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Articles from 2020 In January


USDA’s Cattle report shows inventory down slightly

Red Angus Association of America Red Angus Yearling Heifers

As just about everyone prognosticated, the Jan. 1, 2020, USDA Cattle report shows there are fewer cattle roaming about than a year ago. While the numbers will certainly be cussed and discussed at length, here are the official estimates released by USDA:

  • All cattle and calves in the United States as of Jan. 1, 2020, totaled 94.4 million head, slightly below the 94.8 million head on Jan. 1, 2019.
  • Beef cows, at 31.3 million head, were down 1% from a year ago. Milk cows, at 9.33 million head, were down slightly from the previous year. All cows and heifers that have calved, at 40.7 million head, were 1% below the 41.0 million head on Jan. 1, 2019.
  • Beef replacement heifers, at 5.77 million head, were down 2% from a year ago. Milk replacement heifers, at 4.64 million head, were down 1% from the previous year. Other heifers, at 9.71 million head, were 1% above a year earlier. All heifers 500 pounds and over as of Jan. 1, 2020, totaled 20.1 million head, slightly below the 20.2 million head on Jan. 1, 2019.
  • Steers weighing 500 pounds and over as of Jan. 1, 2020, totaled 16.7 million head, down 1% from Jan. 1, 2019.
  • Bulls weighing 500 pounds and over as of Jan. 1, 2020 totaled 2.24 million head, down 1 percent from January 1, 2019.
  • Calves under 500 pounds as of January 1, 2020 totaled 14.7 million head, up 1% from January 1, 2019.
  • The combined total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots) at 26.4 million head, was slightly below January 1, 2019. The 2019 calf crop in the United States was estimated at 36.1 million head, down 1% from last year's calf crop.

Calf crop down 1%

Calves born during the first half of 2019 were estimated at 26.4 million head, down slightly from the first half of 2018. Calves born during the second half of 2019 were estimated at 9.71 million head, 27% of the total 2019 calf crop.

Cattle on Feed

Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 14.7 million head on Jan. 1, 2020. The inventory is up 2% from the Jan. 1, 2019, total of 14.4 million head. Cattle on feed in feedlots with capacity of 1,000 or more head accounted for 81.5% of the total cattle on feed on Jan. 1, 2020, up slightly from the previous year.

Revisions

All inventory and calf crop estimates for July 1, 2018, Jan. 1, 2019, and July 1, 2019 were reviewed using calf crop, official slaughter, import and export data, and the relationship of new survey information to the prior surveys. Based on the findings of this review, July 1, 2018 all cattle and calves decreased by 0.2%. Jan. 1, 2019, all cattle and calves increased slightly, all cows and heifers that have calved decreased by 0.2%, and 2018 calf crop decreased by 0.2%. July 1, 2019 all cattle and calves were decreased by 0.1%, all cows and heifers that have calved decreased by 0.2%, and 2019 calf crop decreased by 0.7%.

Source: USDAwhich is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

MIDDAY Midwest Digest, Jan. 31, 2020

One of the biggest ag gatherings of the year is next week, National Cattlemen's Beef Association, at San Antonio.

K.C. Wolf is the longest performing mascott in the NFL. Dan Meers is the man behind the mask, and has been doing it for 30 years.

MORNING Midwest Digest, Jan. 31, 2020

There've been comparisons drawn between coronavirus and SARS. But, the world is very different now. 

Some social justice groups are calling for Amy Klobuchar to drop out of the race due to a case she was on in the early 2000s.

Soybean futures prices could be due for an upward correction, say some grain market analysts.

Max caught up with a funeral procession, and wondered, because there was something different about it. It was for a Vietnam veteran who had no family, but 100s showed up to the visitation and funeral.

Farm Progress America, January 31, 2020

Using scrapers on the farm isn't all that new, but the addition of GPS takes it to another level. The technology has come quickly over the last five years, Dave Benson, Ashland Industries, says it has been coming into use at a good time as farmers need to remediate fields from flooding last year. Precision maps and GPS help control, turning the job into a one-man operation.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Max Armstrong, veteran farm broadcaster and host of This Week in Agribusiness.

