. Sometimes it's you know, if you've if your cattle had to get transported longer in their shrunk, the buyer will recognize that he's actually buying more animal than what he's paying for for weight. And so he'll pay a higher price per pound, as compared to somebody who got their cattle there a couple of days early. They fatten up on hay and water. And the buyer recognizes Oh, this, this animal is tanked up. And so they'll pay less per pound. So those games get played. And you can have a wide market spread. So just because somebody gets 90 cents and somebody else gets at 70. What appears to be the same animal doesn't necessarily mean the markets not right. But it could also mean that somebody got less because a buyer was taken advantage of somebody that didn't know the market as well. And so one of the things that I'm trying to do On the markets. So there's a feeder cattle market on the Chicago Mercantile Exchange the futures market, and that has hundreds, if not 1000s, of people trading that market on a regular basis. And so the information is out in the market in terms of what's the price of corn? What's the price of hay? What's the price of those animals going to be when they're slaughtered? That information is known in the marketplace. And they people try to get all that information and then make their best guess, for what that feeders ought to be worth. So then that's in Chicago, well, then local markets tend to reflect that. So if that market goes up a couple of dollars, you would expect your local market to go up as well. It may not go up $2. Maybe Maybe it only go up$1. Or maybe, because your conditions are such it may go up$3. But we tried to I try to model that risk. Well, one of the challenges in so I I've modeled that risk for Washington, because there's good oxygen price data in Washington state. California doesn't have as good of market information. So I'm limited there. Texas has good information. Yeah, a lot of people Sam cattle there. So I've modeled that for Washington and Texas. Well, one of the challenges in Hawaii, is there's not publicly available price data. And so every time every time I talked to produce challenge, I asked him, you know, what do you get for your calves the last time you sold them? And so I'm trying to just to build a database, so that I can see. Okay, how did the prices here compared to say, Washington State prices? And how do they compare to that Chicago price? And are they fairly consistent? In other words, are they moving up and down at the same level? Or is the price here just staying flat and letting the mainland prices vary? So the more I can understand that, then I think the more I can help producers understand their situation here help them. To me risk risk isn't all bad. Sometimes risk provides us a profit potential, but we have to be able to anticipate manage it justify that that's one of the things I'm working on is just trying to understand that yeah, market risk locally.

Melelani Oshiro:

And locally. That's hard. We don't have options, you know, prices here. We don't, that doesn't occur here in Hawaii. So yeah. So that was I guess, one of the things that we, you know, you presented at HCC and talked a bit about the project, and your need to help gather so have you do you think you've gathered enough data from our producers to understand this, this price range? Or is you need more want to gather more?

Dr. Dillion Feuz:

Yeah, I could absolutely use more data. I mean, I have you know, I only have a few observations. I've got some general data and kind of some some annual price data that I can look at over like the last 20 years. Yeah, that would help me know, in general has the has the price level in Hawaii, changed probably relative to the mainland in that time. And given the prices of fuel and transportation, I'd kind of expected it wouldn't change. But in terms of looking at it, that more local variability, I could use much more data. I mean, we've contemplated sending out some kind of survey instrument, haven't done that yet. And I hope if you if we do that, and you receive it that you'll try to respond

Melelani Oshiro:

to Thomas to make it really, really short. If

Dr. Dillion Feuz:

we do that. Yes, yes. It'll just be a couple of questions. Did you sell cattle in the last six months or a year? And yeah, weight and price, where are they? And because I don't, I don't need your name. I don't want your name. I just need to know, different prices that occurred. And then I'll compare those prices with prices from say, Washington State or Texas or with that Chicago Mercantile Exchange.

Shannon Sand:

So you can create like an accurate decision making tool for here that would be geared specifically for Hawaii, which would ideally help a lot of producers hopefully long term, you know?

Dr. Dillion Feuz:

Yeah. Yeah. And then, so then if you can understand your price, and yeah, just a little bit, it almost looks to me like there could be some seasonal differences, where prices in Hawaii are closer to the mainland price, in certain times of year and are further from the mainland price. In other times in a year. Well, if you knew that, then maybe it helps you to say Oh, I'm going to try to adjust my car calving season a little bit more of my calves into that relatively higher market. And yeah, you were in that relatively lower mark? Oh, yeah, it would be the data that I would love to get enough of So, because what I really don't want to do is make a tool and say, here's the market and find out. I had too few of observations, and I just made a big error. And and I'm encourage you to do something that's not right. Yeah, that's more data. Certainly could could help that. Yeah.