Photo: JJ Gouin/iStock/Getty Images

7 ag stories you might have missed this week - Jan. 31, 2020

NolanBerg11/flySnow/SteveOehlenschlager/ThinkstockPhotos 7AgStoriesNEW051517-1540x800

Missed some ag news this week? Here's seven stories to check out.

1. Bayer is trying to reverse the momentum of litigation that has generated thousands of cases alleging exposure to Roundup cases cancer. Meanwhile, the U.S. EPA says glyphosate doesn't cause cancer when used according to the label. And, a lawyer for Monsanto is emphasizing that EPA and other regulatory bodies have deemed glyphosate safe. – Farm Futures

2. A vaccine against African swine fever has proven 100% effective in tests, according to the American Society for Microbiology. There is no commercially available vaccine against the disease, which has decimated China's hog herd in the past 18 months. – Farm Futures

3. Last year was a tough year for Minnesota's sugar beet growers. Of the 398,000 acres contracted by American Crystal Sugar, 115,000 acres were never harvested. – The Farmer

4. Artem Milinchuk, founder and CEO of FarmTogether, asks if regenerative agriculture be profitable in an essay in Forbes. The mission of FarmTogether is to democratize farmland investing. – Forbes

5. The Bill & Melinda Gates Foundation plans to establish a new nonprofit agriculture center in St. Louis. The nonprofit will be called Gates Ag One and is designed to focus its research on helping " “smallholder farmers adapt to climate change and make food production in low- and middle-income countries more productive, resilient, and sustainable.” – KSDK

6. U.S. farm bankruptcies were up 20% in 2019, according to court data analyzed by the American Farm Bureau. This is the highest level since 2011. There were 595 Chapter 12 family farm bankruptcies, nearly 100 more than in 2018. - CNN

7. What can farmers expect when trapping feral hogs? Jason Jensen of the Missouri Department of Conservation offers insight. – Missouri Ruralist

And your bonus.

Tipton (Oklahoma) Public Schools broke ground this week for a 5,000-square-foot high-tech agriculture facility. The facility will cost $1.8 million. – The Lawton Constitution

How can we accelerate our cow power?

Gary Gates PC-Limi-Pair-by-Gary-Gates.JPG

You’ve worked your entire life to build a cowherd you’re extremely proud of: Fertile, docile, good milkers and consistently weaning off heavy calves — that’s what it’s all about.

Yet, even in the best of herds, we can still identify the outliers — some good, some bad — and determining which genetics to proliferate and which to send to town can sometimes be a difficult task.

Yet, with genomic testing, a panel can help you quickly identify specific traits, and with this information, you can accelerate the cow power in your operation at a faster rate with greater accuracy.

Compared to conventional breeding and selection, DNA testing and making decisions based on genomic data can help improve consistency and efficiency, It can narrow down your focus for greater results in one trait or a multitude of traits, depending on your operation goals.

But is it worth the price? Or is it just information overload that will bog you down and overwhelm you?

Perhaps the best answer I’ve heard on this question is to start with the end goal in mind?

Who are you marketing to? What is your end game? Do you sell calves at weaning? Do you retain ownership? Are you selling registered stock? Are you selling meat into a consumer-driven program?

Once you know your end game, work backwards to determine what kinds of calves you need to be raising and which balance of traits will best help you get there in the quickest route possible.

That’s the beauty, in a nutshell, of gathering the genetic data on your cattle. And it’s certainly the fastest way to accelerate the best cow power you have in your operation.

That’s what we are celebrating in our newest photo contest, sponsored by Neogen. “Cow Power” is all about showing us your best females on your ranch, and so far, you guys have delivered some incredible images of your cows at work!

View the complete photo gallery by clicking here.