Melelani Oshiro:

Yeah, for sure. That's the the one thing the more than we were just talking about that data is power. And that is you make decisions on a lot of things, especially when we're looking for grant funding or any vision tool that you want to create, you know, you need to have that data to kind of backup and

Shannon Sand:

make sure you justify, yeah, make, by and show needs, reinforces

Melelani Oshiro:

it's beneficial here in Hawaii, because where we can have a year round, or we do have a year round growing season, you know, so yes, I don't have I mean, we do have certain parts of the year that are forage production isn't as good as others, you know, not as productive. But still, we can produce animals, we don't have very cold, we don't have cold winters, you know, in the States. So for folks to be able to adjust those breeding seasons, you know, and to benefit themselves in the other end of the market. I mean, I think that's a very good and useful tool that you'd like to encourage. So that being said, if you guys are pretty for producers out there that are listening to this, that do send out cattle, and you have not had a chance to talk talk with Dylan. And you know, you'd like to reach out to Shannon, either through the podcast, we can connect you guys are Yeah, data that you'd like to share. Do you know reach out to the podcast, most of y'all have our emails and whatnot, so or can reach us through CTAHR. So definitely, that that would be a very helpful resource. You know, and we produce a data and producers and whatnot, we always talk about, I guess that's a producer, that is what we really need. Right? Is to request more for that. I guess when do you make the decision then, if we want to do a survey or not? Well, I

Dr. Dillion Feuz:

think I think we definitely want to do a survey. And we just need to carve out some time, it'll probably be after the first year that we get sent out. But yeah, I think well, we'll send one out and try to get get some more data. And, you know, the other thing that I would like a little bit on, I know, I think there's a hope anyway, that with the new ownership of the nonprofit say this wrong, the

Melelani Oshiro:

Oh, the Polo slaughter the pole.

Dr. Dillion Feuz:

Oh, hello. Oh, he lost her facility. I think they're trying to expand the capacity a little. And some of you may be encouraged to keep some of your calves rather than sending them to the to the mainland, or selling the broker. Maybe you keep some and and feed them out yourself. I would be interested kind of in what you think your cost are of doing that is I mean, I think there's usually a mineral and salt, right. Some fencing? Yeah, that has to be done. And I was talking with somebody where I grew up where our cattle ran in the winter. In the winter, there was two or three feet of snow on the fences. And so in the spring, as the snow had melted, break those fences so every year there was a fencing cost involved before you can turn your cattle out on the pasture to graze in the summer. Well, that doesn't occur here, but then I heard that the vog is.

Shannon Sand:

Yeah. It's gonna say not even just that but rain in general. It'll it'll eat it. And if you're close to the ocean, the salt? Yep. Well, so everybody

Dr. Dillion Feuz:

has their challenges and Yeah, awesome. You know, if I, if I can learn those a little better, then then as I'm modeling that, because one of the things I'm working with Mark Thorne on is He has years of, of pasture research. And so we're trying to come up with okay, what is the you know, okay, they've kind of narrowed down what they think works in terms of a moderate intensity grazing, stocking. Yeah, and some rotational grazing. But what are the costs involved in that how much you're gonna pay for salt mineral, how much you're gonna pay? You know, even kind of labor? How often do you have to go out check those cattle? So any of that kind of data that I can gather then as I build that decision tool of, alright, am I better off running 50 Cows and calves? Or should I run 40 cows and calves and keep 20 of those calves back to go ahead and feed out and sell to the local plane. Right. Right, instead of selling them does, that's another way to deal with risk is to have a couple of different intergrade if you will sell some of them to your broker, sell some locally to the packing plant. And I've also come to realize in Hawaii, there's quite a little I wouldn't call it a black market, but it's a entrepreneurial, you know, all sell to you. You're my neighbor. Yeah, cash market. You need to be floods figure out how to butcher that beef. And yeah, and sometimes it's not even a cash price. It's a trade for trade. Yeah. Yeah. And that's great. But those are all opportunities. Yeah. And need to be looked at.

Melelani Oshiro:

Yeah, cuz there's still value in that even though you're trading it off for something else. You're still getting something in value for it. Yeah, of course, it needs to be considered and counted in. Yeah. Yeah, that's, that's quite a.

Dr. Dillion Feuz:

It's probably like, I have a mini feedlot in my own backyard, I can feed up to like three or four steers. And I'm partial. I know everybody here likes the grass fed beef. But having lived in Nebraska for several years, I'm partial to corn fed beef. Yeah, I feed my steers lots of corn and grain. But at the end of the day, my operation isn't very profitable, because I end up if I'm losing money, I don't recoup that. If I'm making money. I don't charge it to my children in laws when I'm selling them to be

Shannon Sand:

that sounds like my dad, to be honest. Like we have a small Yeah, a section where we feed out it.

Melelani Oshiro:

Yeah, and well, here too, you know, we've just gotten used to grass fed, I think it's always been from when I was younger, as well. But just the cost of bringing in feed over here is so expensive. Oh, my goodness, yes. You can make a profit, I think in that sense, if you're really bringing in and it's going to be something on that sense, where it's going to be a small scale. You're either doing it for home or doing it for the family. I mean, that's what I do with our poultry.

Dr. Dillion Feuz:

Well, and they're so good. Where I live, there are people that tried to do grass finished beef, well, we only grow grass about four months out of the year. The time it takes or it's you're feeding, hay or forage is other stuff. Here, you can get tasty grass fed beef. You know, I I'm probably not at risk of offending somebody here, because it's probably not anybody from Utah, listening to this podcast. But yeah, they're everybody has different challenges. Yeah. On the grass feed. Yeah. In a climate. Yeah, in that area. The mainland is not the same as grass finishing here where, like you said earlier, you have year round, nice grass production. Yeah, it varies some during the seasons, but still, there's not those stresses. Yeah. And there's not the weather stresses of 20 below zero versus 100 degree heat. Yeah, that's all in the same location in in Utah, you get that kind of Yep, range. And the cattle have to deal with that here. It's much more temperate. And so yeah, you can,

Unknown:

I was real happy to move here. It's like, I can live here from Utah. But yeah.

Melelani Oshiro:

Ya know how I do if you had to go from that extreme spot. It's very, very different. Yeah. So when does the end of when this project and where

Dr. Dillion Feuz:

this the project we're working on. It's, it's grant funded, and it will go tell September of 2022. But we've also Shannon mele, myself, Mark, we've also applied for some additional funding. And if we get that it will go on into another year beyond that. And yeah, my sabbatical will be done. I'll be back in Utah, but I can still work on this. If the grant goes through, then part of my time will be devoted to that grant. And so yeah, I'm hoping to over the next couple of years. Probably get back to the islands. Two or three times. Yeah, hopefully COVID will

Melelani Oshiro:

allow us to be in person. Yeah.

Dr. Dillion Feuz:

Where I can sit down with some of you. You can, you know, we can work through some decisions. You can tell me what some of your challenges are. I can go back to the to the office and fix that decision tool to really reflect your needs. Now, yeah, you know, that is my goal. It's not the To be here and enjoy the beach for a year. And it's, you know, establishing relationships where, yeah, some of you have become my friends. Yeah. And so I'm trying to help out. And I'll definitely have to be doing more work for Utah producers after the end of this year, but can also still be doing doing work. And a lot of it's the same. I mean, some of those decision support tools I'm working on for Hawaii, cattle producers will be the same for Utah producers in terms of yeah, I'll just change the market that we're looking at only using a Wyoming or a Utah auction market resident in Washington State, right? Or, you know, but, but the decision points of okay, here's the price I could get today, versus what can I expect three months from now? Those are always the decisions, we're pretty much making an agriculture with. Almost Yeah, if you think about anything, whether you're your cattle, your sheep, your dairy, you're a farmer, you're growing something, usually you have to make a decision. And you're not going to get paid on that decision for 236 months, sometimes a year, you know, if I make a decision, I'm going to breed more cows. Well, yeah, from the time of that decision till I actually sell more. Yeah, you know, that's, that's a quite a ways out in the future. But if there's some things that we can look at, to help us guess not gasp but to take, take some educated looks at, okay. Here are the conditions in the market that generally leads to higher prices. So now, it'd be a good time to build up my cow herd a little bit and, and have calf to sell in that higher market timeframe. Yeah. Or we've got market conditions that are looking like prices are going to be lower for a little bit. Maybe it's a good year to reduce my cow numbers a little, my pastures grow back get very strong. So then the next year, I can come in again, right. You know, again, those are some things that I would love to try to help and model and yeah, and make it so. So producers feel like they've got more control. Yeah, just Well, yeah, I got 10 calves ready to sell, I guess I'll sell them whatever broker whatever

Melelani Oshiro:

it is, it is yeah. It's good to just be able to understand the risk more for them and make more informed decisions. I think that's very important. Yeah. So you know, one thing that I always have trouble understanding is talking about those prices and stuff is just an understanding the slide. You know, they're white, the weight, price, and slides and how all that works, you want to talk a little bit about how that works and understanding of how to producers understand what that means for them.