Four winners will take home $50 VISA gift cards; plus, two randomly selected voters will receive a set of my children’s books, “Levi’s Lost Calf” and “Can-Do Cowkids.”

THIS CONTEST IS NOW CLOSED. See who won here.

Good luck to all who entered and keep checking back as we update the gallery as entries come in. Have a great day!

MIDDAY Midwest Digest, Jan. 30, 2020

There's an update for a recall from GM, in 2019 Chevy and GM pickups for electronic brake failure. 

The American Farm Bureau is calling for expanded and clear hemp rules, from testing to transportation.

Les Wexner is stepping down as CEO of L Brands.

Proposed legislation in Illinois will stop carnivals from awarding live animals, like goldfish.

Changing beef consumer: How to crack the code

Tomwang112 / Getty Images A group of consumers eating beef

Whether it’s newlyweds in their early 20s, Millennials fed up with Fruit Loops or multi-millions of middle-class Asians, the future of food offers a maze of potential markets for beef. Will the beef industry, or even your individual cow-calf or feeding operation, find the path to them?

Stan Bevers, analyst for the King Ranch Institute for Ranch Management and long-time Texas A&M AgriLife Extension economist and ranch management consultant, said cracking and growing those markets means understanding what potential consumers want and how they can be reached. 

Speaking at January’s Southwest Beef Symposium in Amarillo, Texas, Bevers’ comments extended further than his usual advice to ranchers on the Standard Performance Analysis (SPA) program and ranch Key Performance Indicators he helped develop.

Bevers expounded on a message that continues to grow across U.S. beef sectors—new consumers domestically and abroad, have and will have different food taste and buying habits.

The Gen-Z crowd, born in the mid-90s through the mid-2000s, will be the leaders in 2039,” he said, adding that they are digitally diverse and independent.

“They have always been wired. They prefer to communicate digitally, primarily through social media and texting. They’ve lived through the great recession and have seen their parents and others lose their jobs and struggle financially.

“They want convenience – and will choose between meal kits, prepared meals and online groceries—all delivered to their door within two hours of ordering. They want to utilize all of their senses in a meal adventure and embrace non-human delivery mechanism.”

Beware of one gristly steak  

Gauging Z’er protein preferences will be just as challenging as surviving their isolated complaints. “They will not tolerate a bad eating experience and will proclaim those instantly on social media,” Bevers said.

“G-Z’ers will seek familiarity for consistency and diets based on their medical and genomic advisors. They will be bombarded with radicals seeking to impose their beliefs (i.e. January’s plant-based Golden Globes meal).”   

The G-Z group has many habits and tastes seen in Millennials, the often-maligned group that is approaching 40 years of age. But Millennials have overtaken Baby Boomers in population and are now the heart of the workforce and have money.

Their meat shopping behavior is influenced by authenticity, transparency, responsibility, product inspiration, sourcing and animal welfare,” Bevers said.

Millennials consider price and convenience as primary drivers in their food purchases. They eat more prepared foods than older generations and spend more on ready-to-go categories. About 39% of Millennials buy groceries online and are 30% more likely to eat out.”

Because of Millennial choices, many consumer foods, conveniences and habits are disappearing. “Those things include cereal, movie theaters, cars, bath soap, gyms, fabric softeners, cruises, beer, cable TV and marriage,” Bevers said.

Expect Millennials and Gen Z to grow even more concerned about animal welfare, he added. They will want to know how ranchers treat their cattle at home, if antibiotics have been used, how their cattle are handled at the feedyard and how they are humanely harvested.

Bevers said in order to appease the attitude of young consumers on the effect of livestock on the environment, the beef industry must continue spreading its message on the actual small impact cattle have on greenhouse gases. 

More sirloin in Shanghai  

Satisfying future foreign consumers may be easier than some picky domestic demographics. That’s if recent trade deals are successful and followed by more open avenues for U.S. beef abroad.

And expect to hear more on the enormously growing middle class in Asia. “About 88% of the next billion people in the middle class will be in Asia,” Bevers said. “That includes 380 billion in India, 350 million in China, 210 million in the rest of Asia and 130 million in the rest of the world.”

With U.S. beef exports already surpassing $8 billion annually, there are prime opportunities for greater foreign sale due to a leaping increase in middle class consumers.

“They will have money to purchase what they want in food,” Bevers said. “We must be set up for that with beef products they can enjoy.”

At the ranch 

Those Asian and Pacific Rim consumers crave U.S. meat cuts like short ribs or tripe, cuts that might not fly off American meat cases. But due to transparency sought by foreign buyers, even those and other U.S. exports will likely require some sort of source verification.

“Such third-party verification may be required more often by feedyards and packers working to furnish beef to foreign customers,” Bevers said, adding that being Beef Quality Assurance certified will help assure buyers your cattle meet their demands.

That’s over and above using maximum efficiency in buying breeding stock and producing and selling calves that consumers want in the long run.

Bevers said ranchers who improve efficiency and alter their production methods to match particular markets will help influence “positive change that presents opportunities for higher-than-average profits.”

Stalcup is a freelance writer based in Amarillo, Texas.

Coronavirus: Wise caution or overreaction?

DALE DE LA REY / Contributor / Getty Image GettyImages-1197523066.jpg
A man wearing a mask commutes on a train in Hong Kong on January 30, 2020, as a preventative measure after a virus outbreak which began in the Chinese city of Wuhan.

Empty highways in a town of 11 million. Infrared footage of people in airports showing underwear styles. Masked travelers having thermometers aimed at their foreheads. Airlines reporting dropped bookings.

So is this all it takes to spook Wall Street investors?

Apparently. And as we have come to know, what spooks stock and bond investors can also spook the cattle markets. So, is this a big event with long-term implications? After all, the number of cases of the new coronavirus is reported to be over 6,000.  

The SARS outbreak of 2003 never reached that number. The good news is that while the number of cases is larger in a much shorter time period than SARS, the number of deaths so far is 131 vs. 800 for SARS. So this disease is not as deadly. Some 20,000 people are rumored to being monitored in the Chinese source province. This virus has spread to 15 countries.

Meat industry issues

The problem for the meat industry is that things that interrupt travel and dining out and entertaining affect the demand for meat. As a result, live cattle futures were down $2.59 on Monday. Tellingly, the feeder cattle futures were almost unchanged.

For the rest of the week, fed cattle futures showed glimmers of support early, but continued to slip lower as longs fled the market and the cash market for fed cattle was quiet, offering no direction.

Clearly, the market’s concern is short term, not long term. But packers have been known to use any excuse to bid down cattle, so the markets are staying down for now. The good thing is, people in America are still eating and retailers and foodservice outfits will have to have more meat very soon.

In fact, the wholesale market this week showed no signs of overreaction, with product continuing to flow at steady to slightly higher prices.

However, stocks showed more concern. The Dow Jones average took a 450-point hickey for several reasons. Some of it is related to less commerce and less revenue, also related to travel, vacations, less shopping and spenders hoarding instead. Stocks like airlines and Asian casinos took big hits.

Other factors are China itself. The “uncertainty” that both traders and investors hate was much remedied with the signing of the U.S.-China trade agreement. But with several big cities quarantined and travel difficult or impossible, businesses shut down and some of the population hunkered down at home, there is concern that the world’s largest economy won’t even manage the “tepid” 6.1% growth it had slowed to by the end of 2019.

It could well be enough to slow it under 6%, the lowest growth in decades. The virus also feeds fears that China won’t be able to manage the purchases it agreed to under the trade deal.

Experts in China disagree on when the disease will peak. One expert said another week or 10 days while another projected April or May for China’s biggest population centers.

More than one stock market analyst characterized Monday’s drop as just an excuse or trigger for investors to hit the panic, er, sell button. The market has done well in recent months, the average of the S&P 500 hasn’t varied more than 1% since October. So the obvious signs of some economic and cultural distress were enough for some investors to take profits. Stock earnings multiples have climbed to relatively high multiples, further making some investors nervous.