Dr. Dillion Feuz:

Sure, this is one of those topics where I'll have to be careful that I don't dig down to lose everybody. It's something that if I were standing in front of a whiteboard, teaching students or even if I were at a meeting, I could easily throw out some examples, I think would make sense. But since most of you are just listening, I'll try to talk more and in general, but essentially the price slide it, it's basically based on the idea that animals are going to be close to the same slaughter weight when they're slaughtered. And they're going to get close to the same price. So then it's going to cost something to get the animal from when you're selling it today. To that, that price. And most of the time, your cost of feed, whether that's grass in Hawaii, whether that's grass and in Washington state, whether that's corn stalks and Nebraska, or it's corn grain, and other feed and a feed dot, genuinely that cost of gain per pound is going to be less than the market price. So for every pound that you're adding, you're expected to make a little money, because that's well, I'll just use some round numbers. Let's say the price we're going to sell out as $1 per pound. And the cost of feeding is 80 cents per pound. Then every pound I'm putting on I'm gaining 20 cents. So the buyer, he's figured out in his head, okay, I'm going to need to add 600 pounds to this animal and I should make 20 cents on every one of those 600 pounds. Therefore I'm making $120 on that. Well then if you show up to sell me an animal you that weighs more than what we agreed to on a price. That means I'm going to have less of that weight to gain and I'll make less money. Right. So that's the, that's the rationale. That's one rationale for the slide is that it's trying to, I bought an animal thinking I was going to feed this many days, well, it's going to be heavier. So I'll have less feed and, and I won't make as much. The other issue is, again, let's think about the foreigner pound calf. And if I'm getting $1 per pound for that calf, it's costing the buyer $400 to buy it. If you deliver me a 450 pound calf, right, it's costing me $450 To buy it. And if you deliver me a 500 pound calf at the dollar, it's costing me $500. Well, I only had so much money. And and so as that weight creeps up, you know, and we recognize that, okay, yeah, it's hard for everybody to, to guess the weight of a cattle, your weight, or heifer. And so we give some range, we say, all right, $1, for a 400 pound animal, if you're more than 25 pounds heavier, or more than 50 pounds heavier, you know, you figure that out. And you say, if you go over that, rather than paying you $1, I'm going to pay you 95 cents for the first 25 pounds. And if you go 50 pounds, I'm going to pay you 90 cents less. So now, let's say that the foreigner pound calf cost $1. If we didn't have a slide and you delivered a foreigner and 50 pound calf, it would be $450. But with the slide, if I backed it to 90 cents, let me see if I can do that math. It did cost me I think roughly $405. So I'm still gonna pay a little more for that animal, but not by 50. Not 450. So yeah, slide is basically and it, it's not advantageous to sellers at all, it's the advantage is always to the buyer on the slide. Because I have rarely seen where if you deliver a calf that's light, that they pay you more slide usually doesn't go that direction, you know, so if your calf comes in at 375, rather than 400, they don't pay you more. Yeah, usually the slide only goes up for the heavier weight and the slide goes down for the for the seller. So it's to the sellers advantage, but they are taking your animal, they're taking the risk. And, and that's kind of where the slide comes in. So if you, you know, my guess is most of you don't have access to scales on your operations, maybe some of the bigger producers on the island might have their own scale. If you have a scale, it's always an advantage to kind of be checking that. If not, then you've got to get very good at eyeballing your cattle. And because clearly, you don't want to be having very many your cattle heavy, yeah, right and have to be hit by the slide. If there's a few pounds over, that's fine. That's within the variability. And, you know, that's something that producers can probably, if you feel like you're very good at estimating your weight, maybe that's something you can negotiate with the buyer is take a newer sense, be willing to take a heavier price slide in exchange for a higher market price. Because if you're confident that all your cattle are going to come in under the weight, then you could say, Look, I'll yeah, you can do a 20 cent slide on me if they're over this. But by doing that, will you give me a couple more cents on everything? And you know that again, that's a bargaining and negotiating tactic. I can't guarantee you can get it. Yeah, yeah. Well, I've learned you never get something you don't ask for exactly

Shannon Sand:

right. Or worse. They're gonna tell you is no, right?

Melelani Oshiro:

Yeah, yeah. Right. Exactly. Yeah, well, that makes sense. So it's almost more advantageous for them to kind of meet the weight or be a little bit over, I would say then be under the weight then is that kinda Yeah.

Dr. Dillion Feuz:

And if you snow under the weight, then you're basically yeah, you're not getting paid enough? Yeah, that's true. I've done a lot of work on slaughter cattle pricing and some grid markets. And we are still selling weight in the in the cattle industry, we sell weight at the calf level, feeder level and the slaughter cattle level. And definitely, you always want to kind of push the limit of what that way it is because selling less weight will always bring you less. And all. So ultimately, you kind of got to push that limit, but hopefully get pretty good. Yeah. Yeah,

Shannon Sand:

yeah, but you also don't want to feed them a whole lot, if you can, especially like, I mean, I mean, if you have like real feed efficient calves, that's great, because then you can push it, but I'm just thinking like,

Unknown:

I'd have to balance that with feeding amount extra here, just in terms of the cost of feed and stuff. So yeah, I was like, I can see where you want to push it. So you get as close to it as you can just because that's gonna be financially advantageous. But if you have really feed efficient calves, then you can definitely do that. And some people here really have like some that are like really efficient with their conversion, whenever I think to or record keeping comes really important in your seasons, right? Because then you know, you're getting your animals, when they're getting bred out when you're going to be able to get them into market too, right? Because so you just have those rate ranges a little bit closer together within your calving herd as well. So our you know, your animals that are coming out, that's why I think we talk about record keeping, that's very important. You know,

Melelani Oshiro:

I mean, you know, back before, I still know, a few producer producers that don't actually take bulls out, you know, they leave them in there. They have multiple, what do you call calving seasons during the year? So yeah, you know, it can work for you or against you, in some senses as depending on where you're taking your animals to.

Dr. Dillion Feuz:

Even if you're doing a year round calving base, deleting your bulls, yeah, it's still an advantage. You know, and I'm sure all of you are checking your cattle frequently enough, you may not know the day that calf was born. But if there's a new calf on the ground, and you know, it wasn't there three days ago, well record that, that date. And yeah, because calves, if your genetics are somewhat consistent, and your pastures are consistent, performance tends to be consistent as well. So that okay, at 180 days, my calves will weigh 400 pounds, or maybe for you, it's 190 days, or whatever it is, yeah. And to know that, and then you've recorded that information, you can say, Okay, it looks like I'm going to have a group of calves. You know, in three weeks, that should be getting close. So I need to be talking to the broker, figuring out when I can get him to him. Yeah. And I want to, this is where I think we want to take it as close to that. Yeah, weight as we can. Yeah. Want to sell him today, when you still have two or three weeks that they can still be

Melelani Oshiro:

grazing non weight or oil. Yeah, yeah. Yeah.

Dr. Dillion Feuz:

So yeah, that's good point record keeping his Yeah, it's key that

Melelani Oshiro:

will really help. Even if it's just on your calendar and rewrite it. So like, as long as it's somewhere you can reference it's, it's a matter of getting into the habit of being doing the record keeping whether it's in your phone on a piece of paper or Little Red Book, wherever I'm doing, right. That was the important thing. But yeah, thank you, Dylan, that thank you, for being here and sharing with us about the program. We do believe we're going to start we're going to create a survey at some point to be able to collect more data. Yay. On those prices for the producers that are Yes. Be looking out for it in the next like,

Unknown:

I would say three months maybe? Yeah, yeah. Yeah, yeah. Yeah. Cuz it is 2022 after all. So yeah, well, anything else you want to share? Yeah.

Dr. Dillion Feuz:

I think that's good. And I hope to be back here. In the spring again, we're hoping to do some workshops. Yes, um, you know, Hawaii, Maui, and

Shannon Sand:

maybe in person. That's the dream. Yep. That's

Dr. Dillion Feuz:

me here. And I hope to have some help. So to put together some data from us that I can share. And again, none of it is I don't want to keep it it doesn't doesn't do me any good. So whenever I collaborate, I'll try to get back to you put up on your website. In terms of the price or like, if I can get enough prices reported. I'll put those prices up so that everybody can see them. Yeah. won't be any secrets. You'll all see what I'm basing the numbers on. Yeah,

Melelani Oshiro:

that would be good. Yeah, that would be good. Yeah. Thankfully, you got to have those workshops and share this information again. And in person, so it'd be really good.

Shannon Sand:

Wow. Yeah. Thank you so much for coming, Dylan, we are so glad to have had you on our show today. Thank you for taking the time to talk story with us. We hope our listeners gain some insight into your decision support tools and how Hawaii producers can benefit from them. Yeah, make sure to join our Facebook page, the livestock extension group if you haven't already, and be sure to you visit the U H. CTAHR. Extension website and our YouTube channel which will be listed in the show notes. Yes. For additional information about this topic, see the show notes of the podcast and the description box of our YouTube page. Thanks for listening to the livestock fallout. And before we go show some love for your favorite podcasts. That's us by the way by leaving us a review on Apple podcasts or anywhere you are listening to this and then stay tuned for next month's episode.

Melelani Oshiro:

Mahalo for listening everyone. Happy New Year. Happy New Year.