The U.S. economy is still perking along, and this being earnings season, it is worth noting that many of the stocks that dropped the most were ones that had already been showing stress for weeks. With 17% of the S&P 500 having reported earnings so far for the last quarter of 2019, 70% have exceeded estimates. But, as another analyst noted—and does this sound familiar to livestock folks?—people sometimes act on emotion, not facts. Do tell.

The market did recover 253 points the next day, a long way from all the way back, but a sign that folks are realizing that it is too soon to decide the coronavirus is going to be a big factor.

Where did it come from?

The real wild card here is how this virus originated. Initial reports from the Chinese government attributed it to a seafood market, the kind of “wet market” in China where freshly harvested meat is set out on tables or live animals are harvested in the back of the stall for sale to customers. You might have seen photos of dozens of various critters all lined up on a tarp, just ready to be dressed and cut up for customers.

Could this be a catalyst for Chinese consumers to begin regarding U.S. meat as higher in food safety than exotic critters whacked in the back of an unrefrigerated stall with dubious sanitation and food safety? Chinese consumers have been burned before in food and even baby formula.

However, this is China and government proclamations are sometimes politically motivated or are major cover-ups even more bold than here. The Washington Times is reporting that an Israeli biological warfare analyst, a former Israeli military intelligence expert in chemical and biological warfare, contends the virus might have been created in a Chinese biological weapons lab that, according to China, doesn’t exist.  

The scientist said the only lab in China capable of working with deadly viruses is in the city of Wuhan—where the virus is said to have first appeared. To lend credence to this view, a rumor is said to be circulating on the Chinese internet claiming the whole thing is a U.S. conspiracy to spread germ weapons.

Regardless, the stock market has calmed, the fed market is holding in place and 400 people crowded the lawn at the White House for the signing of the USMCA treaty. Serious worry is not in the cards, at least for now.

Steve Dittmer is a longtime beef industry commentator and executive vice president of the Agribusiness Freedom Foundation. The opinions of Dittmer are not necessarily those of beefmagazine.com or Farm Progress.

Feeder cattle prices versus fed cattle futures

Nevil Speer Feeder prices

Last week’s column highlighted recent trends around negotiated trade for fed cattle. Most importantly, the trends of late defy conventional wisdom. That is, “despite very thin cash markets during the past four months, the market has made an incredible recovery; through December, fed prices tacked on $25 in just 15 weeks – and completely reversed the packer margin trend.”  

Clearly, any discussion around the fed market has implications for feeder cattle, too. However, too often the discussion gets confused. Feeder cattle are not priced off the current (cash) price of fed cattle, but rather based on deferred CME futures contracts.

This week’s graph highlights the relationship between those two markets. The price relationship has remained surprisingly consistent ever since the market transitioned through the sharp plunge of 2015. In general, the CME feeder cattle index has been running about $30 ahead of the deferred live cattle contract. To that end, during the past four years the deferred fed average is $114, while the feeder cattle index has averaged $144.  

Inevitably, one of the most common questions from producers goes something like, “What’s your outlook for feeder prices?” Based on this trend, the answer inherently invokes a question on the other side, “What’s your outlook for fed prices?”  

Nevil SpeerFeeder prices

In other words, wherever the respective deferred live cattle contract is priced, tack on $30 and that’s your starting point for feeder cattle.  

That also invokes the concept of added value. The $30 spread is a strong and consistent trend. And so, in the absence of any additional value (or at least documentation of such), it’s hard to overcome that trend. It represents the power of large numbers – without additional information everything gets regressed to the mean.  

Therefore, adjustments for management and genetics have to be clearly documented and marketed in the proper venue to overcome that trend and be appropriately awarded in the marketplace. 

Speer serves as an industry consultant and is based in Bowling Green, Ky. Contact him at nevil.speer@turkeytrack.biz.